As filed with the U.S. Securities and Exchange Commission on October 22, 2021.
No. 333-260113
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
Semper Paratus Acquisition Corporation
(Exact name of registrant as specified in its charter)
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Cayman Islands
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6770
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98-1597194
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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 No.)
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Semper Paratus Acquisition Corporation
767 Third Avenue, 38th Floor
New York, New York 10017
Telephone: (646) 807-8832
(Address, including zip code, and telephone number, including area code, of registrant’s principal executive offices)
B. Ben Baldanza
Chief Executive Officer
Semper Paratus Acquisition Corporation
767 Third Avenue, 38th Floor
New York, New York 10017
Telephone: (646) 807-8832
(Name, address, including zip code, and telephone number, including area code, of agent for service)
Copies of all communications, including communications sent to agent for service, should be sent to:
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Ari Edelman, Esq.
Reed Smith LLP
599 Lexington Avenue
New York, NY 10022
Telephone: (212) 521-5400
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Douglas S. Ellenoff, Esq.
Stuart Neuhauser, Esq.
Ellenoff, Grossman & Schole LLP
1345 Avenue of the Americas
New York, NY 10105
Telephone: (212) 370-1300
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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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☐
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Accelerated filer
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☐
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Non-accelerated filer
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☒
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Smaller reporting company
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☒
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Emerging growth company
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☒
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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
Securities to be Registered
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Amount
to be
Registered
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Proposed
Maximum
Offering Price
Per Unit
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Proposed
Maximum
Aggregate
Offering Price(1)(2)
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Amount of
Registration Fee(5)
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Units, each consisting of one Class A ordinary share, $0.0001 par value, and one-half of one redeemable warrant(2)
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34,500,000 units
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$10.00
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$345,000,000
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$31,981.50
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Class A ordinary shares included as part of the units(3)
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34,500,000 shares
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—
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—
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— (4)
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Redeemable warrants included as part of the units(3)
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17,250,000 warrants
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—
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—
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— (4)
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Total
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$345,000,000
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$31,981.50
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(1)
Estimated solely for the purpose of calculating the registration fees.
(2)
Includes 4,500,000 units, consisting of 4,500,000 Class A ordinary shares and 2,250,000 redeemable warrants, 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(a), there are also being registered an indeterminable number of additional securities as may be offered or issued to prevent dilution resulting from share sub-division, share dividend, or similar transactions.
(4)
No fee pursuant to Rule 457(g).
(5)
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 this 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 we are not soliciting an offer to buy these securities in any jurisdiction where the offer or sale is not permitted.
PRELIMINARY PROSPECTUS
SUBJECT TO COMPLETION, DATED October 22, 2021
$300,000,000
SEMPER PARATUS ACQUISITION CORPORATION
30,000,000 units
Semper Paratus Acquisition Corporation is a newly organized, special purpose acquisition company (“SPAC”) incorporated as a Cayman Islands exempted company for the purpose of effecting a merger, share exchange, asset acquisition, share purchase, reorganization or similar business combination with one or more businesses, which we refer to throughout this prospectus as our initial business combination. To date, our efforts have been limited to organizational activities as well as activities related to this offering. We have generated no operating revenues to date and we do not expect that we will generate operating revenues until we consummate our initial business combination. We have not identified any potential business combination target, and we have not, nor has anyone on our behalf, initiated any substantive discussions, directly or indirectly, with any potential business combination target.
This is an initial public offering of our securities. Each unit has an offering price of $10.00 and consists of one Class A ordinary share and one-half of one redeemable warrant. Each whole warrant entitles the holder thereof to purchase one Class A ordinary share at a price of $11.50 per share, subject to adjustment, terms and limitations as described herein. The underwriters have a 45-day option from the date of this prospectus to purchase up to 4,500,000 additional units to cover over-allotments, if any.
We will provide our public shareholders with the opportunity to redeem all or a portion of their Class A ordinary shares upon the completion of our initial business combination, subject to the limitations as described herein. If we have not consummated an initial business combination within 15 months from the closing of this offering or during any Extension Period (as defined herein), we will redeem 100% of the public shares for cash, subject to applicable law and certain conditions as described herein.
Our sponsor, Semper Paratus Sponsor LLC, a Delaware limited liability company, and Cantor Fitzgerald & Co., the representative of the underwriters, which we refer to as Cantor, have agreed to purchase 1,360,000 placement units (or 1,450,000 placement units if the underwriters exercise their over-allotment option in full), at a price of $10.00 per unit, in a private placement to occur concurrently with the closing of this offering. Of those 1,360,000 placement units, our sponsor has agreed to purchase 1,210,000 placement units (or 1,300,000 placement units if the underwriters exercise their over-allotment option in full), and Cantor has agreed to purchase 150,000 (regardless of whether the underwriters’ over-allotment option is exercised in full). Each placement unit will be identical to the units sold in this offering, except as described in this prospectus. We refer to these units as the placement units throughout this prospectus. Our initial shareholders currently own 11,983,333 Class B ordinary shares, up to 1,530,000 of which are subject to forfeiture depending on the extent to which the underwriters’ over-allotment option is exercised. The Class B ordinary shares will automatically convert into Class A ordinary shares at the time of our initial business combination or earlier at the option of the holders thereof as described herein. Prior to our initial business combination, only holders of our Class B ordinary shares will be entitled to vote on the election of directors.
Assuming only the minimum number of shares representing a quorum are voted (20,906,668 shares or 50.1% of our issued and outstanding shares), and assuming the over-allotment option is not exercised, no affirmative votes from other public shareholders would be required to approve our initial business combination because our initial shareholders will own 11,663,333 shares in the aggregate (including 10,453,333 founder shares and 1,210,000 placement shares), which number exceeds the 10,453,335 votes (representing a majority of the 20,906,668 shares present and voting) needed to approve the initial business combination.
Upon consummation of this offering, and assuming the over-allotment option is not exercised, our initial shareholders and Cantor will own an aggregate of 11,813,333 shares, or 28.3% of our issued and outstanding shares, including 10,453,333 founder shares and 1,210,000 placement shares held by our initial shareholders and 150,000 placement shares held by Cantor.
Prior to this offering, there has been no public market for our securities. We intend to apply to have our units listed on the Nasdaq Global Market, or the Nasdaq, under the symbol “LGSTU.” We expect that the Class A ordinary shares and warrants comprising the units will begin separate trading on the Nasdaq under the symbols “LGST” and “LGSTW” respectively, 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 underwriters permit earlier separate trading and we have satisfied certain conditions.
We are an “emerging growth company” and “smaller reporting company” under applicable federal securities laws and will be subject to reduced public company reporting requirements. Investing in our securities involves a high degree of risk. See “Risk Factors” beginning on page 37 for a discussion of information that should be considered in connection with an investment in our securities. Investors will not be entitled to protections normally afforded to investors in Rule 419 blank check offerings.
Neither the Securities and Exchange Commission (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.
No offer or invitation, whether directly or indirectly, may be made to the public in the Cayman Islands to subscribe for our securities.
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Per Unit
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Total
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Public offering price.
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10.00 |
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300,000,000 |
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Underwriting discounts and commissions(1)
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0.60 |
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18,000,000 |
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Proceeds, before expenses, to us
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$ |
9.40 |
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$ |
282,000,000 |
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(1)
$0.20 per unit sold in the base offering, or $6,000,000 in the aggregate, is payable upon the closing of this offering. Includes $0.40 per unit sold in the base offering, or $12,000,000 in the aggregate (or up to $14,700,000 in the aggregate if the underwriters’ over-allotment option is exercised in full), payable to Cantor Fitzgerald & Co. for deferred underwriting commissions to be placed in a trust account located in the United States as described herein and released to Cantor Fitzgerald & Co. for its own account only upon the consummation of an initial business combination. 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 placement units described in this prospectus, $306,000,000, or $351,900,000 if the underwriters’ over-allotment option is exercised in full ($10.20 per unit in either case), will be deposited into a U.S.-based trust account with Continental Stock Transfer & Trust Company acting as trustee, and $1,600,000 will be available to pay fees and expenses in connection with the closing of this offering and for working capital following the closing of this offering.
The underwriters are offering the units for sale on a firm commitment basis. The underwriters expect to deliver the units to the purchasers on or about [ ], 2021.
Book-Running Manager
Cantor
The date of this prospectus is [•], 2021
We are responsible for the information contained in this prospectus. We have not authorized anyone to provide you with different information or to make any representations other than those contained in this prospectus, and neither we nor the underwriters take any responsibility for, or can provide assurance as to the reliability of, any other information others may give to you. We are not, and the underwriters are not, making an offer to sell securities in any jurisdiction where the offer or sale is not permitted. You should not assume that the information contained in this prospectus is accurate as of any date other than the date on the front of this prospectus.
TABLE OF CONTENTS
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136 |
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139 |
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141 |
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165 |
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177 |
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188 |
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188 |
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188
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SUMMARY
This summary only highlights the more detailed information appearing elsewhere in this prospectus. As this is a summary, it does not contain all of the information that you should consider in making an investment decision. 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.
Unless otherwise stated in this prospectus or the context otherwise requires, references to:
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“amended and restated memorandum and articles of association” are to the first amended and restated memorandum and articles of association that we will adopt prior to the consummation of this offering;
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“Cantor” or the “representative” are to Cantor Fitzgerald & Co., the representative of the underwriters in this offering;
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“Companies Act” are to the Companies Act (2021 Revision) of the Cayman Islands as the same may be amended from time to time;
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“equity-linked securities” are to any debt or equity securities that are convertible, exercisable or exchangeable for our Class A ordinary shares issued in a financing transaction in connection with our initial business combination;
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“founder shares” are to our Class B ordinary shares initially issued to our sponsor in a private placement prior to this offering and the Class A ordinary shares that will be issued upon the automatic conversion of the Class B ordinary shares at the time of our initial business combination or earlier at the option of the holders thereof (for the avoidance of doubt, such Class A ordinary shares will not be “public shares”);
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“initial shareholders” are to the holders of our founder shares immediately prior to this offering;
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“management” or our “management team” are to our officers and directors (including our director nominees that will become directors in connection with the consummation of this offering);
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“ordinary shares” are to our Class A ordinary shares and our Class B ordinary shares;
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“placement shares” are to the 1,360,000 Class A ordinary shares (or 1,450,000 Class A ordinary shares if the underwriters exercise their over-allotment option in full) included within the placement units being purchased separately by our sponsor and Cantor in the private placement;
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“placement units” are to the units to be issued to our sponsor and Cantor in a private placement simultaneously with the closing of this offering and upon conversion of working capital loans;
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“placement warrants” are to redeemable warrants to purchase an aggregate of 680,000 of our Class A ordinary shares (or 725,000 shares if the underwriters exercise their over-allotment option in full) included within the placement units being purchased separately by our sponsor and Cantor in the private placement;
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“public shares” are to our Class A ordinary shares 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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“public shareholders” are to the holders of our public shares, including our initial shareholders to the extent our initial shareholders purchase public shares; provided that our initial shareholders’ status as a “public shareholder” will only exist with respect to such public shares;
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“public warrants” are to our warrants 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” is to Semper Paratus Sponsor LLC, a Delaware limited liability company; and
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“we,” “us,” “our,” “company” or “our company” are to Semper Paratus Acquisition Corporation, a Cayman Islands exempted company.
Any forfeiture of shares described in this prospectus will take effect as a surrender of shares for no consideration of such shares as a matter of Cayman Islands law. Any conversion of the Class B ordinary shares described in this prospectus will take effect as a compulsory redemption of Class B ordinary shares and
an issuance of Class A ordinary shares as a matter of Cayman Islands law. Any share dividends described in this prospectus will take effect as share capitalizations as a matter of Cayman Islands law.
Unless we tell you otherwise, the information in this prospectus assumes that the underwriters will not exercise their over-allotment option. Unless otherwise stated in this prospectus, or the context otherwise requires, the information presented herein assumes that the representative and/or its affiliates or accounts will not purchase any of the units that may be allocated to them. For a detailed discussion of the arrangements with the representative, please see “Underwriting — Underwriter Expression of Interest.”
General
Semper Paratus Acquisition Corporation (“Semper Paratus”) is a newly organized, special purpose acquisition company (“SPAC”) incorporated as an exempted company in the Cayman Islands and formed for the purpose of effecting a merger, share exchange, asset acquisition, share purchase, reorganization or similar business combination with one or more businesses, which we refer to throughout this prospectus as our initial business combination. To date, our efforts have been limited to organizational activities as well as activities related to this offering. We have generated no operating revenues to date and we do not expect that we will generate operating revenues until we consummate our initial business combination. We have not identified any potential 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 with a company in any business, industry, sector or geographic location, we currently intend to concentrate our efforts to pursue an acquisition opportunity in the transportation, supply chain and logistics industry in any stage of the target’s corporate evolution. Traditional and next-generation supply chain solutions, physical or digital, are driving essential changes across end markets as business leaders around the world navigate unprecedented supply chain disruption caused by the COVID-19 pandemic. We plan to capitalize on our management team’s extensive experience in our target sectors, along with their valuable networks of seasoned venture capital and private equity investors, veteran operational partners and others to identify these unique acquisition opportunities. Our management team has a distinguished history of accomplishments across a broad spectrum of subsectors within the transportation, supply chain, and logistics industry, growing businesses into industry-leading enterprises by structurally improving their strategic position, growth trajectory and profitability. Our board of directors also has a significant track record in our target sectors and expertise in corporate strategy, technological innovation and operational enhancement. We expect their knowledge will enhance the management team’s perspective as we evaluate potential initial business combinations and support the target’s management after completing an initial business combination, to the extent they remain on our board following the completion of our initial business combination.
Our Management Team
Our management team is led by Richard N. Peretz, our Executive Chairman, Hooman Yazhari, our Vice Chairman, Ben Baldanza, our Chief Executive Officer, Jeff Rogers, our President, and Philippe J. Kurzweil, our Chief Financial Officer. The team has significant operational and transactional experience, primarily in the transportation, mobility and supply chain management industries. We believe our management team has complementary skills and deep operational experience relevant to our target industries with a strong history of working productively and creatively with stakeholders and labor groups, which represent a prominent and sustainable competitive advantage. Enriching this differentiated characteristic is management’s well-connected network, extending from leadership of the largest industrial and transportation enterprises to founders at early-stage technology ventures across our target markets as well as consultants, private equity and venture capital firms, and more. Our team is a flat, consensus-driven organization with a focus on seeking business combination opportunities that we hope will meaningfully benefit from accessing capital via the public market and more importantly, have the potential to become a world-class, industry leading organization with help from the wide-ranging set of competencies of our officers and directors.
Richard N. Peretz serves as Executive Chairman. Mr. Peretz currently serves on the Board of Directors for Tribe Capital Growth Corp. I and Tribe Capital Growth Corp. II, both special purpose acquisition companies, as well as for ELMS — Electric Last Mile, Inc., an EV company and is a director nominee for Altus Power, a clean energy C&I company. Mr. Peretz also serves as a venture partner for Playground Global,
an early-stage investment firm. From 1981 to 2019, Mr. Peretz held a number of executive roles at United Parcel Service, Inc. (“UPS”) in US and Global operations as well as in Supply Chain Management. From 2015 to 2019, he served as Chief Financial Officer (CFO) and a member of the UPS Executive Leadership Team. The senior leadership team was responsible for the global company’s strategy and day to day operations in over 220 countries. Mr. Peretz oversaw all global financial operations and acted as senior liaison to the financial community. He spearheaded the move into technology-based operational capital investments and improved the capital structure along with the working capital for UPS. Prior to serving as CFO, Mr. Peretz was both the corporate Controller and Treasurer, leading all global M&A for UPS, overseeing nearly $3 billion in acquisitions globally in areas including healthcare logistics, truckload brokerage, business-to-business shipping and business-to-consumer shipping. Acquisitions at UPS included third-party logistics provider Coyote Logistics and healthcare logistics companies such as Marken, Polar Speed (UK), Poltraf (Poland), Cemelog (Hungary) and Pieffe Group (Italy). He helped strengthen UPS’s business-to-consumer portfolio with the acquisitions of iParcel (US) and Kiala (Europe). Mr. Peretz also helped expand the company’s international small package footprint in Turkey, Slovenia, Romania, South Korea, Vietnam and Costa Rica.
Mr. Peretz also served on the team responsible for taking UPS public in 1999, the largest IPO in U.S. history at the time. Mr. Peretz served as an investment committee member for the UPS Strategic Venture Fund. Previously, he was a member of the Board of Directors for First International Bancorp. Mr. Peretz holds a BBA in Accounting (1985) from the University of Texas in San Antonio and an MBA (1995) from the Goizueta Business School at Emory University. We believe Mr. Peretz is well qualified to serve as a member of our board of directors due to his extensive strategic, operational and management experience.
Hooman Yazhari serves as Vice Chairman. Mr. Yazhari is the Founder and CEO of Mobility Capital Group, an impact aligned investment manager providing credit-oriented capital for the next generation of enterprises and assets in mobility, logistics and transportation. Mr. Yazhari has served as an Independent Director of Voyager Aviation, a global aircraft lessor since 2017. He also has been a Co-Founder and Chairman of Beyond Capital Fund, an early stage and emerging market focused impact investment fund, since 2010. From February 2018 to March 2019, Mr. Yazhari served as Chief Executive Officer and a member of the Board of Directors of Waypoint Leasing, the largest independent global helicopter lessor and financier, where he led an operational and balance sheet restructuring and transformation and successful strategic sale of its operating assets and business, pursuant to a voluntary filing under Chapter 11 of the United States Bankruptcy Code, in March 2019. From 2015 to 2018, he served as General Counsel and Chief Administrative Officer for CHC Helicopter Corporation (“CHC”), a global helicopter services company, while taking on a leadership role in the operational and balance sheet restructuring and related turnaround, pursuant to a voluntary filing under Chapter 11 of the United States Bankruptcy Code. From 2012 to 2014, Mr. Yazhari served as General Counsel for International Lease Finance Corporation (“ILFC”), the largest global aircraft lessor, serving as part of the team that rebuilt and renewed the lessor after the global financial crisis and led it to a strategic sale. Mr. Yazhari previously served as an Independent Director of Speedcast Americas, Inc., a global telecommunication enterprise (2020-2021) and Vice Chairman and Lead Independent Director of Bristow Group, a global helicopter services company. Mr. Yazhari holds an LLM in Corporate and Commercial Law (1995) from the London School of Economics and Political Science, and a BA in Law (1994) from Jesus College, Oxford University. We believe Mr. Yazhari is well qualified to serve as a member of our board of directors due to his extensive strategic, operational and management experience.
B. Ben Baldanza will serve as Chief Executive Officer. Mr. Baldanza is currently the CEO of Diemacher LLC, an advisory firm focused on business restructuring, revenue optimization and cost containment. Mr. Baldanza currently serves on the Board of Directors for JetBlue Airways, where he serves as Chair of the Audit Committee, GoAir Limited, where he serves as Vice Chairman, and Six Flags Entertainment. From 2006 to 2016, Mr. Baldanza served as the President and CEO, and as a director, of Spirit Airlines, Inc. (“Spirit Airlines”), a low-cost airline, where he oversaw revenue growth from $500 million to $2.1 billion. During his time at Spirit Airlines, he led an IPO in 2011 while also managing an operational turnaround that resulted in industry leading margins. Recruited by Oaktree Capital in 2004, Mr. Baldanza transformed Spirit into an ‘Ultra Low Cost Carrier,’ leveraging a new aircraft fleet, establishment of a defensible franchise network, unbundling of pricing and reduction of costs per seat mile. Mr. Baldanza was twice named to the list of Business Travel News’s 25 Most Influential.
Prior to 2005, Mr. Baldanza held executive roles with American Airlines, Northwest Airlines, Continental Airlines, TACA Airlines (“TACA”) and US Airways where he was responsible for finance, marketing and revenue management. While at Continental Airlines, Mr. Baldanza assisted with applying innovations in scheduling, pricing and revenue management, increasing unit revenues, underpinning a rise in the share price and improvements in profitability. With US Airways, Mr. Baldanza led the rationalization of duplicative hubs, rapid Caribbean expansion and shift to monetize frequent flier rewards on a profit, as opposed to usage, basis.
Mr. Baldanza also worked at UPS, where he supervised the improvement of revenues and capital cost savings. Mr. Baldanza also currently serves as an Operating Partner for Sterling Investment Partners, a private equity firm, and as an Adjunct Professor of Economics at George Mason University. He holds a BA in Policy Studies and Economics (1984) from Syracuse University and an MPA (1986) from Princeton University in Urban and Regional Planning and Transportation Economics.
Jeff Rogers will serve as President. Mr. Rogers is currently a strategic advisor to TruckPark, an inventory management and booking platform for the trucking industry, and an operating advisor to Red Arts Capital, a private equity firm focused on supply chain and industrial businesses. From 2015 to 2020, Mr. Rogers served as CEO and director of Universal Logistics Holdings (“Universal Logistics”), a global asset-light provider of transport and logistics solutions. During an 18-month period at Universal Logistics, Mr. Rogers led multiple acquisitions in the International Intermodal space that provided strategic footprints and positively contributed to growth and profitability. From 1998 to 2013, Mr. Rogers held several executive positions at YRC Worldwide including CFO of YRC Regional Transportation (2006-2008), President of USF Holland Inc. (“Holland”) (2008-2011), a YRC subsidiary and President of YRC Freight (2011-2013). While President of USF Holland, Mr. Rogers led a significant turnaround, closing unprofitable locations and shrinking Holland’s footprint to focus on next-day and two-day lanes. From 1984 to 1998, Mr. Rogers held numerous finance and operations related roles at UPS. He holds a BS in Accounting (1988) from Kansas Newman University and an MBA (1995) from Baker University. Mr. Rogers is also an Army veteran and served as an Airborne Ranger from 1980 to 1984.
Philippe J. Kurzweil will serve as Chief Financial Officer. From 2020 to 2021, Mr. Kurzweil was a part of the investment team at Arch Companies, a real estate private equity firm, where he was responsible for deal sourcing, due diligence and financing. From 2013 to 2020, he was a Research Analyst at Corsair Capital Management LP, an investment advisor, where he was responsible for idea generation and investment underwriting. From 2008 to 2013, Mr. Kurzweil was a Senior Associate at Morgan Stanley Investment Management, an investment advisor, where he was responsible for macroeconomic research and the management of fixed income portfolios. He holds a BSE (2008) in Operations Research and Financing Engineering from Princeton University with highest honors.
Paul P. Jebely serves as an Independent Director and chair of the Compensation Committee. Currently, Mr. Jebely is a managing partner at Pillsbury Winthrop Shaw Pittman, where he also serves in various leadership positions, such as co-chair of aviation finance and co-chair of private wealth. He His law practice is focused exclusively on the private and commercial aviation industry. He has served as counsel on billions of dollars of deals involving financing, acquisition, disposal and merger transactions in addition to handling numerous dispute, enforcement and restructuring situations. Mr. Jebely is well regarded in the aviation and legal industries, and has been named top private client attorney in Asia (2020) and rated top private aircraft attorney in Asia (2016 – 2020).
From 2011 to 2016, Mr. Jebely held numerous positions at Clyde & Co where he rose to Senior Equity Partner and Global Head of Aviation Finance. From 2008 to 2011, Mr. Jebely held numerous positions at Ashurst, where he rose to head of their AMEA aviation practice. Mr. Jebely holds a JD (2005) from Osgoode Hall Law School at York University and a BA (2002) from Trinity Collage at the University of Toronto. We believe Mr. Jebely is well qualified to serve as a member of our board of directors due to his extensive strategic, legal and transactional experience.
Parizad Olver Parchi will serve as Independent Director and Chair of the Audit Committee. Ms. Olver is currently the Founder and Managing Partner of Panorama Aero, a US-based special mission aerospace lessor and end-to-end logistics provider. Panorama Aero was founded in 2018 through the management buyout of Cowen Aviation Finance, a company Ms. Olver established and led while at Cowen. Immediately
after founding Panorama Aero, she established a funding relationship with Fortress Investment Group, called Triangle Aero. From 2009 to 2018, Ms. Olver held numerous executive roles at Cowen Inc., a multinational investment bank, where she most recently served as President and CEO of Cowen Aviation Finance, an operating lessor funded by Cowen Inc. From 2007 to 2009, Ms. Olver served as a senior strategist at Fortress Investment Group’s Drawbridge Special Opportunities Fund, whose investment portfolio included structured product securities and related investments in the aircraft, equipment and specialty finance sectors.
Ms. Olver’s investment experience began in 2005 at Ramius Capital Group, a multi-strategy hedge fund, where she was a special situations investor and co-managed an investment strategy that included a leasing book of distressed narrow body aircraft. She began her career at Morgan Stanley as an investment banking analyst from 2002 to 2005. Ms. Olver holds a BS (2001) from UC Berkley’s Haas School of Business and an MBA (2011) from Columbia University and London Business School. We believe Ms. Olver is well qualified to serve as a member of our board of directors due to her extensive strategic, operational, management, and financial experience.
Brad Stewart will serve as Independent Director. Mr. Stewart is currently CEO and board member of Fair.com, a US-based automotive marketplace and technology company. Previously, from 2011 to 2019, Mr. Stewart held numerous executive roles at XOJet, the largest on-demand private jet services company in North America, most recently serving as Chairman and CEO. While leading XOJet, he oversaw a highly complex and regulated business with three separate business units: aircraft fleet ownership and operations; branded direct-to-consumer brokerage with membership/subscription; and shuttle operations. Concurrent with his tenure at XOJet, from 2014 to 2019, Mr. Stewart served as Senior Advisor to TPG Growth, the growth equity and venture capital division of a global private equity company, where he served on multiple portfolio company boards. From 2007 to 2010, Mr. Stewart served as Vice President and then Portfolio Company Advisor at Parthenon Capital, a middle market private equity company with expertise in financial, healthcare and business services. Mr. Stewart began his career as a consultant working at both McKinsey & Company (2004-2007) and Deloitte Consulting (1999-2002). Mr. Stewart holds an MBA from Columbia Business School (2004) and a BS in Corporate Finance from University of Minnesota’s Carlson School of Management (1999). We believe Mr. Stewart is well qualified to serve as a member of our board of directors due to his extensive strategic, operational, and management experience.
The past performance of the members of our management team or their affiliates is not a guarantee that we will be able to identify a suitable candidate for our initial business combination or of success with respect to any business combination we may consummate. Mr. Peretz has had management experience with blank check companies or special purpose acquisition companies, including Tribe Capital Growth Corp. I and Tribe Capital Growth Corp. II. Although Tribe Capital Growth Corp. I and Tribe Capital Growth Corp. II are both special purpose acquisition companies, both entities focus on the technology sector rather than the transportation, supply chain and logistics industry. In addition, Tribe Capital Growth Corp. II, as of the date of this prospectus, has not yet consummated its initial public offering. Except for Mr. Peretz, at this time, none of our other officers or directors, our sponsor, nor its respective officers, directors, employees, or affiliates, have had management experience with blank check companies or special purpose acquisition companies in the past. You should not rely on the historical record of the performance of our management or any of their affiliates’ performance as indicative of our future performance.
Our Independent Director and Independent Director Nominees
Our efforts to seek a suitable business combination target will be complemented and augmented by the expertise and network of the relationships of our independent director, Paul P. Jebely, and our independent director nominees, Parizad Olver Parchi and Brad Stewart, each of whom has extensive experience in business and financial matters, as well as a deep understanding of the transportation, supply chain and logistics sector.
For additional information regarding our independent director nominees, see “Management — Officers, Directors and Director Nominees.”
Industry Opportunity
The COVID-19 pandemic has significantly challenged the resilience of global supply chains, putting a signification portion of global companies’ earnings and cash flows at risk. We believe that the pandemic has highlighted the urgency and significance of supply chain innovations, as company executives seek to instill flexibility into their logistics networks and deliver productivity improvements. We believe companies must recognize the fundamental shifts in how customers spend and how transportation and logistics infrastructures should operate differently to meet customer expectations and foster trust and loyalty. The global logistics industry was worth $6.255 trillion in 2020 and is projected to grow at a 4.7% compound annual growth rate from 2020 to 2024 according to Transport Intelligence.1 Multiple macroeconomic trends, such as the globalization of trade, acceleration of e-commerce adoption, rise of Internet-of-Things (IoT) enabled devices, focus on energy efficiency/carbon footprint and emergence of specialty outsourced transportation and logistics providers, are expected to be the driving force of market growth for logistics services providers.
The e-commerce industry relies on exceptionally competent logistics services to manage its supply chains and meet its consumer promises. Since the onset of the COVID-19 pandemic, widespread stay-at-home orders and concerns over the virus have compressed 10 years of adoption of e-commerce into three months, according to McKinsey. The impact of this acceleration is significant to both business-to-business (B2B) and business-to-consumer (B2C) enterprises. As companies prepare for this structural uplift and large influx of online traffic, new technologies and operation innovations are strategically imperative for navigating fulfillment challenges and associated reverse logistics volume.
As global supply chains become increasingly integrated, innovations around logistics automation, big data analytics, and network optimization have gained traction across the industry. Interoperability is playing an increasingly critical role for service providers today. We believe that companies view digital interoperability, through data analytics and information exchanges, as the key enabler of the next-generation supply chain. We believe logistics of tomorrow will heavily rely upon artificial intelligence, autonomous systems, and digitalization to help connect and coordinate for improved visibility, productivity, and predictability. We also believe logistics management via multi-modal transport requires handovers between stakeholders and numerous document exchanges. As global trade volume grows, we anticipate that demand for faster processing and communication across electronic interfaces will follow. We believe that digitally-enabled supply chains can provide real-time tracking of shipments, delivery time prediction, and much higher automation-enabled throughput. In order to remain competitive, we believe transportation service providers must embrace and adopt digital transformation to deliver expected business results.
We intend to source our potential combination opportunities by proactively approaching our extensive network of contacts, including private equity and venture capital sponsors, executives of public and private companies, merger and acquisition advisory firms, investment banks, capital markets desks, lenders and other financial intermediaries. We believe the prior operational and investment experience of our team will give us a competitive advantage when accessing potential initial business combination opportunities. Collectively, our management team and directors have extensive experience in the following areas:
•
Broad experience in both the public and private companies over the last three decades providing guidance on managing a wide range of challenges, including strategy, operations, finance, marketing and regulatory affairs.
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Established networks across the global transportation, supply chain and logistics sectors, providing a deep sourcing network and due diligence acumen.
•
Extensive operating and investing experience and a strong track record of creating shareholder value, with clear focus on operations and organizational alignment with management for progressive growth.
•
Scaling companies with compelling competitive moats and unit economics models through organic and acquisition-based strategic investments.
•
Ability to attract, assess, and develop talented, high performing and resilient management teams, with an emphasis on mentoring and values-based leadership, excellence and integrity.
1
Converted to USD from €5.275 trillion at a rate of 1:1.1858 as of June 30, 2021.
Following the completion of this offering, we intend to begin the process of communicating with the network of relationships of our management team and their affiliates to articulate the parameters for our search for a potential initial business combination target and begin the process of pursuing and reviewing potential opportunities.
Our Acquisition Criteria
Consistent with our business strategy, we have identified the following general criteria and guidelines that we believe are important in evaluating prospective targets for our acquisition opportunities. We intend to use these criteria and guidelines in evaluating initial business combination opportunities, but we may decide to enter into our acquisition with a target business that does not meet any or all of these criteria and guidelines.
•
Asset or Non-Asset Based Companies: Innovative companies with unique assets or intellectual property, disruptive platforms and product offerings, will be at the forefront of our evaluation process. Our management team and our board have extensive operational, commercial and transactional experience with technology-driven companies in our target sectors, and we intend to use these skills to identify market leaders;
•
Defensible Forward Looking Business Model: Companies exposed to attractive trends in an emerging space that will continue to evolve in a post-COVID world, with differentiated technology aimed at solving critical challenges in their areas of focus, efficiency, customer experience and sustainability;
•
Scalable Business with Opportunity to Produce Attractive Financial Returns: Marketability to support significant growth while also driving margin expansion through technological or operational advancements;
•
Significant Opportunity for Near-and Long-Term Growth: Fundamentally sound business that is underperforming its full potential and can benefit from applications and use of modern technology and tools, which can be leveraged in novel and transformative ways;
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Capable and Creative Management Team: Qualified leadership team that is open to mentorship, with a demonstrated track record of driving organic revenue growth and margin improvement;
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Partnership Approach: Companies that will benefit from our management team’s knowledge of industry dynamics, proven collection of operational strategies and tools, access to capital and relationships with key players in target industries and ability to rapidly scale businesses; and
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Value Proposition as a Public Company: Companies that will benefit from being publicly traded and having access to the public capital markets, enhancing their ability to pursue accretive acquisitions, high-return capital projects, and/or strengthen its balance sheet.
These criteria are not intended to be exhaustive. Any evaluation relating to the merits of a particular initial business combination may be based, to the extent relevant, on these general guidelines as well as other considerations, factors and criteria that our management team may deem relevant. In the event that we decide to enter into our initial business combination with a target business that does not meet any or all of the above criteria and guidelines, we intend to disclose that the target business does not meet the above criteria in our shareholder communications related to our initial business combination, which, as discussed in this prospectus, would be in the form of proxy solicitation or tender offer materials that we would file with the SEC.
Other Acquisition Considerations
Members of our management team may directly or indirectly own our ordinary shares or placement units following this offering, and, accordingly, may have a conflict of interest in determining whether a particular target business is an appropriate business with which to effectuate our initial business combination. Further, each of our officers and directors may have a conflict of interest with respect to evaluating a particular business combination if the retention or resignation of any such officers and directors was included by a target business as a condition to any agreement with respect to our initial business combination.
In addition, all of our officers and directors are members of our sponsor. The membership interests not owned by our officers and directors are held by third-party investors that are not affiliated with our management.
Each of our officers and directors presently has, and in the future any of our officers and directors may have additional, fiduciary or contractual obligations to other entities pursuant to which such officer or director is or will be required to present acquisition opportunities to such entity. Accordingly, subject to his or her fiduciary duties under Cayman Islands law, if any of our officers or directors becomes aware of an acquisition opportunity which is suitable for an entity to which he or she has then current fiduciary or contractual obligations, he or she will need to honor his or her fiduciary or contractual obligations to present such acquisition opportunity to such entity, and only present it to us if such entity rejects the opportunity. Our amended and restated memorandum and articles of association provide that, subject to his or her fiduciary duties under Cayman Islands law, no director or officer shall be disqualified or prevented from contracting with the company nor shall any contract or transaction entered into by or on behalf of the company in which any director shall have an interest be liable to be avoided. A director shall be at liberty to vote in respect of any contract or transaction in which he is interested provided that the nature of such interest shall be disclosed at or prior to its consideration or any vote thereon by the board of directors. We do not believe, however, that any fiduciary duties or contractual obligations of our officers or directors would materially undermine our ability to complete our business combination.
Our officers and directors are not prohibited from becoming either a director or officer of any other special purpose acquisition company with a class of securities registered under the Securities Exchange Act of 1934, as amended, or the Exchange Act.
Our Acquisition Process
In evaluating a prospective target business, we intend to conduct a comprehensive due diligence review. That due diligence review may include, among other things, financial statement analysis, document reviews, meetings with the target’s management and other employees, consultations with relevant industry experts, competitors, customers and suppliers, as well as a review of additional information that we will seek to obtain as part of our analysis of a target company.
We are not prohibited from pursuing an initial business combination with a business that is affiliated with our sponsor or a member of our management team. In the event we seek to complete our initial business combination with a business that is affiliated with our sponsor or a member of our management team, we, or a committee of independent and disinterested directors, intend to obtain an opinion from an independent investment banking firm that is a member of the Financial Industry Regulatory Authority (“FINRA”) or an independent accounting firm that our 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.
We currently do not have any specific business combination under consideration. Our officers and directors have neither individually selected nor considered a target business nor have they had any substantive discussions regarding possible target businesses among themselves or with our underwriters or other advisors. Our management team is regularly made aware of potential business opportunities, one or more of which we may desire to pursue for a business combination, but we have not (nor has anyone on our behalf) contacted any prospective target business or had any substantive discussions, formal or otherwise, with respect to a business combination transaction with our company. Additionally, we have not, nor has anyone on our behalf, taken any substantive measure, directly or indirectly, to identify or locate any suitable acquisition candidate for us, nor have we engaged or retained any agent or other representative to identify or locate any such acquisition candidate.
Certain of our directors, director nominees 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 entities. For further information, see “Proposed Business — Our Acquisition Process” in this prospectus.
Initial Business Combination
So long as our securities are then listed on the Nasdaq, our initial business combination must occur with one or more target businesses that together have an aggregate fair market value of at least 80% of the
net assets held in the trust account (excluding the deferred underwriting commissions and taxes payable on the interest earned on the trust account) at the time of signing a definitive agreement in connection with our initial business combination. Our board of directors intends to make the determination as to fair market value of our initial business combination. While we consider it unlikely that our board of directors will not be able to make an independent determination of the fair market value of a target business or businesses, it may be unable to do so if the board of directors is less familiar or experienced with the target business, there is a significant amount of uncertainty as to the value of the target’s assets or prospects, including if such target is at an early stage of development, operations or growth, or if the anticipated transaction involves a complex financial analysis or other specialized skills and the board of directors determines that outside expertise would be helpful or necessary in conducting such analysis. If our board of directors is unable to independently determine the fair market value of the target business or businesses, we intend to obtain an opinion from an independent investment banking firm that is a member of FINRA or an independent accounting firm with respect to the satisfaction of such criteria. Unless such opinion includes material information regarding the valuation of a target business or the consideration to be provided, it is not anticipated that copies of such opinion would be distributed to our shareholders. However, if required under applicable law, any proxy statement that we deliver to shareholders and file with the SEC in connection with a proposed transaction will include such opinion. We have also agreed not to enter into a definitive agreement regarding an initial business combination without the prior consent of our sponsor. Additionally, pursuant to Nasdaq rules, any initial business combination must be approved by a majority of our independent directors.
We anticipate structuring our initial business combination so that the post-business combination company in which our public shareholders own shares will own or acquire 100% of the equity interests or assets of the target business or businesses. We may, however, structure our initial business combination such that the post-business combination company owns or acquires less than 100% of such interests or assets of the target business in order to meet certain objectives of the target management team or shareholders or for other reasons, but we will only complete such business combination if the post-business combination company owns or acquires 50% or more of the outstanding voting securities of the target or otherwise acquires a controlling interest in the target sufficient for it not to be required to register as an investment company under the Investment Company Act of 1940, as amended, which we refer to as the Investment Company Act. Even if the post-business combination company owns or acquires 50% or more of the voting securities of the target, our shareholders prior to the business combination may collectively own a minority interest in the post-business combination company, depending on valuations ascribed to the target and us in the business combination. For example, we could pursue a transaction in which we issue a substantial number of new shares in exchange for all of the outstanding capital stock, shares or other equity interests of a target. In this case, we would acquire a 100% controlling interest in the target. However, as a result of the issuance of a substantial number of new shares, our shareholders immediately prior to our initial business combination could own less than a majority of our 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-business combination 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 the 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. If our securities are not then listed on the Nasdaq for whatever reason, we would no longer be required to meet the foregoing 80% of net assets test.
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.
Corporate Information
Our executive offices are located at 767 Third Avenue, 38th Floor, New York, New York 10017 and our telephone number is (646) 807-8832. Upon completion of this offering, we will maintain a corporate website at http://semperparatusspac.com. The information contained on or accessible through our corporate website or any other website that we may maintain is not deemed to be incorporated by reference in, and is
not considered a 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 decisions whether to invest in our securities.
We are a Cayman Islands exempted company. Exempted companies are Cayman Islands companies conducting business mainly outside the Cayman Islands and, as such, are exempted from complying with certain provisions of the Companies Act. As an exempted company, we have applied for and received a tax exemption undertaking from the Cayman Islands government that, in accordance with Section 6 of the Tax Concessions Act (2018 Revision) of the Cayman Islands, for a period of 30 years from the date of the undertaking, no law which is enacted in the Cayman Islands imposing any tax to be levied on profits, income, gains or appreciations will apply to us or our operations and, in addition, that no tax to be levied on profits, income, gains or appreciations or which is in the nature of estate duty or inheritance tax will be payable (i) on or in respect of our shares, debentures or other obligations or (ii) by way of the withholding in whole or in part of a payment of dividend or other distribution of income or capital by us to our shareholders or a payment of principal or interest or other sums due under a debenture or other obligation of us.
We are also an “emerging growth company”, as defined in Section 2(a) of the Securities Act of 1933, as amended, or 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, or 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 shareholder 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 Class A ordinary shares that are held by non-affiliates equals or exceeds $700 million as of the last business day of our most recently completed second fiscal quarter, and (2) the date on which we have issued more than $1.0 billion in non-convertible debt securities during the prior three-year period. References herein to “emerging growth company” 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 ordinary shares held by non-affiliates exceeds $250 million as of the last business day 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 ordinary shares held by non-affiliates equals or exceeds $700 million as of the last business day of that year’s second fiscal quarter.
After completion of this offering and until the completion of our initial business combination, only holders of our founder shares will have the right to vote on the appointment of directors. As a result, the Nasdaq will consider us to be a “controlled company” within the meaning of the Nasdaq corporate governance standards. Under the Nasdaq corporate governance standards, a company of which more than 50% of the voting power is held by an individual, group or another company is a “controlled company” and may elect not to comply with certain corporate governance requirements. We do not intend to utilize these exemptions and intend to comply with the corporate governance requirements of the Nasdaq, subject to applicable phase-in rules. However, if we determine in the future to utilize some or all of these exemptions, you will not have the same protections afforded to shareholders of companies that are subject to all of the Nasdaq corporate governance requirements.
The Offering
In deciding 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.
30,000,000 units (or 34,500,000 units if the underwriters’ over-allotment option is exercised in full), at $10.00 per unit), each unit consisting of:
•
one Class A ordinary share; and
•
one-half of one redeemable warrant.
Units: “LGSTU”
Class A ordinary shares: “LGST”
Warrants: “LGSTW”
Trading commencement and separation of Class A ordinary shares and warrants
The units are expected to begin trading on or promptly after the date of this prospectus. The Class A ordinary shares and warrants comprising 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 Cantor informs 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 Class A ordinary shares 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 Class A ordinary shares 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 two 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 Class A ordinary shares and warrants is prohibited until we have filed a Current Report on
Form 8-K
In no event will the Class A ordinary shares and warrants be traded separately until we have filed with the SEC a Current Report on Form 8-K that includes an audited balance sheet 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 outstanding before this offering
0
Number outstanding after this offering and the private placement
31,360,000(1)
Ordinary shares:
Number outstanding before this offering
11,983,333(2)(3)
Number outstanding after this offering and the private placement
41,813,333(1)(2)(4)
Warrants:
Number of placement warrants held as part of the placement units to be sold in a private placement simultaneously with this offering
680,000(1)
Number of warrants to be outstanding after this offering and the private placement
15,680,000(1)
Each whole warrant is exercisable to purchase one Class A ordinary share, subject to adjustment as described herein. Only whole warrants are exercisable.
We structured each unit to contain one-half of one redeemable warrant, with each whole warrant exercisable for one Class A ordinary share, as compared to units issued by some other similar blank check companies which contain whole warrants exercisable for one whole share, 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, thus making us, we believe, a more attractive business combination partner for target businesses.
(1)
Assumes the underwriters do not exercise the over-allotment option and the corresponding forfeiture by our sponsor of 1,530,000 founder shares.
(2)
Founder shares are currently classified as Class B ordinary shares, which shares will automatically convert into Class A ordinary shares at the time of our initial business combination or earlier at the option of the holders thereof as described below adjacent to the caption “Founder shares conversion and anti-dilution rights” and in our amended and restated memorandum and articles of association. Such Class A ordinary shares delivered upon conversion will not have any redemption rights or be entitled to liquidating distributions from the trust account if we do not consummate an initial business combination.
(3)
Includes 1,530,000 founder shares that are subject to forfeiture.
(4)
Includes 30,000,000 public shares, 1,360,000 Class A ordinary shares underlying the placement units, and 10,453,333 founder shares, assuming 1,530,000 founder shares have been forfeited.
$11.50 per whole share, subject to adjustment as described herein. In addition, if (x) we issue additional Class A ordinary shares 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 Class A ordinary share (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 initial shareholders or their affiliates, without taking into account any founder shares held by our initial shareholders 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 consummation of our initial business combination (net of redemptions) and (z) the volume weighted average trading price of our Class A ordinary shares 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 adjacent to “Redemption of warrants when the price per Class A ordinary share equals or exceeds $18.00” 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 adjacent to the caption “Redemption of warrants when the price per Class A ordinary share 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
•
twelve 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 Class A ordinary shares 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 Class A ordinary share equals or exceeds $10.00”). 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.
We are not registering the Class A ordinary shares 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 Class A ordinary shares issuable upon exercise of the warrants, to cause such registration statement to become effective and to maintain a current prospectus relating to those Class A ordinary shares until the warrants expire or are redeemed, as specified in the warrant agreement. If a registration statement covering the Class A ordinary shares issuable upon exercise of the warrants is not effective by the later of twelve months from the closing of this offering and the 60th business day after the closing of our initial business combination, warrantholders may, until such time as there is an effective registration statement and during any period when we will have failed to maintain an effective registration statement, exercise warrants on a “cashless basis” in accordance with Section 3(a)(9) of the Securities Act or another exemption. If that exemption, or another exemption, is not available, holders will not be able to exercise their warrants on a cashless basis.
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 Class A ordinary share equals or exceeds $18.00
Once the warrants become exercisable, we may redeem the outstanding warrants:
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in whole and not in part;
•
at a price of $0.01 per warrant;
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upon a minimum of 30 days’ prior written notice of redemption, which we refer to as the “30-day redemption period”; and
•
if, and only if, the last reported sale price, which we refer to as the “closing price”, of our Class A ordinary shares 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 — Warrants — Public Shareholders’ Warrants — Anti-Dilution Adjustments”) 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.
We will not redeem the warrants as described above unless an effective registration statement under the Securities Act covering the Class A ordinary shares issuable upon exercise of the warrants is effective and a current prospectus relating to
those Class A ordinary shares 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.
If we call the warrants for redemption as described above, our management will have the option to require all holders that wish to exercise warrants to do so on a cashless basis. In determining whether to require all holders to exercise their warrants on a cashless basis, our management will consider, among other factors, our cash position, the number of warrants that are outstanding and the dilutive effect on our shareholders of issuing the maximum number of Class A ordinary shares issuable upon the exercise of our warrants. In such event, each holder would pay the exercise price by surrendering the warrants for that number of Class A ordinary shares equal to the lesser of (i) the quotient obtained by dividing (x) the product of the number of Class A ordinary shares underlying the warrants, multiplied by the excess of the fair market value (as defined below) of our Class A ordinary shares over the exercise price of the warrants by (y) the fair market value and (ii) 0.361 per warrant. Please see “Description of Securities — Warrants — Public Shareholders’ Warrants” for additional information.
None of the placement warrants will be redeemable by us so long as such placement warrants are held by our sponsor, Cantor or their permitted transferees.
Redemption of warrants when the price per Class A ordinary share equals or exceeds $10.00
Once the warrants become exercisable, we may redeem the outstanding warrants:
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in whole and not in part;
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at a price of $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 — Warrants — Public Shareholders’ Warrants” based on the redemption date and the fair market value (as defined below) of our Class A ordinary shares except as otherwise described in “Description of Securities — Warrants — Public Shareholders’ Warrants”; and
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if, and only if, the closing price of our Class A ordinary shares equals or exceeds $10.00 per public 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 — Warrants — Public Shareholders’ Warrants — Anti-dilution Adjustments”) on the trading day prior to the date on which we send the notice of redemption to the warrant holders.
The “fair market value” of our Class A ordinary shares for the above purpose shall mean the volume weighted average price of our Class A ordinary shares for the 10 trading days ending on the third trading day prior to 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 Class A ordinary shares per warrant (subject to adjustment).
No fractional Class A ordinary shares 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 Class A ordinary shares to be issued to the holder. Please see the section entitled “Description of Securities — Warrants — Public Shareholders’ Warrants” for additional information.
Underwriter Expression of Interest
Cantor Fitzgerald & Co. has informed us that it, its affiliates, or certain accounts over which it or its affiliates have discretionary authority have expressed an interest in purchasing up to 7.0% of the units to be sold in this offering. However, because indications of interest are not binding agreements or commitments to purchase and are simply expressions of intent, these entities may determine to purchase fewer or no units at all in the offering or may purchase more units than they indicate an interest in purchasing (although all such entities combined have indicated that they will not purchase more than an aggregate of 9.99% of the units offered in this offering). In addition, Cantor may allocate fewer or no units offered in this offering to any of these entities. The underwriters will receive the same underwriting discount on any units purchased by these entities as they will on any other units sold to the public in this offering. If any such entity purchases any units in this offering or otherwise in the open market, it has no obligation to (i) vote the underlying shares in favor of any business combination, (ii) refrain from exercising any redemption rights with respect to any shares underlying the units offered in this offering or (iii) hold any such units or underlying shares beyond the consummation of an initial business combination, if any. Any trading decisions made by any of the foregoing entities will be made by them based on market conditions at the time of the proposed sale or redemption. Cantor’s affiliates will not receive any economic or other interest in our sponsor.
On April 22, 2021, our sponsor paid an aggregate purchase price of $25,000, or approximately $0.0029 per share, to subscribe for an aggregate of 8,625,000 Class B ordinary shares, par value $0.0001. Prior to the initial investment in the company of $25,000 by our sponsor, our company had no assets, tangible or intangible. On August 9, 2021, we effected a dividend of approximately 0.3628 shares for each outstanding Class B ordinary share, such that our sponsor owned an
aggregate of 11,754,150 founder shares, for approximately $0.0021 per share. On October 1, 2021, we effected a dividend of approximately 0.0195 shares for each outstanding Class B ordinary share, such that our sponsor owns an aggregate of 11,983,333 founder shares, for approximately $0.0021 per share. The per share price of the founder shares was determined by dividing the amount contributed to our company by the number of founder shares issued. If we increase or decrease the size of this offering, we will effect a share capitalization or a share surrender or redemption or other appropriate mechanism, as applicable, with respect to our Class B ordinary shares immediately prior to the consummation of this offering in such amount as to maintain the number of founder shares, on an as-converted basis, at 25% of our issued and outstanding ordinary shares upon the consummation of this offering and the issuance of the placement units. Up to 1,530,000 founder shares are subject to forfeiture by our sponsor, depending on the extent to which the underwriters’ over-allotment option is exercised.
In May 2021, our sponsor allocated (i) 25,000 founder shares to each of our independent director and independent director nominees in exchange for the payment of $84, or approximately $0.0034 per share; and (ii) 30,000 founder shares to Mr. Kurzweil in exchange for the payment of $100, or approximately $0.0033 per share. None of these transferred founder shares are subject to forfeiture in the event that the underwriters’ over-allotment option is not exercised in full.
The founder shares are identical to the Class A ordinary shares 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 shareholders and each member of our management team have entered into an agreement with us, pursuant to which they have agreed to (i) waive their redemption rights with respect to their founder shares and public shares in connection with the completion of our initial business combination, (ii) waive their redemption rights with respect to their founder shares and public shares in connection with a shareholder vote to approve an amendment to our amended and restated memorandum and articles of association (A) that would modify the substance or timing of our obligation to provide holders of our Class A ordinary shares the right to have their shares redeemed 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 15 months from the closing of this offering or (B) with
respect to any other provision relating to the rights of holders of our Class A ordinary shares and (iii) waive their rights to liquidating distributions from the trust account with respect to any founder shares and placement shares (but will retain such rights for any public shares) they hold if we fail to consummate an initial business combination within 15 months from the closing of this offering or during any extended time that we have to consummate a business combination beyond 15 months as a result of a shareholder vote to amend our amended and restated memorandum and articles of association (an “Extension Period”) (although the initial shareholders and each member of our management team 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 seek shareholder approval, we will complete our initial business combination only if we obtain the approval of an ordinary resolution under Cayman Islands law, which requires the affirmative vote of a majority of the shareholders who attend and who vote at a quorate general meeting of the company. In such case, our initial shareholders and each member of our management team have agreed to vote their founder shares, public shares, and placement shares in favor of our initial business combination. As a result, in addition to founder shares and placement shares held by our initial shareholders and members of our management team, we would need 9,243,335 shares, or 30.8% (assuming all issued and outstanding shares are voted and the over-allotment option is not exercised), of the 30,000,000 public shares sold in this offering to be voted in favor of an initial business combination in order to have our initial business combination approved. However, assuming only the minimum number of shares representing a quorum (20,906,668 shares or 50.1% of our issued and outstanding shares) are voted, and assuming the over-allotment option is not exercised, no affirmative votes from other public shareholders would be required to approve our initial business combination because our initial shareholders will own 11,663,333 shares in the aggregate (including 10,453,333 founder shares and 1,210,000 placement shares), which number exceeds the 10,453,335 votes (representing a majority of the 20,906,668 shares present and voting) needed to approve the initial business combination.
Upon consummation of this offering, and assuming the over-allotment option is not exercised, our initial shareholders and Cantor will own an aggregate of 11,813,333 shares, or 28.3% of our issued and outstanding shares, including 10,453,333 founder shares and 1,210,000 placement shares held by our initial shareholders and 150,000 placement shares held by Cantor.
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the founder shares will automatically convert into our Class A ordinary shares at the time of our initial business
combination or earlier at the option of the holders thereof as described below adjacent to the caption “Founder shares conversion and anti- dilution rights” and in our amended and restated memorandum and articles of association;
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the founder shares are entitled to registration rights.
Transfer restrictions on founder
shares
Except as described herein, our initial shareholders and each member of our management team have agreed not to transfer, assign or sell any of their founder shares until the earliest of (A) one year after the completion of our initial business combination and (B) subsequent to our initial business combination, (x) if the closing price of our Class A ordinary shares equals or exceeds $12.00 per share (as adjusted for share subdivisions, share capitalizations, 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 on which we complete a liquidation, merger, share exchange or other similar transaction that results in all of our public shareholders having the right to exchange their ordinary shares for cash, securities or other property (except as described herein under the section of this prospectus entitled “Principal Shareholders — Restrictions on Transfers of Founder Shares and Placement Units”). We refer to such transfer restrictions throughout this prospectus as the “lock-up”.
Any permitted transferees would be subject to the same restrictions and other agreements of our initial shareholders and our management team with respect to any founder shares.
Founder shares conversion and anti-dilution rights
The founder shares are designated as Class B ordinary shares and will automatically convert into Class A ordinary shares, which such Class A ordinary shares delivered upon conversion will not have any redemption rights or be entitled to liquidating distributions if we do not consummate an initial business combination, at the time of our initial business combination or earlier at the option of the holders thereof at a ratio such that the number of Class A ordinary shares issuable upon conversion of all founder shares will equal, in the aggregate, on an as-converted basis, 25% of the sum of (i) the total number of ordinary shares issued and outstanding upon completion of this offering, plus (ii) the total number of Class A ordinary shares issued or deemed issued or issuable upon conversion or exercise of any equity-linked securities (as defined herein) or rights issued or deemed issued, by our company in connection with or in relation to the consummation of the initial business combination, excluding any Class A ordinary shares or equity-linked securities exercisable for or convertible into Class A ordinary shares issued, deemed issued, or to be issued, to any seller in the initial business combination and any placement units issued to our sponsor or its affiliates upon conversion of working capital loans. Any conversion of Class B ordinary shares described herein will take effect as a
compulsory redemption of Class B ordinary shares and an issuance of Class A ordinary shares as a matter of Cayman Islands law. In no event will the Class B ordinary shares convert into Class A ordinary shares at a rate of less than one-to-one.
Election of directors; Voting rights
Prior to our initial business combination, only holders of our founder shares will have the right to vote on the appointment of directors. Holders of our public shares will not be entitled to vote on the election of directors during such time. In addition, prior to the completion of an initial business combination, 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 memorandum and articles of association may only be amended by a special resolution passed by not less than 90% of our ordinary share shareholders who attend and vote at our general meeting. With respect to any other matter submitted to a vote of our shareholders, including any vote in connection with our initial business combination, except as required by law, 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.
Our sponsor and Cantor have committed, pursuant to written agreements, to purchase an aggregate of 1,360,000 placement units (or 1,450,000 placement units if the underwriters exercise their over- allotment option in full), at a price of $10.00 per unit ($13,600,000, or $14,500,000 if the underwriters exercise their over-allotment option in full, in the aggregate), in a private placement that will close simultaneously with the closing of this offering. Of those 1,360,000 placement units, our sponsor has agreed to purchase 1,210,000 placement units (or 1,300,000 placement units if the underwriters exercise their over-allotment option in full), and Cantor has agreed to purchase 150,000 (regardless of whether the underwriters’ over- allotment option is exercised in full). If we do not complete our initial business combination within 15 months from the closing of this offering or during any Extension Period, the proceeds of the sale of the placement units held in trust account will be used to fund the redemption of our public shares (subject to the requirements of applicable law) and the placement warrants will expire worthless. The placement warrants included in the placement units will be non-redeemable by us and exercisable on a cashless basis so long as they are held by our sponsor, Cantor or their permitted transferees (see “Description of Securities — Warrants — Placement Warrants”). If the placement warrants are held by holders other than our sponsor, Cantor or their permitted transferees, the 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.
Transfer restrictions on placement
units
The placement units and their component securities will not be transferable, assignable or salable until 30 days after the
completion of our initial business combination, except as described herein under “Principal Shareholders — Transfers of Founder Shares and Placement Units.”
In addition, for as long as placement units are held by Cantor or its designees or affiliates, they will be subject to the lock-up and registration rights limitations imposed by FINRA Rule 5110 and the warrants that are part of the placement units may not be exercised after five years from the effective date of the registration statement of which this prospectus forms a part.
Cashless exercise of placement
warrants
If holders of placement warrants elect to exercise them on a cashless basis, they would pay the exercise price by surrendering their warrants for that number of Class A ordinary shares equal to the quotient obtained by dividing (x) the product of the number of Class A ordinary shares underlying the warrants, multiplied by the excess of the “Sponsor fair market value” (defined below) over the exercise price of the warrants by (y) the Sponsor fair market value. The “Sponsor fair market value” shall mean the average reported closing price of the Class A ordinary shares 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, Cantor or their 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.
None of the placement warrants will be redeemable by us so long as such placement warrants are held by our sponsor, Cantor or their permitted transferees.
Proceeds to be held in trust account
Of the proceeds we will receive from this offering and the sale of the placement units described in this prospectus, $306,000,000, or $351,900,000 if the underwriters’ over-allotment option is exercised in full ($10.20 per unit in either case), will be deposited into a segregated trust account located in the United States with Continental Stock Transfer & Trust Company acting as trustee. The proceeds to be placed in the trust account include $12,000,000, or $14,700,000 if the underwriters’ over-allotment option is exercised in full, in deferred underwriting commissions.
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, our amended and restated memorandum and articles of association, as discussed below and subject to the requirements of law and regulation, will provide that the proceeds from this offering and the sale of the placement units held in the trust account will not be released from the trust account (1) to us, until the completion of our initial business combination, or
(2) to our public shareholders, until the earliest of (a) the completion of our initial business combination, and then only in connection with those Class A ordinary shares that such shareholders properly elected to redeem, subject to the limitations described herein, (b) the redemption of any public shares properly tendered in connection with a shareholder vote to amend our amended and restated memorandum and articles of association (A) to modify the substance or timing of our obligation to provide holders of our Class A ordinary shares the right to have their shares redeemed 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 15 months from the closing of this offering or (B) with respect to any other provision relating to the rights of holders of our Class A ordinary shares and (c) the redemption of our public shares if we have not consummated our business combination within 15 months from the closing of this offering or during any Extension Period, subject to applicable law. Public shareholders who redeem their Class A ordinary shares in connection with a shareholder vote described in clause (b) in the preceding sentence shall not be entitled to funds from the trust account upon the subsequent completion of an initial business combination or liquidation if we have not consummated an initial business combination within 15 months from the closing of this offering or during any Extension Period, with respect to such Class A ordinary shares so redeemed. 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 shareholders.
Anticipated expenses and funding sources
Except as described above with respect to the payment of taxes or to redeem our public shares in connection with an amendment to our amended and restated memorandum and articles of association, unless and until we complete our initial business combination, no proceeds held in the trust account will be available for our use. The proceeds held in the trust account will be invested only in U.S. government treasury obligations 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 which invest only in direct U.S. government treasury obligations. Assuming an interest rate of 0.02% per year, we estimate the interest earned on the trust account will be approximately $61,200 per year; however, we can provide no assurances regarding this amount.
Unless and until we complete our initial business combination, we may pay our expenses only from:
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the portion of the net proceeds of this offering and the sale of the placement units not held in the trust account, which will be approximately $1,100,000 in working capital after the payment of approximately $500,000 in expenses relating to this offering; and
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any loans or additional investments from our sponsor or
its affiliates, although they are under no obligation to advance additional funds to us in such circumstances; provided 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
So long as our securities are then listed on the Nasdaq, our initial business combination must occur with one or more target businesses that together have an aggregate fair market value of at least 80% of the net assets held in the trust account (excluding the deferred underwriting commissions and taxes payable on the interest earned on the trust account) at the time of signing a definitive agreement in connection with our initial business combination.
Our board of directors intends to make the determination as to fair market value of our initial business combination. While we consider it unlikely that our board of directors will not be able to make an independent determination of the fair market value of a target business or businesses, it may be unable to do so if the board of directors is less familiar or experienced with the target business, there is a significant amount of uncertainty as to the value of the target’s assets or prospects, including if such target is at an early stage of development, operations or growth, or if the anticipated transaction involves a complex financial analysis or other specialized skills and the board of directors determines that outside expertise would be helpful or necessary in conducting such analysis. If our board of directors is unable to independently determine the fair market value of the target business or businesses, we intend to obtain an opinion from an independent investment banking firm that is a member of FINRA or an independent accounting firm with respect to the satisfaction of such criteria. Unless such opinion includes material information regarding the valuation of a target business or the consideration to be provided, it is not anticipated that copies of such opinion would be distributed to our shareholders. However, if required under applicable law, any proxy statement that we deliver to shareholders and file with the SEC in connection with a proposed transaction will include such opinion. If our securities are not then listed on the Nasdaq for whatever reason, we would no longer be required to meet the foregoing 80% of net assets test. We have also agreed not to enter into a definitive agreement regarding an initial business combination without the prior consent of our sponsor. Additionally, pursuant to Nasdaq rules, any initial business combination must be approved by a majority of our independent directors.
We may structure our initial business combination such that the post- transaction company owns or acquires less than 100% of such interests or assets of the target business in order to meet certain objectives of the target management team or shareholders or for other reasons. However, we will complete our initial business combination only if the post-business combination company in which our public shareholders own
shares will own or acquire 50% or more of the outstanding voting securities of the target or is otherwise not required to register as an investment company under the Investment Company Act. Even if the post-business combination company owns or acquires 50% or more of the voting securities of the target, our shareholders prior to our initial business combination may collectively own a minority interest in the post-business combination company, depending on valuations ascribed to the target and us in the 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-business combination 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 the 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 and we will treat the target businesses together as the initial business combination for purposes of a tender offer or for seeking shareholder approval, as applicable.
Permitted purchases and other transactions with respect to our securities
If we seek shareholder approval of our initial business combination and we do not conduct redemptions in connection with our initial business combination pursuant to the tender offer rules, our sponsor, management team, advisors or 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. 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, management team, advisors or 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. If they engage in such transactions, they will be restricted from making any such purchases when they are in possession of any material nonpublic information not disclosed to the seller or if such purchases are prohibited by Regulation M under the Securities Exchange Act of 1934, as amended, or 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. Any such purchases will be reported pursuant to Section 13 and Section 16 of the Exchange Act to the extent
such purchasers are subject to such reporting requirements. See “Proposed Business — Permitted Purchases and Other Transactions with Respect to Our Securities” for a description of how our sponsor, management team, advisors and their respective affiliates will select which shareholders to purchase securities from in any private transaction.
The purpose of any such transaction could be to (1) vote in favor of the business combination and thereby increase the likelihood of obtaining shareholder approval of the 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. Any such purchases of our securities 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 Class A ordinary shares or public warrants may be reduced and the number of beneficial holders of our securities may be reduced, which may make it difficult to maintain or obtain the quotation, listing or trading of our securities on a national securities exchange.
Redemption rights for public shareholders upon completion of our initial business combination
We will provide our public shareholders with the opportunity to redeem all or a portion of their Class A ordinary 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 earned on the funds held in the trust account and not previously released to us to pay our taxes, if any, 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 $10.20 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. Further, we will not proceed with redeeming our public shares, even if a public shareholder has properly elected to redeem its shares, if a business combination does not close.
Our initial shareholders and each member of our management team, have entered into an 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.
Limitations on redemptions
Our amended and restated memorandum and articles of association will provide 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 either prior to or upon consummation of an initial business combination (so that we do not then become subject to the SEC’s “penny stock” rules). However, a greater net tangible asset or cash requirement may be contained in the agreement relating to our initial business combination. For example, the proposed business combination may require: (i) cash consideration to be paid to the target or its owners, (ii) cash to be transferred to the target for working capital or other general corporate purposes or (iii) the retention of cash to satisfy other conditions in accordance with the terms of the proposed business combination. Furthermore, although we will not redeem shares in an amount that would cause our net tangible assets to fall below $5,000,001, we do not have a maximum redemption threshold based on the percentage of shares sold in this offering, as many blank check companies do. In the event the aggregate cash consideration we would be required to pay for all Class A ordinary 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 Class A ordinary shares submitted for redemption will be returned to the holders thereof, and we instead may search for an alternate business combination or seek to revise the terms of such business combination. In addition, if accepting all properly submitted redemption requests in connection with an amendment we seek to make to our amended and restated memorandum and articles of association would cause our net tangible assets to be less than $5,000,001, we would not proceed with such amendment or the related redemption of our public shares at such time.
Manner of conducting redemptions
We will provide our public shareholders with the opportunity to redeem all or a portion of their public shares upon the completion of our initial business combination either (i) in connection with a general meeting called to approve the business combination or (ii) by means of a tender offer. The decision as to whether we will seek shareholder 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 shareholder approval under applicable law or stock exchange listing requirement. Asset acquisitions and share purchases would not typically require shareholder approval, while direct mergers with our company and any transactions where we issue more than 20% of our outstanding ordinary shares or seek to amend our amended and restated memorandum and articles of association would typically require shareholder approval. We
currently intend to conduct redemptions in connection with a shareholder vote unless shareholder approval is not required by applicable law or stock exchange listing requirement or we choose to conduct redemptions pursuant to the tender offer rules of the SEC for business or other reasons.
If we hold a shareholder vote to approve our initial business combination 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.
If we seek shareholder approval, we will complete our initial business combination only if we obtain the approval of an ordinary resolution under Cayman Islands law, which requires the affirmative vote of a majority of the shareholders who attend and who vote at a quorate general meeting of the company. Our initial shareholders and our management team who hold founder shares or public shares will count towards this quorum and, pursuant to the terms of an agreement entered into with us, have agreed to vote their founder shares, any public shares, and placement shares held by them, in favor of our initial business combination. We expect that at the time of any shareholder vote relating to our initial business combination, our initial shareholders and members of our management team will own at least 27.89% of our outstanding ordinary shares entitled to vote thereon. As a result, in addition to shares held by our initial shareholders and members of our management team, we would need 9,243,335 shares, or 30.8% (assuming all issued and outstanding shares are voted and the over-allotment option is not exercised) of the 30,000,000 public shares sold in this offering to be voted in favor of an initial business combination in order to have our initial business combination approved. However, assuming only the minimum number of shares representing a quorum (20,906,668 shares or 50.1% of our issued and outstanding shares) are voted, and assuming the over-allotment option is not exercised, no affirmative votes from other public shareholders would be required to approve our initial business combination because our initial shareholders will own 11,663,333 shares in the aggregate (including 10,453,333 founder shares and 1,210,000 placement shares), which number exceeds the 10,453,335 votes (representing a majority of the 20,906,668 shares being voted) needed to approve the initial business combination.
Upon consummation of this offering, and assuming the over-allotment option is not exercised, our initial shareholders and Cantor will own an aggregate of 11,813,333 shares, or 28.3% of our issued and outstanding shares, including 10,453,333 founder shares and 1,210,000 placement shares held by our initial shareholders and 150,000 placement shares held by Cantor. Each public shareholder may elect to redeem their public shares irrespective of whether they vote for or
against the proposed initial business combination or vote at all. Our amended and restated memorandum and articles of association will require that at least five days’ notice be given of any such general meeting.
If we conduct redemptions pursuant to the tender offer rules of the SEC, we will, pursuant to our amended and restated memorandum and articles of association:
•
conduct the redemptions pursuant to Rule 13e-4 and Regulation 14E of the Exchange Act, which regulate issuer tender offers; and
•
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 Class A ordinary shares 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 shareholders not tendering more than the number of public shares we are permitted to redeem. If public shareholders tender more shares than we have offered to purchase, we will withdraw the tender offer and not complete such initial business combination.
Limitation on redemption rights of shareholders holding more than 15% of the shares sold in this offering if we hold a shareholder vote
Notwithstanding the foregoing redemption rights, if we seek shareholder approval of our initial business combination and we do not conduct redemptions in connection with our initial business combination pursuant to the tender offer rules, our amended and restated memorandum and articles of association will provide that a public shareholder, together with any affiliate of such shareholder or any other person with whom such shareholder 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 shareholders 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, our sponsor or our management team to purchase their
shares at a significant premium to the then- current market price or on other undesirable terms. Absent this provision, a public shareholder 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, our sponsor or our management team at a premium to the then-current market price or on other undesirable terms. By limiting our shareholders’ 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 shareholders 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 shareholders’ ability to vote all of their shares (including all shares held by those shareholders that hold more than 15% of the shares sold in this offering) for or against our initial business combination.
Release of funds in trust account on closing of our initial business combination
On the completion of our initial business combination, the funds held in the trust account will be disbursed directly by the trustee or released to us to pay amounts due to any public shareholders who properly exercise their redemption rights as described above adjacent to the caption “Redemption rights for public shareholders 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 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 post-transaction 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 memorandum and articles of association will provide that we will have only 15 months from the closing of this offering (or such extended time beyond 15 months as a result of a shareholder vote to amend our amended and restated memorandum and articles of association) to consummate our initial business combination. If we have not consummated an initial business combination within 15 months from the closing of this offering or during any Extension Period, we will: (i) cease all operations except for the purpose of winding up; (ii) as promptly as reasonably
possible but not more than ten business days thereafter, redeem the public shares, at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the trust account, including interest earned on the funds held in the trust account and not previously released to us to pay our taxes, if any (less up to $100,000 of interest to pay dissolution expenses), divided by the number of the then-outstanding public shares, which redemption will completely extinguish public shareholders’ rights as shareholders (including the right to receive further liquidation distributions, if any); and (iii) as promptly as reasonably possible following such redemption, subject to the approval of our remaining shareholders and our board of directors, liquidate and dissolve, subject in each case to our obligations under Cayman Islands law to provide for claims of creditors and the requirements of other applicable law. There will be no redemption rights or liquidating distributions with respect to our warrants, which will expire worthless if we fail to consummate an initial business combination within 15 months from the closing of this offering or during any Extension Period.
Our initial shareholders and each member of our management team have entered into an 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 and placement shares (but will retain such rights for any public shares) they hold if we fail to consummate an initial business combination within 15 months from the closing of this offering or during any Extension Period (although our initial shareholders, and each member of our management team, 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).
The underwriters have agreed to waive their rights to their deferred underwriting commission held in the trust account in the event we do not consummate an initial business combination within 15 months from the closing of this offering or during any Extension Period 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 initial shareholders and each member of our management team have agreed, pursuant to an agreement with us, that they will not propose any amendment to our amended and restated memorandum and articles of association (A) that would modify the substance or timing of our obligation to provide holders of our Class A ordinary shares the right to have their shares redeemed 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 15 months from the closing of this offering or (B) with respect to any other provision relating to the rights of holders of our Class A ordinary shares; unless we provide our public shareholders with the opportunity to redeem their Class A
ordinary 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 earned on the funds held in the trust account and not previously released to us to pay our taxes, if any, divided by the number of the then-outstanding public shares, subject to the limitations described above adjacent to the caption “Limitations on redemptions.” For example, our board of directors may propose such an amendment if it determines that additional time is necessary to complete our initial business combination. In such event, we will conduct a proxy solicitation and distribute proxy materials pursuant to Regulation 14A of the Exchange Act seeking shareholder approval of such proposal and, in connection therewith, provide our public shareholders with the redemption rights described above upon shareholder approval of such amendment. This redemption right shall apply in the event of the approval of any such amendment, whether proposed by our sponsor, any member of our management team or any other person. 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.
Our amended and restated memorandum and articles of association will provide that, if we wind up for any other reason prior to the consummation of our initial business combination, we will follow the foregoing procedures with respect to the liquidation of the trust account as promptly as reasonably possible but not more than ten business days thereafter, subject to applicable Cayman Islands law.
Limited payments to insiders
There will be no finder’s fees, reimbursements or cash payments made by us to our sponsor, our management team or 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 placement units, in each case held in the trust account, prior to the completion of our initial business combination:
•
repayment of a promissory note in an aggregate principal amount of up to $300,000 made to us by our sponsor to cover offering- related and organizational expenses;
•
payments of $10,000 per month to an affiliate of our sponsor for office space and administrative and support services;
•
reimbursement for any out-of-pocket expenses related to identifying, investigating, negotiating and completing an initial business combination;
•
payment to Cantor or its affiliates of fees for any financial advisory or other similar investment banking services provided to our company, and reimbursement of Cantor or any such affiliate for any out-of-pocket expenses incurred by Cantor or any such affiliate in connection with the performance of such services; and
•
repayment of loans which may be made by our sponsor or an affiliate of our sponsor, if any, to finance transaction costs in connection with an intended initial business combination. Up to $1,500,000 of any such loans may be convertible into units of the post-business combination entity at a price of $10.00 per unit at the option of the lender. The units would be identical to the placement units. Except for the foregoing, the terms of such additional loans, if any, have not been determined and no written agreements exist with respect to such loans.
Prior to the effectiveness of this registration statement, we will establish and maintain an audit committee, which will be composed entirely of independent directors. Among its responsibilities, the audit committee will review on a quarterly basis all payments that were made by us to our sponsor, any member of our management team or their respective affiliates and monitor compliance with 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.”
Our sponsor beneficially owns substantially all of our outstanding ordinary shares prior to the consummation of this offering. In addition, there may be situations in which members of our management team or sponsor have obligations or interests that actually or potentially conflict with our interests. These conflicts may not be resolved in our favor and, as a result, we may be denied certain investment opportunities or otherwise disadvantaged in some situations by the obligations or interests of our management team. For example, certain members of our management team presently have, and any of them in the future may have, additional fiduciary or contractual duties to other entities. Our management team is also not prohibited from sponsoring, investing or otherwise becoming involved with, any other special purpose acquisition companies, including in connection with their initial business combinations, prior to us completing our initial business combination. A special purpose acquisition company sponsored by an affiliate of our sponsor or with certain members of our management team also serving on its management team could pursue a business combination opportunity in the same or similar businesses or industries as us, the pursuit of which could create an actual or potential conflict of interest relating to what would otherwise be an opportunity for us. As a result, if any member of our management team becomes aware of a business combination opportunity which is suitable for an entity to which he or she has then-current fiduciary or contractual obligations, then, subject to any applicable fiduciary duties under Cayman Islands law, he or she will need to honor such fiduciary or contractual obligations to present such business combination opportunity to such entity, and only
present it to us if such entities reject the opportunity and he or she determines to present the opportunity to us. If these other entities decide to pursue any such opportunity, we may be precluded from pursuing it.
Our amended and restated memorandum and articles of association will provide that, to the fullest extent permitted by applicable law: (i) no individual serving as a director or an officer shall have any duty, except to the extent expressly assumed by contract, to refrain from engaging directly or indirectly in the same or similar business activities or lines of business as us; and (ii) we renounce any interest or expectancy in, or in being offered an opportunity to participate in, any potential transaction or matter which may be a corporate opportunity offered to any director or officer, on the one hand, and us, on the other.
Our sponsor has agreed that it will be liable to us if and to the extent any claims by (A) a third-party (other than our independent auditors) for services rendered or products sold to us, or (B) a prospective target business with which we have discussed entering into a transaction agreement, reduce the amounts in the trust account to below the lesser of (i) $10.20 per public share and (ii) 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 $10.20 per public share due to reductions in the value of the trust assets, in each case net of the interest that may be withdrawn to pay our tax obligations. Such liabilities will not apply to any claims by a third-party or prospective target business that executed a waiver of any and all rights to seek access to the trust account nor will it apply 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. However, we have neither asked our sponsor to reserve for such indemnification obligations nor have we independently verified whether our sponsor has sufficient funds to satisfy its indemnity obligations, and we believe that our sponsor’s only assets are securities of our company. Therefore, we cannot assure you that our sponsor would be able to satisfy those obligations.
Risks
Summary of Risk Factors
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” of this prospectus. Such risks include, but are not limited to, the following:
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Your only opportunity to affect the investment decision regarding a potential business combination may be limited to the exercise of your right to redeem your shares from us for cash.
•
If we seek shareholder approval of our initial business combination, our initial shareholders, and each member of our management team, have agreed to vote their founder shares in favor of such initial business combination, regardless of how our public shareholders vote.
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The ability of our public shareholders to redeem their shares for cash may make our financial condition unattractive to potential business combination targets, which may make it difficult for us to enter into a business combination with a target.
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The requirement that we consummate an initial business combination within 15 months after the closing of this offering or during an Extension Period 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 shareholders.
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The ability of our public shareholders to exercise redemption rights with respect to a large number of our shares may not allow us to complete the most desirable business combination or optimize our capital structure.
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If we seek shareholder approval of our initial business combination, our sponsor, management team, advisors and their respective affiliates may elect to purchase public shares or warrants, which may influence a vote on a proposed business combination and reduce the public “float” of our Class A ordinary shares or public warrants.
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If a shareholder 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.
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You will not have any rights or interests in funds from the trust account, except under certain limited circumstances. Therefore, to liquidate your investment, you may be forced to sell your public shares or warrants, potentially at a loss.
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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 shareholder 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 shareholders are deemed to hold in excess of 15% of our Class A ordinary shares, you would lose the ability to redeem all such shares in excess of 15% of our Class A ordinary shares.
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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 a business combination. If we have not consummated our initial business combination within the required time period, our public shareholders
may receive only approximately $10.20 per public share, or less in certain circumstances, on the liquidation of our trust account and our warrants will expire worthless.
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If the net proceeds of this offering and the sale of the placement units not being held in the trust account are insufficient to allow us to operate for the 15 months following the closing of this offering, it could limit the amount available to fund our search for a target business or businesses and our ability to complete our initial business combination, and we will depend on loans from our sponsor or its affiliates to fund our search and to complete our initial business combination.
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If we have not consummated an initial business combination within 15 months from the closing of this offering, our public shareholders may be forced to wait beyond such 15 months before redemption from our trust account.
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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 key personnel could negatively impact the operations and profitability of our post-transaction business.
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Because our initial shareholders 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.
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Our initial shareholders control a substantial interest in us and thus may exert a substantial influence on actions requiring a shareholder vote, potentially in a manner that you do not support.
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We are a recently 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 independent registered public accounting firm’s report contains an explanatory paragraph that expresses substantial doubt about our ability to continue as a “going concern” absent the consummation of this offering.
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Past performance by our sponsor, our management team or their respective affiliates may not be indicative of future performance of an investment in us.
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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 the status of debt and equity markets.
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Because we are incorporated under the laws of the Cayman Islands, you may face difficulties in protecting your interests, and your ability to protect your rights through the U.S. federal courts may be limited.
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The other risks and uncertainties discussed in “Risk Factors” and elsewhere in this prospectus.
SUMMARY FINANCIAL DATA
The following table summarizes the relevant financial data for our business and should be read with our financial statements, which are included in this prospectus. We have not had any significant operations to date, so only balance sheet data is presented.
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|
|
June 30, 2021
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|
|
Balance Sheet Data:
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|
|
Actual
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|
|
As Adjusted
|
|
|
Working capital (deficiency)
|
|
|
|
$ |
(133,209) |
|
|
|
|
$ |
1,113,701 |
|
|
|
Total assets
|
|
|
|
$ |
146,910 |
|
|
|
|
$ |
307,113,701 |
|
|
|
Total liabilities
|
|
|
|
$ |
133,209 |
|
|
|
|
$ |
12,850,000 |
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|
|
Value of Class A ordinary shares subject to possible redemption
|
|
|
|
$ |
0 |
|
|
|
|
$ |
306,000,000 |
|
|
|
Shareholders’ equity
|
|
|
|
$ |
13,701 |
|
|
|
|
$ |
(11,736,299) |
|
|
If no business combination is completed within 15 months from the closing of this offering, the proceeds 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 pay our franchise and income taxes as well as expenses relating to the administration of the trust account (less up to $100,000 of interest released to us to pay dissolution expenses), will be used to fund the redemption of our public shares. Our sponsor, 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 such time period.
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 Search for, Consummation of, or Inability to Consummate, a Business Combination and Post-Business Combination
Your only opportunity to affect the investment decision regarding a potential business combination may be limited to the exercise of your right to redeem your shares from us for cash.
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. Since our board of directors may complete a business combination without seeking shareholder approval, public shareholders may not have the right or opportunity to vote on the business combination, unless we seek such shareholder approval. Accordingly, your only opportunity to affect the investment decision regarding a potential business combination may be limited to exercising your redemption rights within the period of time (which will be at least 20 business days) set forth in our tender offer documents mailed to our public shareholders in which we describe our initial business combination.
If we seek shareholder approval of our initial business combination, our initial shareholders, and each member of our management team, have agreed to vote their founder shares in favor of such initial business combination, regardless of how our public shareholders vote.
Our initial shareholders will own, on an as-converted basis, 27.89% of our outstanding ordinary shares immediately following the completion of this offering.
Our initial shareholders also may from time to time purchase Class A ordinary shares prior to our initial business combination. Our amended and restated memorandum and articles of association will provide that, if we seek shareholder approval, we will complete our initial business combination only if we obtain the approval of an ordinary resolution under Cayman Islands law, which requires the affirmative vote of a majority of the shareholders who attend and who vote at a quorate general meeting of the company. As a result, in addition to shares held by our initial shareholders and members of our management team, we would need 9,243,335 shares, or 30.8% (assuming all issued and outstanding shares are voted and the
over-allotment option is not exercised) of the 30,000,000 public shares sold in this offering to be voted in favor of an initial business combination in order to have our initial business combination approved. However, assuming only the minimum number of shares representing a quorum (20,906,668 shares or 50.1% of our issued and outstanding shares) are voted, and assuming the over-allotment option is not exercised, no affirmative votes from other public shareholders would be required to approve our initial business combination because our initial shareholders will own 11,663,333 shares in the aggregate (including 10,453,333 founder shares and 1,210,000 placement shares), which number exceeds the 10,453,335 votes (representing a majority of the 20,906,668 shares present and voting) needed to approve the initial business combination.
Upon consummation of this offering, and assuming the over-allotment option is not exercised, our initial shareholders and Cantor will own an aggregate of 11,813,333 shares, or 28.3% of our issued and
outstanding shares, including 10,453,333 founder shares and 1,210,000 placement shares held by our initial shareholders and 150,000 placement shares held by Cantor.
Accordingly, if we seek shareholder approval of our initial business combination, the agreement by our initial shareholders and each member of our management team to vote their founder shares, public shares, and placement shares, in favor of our initial business combination will increase the likelihood that we will receive the requisite shareholder approval for such initial business combination. In addition, we have agreed not to enter into a definitive agreement regarding an initial business combination without the prior consent of our sponsor.
Concentration of ownership in our sponsor may prevent other investors from influencing significant corporate decisions or adversely affect the trading price of our ordinary shares.
Our sponsor will own a significant amount of our outstanding ordinary shares. As a result, our sponsor could exercise significant influence over us and be able to exercise significant influence over all matters requiring shareholder approval (although we have no knowledge of any affiliation or other agreement or arrangement, as to voting of our securities or otherwise, among any such persons).This potential concentration of influence could be disadvantageous to other shareholders with interests different from those of our sponsor. In addition, this potential significant concentration of share ownership may adversely affect the trading price of our ordinary shares because investors often perceive disadvantages in owning shares in companies with principal shareholders and might make it more difficult to complete a business combination with targets that would prefer to enter into a transaction with a SPAC with less concentrated ownership.
The ability of our public shareholders to redeem their shares for cash may make our financial condition unattractive to potential business combination targets, which may make it difficult for us to enter into a business combination with a target.
We may seek to enter into a business combination transaction agreement with a prospective target that requires as a closing condition that we have a minimum net worth or a certain amount of cash. If too many public shareholders exercise their redemption rights, we would not be able to meet such closing condition and, as a result, would not be able to proceed with the business combination. Furthermore, 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 either prior to or upon consummation of an initial business combination (so that we do not then become subject to the SEC’s “penny stock” rules). Consequently, if accepting all properly submitted redemption requests would cause our net tangible assets to be less than $5,000,001 either prior to or upon consummation of an initial business combination 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 or seek to revise the terms of such business combination. Prospective targets will be aware of these risks and, thus, may be reluctant to enter into a business combination transaction with us.
The ability of our public shareholders to exercise redemption rights with respect to a large number of our shares may not allow us to complete the most desirable business combination or optimize our capital structure.
At the time we enter into an agreement for our initial business combination, we will not know how many shareholders may exercise their redemption rights, and therefore will need to structure the transaction based on our expectations as to the number of shares that will be submitted for redemption. If a large number of shares are submitted for redemption, we may need to restructure the transaction to reserve a greater portion of the cash in the trust account or arrange for additional 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 amount of the deferred underwriting commissions payable to the underwriters will not be adjusted for any shares that are redeemed in connection with an initial business combination. The per-share amount we will distribute to shareholders who properly exercise their redemption rights will not be reduced by the deferred underwriting commissions
and, after such redemptions, the amount held in trust will continue to reflect our obligation to pay the entire deferred underwriting commissions.
The ability of our public shareholders to exercise redemption rights with respect to a large number of our shares could increase the probability that our initial business combination would be unsuccessful and that you would have to wait for liquidation in order to redeem your shares.
If our initial business combination agreement requires us to use a portion of the cash in the trust account to pay the purchase price, or requires us to have a minimum amount of cash at closing, the probability that our initial business combination would be unsuccessful is increased. If our initial business combination is unsuccessful, you would not receive your pro rata portion of the funds in the trust account until we liquidate the trust account. If you are in need of immediate liquidity, you could attempt to sell your shares in the open market; however, at such time our shares may trade at a discount to the pro rata amount per share in the trust account. In either situation, you may suffer a material loss on your investment or lose the benefit of funds expected in connection with our redemption until we liquidate or you are able to sell your shares in the open market.
The requirement that we consummate an initial business combination within 15 months after the closing of this offering or during an Extension Period 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 shareholders.
Any potential target business with which we enter into negotiations concerning a business combination will be aware that we must consummate an initial business combination within 15 months from the closing of this offering or during an Extension Period. Consequently, such target business may obtain leverage over us in negotiating a business combination, knowing that if we do not complete our initial business combination with that particular target business, we may be unable to complete our initial business combination with any target business. This risk will increase as we get closer to the time frame described above. In addition, we may have limited time to conduct due diligence and may enter into our initial business combination on terms that we would have rejected upon a more comprehensive investigation.
Our shareholders may not be afforded an opportunity to vote on our proposed initial business combination, which means we may complete our initial business combination even though a majority of our shareholders do not support such a combination.
We may choose not to hold a shareholder vote before we complete our initial business combination if the business combination would not require shareholder approval under applicable law or stock exchange listing requirement. For instance, if we were seeking to acquire a target business where the consideration we were paying in the transaction was all cash, we would typically not be required to seek shareholder approval to complete such a transaction. Except for as required by applicable law or stock exchange listing requirement, the decision as to whether we will seek shareholder approval of a proposed business combination or will allow shareholders to sell their shares to us in a tender offer will be made by us, solely in our discretion, and will be based on a variety of factors, such as the timing of the transaction and whether the terms of the transaction would otherwise require us to seek shareholder approval. Accordingly, we may complete our initial business combination even if holders of a majority of our issued and outstanding ordinary shares do not approve of the business combination we complete.
Please see the section entitled “Proposed Business — Shareholders May Not Have the Ability to Approve Our Initial Business Combination” for additional information.
We may not be able to complete our initial business combination within the prescribed time frame, in which case we would cease all operations except for the purpose of winding up and we would redeem our public shares and liquidate, in which case our public shareholders may only receive $10.20 per share, or less than such amount in certain circumstances, and our warrants will expire worthless.
Our sponsor, officers and directors have agreed that we must complete our initial business combination within 15 months from the closing of this offering (or during an Extension Period, if applicable). 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. For example, the outbreak of COVID-19 continues to grow both in the United States 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 continued outbreak of COVID-19 may negatively impact businesses we may seek to acquire. If we have not completed our initial business combination within such 15-month period (or Extension Period, if applicable), 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, subject to lawfully available funds therefor, 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 pay our taxes (less up to $100,000 of interest to pay dissolution expenses), divided by the number of then outstanding public shares, which redemption will completely extinguish public shareholders’ rights as shareholders (including the right to receive further liquidating distributions, if any), subject to applicable law; and (iii) as promptly as reasonably possible following such redemption, subject to the approval of our remaining shareholders and our board of directors, dissolve and liquidate, subject in each case to our obligations under Cayman Islands law to provide for claims of creditors and the requirements of other applicable law, in which case our public shareholders may only receive $10.20 per share, or less than such amount 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 shareholders may be less than $10.20 per share” and other risk factors herein.
Because our trust account will initially contain $10.20 per Class A ordinary share, public shareholders may be more incentivized to redeem their public shares at the time of our initial business combination.
Our trust account will initially contain $10.20 per Class A ordinary share. This is different than some other similarly structured blank check companies for which the trust account will only contain $10.00 per Class A ordinary share. As a result of the additional funds that could be available to public shareholders upon redemption of public shares, our public shareholders may be more incentivized to redeem their public shares and not to hold those Class A ordinary shares through our initial business combination. A higher percentage of redemptions by our public shareholders could make it more difficult for us to complete our initial business combination.
As the number of special purpose acquisition companies increases, there may be more competition to find an attractive target for an initial business combination. This could increase the costs associated with completing our initial business combination and may result in our inability to find a suitable target for our initial business combination.
In recent years, the number of special purpose acquisition companies that have been formed has increased substantially. Many companies have entered into business combinations with special purpose acquisition companies, and there are still many special purpose acquisition companies seeking targets for their initial business combination, as well as many additional special purpose acquisition companies currently in registration. As a result, at times, fewer attractive targets may be available, and it may require more time, effort and resources to identify a suitable target for 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 target 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 a suitable target for and/or complete our initial business combination.
Changes in the market for directors and officers liability insurance could make it more difficult and more expensive for us to negotiate and complete an initial business combination.
In recent months, the market for directors and officers liability insurance for special purpose acquisition companies has changed. Fewer insurance companies are offering quotes for directors and officers liability coverage, the premiums charged for such policies have generally increased and the terms of such policies have generally become less favorable. There can be no assurance that these trends will not continue.
The increased cost and decreased availability of directors and officers liability insurance could make it more difficult and more expensive for us to negotiate an initial business combination. In order to obtain directors and officers liability insurance or modify its coverage as a result of becoming a public company, the post-business combination entity might need to incur greater expense, accept less favorable terms or both. However, any failure to obtain adequate directors and officers liability insurance could have an adverse impact on the post-business combination’s ability to attract and retain qualified officers and directors.
In addition, even after we were to complete an initial business combination, our directors and officers could still be subject to potential liability from claims arising from conduct alleged to have occurred
prior to the initial business combination. As a result, in order to protect our directors and officers, the
post-business combination entity may need to purchase additional insurance with respect to any such claims (“run-off insurance”). The need for run-off insurance would be an added expense for the post-business combination entity and could interfere with or frustrate our ability to consummate an initial business combination on terms favorable to our investors.
We may issue our shares to investors in connection with our initial business combination at a price that may be less than the prevailing market price of our shares at that time.
In connection with our initial business combination, we may issue shares to investors in private placement transactions (so-called PIPE transactions) at a price which is generally approximately $10.00. The purpose of such issuances would be to enable us to provide sufficient liquidity to the post-business combination entity. The price of the shares we issue may therefore be less, and potentially significantly less, than the market price for our shares at such time.
We may engage the underwriters or their respective affiliates to provide additional services to us after this offering, which may include acting as financial advisor in connection with an initial business combination or as placement agent in connection with a related financing transaction. The underwriters are entitled to receive deferred commissions that will be released from the trust only on a completion of an initial business combination. These financial incentives may cause the underwriters to have potential conflicts of interest in rendering any such additional services to us after this offering, including, for example, in connection with the sourcing and consummation of an initial business combination.
We may engage the underwriters or their respective affiliates to provide additional services to us after this offering, including, for example, identifying potential targets, providing financial advisory services, acting as a placement agent in a private offering or arranging debt financing. We may pay the underwriters or their respective affiliates fair and reasonable fees or other compensation that would be determined at that time in an arm’s length negotiation; provided that no agreement will be entered into with the underwriters or their respective affiliates and no fees or other compensation for such services will be paid to the underwriters or their respective affiliates prior to the date that is 90 days from the date of this prospectus, unless such payment would not be deemed underwriting compensation in connection with this offering. The underwriters are also entitled to receive deferred commissions that are conditioned on the completion of an initial business combination. The fact that the underwriters or their respective affiliates’ financial interests are tied to the consummation of a business combination transaction may give rise to potential conflicts of interest in providing any such additional services to us, including potential conflicts of interest in connection with the sourcing and consummation of an initial business combination.
If we seek shareholder approval of our initial business combination, our sponsor, management team, advisors and their respective affiliates may elect to purchase public shares or warrants, which may influence a vote on a proposed business combination and reduce the public “float” of our Class A ordinary shares or public warrants.
If we seek shareholder approval of our initial business combination and we do not conduct redemptions in connection with our initial business combination pursuant to the tender offer rules, our sponsor,
management team, advisors or 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, although they are under no obligation to do so. However, they have no current commitments, plans or intentions to engage in such transactions and have not formulated any terms or conditions for any such transactions. None of the funds in the trust account will be used to purchase public shares or warrants in such transactions.
In the event that our sponsor, management team, advisors or their respective affiliates purchase shares in privately negotiated transactions from public shareholders who have already elected to exercise their redemption rights, such selling shareholders would be required to revoke their prior elections to redeem their shares. The purpose of any such transaction could be to (1) vote in favor of the business combination and thereby increase the likelihood of obtaining shareholder approval of the 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. Any such purchases of our securities 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 Class A ordinary shares or public warrants may be reduced and the number of beneficial holders of our securities may be reduced, which may make it difficult to maintain or obtain the quotation, listing or trading of our securities on a national securities exchange. Any such purchases will be reported pursuant to Section 13 and Section 16 of the Exchange Act to the extent such purchasers are subject to such reporting requirements. See “Proposed Business — Permitted Purchases and Other Transactions with Respect to Our Securities” for a description of how our sponsor, management team, advisors or their affiliates will select which shareholders to purchase securities from in any private transaction.
If a shareholder 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 proxy rules or tender offer rules, as applicable, when conducting redemptions in connection with our initial business combination. Despite our compliance with these rules, if a shareholder fails to receive our proxy solicitation or tender offer materials, as applicable, such shareholder may not become aware of the opportunity to redeem its shares. In addition, the proxy solicitation or tender offer 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 redeem or tender public shares. In the event that a shareholder fails to comply with these procedures, its shares may not be redeemed. See “Proposed Business — Business Strategy — Effecting Our Initial Business Combination — Tendering Share 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. Therefore, to liquidate your investment, you may be forced to sell your public shares or warrants, potentially at a loss.
Our public shareholders will be entitled to receive funds from the trust account only upon the earliest to occur of: (i) our completion of an initial business combination, and then only in connection with those Class A ordinary shares that such shareholders properly elected to redeem, subject to the limitations described herein, (ii) the redemption of any public shares properly tendered in connection with a shareholder vote to amend our amended and restated memorandum and articles of association (A) to modify the substance or timing of our obligation to provide holders of our Class A ordinary shares the right to have their shares redeemed 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 15 months from the closing of this offering or (B) with respect to any other provision relating to the rights of holders of our Class A ordinary shares, and (iii) the redemption of our public shares if we have not consummated an initial business combination within 15 months from the closing of this offering or during any Extension Period, subject to applicable law and as further described herein. Public shareholders who redeem their Class A ordinary shares in connection with a shareholder vote described in clause (ii) in the preceding sentence shall not be entitled to funds from the
trust account upon the subsequent completion of an initial business combination or liquidation if we have not consummated an initial business combination within 15 months from the closing of this offering or during any Extension Period, with respect to such Class A ordinary shares so redeemed. In no other circumstances will a public shareholder have any right or interest of any kind 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 or warrants, potentially at a loss.
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 placement units 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 United States securities laws. However, because we will have net tangible assets in excess of $5,000,000 upon the completion of this offering and the sale of the placement units and will file a Current Report on Form 8-K, including an audited balance sheet 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 shareholder 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 shareholders are deemed to hold in excess of 15% of our Class A ordinary shares, you would lose the ability to redeem all such shares in excess of 15% of our Class A ordinary shares.
If we seek shareholder approval of our initial business combination and we do not conduct redemptions in connection with our initial business combination pursuant to the tender offer rules, our amended and restated memorandum and articles of association will provide that a public shareholder, together with any affiliate of such shareholder or any other person with whom such shareholder is acting in concert or as a “group” (as defined under Section 13 of the Exchange Act), would 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 shareholders’ 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. 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.
Because of our limited resources and the significant competition for business combination opportunities it may be more difficult for us to complete a business combination. If we have not consummated our initial business combination within the required time period, our public shareholders may receive only approximately $10.20 per public share, or less in certain circumstances, on the liquidation of our trust account, 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. 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 placement units, our ability to compete with respect to the acquisition of certain target businesses that are sizable will be limited by our available financial resources. These inherent competitive limitations give others an advantage in pursuing the acquisition of certain target businesses. Furthermore, we are obligated to offer holders of our public shares the right to redeem their shares for cash at the time of our initial business combination in conjunction with a shareholder vote or via a tender offer. Target companies will be aware that this may 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. See “— If third parties bring claims against us, the proceeds held in the trust account could be reduced and the per-share redemption amount received by shareholders may be less than $10.20 per public share” and other risk factors herein.
If the net proceeds of this offering and the sale of the placement units not being held in the trust account are insufficient to allow us to operate for the 15 months following the closing of this offering, it could limit the amount available to fund our search for a target business or businesses and our ability to complete our initial business combination, and we will depend on loans from our sponsor or its affiliates to fund our search and to complete our initial business combination.
Of the net proceeds of this offering and the sale of the placement units, only approximately $1,100,000 will be available to us initially outside the trust account to fund our working capital requirements. 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 15 months following the closing of this offering; however, we cannot assure you that our estimate is accurate, and our sponsor or its affiliates are under no obligation to advance additional funds to us. Of the funds available to us, we may 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 with respect to a particular proposed business combination, although we do not have any current intention to do so.
In the event that our offering expenses exceed our estimate of $500,000, we may fund such excess with funds not to be held in the trust account. In such case, unless funded by the proceeds of loans that may be available from our sponsor or its affiliates, 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 $500,000, the amount of funds we intend to be held outside the trust account would increase by a corresponding amount. The amount held in the trust account will not be impacted as a result of such increase or decrease. If we are required to seek additional capital, we would need to borrow funds from our sponsor or its affiliates or other third parties to operate or may be forced to liquidate. Neither our sponsor nor its affiliates is under any obligation to advance additional funds to us. Any such advances may be repaid only from funds held outside the trust account or from funds released to us upon completion of our initial business combination. Up to $1,500,000 of loans that may be made available from our sponsor or its affiliates may be convertible into units of the post-business combination entity at a price of $10.00 per unit at the option of the lender. The units would be identical to the placement units. Prior to the completion of our initial business combination, we do not expect to seek loans from parties other than our sponsor or its affiliates, 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 have not consummated our initial business combination within the required time period because we do not have sufficient funds available to us, we would be forced to cease operations and liquidate the trust account. Consequently, our public shareholders may only receive an estimated $10.20 per public share, or possibly less, on our redemption of our public 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 shareholders may be less than $10.20 per public 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, or incur 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 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-transaction debt financing. Accordingly, any holders who choose to retain their securities following the initial business combination could suffer a reduction in the value of their securities. Such holders are unlikely to have a remedy for such reduction in value.
If third parties bring claims against us, the proceeds held in the trust account could be reduced and the per-share redemption amount received by shareholders may be less than $10.20 per public 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, 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 shareholders, there is no guarantee that such parties will execute such agreements or, even if such parties execute such agreements, that such parties would be prevented from bringing claims against the trust account for, among other things, 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 only enter into an agreement with a third-party that has not executed a waiver 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 significantly superior to those of other consultants that would agree to execute a waiver or in cases where management is unable to find a service provider willing to execute a waiver. In addition, the underwriters of this offering and our independent registered public accounting firm will not execute agreements with us waiving such claims to the monies held in the trust account. Further, there is no guarantee that any 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 consummated an initial business combination within 15 months from the closing of this offering or during any Extension 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 ten years following redemption. Accordingly, the per-share redemption amount received by public shareholders could be less than the $10.20 per public share initially held in the trust account, due to claims of such creditors.
Subject to the immediately following paragraph, our sponsor has agreed that it will be liable to us if and to the extent any claims by (A) a third-party (other than our independent auditors) for services rendered or products sold to us, or (B) a prospective target business with which we have discussed entering into a transaction agreement, reduce the amounts in the trust account to below the lesser of (i) $10.20 per public share and (ii) 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 $10.20 per public share due to reductions in the value of the trust assets, in each case net of the interest that may be withdrawn to pay our tax obligations, provided that such liability will not apply to any claims by a third-party or prospective target business that executed a waiver of any and all rights to seek access to the trust account nor will it apply 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.
However, we have not asked our sponsor to reserve for such indemnification obligations, nor have we independently verified whether our sponsor has sufficient funds to satisfy its indemnity obligations and we believe that our sponsor’s only assets are securities of our company. Therefore, we cannot assure you that our sponsor would be able to satisfy those 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 $10.20 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 share in connection with any redemption of your public shares. None of our officers, directors or other affiliates will indemnify us for claims by third parties including, without limitation, claims by vendors and prospective target businesses. Recourse against us and our sponsor will be limited as noted herein; there will not be any recourse against any of our affiliates other than sponsor as noted herein.
If we have not consummated an initial business combination within 15 months from the closing of this offering, our public shareholders may be forced to wait beyond such 15 months before redemption from our trust account.
If we have not consummated an initial business combination within 15 months from the closing of this offering and no Extension Period has been provided for on the terms described elsewhere in this prospectus, the proceeds 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 pay our taxes, if any (less up to $100,000 of interest to pay dissolution expenses), will be used to fund the redemption of our public shares, as further described herein. Any redemption of public shareholders from the trust account will be effected automatically by function of our amended and restated memorandum and articles of association prior to any voluntary winding up. If we are required to wind up, liquidate the trust account and distribute such amount therein, pro rata, to our public shareholders, as part of any liquidation process, such winding up, liquidation and distribution must comply with the applicable provisions of the Companies Act. In that case, investors may be forced to wait beyond 15 months from the closing of this offering 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 memorandum and articles of association, and only then in cases where investors have sought to redeem their Class A ordinary shares. Only upon our redemption or any liquidation will public shareholders be entitled to distributions if we do not complete our initial business combination and do not amend certain provisions of our amended and restated memorandum and articles of association. Our amended and restated memorandum and articles of association will provide that, if we wind up for any other reason prior to the consummation of our initial business combination, we will follow the foregoing procedures with respect to the liquidation of the trust account as promptly as reasonably possible but not more than ten business days thereafter, subject to applicable Cayman Islands law.
Because we are neither limited to evaluating a target business in a particular industry sector nor have we selected 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.
We may pursue business combination opportunities in any industry, sector, including, but not limited to the transportation, supply chain and logistics industry, or geographic area, except that we will not, under our amended and restated memorandum and articles of association, 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 a development stage entity. Although our officers and directors 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 ultimately prove to be more favorable to investors than a direct investment, if such opportunity were available, in a business combination target. Accordingly, any holders who choose to retain their securities following the initial business combination could suffer a reduction in the value of their securities. Such holders are unlikely to have a remedy for such reduction in value.
We may seek acquisition opportunities in industries or sectors which may or may not be outside of our management’s area of expertise.
We will consider a business combination outside of our management’s area of expertise if a business combination target is presented to us and we determine that such candidate offers an attractive acquisition opportunity for our company. Although our management will endeavor to evaluate the risks inherent in any particular business combination target, we cannot assure you that we will adequately ascertain or assess all of the significant risk factors. We also cannot assure you that an investment in our units will not ultimately prove to be less favorable to investors in this offering than a direct investment, if an opportunity were available, in a business combination target. 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 holders who choose to retain their securities following the initial business combination could suffer a reduction in the value of their securities. Such holders are unlikely to have a remedy for such reduction in value.
Because we intend to seek a business combination with a target business in the transportation, supply chain and logistics sector, we expect our future operations to be subject to risks associated with the transportation, supply chain and logistics sector or related businesses.
Business combinations with transportation, supply chain and logistics or related businesses may involve special considerations and risks. If we complete our initial business combination with a transportation, supply chain and logistics technology or related business, we will be subject to the following risks, among others, any of which could be detrimental to us and the business we acquire:
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The outbreak and spread of the novel strain of coronavirus COVID-19 may have a significant impact on us, as well as on the operations, financial performance and liquidity of many of the customers of potential target businesses.
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The transportation, supply chain and logistics industry is rapidly evolving. We expect to continue to face significant competition, which could materially adversely affect us.
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Changes in our relationships with any of the significant customers of potential target businesses, including the loss or reduction in business from one or more of them, could have a material adverse effect on us.
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Increased security requirements could impose substantial costs on us and we could be the target of an attack or have a security breach, which could materially adversely affect us.
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Severe weather or other natural or manmade disasters could materially adversely affect us.
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We are exposed to the effects of changing fuel and energy prices, including gasoline, diesel and jet fuel, and interruptions in supplies of these commodities.
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We may be required to make significant capital and other investments in our business, and we may not be able to do so based on our operations and financial condition or at a level to remain competitive with competitors that have greater financial resources than us.
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Increasingly complex and stringent laws, regulations and policies could materially increase our operating costs.
Any of the foregoing could have an adverse impact on our operations following a business combination.
Although we have identified general criteria 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 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.
Although we have identified general criteria for evaluating prospective target businesses, it is possible that a target business with which we enter into our initial business combination will not have all of these positive attributes. If we complete our initial business combination with a target that does not meet some or all of these guidelines, such combination may not be as successful as a combination with a business that does meet all of our general criteria. In addition, if we announce a prospective business combination with a target that does not meet our general criteria, a greater number of shareholders may exercise their redemption rights, which may make it difficult for us to meet any closing condition with a target business that requires us to have a minimum net worth or a certain amount of cash. In addition, if shareholder approval of the transaction is required by applicable law or stock exchange listing requirements, or we decide to obtain shareholder approval for business or other reasons, it may be more difficult for us to attain shareholder approval of our initial business combination if the target business does not meet our general criteria.
We are not required to obtain an opinion from an independent investment banking firm that is a member of FINRA or an independent accounting firm unless we complete our initial business combination with an affiliated entity, and 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 from an independent investment banking firm that is a member of FINRA or an independent accounting firm that the price we are paying is fair to our company from a financial point of view. If no opinion is obtained, our shareholders 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 proxy solicitation or tender offer materials, as applicable, related to our initial business combination.
Because we must furnish our shareholders 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 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 statements in time for us to disclose such statements in accordance with federal proxy rules and complete our initial business combination within the prescribed time frame.
Our limited resources could be depleted in researching acquisitions that are not completed, which could materially adversely affect subsequent attempts to locate and acquire or merge with another business.
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 would 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 consummated our initial business combination within the required time period, our public shareholders may receive only approximately $10.20 per public share, or less in certain circumstances, on the liquidation of our trust account, and our warrants will expire worthless.
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 would we be required to comply with the independent registered public accounting firm attestation requirement on our internal controls 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 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.
We may have a limited ability to assess the management of a prospective target business and, as a result, we may effectuate 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 business’s management, therefore, may prove to be incorrect and such management may lack the skills, qualifications or abilities we suspected. Should the target business’s management not possess the skills, qualifications or abilities necessary to manage a public company, the operations and profitability of the post-transaction business may be negatively impacted. Accordingly, any holders who choose to retain their securities following the initial business combination could suffer a reduction in the value of their securities. Such holders are unlikely to have a remedy for such reduction in value.
We may issue notes or other debt securities, or otherwise incur substantial debt, to complete a business combination, which may adversely affect our leverage and financial condition and thus negatively impact the value of our shareholders’ investment in us.
Although we have no commitments as of the date of this prospectus to issue any notes or other debt securities, or to otherwise incur outstanding debt following this offering, we may choose to incur substantial debt to complete our initial business combination. We have agreed that we will not incur any indebtedness unless we have obtained from the lender a waiver of any right, title, interest or claim of any kind in or to the monies held in the trust account. As such, no issuance of debt will affect the per-share amount available for redemption from the trust account. Nevertheless, the incurrence of debt could have a variety of negative effects, including:
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default and foreclosure on our assets if our operating revenues after an initial business combination are insufficient to repay our debt obligations;
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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;
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our immediate payment of all principal and accrued interest, if any, if the debt is payable on demand;
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our inability to obtain necessary additional financing if the debt contains covenants restricting our ability to obtain such financing while the debt is outstanding;
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our inability to pay dividends on our Class A ordinary shares;
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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 our Class A ordinary shares if declared, expenses, capital expenditures, acquisitions and other general corporate purposes;
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limitations on our flexibility in planning for and reacting to changes in our business and in the industry in which we operate;
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increased vulnerability to adverse changes in general economic, industry and competitive conditions and adverse changes in government regulation; and
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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.
We may only be able to complete one business combination with the proceeds of this offering and the sale of the placement units, 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 placement units will provide us with up to $294,000,000 (or $337,200,000 if the underwriters’ over-allotment option is exercised in full) that we may use to complete our initial business combination (after taking into account $12,000,000, or $14,700,000 if the over-allotment option is exercised in full, of deferred underwriting commissions being held in the trust account).
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 may need or desire 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.
We may seek business combination opportunities with a high degree of complexity that require significant operational improvements, which could delay or prevent us from achieving our desired results.
We may seek business combination opportunities with large, highly complex companies that we believe would benefit from operational improvements. While we intend to implement such improvements, to the extent that our efforts are delayed or we are unable to achieve the desired improvements, the business combination may not be as successful as we anticipate.
To the extent we complete our initial business combination with a large complex business or entity with a complex operating structure, we may also be affected by numerous risks inherent in the operations of the business with which we combine, which could delay or prevent us from implementing our strategy. Although our management team will endeavor to evaluate the risks inherent in a particular target business and its operations, we may not be able to properly ascertain or assess all of the significant risk factors until we complete our initial business combination. If we are not able to achieve our desired operational improvements, or the improvements take longer to implement than anticipated, we may not achieve the gains that we anticipate. Furthermore, some of these risks and complexities may be outside of our control and leave us with no ability to control or reduce the chances that those risks and complexities will adversely impact a target business. Such a combination may not be as successful as a combination with a smaller, less complex organization.
We do not have a specified maximum redemption threshold. The absence of such a redemption threshold may make it possible for us to complete our initial business combination with which a substantial majority of our shareholders do not agree.
Our amended and restated memorandum and articles of association do 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 either prior to or upon consummation of an initial business combination (so that we do not then become subject to the SEC’s “penny stock” rules). As a result, we may be able to complete our initial business combination even though a substantial majority of our public shareholders do not agree with the transaction and have redeemed their shares or, if we seek shareholder 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, management team, advisors or any of their respective affiliates. In the event the aggregate cash consideration we would be required to pay for all Class A ordinary 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, all Class A ordinary shares submitted for redemption will be returned to the holders thereof, and we instead may search for an alternate business combination or seek to revise the terms of such business combination.
In order to effectuate an initial business combination, blank check companies have, in the recent past, amended various provisions of their charters and other governing instruments, including their warrant agreements. We cannot assure you that we will not seek to amend our amended and restated memorandum and articles of association or governing instruments in a manner that will make it easier for us to complete our initial business combination that some of our holders 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 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. Amending our amended and restated memorandum and articles of association will require at least a special resolution of our shareholders as a matter of Cayman Islands law, meaning it has been approved by either (i) holders of at least two-thirds of our ordinary shares (or any higher threshold specified in our company’s amended and restated memorandum and articles of association) who attend and vote at a quorate general meeting of our company or (ii) if so authorized by our amended and restated memorandum and articles of association, by a unanimous written resolution of all of our company’s shareholders entitled to vote at a general meeting. Our amended and restated memorandum and articles of association will provide that any of its provisions (other than amendments relating to provisions governing the election or removal of directors prior to our initial business combination, which will require the approval of holders of at least 90% of our ordinary shares attending and voting at a quorate general meeting) may be amended if approved either by holders of at least two-thirds of our ordinary share shareholders who attend and vote at a general meeting (i.e., the lowest threshold permissible under Cayman Islands law) or by a unanimous written resolution of all of our shareholders entitled to vote at a general meeting.
Amending our warrant agreement will require a vote of holders of at least 50% of the public warrants and, solely with respect to any amendment to the terms of the placement warrants or any provision of the warrant agreement with respect to the placement warrants, 50% of the number of the then outstanding placement warrants. In addition, our amended and restated memorandum and articles of association will require us to provide our public shareholders with the opportunity to redeem their public shares for cash if we propose an amendment to our amended and restated memorandum and articles of association (A) that would modify the substance or timing of our obligation to provide holders of our Class A ordinary shares the right to have their shares redeemed 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 15 months from the closing of this offering or (B) with respect to any other provision relating to the rights of holders of our Class A ordinary shares. 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.
We cannot assure you that we will not seek to amend our amended and restated memorandum and articles of association or governing instruments or extend the time to consummate an initial business combination in order to effectuate our initial business combination.
The provisions of our amended and restated memorandum and articles of association that relate to the rights of holders of our Class A ordinary shares (and corresponding provisions of the agreement governing the release of funds from our trust account) may be amended with the approval of a special resolution which requires the approval of the holders of at least two-thirds of our ordinary share shareholders who attend and vote at a quorate general meeting of the company, 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 memorandum and articles of association to facilitate the completion of an initial business combination that some of our holders may not support.
Some other blank check companies have a provision in their charter which prohibits the amendment of certain of its provisions, including those which relate to the rights of a company’s shareholders, without approval by a certain percentage of the company’s shareholders. In those companies, amendment of these provisions typically requires approval by between 90% and 100% of the company’s shareholders. Our amended and restated memorandum and articles of association will provide that any of its provisions related to the
rights of holders of our Class A ordinary shares (including the requirement to deposit proceeds of this offering and the placement of units into the trust account and not release such amounts except in specified circumstances, and to provide redemption rights to public shareholders as described herein) may be amended if approved by special resolution, meaning the affirmative vote of holders of at least two-thirds
of our shares entitled to vote thereon who attend and vote in person or by proxy at a quorate general meeting of the company, and corresponding provisions of the trust agreement governing the release of funds from our trust account may be amended if approved by holders of at least 65% of our ordinary shares; provided that the provisions of our amended and restated memorandum and articles of association governing the election or removal of directors prior to our initial business combination may only be amended by a special resolution passed by not less than 90% of our ordinary share shareholders who attend and vote at a quorate general meeting. Our initial shareholders and their permitted transferees, who will collectively beneficially own, on an as-converted basis, 25% of our Class A ordinary shares upon the closing of this offering (excluding the placement shares underlying the placement units and assuming they do not purchase any units in this offering), may participate in any vote to amend our amended and restated memorandum and articles of association and/or trust agreement and will have the discretion to vote in any manner they choose; provided that our initial shareholders and each member of our management team have entered into an agreement with us, pursuant to which they have agreed to waive their redemption rights with respect to their founder shares and public shares in connection with a shareholder vote to approve an amendment to our amended and restated memorandum and articles of association (A) that would modify the substance or timing of our obligation to provide holders of our Class A ordinary shares the right to have their shares redeemed 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 15 months from the closing of this offering or (B) with respect to any other provision relating to the rights of holders of our Class A ordinary shares. As a result, we may be able to amend the provisions of our amended and restated memorandum and articles of association which govern our pre-business combination behavior more easily than some other blank check companies, and this may increase our ability to complete a business combination with which you do not agree. Our shareholders may pursue remedies against us for any breach of our amended and restated memorandum and articles of association.
Our initial shareholders and each member of our management team have agreed, pursuant to agreements with us, that they will not propose any amendment to our amended and restated memorandum and articles of association (A) that would modify the substance or timing of our obligation to provide holders of our Class A ordinary shares the right to have their shares redeemed 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 15 months from the closing of this offering or (B) with respect to any other provision relating to the rights of holders of our Class A ordinary shares, unless we provide our public shareholders with the opportunity to redeem their Class A ordinary 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 earned on the funds held in the trust account and not previously released to us to pay our taxes, if any, divided by the number of the then-outstanding public shares. Our shareholders 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 or our management team for any breach of these agreements. As a result, in the event of a breach, our shareholders would need to pursue a shareholder derivative action, subject to applicable law.
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 placement units will be sufficient to allow us to complete our initial business combination, because we have not yet selected any prospective target business we cannot ascertain the capital requirements for any particular transaction. If the net proceeds of this offering and the sale of the placement units 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 shareholders 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. The current economic environment may make it difficult for companies to obtain acquisition financing. 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. If we have not consummated our initial business combination within the required time period, our public shareholders may receive only approximately $10.20 per public share, or less in certain circumstances, on the liquidation of our trust account, and our warrants will expire worthless. 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 officers, directors or shareholders is required to provide any financing to us in connection with or after our initial business combination.
Risks Relating to our Securities
The 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 have our units listed on the Nasdaq on or promptly after the date of this prospectus and our Class A ordinary shares and warrants listed on or promptly after their date of separation. 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, our securities may not be listed on the Nasdaq in the future or prior to our initial business combination.
If the Nasdaq delists our securities from trading on its exchange and we are not able to list our securities on another national securities exchange, we expect our 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 ordinary shares are a “penny stock” which will require brokers trading in our Class A ordinary shares 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 our Class A ordinary shares and warrants will be listed on the Nasdaq, our units, Class A ordinary shares and warrants will qualify as covered securities under the 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 blank check companies, other than the State of Idaho, 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 the Nasdaq, our securities would not qualify as covered securities under the statute and we would be subject to regulation in each state in which we offer our securities.
The securities in which we invest the proceeds held in the trust account could bear a negative rate of interest, which could reduce the interest income available for payment of taxes or reduce the value of the assets held in trust such that the per share redemption amount received by shareholders may be less than $$10.20 per share.
The net proceeds of this offering and certain proceeds from the sale of the placement units, in the amount of $306,000,000, will be held in an interest-bearing trust account. The proceeds held in the trust
account may only be invested in direct U.S. Treasury obligations having a maturity of 185 days or less, or in certain money market funds which invest only in direct U.S. Treasury obligations. While short-term U.S. 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 of very low or negative yields, the amount of interest income (which we may withdraw to pay income taxes, if any) would be reduced. In the event that we are unable to complete our initial business combination, our public shareholders are entitled to receive their pro-rata share of the proceeds held in the trust account, plus any interest income. If the balance of the trust account is reduced below $306,000,000 as a result of negative interest rates, the amount of funds in the trust account available for distribution to our public shareholders may be reduced below $10.20 per share.
We are not registering the Class A ordinary shares 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. If the issuance of the shares upon exercise of warrants is not registered, qualified or exempt from registration or qualification, the holder of such warrant will not be entitled to exercise such warrant and such warrant may have no value and expire worthless.
We are not registering the Class A ordinary shares 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 for the registration under the Securities Act of the Class A ordinary shares issuable upon exercise of the warrants and thereafter will use our commercially reasonable efforts to cause the same to become effective within the later of twelve months from the closing of this offering and 60 business days following our initial business combination and to maintain a current prospectus relating to the Class A ordinary shares issuable upon exercise of the warrants, until the expiration of the warrants in accordance with the provisions of the warrant agreement. 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 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, we will be required to permit holders to exercise their warrants on a cashless basis. 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 foregoing, if a registration statement covering the Class A ordinary shares issuable upon exercise of the warrants is not effective within a specified period following the consummation of our initial business combination, warrantholders may, until such time as there is an effective registration statement and during any period when we shall have failed to maintain an effective registration statement, exercise warrants on a cashless basis pursuant to the exemption provided by Section 3(a)(9) of the Securities Act, provided that such exemption is available. If that exemption, or another exemption, is not available, holders will not be able to exercise their warrants on a cashless basis. 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 there is no exemption 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 will 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 Class A ordinary shares included in the units. If and when the warrants become redeemable by us, we may not exercise our redemption right if the issuance of ordinary shares upon exercise of the warrants is not exempt from registration or qualification under applicable state blue sky laws or we are unable to effect such registration or qualification. There may be a circumstance where an exemption from registration exists for holders of our placement warrants to exercise their warrants while a
corresponding exemption does not exist for holders of the warrants included as part of units sold in this offering. In such an instance, our sponsor and its transferees (which may include our directors and executive officers) would be able to sell the ordinary shares underlying their warrants while holders of our public warrants would not be able to exercise their warrants and sell the underlying ordinary shares. We will use our commercially reasonable efforts to register or qualify such ordinary shares under the blue sky laws of the state of residence in those states in which the warrants were offered by us in this offering. However, there may be instances in which holders of our public warrants may be unable to exercise such public warrants but holders of our placement warrants may be able to exercise such placement warrants.
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 compliance with other rules and regulations that we are currently not subject to.
In order not to be regulated as an investment company under the Investment Company Act, unless we can qualify for an exclusion, we must ensure that we are engaged primarily in a business other than investing, reinvesting or trading of securities and that our activities do not include investing, reinvesting, owning, holding or trading “investment securities” constituting more than 40% of our total assets (exclusive of U.S. government securities and cash items) on an unconsolidated basis. Our business will be to identify and complete a business combination and thereafter to operate the post-transaction business or assets for the long term. We do not plan to buy businesses or assets with a view to resale or profit from their resale. We do not plan to buy unrelated businesses or assets or to be a passive investor.
We do not believe that our anticipated principal activities will subject us to the Investment Company Act. To this end, the proceeds held in the trust account may only be invested in United States “government securities” within the meaning of Section 2(a)(16) of the Investment Company Act having a maturity of 185 days or less or in money market funds meeting certain conditions under Rule 2a-7 promulgated under the Investment Company Act which invest only in direct U.S. government treasury obligations. Pursuant to the trust agreement, the trustee is not permitted to invest in other securities or assets. By restricting the investment of the proceeds to these instruments, and by having a business plan targeted at acquiring and growing businesses for the long term (rather than on buying and selling businesses in the manner of a merchant bank or private equity fund), we intend to avoid being deemed an “investment company” within the meaning of the Investment Company Act. This offering is not intended for persons who are seeking a return on investments in government securities or investment securities. The trust account is intended as a holding place for funds pending the earliest to occur of either: (i) the completion of our initial business combination; (ii) the redemption of any public shares properly tendered in connection with a shareholder vote to amend our amended and restated memorandum and articles of association (A) to modify the substance or timing of our obligation to provide holders of our Class A ordinary shares the right to have their shares redeemed 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 15 months from the closing of this offering or (B) with respect to any other provision relating to the rights of holders of our Class A ordinary shares; or (iii) absent our completing an initial business combination within 15 months from the closing of this offering or during any Extension Period, our return of the funds held in the trust account to our public shareholders
as part of our redemption of the public shares. If we do not invest the proceeds as discussed above, we may be deemed to be subject to 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 our initial business combination. If we have not consummated our initial business combination within the required time period, our public shareholders may receive only approximately $10.20 per public share, or less in certain circumstances, on the liquidation of our trust account, and our warrants will expire worthless.
Holders of Class A ordinary shares will not be entitled to vote on any election of directors we hold prior to our initial business combination.
Prior to our initial business combination, only holders of our founder shares will have the right to vote on the appointment of directors. Holders of our public shares will not be entitled to vote on the election of directors during such time. In addition, prior to our initial business combination, holders of a majority of our founder shares may remove a member of the board of directors for any reason. Accordingly, you may not have any say in the management of our company prior to the consummation of an initial business combination.
The grant of registration rights to our initial shareholders and the underwriters 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 our Class A ordinary shares.
Pursuant to an agreement to be entered into on or prior to the closing of this offering, our initial shareholders, the underwriters, and their permitted transferees can demand that we register the resale of the Class A ordinary shares into which founder shares are convertible, the placement units and the Class A ordinary shares issuable upon exercise of the placement warrants, and warrants that may be issued upon conversion of working capital loans and the Class A ordinary shares issuable upon conversion of such warrants. 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 our Class A ordinary shares. In addition, the existence of the registration rights may make our initial business combination more costly or difficult to conclude. This is because the shareholders 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 our securities that is expected when the securities owned by our sponsor, the underwriters or their permitted transferees are registered for resale.
We may issue additional Class A ordinary shares or preference shares to complete our initial business combination or under an employee incentive plan after completion of our initial business combination. We may also issue Class A ordinary shares upon the conversion of the founder shares 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 memorandum and articles of association. Any such issuances would dilute the interest of our shareholders and likely present other risks.
Our amended and restated memorandum and articles of association will authorize the issuance of up to 200,000,000 Class A ordinary shares, par value $0.0001 per share, 20,000,000 Class B ordinary shares, par value $0.0001 per share, and 1,000,000 preference shares, par value $0.0001 per share. Immediately after this offering, there will be 170,000,000 and 9,546,667 (assuming in each case that the underwriters have not exercised their over-allotment option) authorized but unissued Class A ordinary shares and Class B ordinary shares, respectively, available for issuance which amount does not take into account shares reserved for issuance upon exercise of outstanding warrants or shares issuable upon conversion of the Class B ordinary shares, if any. The Class B ordinary shares will automatically convert into Class A ordinary shares (which such Class A ordinary shares delivered upon conversion will not have any redemption rights or be entitled to liquidating distributions from the trust account if we fail to consummate an initial business combination) at the time of our initial business combination or earlier at the option of the holders thereof as described herein and in our amended and restated memorandum and articles of association. Immediately after this offering, there will be no preference shares issued and outstanding.
We may issue a substantial number of additional Class A ordinary shares or preference shares to complete our initial business combination or under an employee incentive plan after completion of our
initial business combination. We may also issue Class A ordinary shares in connection with our redeeming the warrants as described in “Description of Securities — Warrants — Public Shareholders’ Warrants” or upon conversion of the Class B ordinary shares at a ratio greater than one-to-one at the time of our initial business combination as a result of the anti-dilution provisions as set forth herein. However, our amended and restated memorandum and articles of association will provide, among other things, that prior to the consummation of our initial business combination, we may not issue additional shares that would entitle the holders thereof to (i) receive funds from the trust account or (ii) vote as a class with our public shares (a) on our initial business combination or on any other proposal presented to shareholders prior to or in connection with the completion of an initial business combination or (b) to approve an amendment to our amended and restated memorandum and articles of association to (x) extend the time we have to consummate a business combination beyond 15 months from the closing of this offering or (y) amend the foregoing provisions. These provisions of our amended and restated memorandum and articles of association, like all provisions of our amended and restated memorandum and articles of association, may be amended with a special resolution of our shareholders as a matter of Cayman Islands law. The issuance of additional ordinary or preference shares:
•
may significantly dilute the equity interest of investors in this offering, which dilution would increase if the anti-dilution provisions in the Class B ordinary shares resulted in the issuance of Class A ordinary shares on a greater than one-to-one basis upon conversion of the Class B ordinary shares;
•
may subordinate the rights of holders of Class A ordinary shares if preference shares are issued with rights senior to those afforded our Class A ordinary shares;
•
could cause a change of control if a substantial number of Class A ordinary shares are 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 officers and directors;
•
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, Class A ordinary shares and/or warrants; and
•
may not result in adjustment to the exercise price of our warrants.
Unlike some other similarly structured blank check companies, our initial shareholders will receive additional Class A ordinary shares if we issue shares to consummate an initial business combination.
The founder shares will automatically convert into Class A ordinary shares (which such Class A ordinary shares delivered upon conversion will not have any redemption rights or be entitled to liquidating distributions from the trust account if we fail to consummate an initial business combination) at the time of our initial business combination or earlier at the option of the holders thereof at a ratio such that the number of Class A ordinary shares issuable upon conversion of all founder shares will equal, in the aggregate, on an as-converted basis, 25% of the sum of (i) the total number of ordinary shares issued and outstanding upon completion of this offering, plus (ii) the total number of Class A ordinary shares issued or deemed issued or issuable upon conversion or exercise of any equity-linked securities or rights issued or deemed issued, by the company in connection with or in relation to the consummation of the initial business combination, excluding any Class A ordinary shares or equity-linked securities exercisable for or convertible into Class A ordinary shares issued, deemed issued, or to be issued, to any seller in the initial business combination and any placement units issued to our sponsor or its affiliates upon conversion of working capital loans. In no event will the Class B ordinary shares convert into Class A ordinary shares at a rate of less than one-to-one. This is different than some other similarly structured blank check companies in which the initial shareholders will only be issued an aggregate of 20% of the total number of shares to be outstanding prior to the initial business combination.
Our management may not be able to maintain control of a target business after our initial business combination. Upon the loss of control of a target business, new management may not 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 shareholders own shares will own less than 100% of the equity interests or assets of a target business,
but we will only complete such business combination if the post-transaction company owns or acquires 50% or more of the outstanding voting securities of the target or otherwise acquires a controlling interest in the target 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 shareholders 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 the initial business combination. For example, we could pursue a transaction in which we issue a substantial number of new Class A ordinary shares in exchange for all of the outstanding capital stock, shares or other equity interests of a target. 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 Class A ordinary shares, our shareholders immediately prior to such transaction could
own less than a majority of our outstanding Class A ordinary shares subsequent to such transaction. In addition, other minority shareholders 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 control of the target business.
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 50% of the then-outstanding public warrants. As a result, the exercise price of your warrants could be increased, the exercise period could be shortened and the number of our Class A ordinary shares purchasable upon exercise of a warrant could be decreased, all without your approval.
Our warrants will be issued in registered form under a warrant agreement between Continental Stock Transfer & Trust Company, as warrant agent, and us. The warrant agreement provides that the terms of the warrants may be amended without the consent of any holder for the purpose of (i) curing any ambiguity or correcting 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, (ii) amending the provisions relating to cash dividends on ordinary shares as contemplated by and in accordance with the warrant agreement or (iii) 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; provided that the approval by the holders of at least 50% of the then-outstanding public warrants is required to make any change that adversely affects the interests of the registered holders of public warrants. Accordingly, we may amend the terms of the public warrants in a manner adverse to a holder if holders of at least 50% of the then-outstanding public warrants approve of such amendment and, solely with respect to any amendment to the terms of the placement warrants or any provision of the warrant agreement with respect to the placement warrants, 50% of the number of the then- outstanding placement warrants.
Although our ability to amend the terms of the public warrants with the consent of at least 50% 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, convert the warrants into cash, shorten the exercise period or decrease the number of Class A ordinary shares purchasable upon exercise of a warrant.
Since our sponsor paid only approximately $0.0021 per share for the founder shares, certain of our officers and directors could potentially make a substantial profit even if we acquire a target business that subsequently declines in value.
In April 2021, we issued 8,625,000 founder shares to our sponsor in exchange for a capital contribution of $25,000, or approximately $0.0029 per share. On August 9, 2021, we effected a dividend of approximately 0.3628 shares for each outstanding Class B ordinary share, such that our sponsor owned an aggregate of 11,754,150 founder shares, for approximately $0.0021 per share. On October 1, 2021, we effected a dividend of approximately 0.0195 shares for each outstanding Class B ordinary share, such that our sponsor owns an aggregate of 11,983,333 founder shares, for approximately $0.0021 per share. Certain of our officers and directors have a significant economic interest in our sponsor. As a result, the low acquisition cost of the founder shares creates an economic incentive whereby our officers and directors could potentially make a substantial profit even if we complete a business combination with a target business that subsequently declines in value and is unprofitable for public investors.
The nominal purchase price paid by our sponsor for the founder shares may result in significant dilution to the implied value of your public shares upon the consummation of our initial business combination.
We are offering our units at an offering price of $10.00 per unit and the amount in our trust account is initially anticipated to be $10.20 per public share, implying an initial value of $10.00 per public share. However, prior to this offering, our sponsor paid a nominal aggregate purchase price of $25,000 for the founder shares, or approximately $0.0021 per share. As a result, the value of your public shares may be significantly diluted upon the consummation of our initial business combination, when the founder shares are converted into public shares. For example, the following table shows the dilutive effect of the founder shares on the implied value of the public shares upon the consummation of our initial business combination, assuming that our equity value at that time is $294,000,000, which is the amount we would have for our initial business combination in the trust account after payment of $12,000,000 of deferred underwriting commissions, assuming the underwriters’ over-allotment option is not exercised, no interest is earned on the funds held in the trust account, and no public shares are redeemed in connection with our initial business combination, and without taking into account any other potential impacts on our valuation at such time, such as the trading price of our public shares, the business combination transaction costs, any equity issued or cash paid to the target’s sellers or other third parties, or the target’s business itself, including its assets, liabilities, management and prospects, as well as the value of our public and private warrants. At such valuation, each of our ordinary shares would have an implied value of $7.03 per share upon consummation of our initial business combination, which would be a 31.1% decrease as compared to the initial implied value per public share of $10.00 (the price per unit in this offering, assuming no value to the public warrants).
| |
Public shares
|
|
|
|
|
30,000,000 |
|
|
| |
Founder shares
|
|
|
|
|
10,453,333 |
|
|
| |
Placement shares
|
|
|
|
|
1,360,000 |
|
|
| |
Total shares
|
|
|
|
|
41,813,333 |
|
|
| |
Total funds in trust available for initial business combination (less deferred underwriting commissions)
|
|
|
|
$ |
294,000,000 |
|
|
| |
Initial implied value per public share
|
|
|
|
$ |
10.00 |
|
|
| |
Implied value per share upon consummation of initial business combination
|
|
|
|
$ |
7.03 |
|
|
The value of the founder shares following completion of our initial business combination is likely to be substantially higher than the nominal price paid for them, even if the trading price of our ordinary shares at such time is substantially less than $10.20 per share.
Upon the closing of this offering, assuming no exercise of the underwriters’ over-allotment option, our sponsor will have invested in us an aggregate of $12,125,000, comprised of the $25,000 purchase price for the founder shares and the $10.00 purchase price for the placement units. Assuming a trading price of $10.00 per share upon consummation of our initial business combination, the 10,453,333 founder shares would have an aggregate implied value of $104,533,330. Even if the trading price of our ordinary shares was as low as $1.04 per share, and the placement warrants were worthless, the value of the founder shares and the placement shares would be equal to the sponsor’s initial investment in us. As a result, if we complete our initial business combination, our sponsor is likely to be able to recoup its investment in us and make a substantial profit on that investment, even if our public shares have lost significant value. Accordingly, our management team, which owns interests in our sponsor, may have an economic incentive that differs from that of the public shareholders to pursue and consummate an initial business combination rather than to liquidate and to return all of the cash in the trust to the public shareholders, even if that business combination were with a riskier or less-established target business. For the foregoing reasons, you should consider our management team’s financial incentive to complete an initial business combination when evaluating whether to redeem your shares prior to or in connection with the initial business combination.
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, which we refer to as 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, which we refer to as 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.
The 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. We note that there is uncertainty as to whether a court would enforce this provision and that investors cannot waive compliance with the federal securities laws and the rules and regulations thereunder. Section 22 of the Securities Act creates concurrent jurisdiction for state and federal courts over all suits brought to enforce any duty or liability created by the Securities Act or the rules and regulations thereunder.
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 public warrants at any time after they become exercisable and prior to their expiration, at a price of $0.01 per warrant, provided that the closing price of our Class A ordinary shares 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 — Warrants — Public Shareholders’ Warrants — Anti-Dilution Adjustments”) for any 20 trading days within a 30-trading day period ending on the third trading day prior to proper notice of such redemption; provided that certain other conditions are met. 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 could force you to (i) exercise your warrants and pay the exercise price therefor at a time when it may be disadvantageous for you to do so, (ii) sell your warrants at the then-current market price when you might otherwise wish to hold your warrants or (iii) 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 placement warrants will be redeemable by us so long as such placement warrants are held by our sponsor, Cantor or their permitted transferees.
In addition, we have the ability to redeem the outstanding public warrants at any time after they become exercisable and prior to their expiration, at a price of $0.10 per warrant upon a minimum of 30 days’ prior written notice of redemption; provided that the closing price of our Class A ordinary
shares 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 — Warrants — Public Shareholders’ Warrants — Anti-Dilution Adjustments”) on the trading
day prior to the date on which we send the notice of redemption to the warrant holders; provided that certain other conditions are met, including that holders will be able to exercise their warrants prior to redemption for a number of Class A ordinary shares determined based on the redemption date and the fair market value of our Class A ordinary shares. Please see “Description of Securities — Warrants — Public Shareholders’ Warrants — Redemption of warrants when the price per Class A ordinary share 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 ordinary shares received is capped at 0.361 Class A ordinary shares per warrant (subject to adjustment) irrespective of the remaining life of the warrants. None of the placement warrants will be redeemable by us so long as such placement warrants are held by our sponsor, Cantor or their permitted transferees.
Our warrants may have an adverse effect on the market price of our Class A ordinary shares and make it more difficult to effectuate our initial business combination.
We will be issuing warrants to purchase 15,000,000 of our Class A ordinary shares (or up to 17,250,000 Class A ordinary shares if the underwriters’ over-allotment option is exercised in full) 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 1,360,000 placement units (or 1,450,000 placement units if the underwriters exercise their over-allotment option in full). In addition, in the future our sponsor or its affiliates may make working capital loans, up to $1,500,000 of which loans may be converted into up to an additional 150,000 units, at the price of $10.00 per unit. We may also issue Class A ordinary shares in connection with our redemption of our warrants.
To the extent we issue ordinary shares for any reason, including to effectuate a business combination, the potential for the issuance of a substantial number of additional Class A ordinary shares upon exercise of these warrants could make us a less attractive acquisition vehicle to a target business. Such warrants, when exercised, will increase the number of issued and outstanding Class A ordinary shares and reduce the value of the Class A ordinary shares issued to complete the business transaction. Therefore, our warrants may make it more difficult to effectuate a business transaction or increase the cost of acquiring the target business.
The 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, Cantor or their permitted transferees, (i) they will not be redeemable by us, (ii) they (including the Class A ordinary shares issuable upon exercise of these placement 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, (iii) they may be exercised by the holders on a cashless basis and (iv) they will be entitled to registration rights.
Because each unit contains one-half 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-half of one redeemable warrant. Pursuant to the warrant agreement, no fractional warrants will be issued upon separation of the units, and only whole units will trade. If, upon exercise of the warrants, a holder would be entitled to receive a fractional interest in a share, we will, upon exercise, round down to the nearest whole number the number of Class A ordinary shares to be issued to the warrant holder. This is different from other offerings similar to ours whose units include one ordinary share and one whole warrant to purchase one whole 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-half 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 a unit included a warrant to purchase one whole share.
A provision of our warrant agreement may make it more difficult for us to consummate an initial business combination.
Unlike many blank check companies, if (i) we issue additional Class A ordinary shares 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 ordinary share, (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 consummation 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 — Warrants — Public Shareholders’ Warrants — Redemption of warrants when the price per Class A ordinary share equals or exceeds $18.00” 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 — Warrants-Public Shareholders’ Warrants — Redemption of warrants when the price per Class A ordinary share 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.
The determination of the offering price of our units and the size of this offering is not as definitive as the pricing of securities and size of an offering of an operating company in a particular industry. You may have less assurance, therefore, that the offering price of our units properly reflects the value of such units than you would have in a typical offering of an operating company.
Prior to this offering, there has been no public market for any of our securities. The public offering price of the units and the terms of the warrants were negotiated between us and the underwriters. 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, prices and terms of the units, including the Class A ordinary shares 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 suitable acquisition opportunities;
•
general conditions of the securities markets at the time of this offering; and
•
other factors as were deemed relevant.
Although these factors were considered, the determination of our offering price is not as definitive as the pricing of securities of an operating company in a particular industry since we have no historical operations or financial results.
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. Shareholders 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. 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.
Our private warrants are expected to be accounted for as a warrant liability and will be recorded at fair value upon issuance with any changes in fair value each period reported in earnings, which may have an adverse effect on the market price of our securities or may make it more difficult for us to consummate an initial business combination.
Following the consummation of this offering and the concurrent private placement of the placement units, we will have 680,000 private warrants outstanding (or 725,000 private warrants if the
underwriters exercise their over-allotment option in full). We currently expect to account for these private warrants as a warrant liability, which means that we will record them at fair value upon issuance with any changes in fair value each period reported in earnings. The impact of changes in fair value on earnings may have an adverse effect on the market price of our securities. In addition, potential targets may seek a business combination partner that does not have warrants that are accounted for as a warrant liability, which may make it more difficult for us to consummate an initial business combination with a target business.
We account for warrants for shares of the company’s ordinary shares that are not indexed to our own shares as liabilities at fair market value on the balance sheet. The warrants are subject to re-measurement at each balance sheet date and any change in fair market value is recognized as a component of other income (expense), net on the statement of operations. We will continue to adjust the liability for changes in fair market value until the earlier of the exercise or expiration of the warrants. At that time, the portion of the warrant liability related to the warrants will be reclassified to additional paid-in capital.
Risks Relating to our Sponsor and Management Team
Our independent 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 shareholders.
In the event that the proceeds in the trust account are reduced below the lesser of (i) $10.20 per public share and (ii) 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 $10.20 per public share due to reductions in the value of the trust assets, in each case net of the interest that may be withdrawn to pay our tax obligations, 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 and subject to their fiduciary duties 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 shareholders may be reduced below $10.20 per public share.
We may not have sufficient funds to satisfy indemnification claims of our directors and officers.
We have agreed to indemnify our officers and directors to the fullest extent permitted by law. However, our officers and directors have agreed to waive any right, title, interest or claim of any kind in or to any monies in the trust account and to not seek recourse against the trust account for any reason whatsoever (except to the extent they are entitled to funds from the trust account due to their ownership of public shares). Accordingly, any indemnification provided will be able to be satisfied by us only if (i) we have sufficient funds outside of the trust account or (ii) we consummate an initial business combination. Our obligation to indemnify our officers and directors may discourage shareholders from bringing a lawsuit against our officers or directors for breach of their fiduciary duty. These provisions also may have the effect of reducing the likelihood of derivative litigation against our officers and directors, even though such an action, if successful, might otherwise benefit us and our shareholders. Furthermore, a shareholder’s investment may be adversely affected to the extent we pay the costs of settlement and damage awards against our officers and directors pursuant to these indemnification provisions.
Members of our management team and board of directors have significant experience as founders, board members, officers or executives of other companies. As a result, certain of those persons have been, or may become, involved in proceedings, investigations and litigation relating to the business affairs of the companies with which they were, are, or may be in the future be, affiliated. These activities may have an adverse effect on us, which may impeded our ability to consummate an initial business combination.
During the course of their careers, members of our management team and board of directors have had significant experience as founders, board members, officers or executives of other companies. As a result of their involvement and positions in these companies, certain of those persons, are now, or may in the future become, involved in litigation, investigations or other proceedings relating to the business affairs of
such companies or transactions entered into by such companies. Any such litigation, investigations or other proceedings may divert the attention and resources of the members of both our management team and our board of directors away from identifying and selecting a target business or businesses for our initial business combination and may negatively affect our reputation, which may impede our ability to complete an initial business combination.
We are dependent upon our officers and directors and their loss could adversely affect our ability to operate.
Our day-to-day operations are dependent upon a relatively small group of individuals and, in particular, our officers and directors. We believe that our success depends on the continued service of our officers and directors, at least until we have completed our initial business combination. We do not have an employment agreement with, or key-person insurance on the life of, any of our directors or officers. The unexpected loss of the services of our key personnel could have a detrimental effect on us.
The unexpected loss of the services of one or more of our directors or officers could have a detrimental effect on us.
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 key personnel could negatively impact the operations and profitability of our
post-transaction business.
Our ability to successfully effect our initial business combination is dependent upon the efforts of our key personnel. We believe that our success depends on the continued service of our key personnel, at least until we have consummated our initial business combination. None of our officers are required to commit any specified amount of time to our affairs and, accordingly, they will have conflicts of interest in allocating management time among various business activities, including identifying potential business combinations and monitoring the related due diligence. If our officers’ and directors’ other business affairs require them to devote more substantial amounts of time to their other business activities, it could limit their ability to devote time to our affairs and could have a negative impact on our ability to consummate our initial business combination.
The role of our key personnel after our initial business combination, however, remains to be determined. Although some of our key personnel may serve in senior management or advisory positions following our initial business combination, it is likely that most, if not all, of the management of the target business will remain in place. These individuals may be unfamiliar with the requirements of operating a public company which could cause us to have to expend time and resources helping them become familiar with such requirements. This could be expensive and time-consuming and could lead to various regulatory issues which may adversely affect our operations.
Our key personnel may negotiate employment or consulting agreements with a target business in connection with a particular business combination, and a particular business combination may be conditioned on the retention or resignation of such key personnel. These agreements may provide for our key personnel 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 our 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 the business combination. Such negotiations also could make such key personnel’s retention or resignation a condition to any such agreement. The personal and financial interests of such individuals may influence their motivation in identifying and selecting a target business. 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, in senior management, advisory positions or
otherwise, after the completion of our initial business combination. 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.
In addition, pursuant to an agreement to be entered into on or prior to the closing of this offering, our sponsor, upon and following consummation of an initial business combination, will be entitled to nominate three individuals for appointment to our board of directors, as long as our sponsor holds any securities covered by the registration and shareholder rights agreement, which is described under the section of this prospectus entitled “Description of Securities — Registration and Shareholder Rights.”
The officers and directors of an acquisition candidate may resign upon completion of our initial business combination. The loss of a business combination target’s key personnel could negatively impact the operations and profitability of our post-transaction business.
The officers and directors 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-transaction 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. As a result, we may need to reconstitute the management team of the post-transaction company in connection with our initial business combination, which may adversely impact the operations and profitability of our
post-transaction business.
Our officers and directors 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 officers and directors 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 and directors is engaged in several other business endeavors for which he or she may be entitled to substantial compensation, and our officers and directors are not obligated to contribute any specific number of hours per week to our affairs. Our independent directors also serve as officers and 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 — Officers, Directors and Director Nominees.”
Each of our officers and directors presently has, and any of them in the future may have, additional fiduciary or contractual obligations to other entities, including another blank check company, 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. Each of our officers and directors presently has, and any of them in the future may have, additional fiduciary or contractual obligations to other entities, and due to such fiduciary or contractual obligations, such officer or director may be required to present a business combination opportunity to such entity, subject to his or her fiduciary duties under Cayman Islands law. Accordingly, our officers and directors 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 another entity prior to its presentation to us, subject to their fiduciary duties under Cayman Islands law. In addition, our directors and officers may now be, or in the future become, affiliated with entities that are engaged in a similar business. For example, our Executive Chairman, Richard N. Peretz serves as a director of Tribe Capital Growth Corp. I, Tribe Capital Growth Corp. II, ELMS — Electric Last Mile, Inc. and has agreed to serve as a director
of our Company. Like the Company, Tribe Capital Growth Corp. I and Tribe Capital Growth Corp. II are both blank check companies incorporated for the purpose of effecting their own respective initial business combinations. Mr. Peretz owes fiduciary duties under the DGCL to each of the aforementioned companies.
In addition, our directors and officers 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 our directors’ and officers’ fiduciary duties under the Cayman Islands law. Our amended and restated memorandum and articles of association will provide that, to the fullest extent permitted by applicable law: (i) no individual serving as a director or an officer shall have any duty, except to the extent expressly assumed by contract, to refrain from engaging directly or indirectly in the same or similar business activities or lines of business as us; and (ii) we renounce any interest or expectancy in, or in being offered an opportunity to participate in, any potential transaction or matter which may be a corporate opportunity offered to any director or officer, on the one hand, and us, on the other.
Our sponsor and directors and officers are also not prohibited from sponsoring, investing or otherwise becoming involved with, any other blank check companies similar to ours, including in connection with their initial business combinations, or may pursue other business or investment ventures during the period in which we are seeking an initial business combination, prior to us completing our initial business combination. A special purpose acquisition company sponsored by an affiliate of our sponsor or with certain members of our management team also serving on its management team could pursue a business combination opportunity in the same or similar businesses or industries as us, the pursuit of which could create an actual or potential conflict of interest relating to what would otherwise be an opportunity for us. Any such companies, businesses or ventures may present additional conflicts of interest in pursuing an initial business combination. However, we do not believe that any such potential conflicts would materially affect our ability to complete our initial business combination.
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 — Officers, Directors and Director Nominees,” “Management — Conflicts of Interest” and “Certain Relationships and Related Party Transactions.”
Our officers, directors, security holders and their respective affiliates may have competitive pecuniary interests that conflict with our interests.
We may enter into a business combination with a target business that is affiliated with our sponsor or a member of our management team, although we do not currently intend to do so.
Further, our directors and our officers have invested, and may in the future invest, in a broad array of sectors, including those in which our company may invest, and are also focused on acquisitions and investments in industries in which we may search for a target business. 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 persons.
Because our initial shareholders will lose their entire investment in us if our initial business combination is not completed, and because our sponsor, officers and directors who have an interest in founder shares may profit substantially even under circumstances where our public shareholders would experience losses in connection with their investment, a conflict of interest may arise in determining whether a particular business combination target is appropriate for our initial business combination. In addition, since our sponsor paid only approximately $0.0021 per share for the founder shares, certain of our officers and directors could potentially make a substantial profit even if we acquire a target business that subsequently declines in value.
On April 22, 2021, our sponsor paid an aggregate purchase price of $25,000, or approximately $0.0029 per share, to subscribe for an aggregate of 8,625,000 Class B ordinary shares, par value $0.0001. Prior to the initial investment in the company of $25,000 by our sponsor, our company had no assets, tangible or intangible. The per share price of the founder shares was determined by dividing the amount contributed to
our company by the number of founder shares issued. In May 2021, our sponsor allocated (i) 25,000 founder shares to each of our independent director and independent director nominees in exchange for the payment of $84, or approximately $0.0034 per share; and (ii) 30,000 founder shares to Mr. Kurzweil in exchange for the payment of $100, or approximately $0.0033 per share. None of these granted founder shares are subject to forfeiture in the event that the underwriters’ over-allotment option is not exercised in full. On August 9, 2021, we effected a dividend of approximately 0.3628 shares for each outstanding Class B ordinary share, such that our sponsor owned an aggregate of 11,754,150 founder shares, for approximately $0.0021 per share. On October 1, 2021, we effected a dividend of approximately 0.0195 shares for each outstanding Class B ordinary share, such that our sponsor owns an aggregate of 11,983,333 founder shares, for approximately $0.0021 per share. If we increase or decrease the size of this offering, we will effect a share capitalization or a share surrender or redemption or other appropriate mechanism, as applicable, with respect to our Class B ordinary shares immediately prior to the consummation of this offering in such amount as to maintain the number of founder shares, on an
as-converted basis, at 25% of our issued and outstanding ordinary shares upon the consummation of this offering and issuance of placement units. The Class B ordinary shares will be worthless if we do not complete an initial business combination within 15 months from the closing of this offering or during any Extension Period.
In addition, our sponsor and Cantor have committed, pursuant to a written agreement, to purchase an aggregate of 1,360,000 placement units (or 1,450,000 placement units if the underwriters exercise their
over- allotment option in full), at a price of $10.00 per unit ($13,600,000, or $14,500,000 if the underwriters exercise their over-allotment option, in the aggregate), in a private placement that will close simultaneously with the closing of this offering. Of those 1,360,000 placement units, our sponsor has agreed to purchase 1,210,000 placement units (or 1,300,000 placement units if the underwriters exercise their over-allotment option in full) and Cantor has agreed to purchase 150,000 placement units (regardless of whether the underwriters’ over-allotment option is exercised in full). If we do not consummate an initial business combination within 15 months from the closing of this offering or during any Extension Period, the placement warrants will expire worthless. The personal and financial interests of our officers and directors 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 15-month anniversary of the closing of this offering nears, which is the deadline for our consummation of an initial business combination.
Since our officers and directors will be eligible to share in a portion of any appreciation in founder shares purchased at approximately $0.0034 per share, a conflict of interest may arise in determining whether a particular business combination target is appropriate for our initial business combination.
The members of our management team have invested in our sponsor by subscribing for units issued by the sponsor. These officers and directors will not receive any cash compensation from us prior to a business combination but through their investment in the sponsor will be eligible to share in a portion of any appreciation in founder shares and placement units, provided that we successfully complete a business combination. We believe that this structure aligns the incentives of these officers and directors with the interests of our shareholders. However, investors should be aware that, as the sponsor and our independent directors and independent director nominees have paid approximately $0.0034 per share for the interest in the founder shares, this structure also creates an incentive whereby our officers and directors could potentially make a substantial profit even if we complete a business combination with a target that ultimately declines in value and is not profitable for public investors.
Our initial shareholders control a substantial interest in us and thus may exert a substantial influence on actions requiring a shareholder vote, potentially in a manner that you do not support.
Upon closing of this offering, our initial shareholders and their permitted transferees will own, on an as- converted basis, 25% of our issued and outstanding ordinary shares (excluding the placement shares underlying the placement units and assuming they do not purchase any units in this offering). Accordingly, they may exert a substantial influence on actions requiring a shareholder vote, potentially in a manner that you do not support, including amendments to our amended and restated memorandum and articles of association. If our initial shareholders purchase any units in this offering or if our initial shareholders
purchase any additional Class A ordinary shares in the aftermarket or in privately negotiated transactions, this would increase their control. Neither our initial shareholders nor, to our knowledge, any members of our management team, 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 ordinary shares.
In addition, our board of directors, whose members were appointed by our sponsor, is and will be divided into three classes, each of which will generally serve for a term of three years with only one class of directors being appointed in each year. We may not hold an annual general meeting to appoint new directors prior to the completion of our initial business combination, in which case all of the current directors will continue in office until at least the completion of the business combination. If there is an annual general meeting, as a consequence of our “staggered” board of directors, only a minority of the board of directors will be considered for election and our initial shareholders, because of their ownership position, will control the outcome, as only holders of our Class B ordinary shares will have the right to vote on the appointment of directors and to remove directors prior to our initial business combination. Accordingly, our initial shareholders will continue to exert control at least until the completion of our initial business combination.
Our sponsor contributed $25,000, or approximately $0.0021 per share, in consideration of 11,983,333 Class B ordinary shares, par value $0.0001, and, accordingly, you will experience immediate and substantial dilution from the purchase of our Class A ordinary shares.
The difference between the public offering price per share (allocating all of the unit purchase price to the Class A ordinary share and none to the warrant included in the unit) and the pro forma net tangible book value per Class A ordinary share 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 closing of this offering, and assuming no value is ascribed to the warrants included in the units, you and the other public shareholders will incur an immediate and substantial dilution of approximately 109.9% (or $10.99 per share, assuming the underwriters do not exercise the over-allotment option), the difference between the pro forma net tangible book value per share of $(0.99) and the initial offering price of $10.00 per unit. This dilution would increase to the extent that the anti-dilution provisions of the founder shares result in the issuance of Class A ordinary shares on a greater than one-to-one basis upon conversion of the founder shares at the time of our initial business combination and would become exacerbated to the extent that public shareholders seek redemptions from the trust for their public shares. 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 our Class A ordinary shares.
We may engage Cantor or its affiliates as our financial advisor on our business combination and other transactions. Furthermore, we may acquire a target company that has engaged Cantor or its affiliates as a financial advisor on an unrelated transaction, and such engagement may limit Cantor’s ability to participate in certain transactions on our behalf or preclude us from taking certain actions. Any fee in connection with such engagement may be conditioned upon the completion of such transactions. This financial interest in the completion of such transactions may influence the advice such affiliate provides.
We may engage Cantor or its affiliates as a financial advisor in connection with our initial business combination and pay it a customary financial advisory fee. Furthermore, we may acquire a target company that has engaged Cantor or its affiliates as a financial advisor on an unrelated transaction, and such engagement may limit Cantor’s ability to participate in certain transactions on our behalf or preclude us from taking certain actions. Pursuant to any such engagement, Cantor or the applicable affiliate may earn its fee upon closing of the initial business combination. The payment of such fee would likely be conditioned upon the completion of the initial business combination. Therefore, Cantor or such affiliate may have additional financial interests in the completion of the initial business combination. These financial interests may influence the advice Cantor or such affiliate provides us as our financial advisor, which advice would contribute to our decision on whether to pursue a business combination with any particular target.
In addition, Cantor (or its affiliates) is often engaged as a financial advisor, or to provide financing, to corporations and other entities and their directors and managers in connection with the sale of those entities, their assets or their subsidiaries, and Cantor’s compensation in connection with these engagements may be substantial. Sellers generally require Cantor (or the applicable affiliate) to act exclusively on their behalf and Cantor (or the applicable affiliate) may be precluded in many instances from participating in our initial business combination with such a target business. Additionally, we may be precluded in many instances from attempting to acquire securities of the business being sold or otherwise participate as a buyer in the transaction where Cantor or an affiliate thereof is advising the seller. Cantor and its affiliates also represents potential buyers. Cantor may be incentivized to direct an opportunity to one of these buyers, thereby eliminating or reducing the investment opportunity available to us.
Risks Associated with Acquiring and Operating a Business in Foreign Countries
If we pursue a target 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 initial business 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 we pursue a target 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 jurisdiction, 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 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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local or regional economic policies and market conditions;
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unexpected changes in regulatory requirements;
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longer payment cycles;
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tax issues, such as tax law changes and variations in tax laws as compared to the United States;
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rates of inflation;
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challenges in collecting accounts receivable;
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employment regulations;
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corruption;
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protection of intellectual property;
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social unrest, crime, strikes, riots and civil disturbances; and
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terrorist attacks, natural disasters and wars.
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 initial business combination, or, if we complete such combination, our operations might suffer, either of which may adversely impact our business, financial condition and results of operations.
If our management following our initial business combination is unfamiliar with United States 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 may resign from their positions as officers or directors 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 United States securities laws. If new management is unfamiliar with United States 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, substantially all of our assets may be located in a foreign country and substantially all of our revenue may be derived from our operations in any such country. Accordingly, our results of operations and prospects will be subject, to a significant extent, to the economic, political and social conditions and government policies, developments and conditions in the country in which we operate.
The economic, political and social conditions, as well as government policies and cultural and language differences, of the country in which our operations are located could affect our business, including, but not limited to, deterioration of political relations with the United States. 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.
Exchange rate fluctuations and currency policies may cause a target business’s ability to succeed in the international markets to be diminished.
In the event we acquire a non-U.S. target, all revenues and income would likely be received in a foreign currency, and the dollar equivalent of our net assets and distributions, if any, could be adversely affected by reductions in the value of the local currency. The value of the currencies in our target regions fluctuate and are affected by, among other things, changes in political and economic conditions. Any change in the relative value of such currency against our reporting currency may affect the attractiveness of any target business or, following consummation of our initial business combination, our financial condition and results of operations. Additionally, if a currency appreciates in value against the dollar prior to the consummation of our initial business combination, the cost of a target business as measured in dollars will increase, which may make it less likely that we are able to consummate such transaction.
We may reincorporate in another jurisdiction in connection with our initial business combination, and the laws of such jurisdiction may govern some or all of our future material agreements and we may not be able to enforce our legal rights.
In connection with our initial business combination, we may relocate the home jurisdiction of our business from the Cayman Islands to another jurisdiction. If we determine to do this, the laws of such jurisdiction may govern some or all of our future material agreements. The system of laws and the enforcement of existing laws in such jurisdiction may not be as certain in implementation and interpretation as in the United States. The inability to enforce or obtain a remedy under any of our future agreements could result in a significant loss of business, business opportunities or capital.
We may reincorporate or become a tax resident in another jurisdiction in connection with our initial business combination and such reincorporation or change in tax residency may result in taxes imposed on us, our shareholders, or our warrant holders.
We may, in connection with our initial business combination and subject to requisite shareholder approval under the Companies Act and our amended and restated memorandum and articles of association, reincorporate in the jurisdiction in which the target company or business is located or in another jurisdiction. Tax structuring considerations are complex, the relevant facts and law are uncertain and may change, and
we may prioritize commercial and other considerations over tax considerations. The transaction may require a shareholder or warrant holder to recognize taxable income in the jurisdiction in which the shareholder or warrant holder is a tax resident or in which its members are resident if it is a tax transparent entity. We do not intend to make any cash distributions to shareholders or warrant holders to pay such taxes. Shareholders or warrant holders may be subject to withholding taxes or other taxes with respect to their ownership of us after the reincorporation. In addition, regardless of whether we reincorporate in another jurisdiction, we could be treated as a tax resident in the jurisdiction in which the partner company or business is located, which could result in adverse tax consequences to us (e.g., taxation on our worldwide income in such jurisdiction) and to our shareholders or warrant holders.
After our initial business combination, it is possible that a majority of our directors and officers will live outside the United States and all of our assets will be located outside the United States; therefore investors may not be able to enforce federal securities laws or their other legal rights.
It is possible that after our initial business combination, a majority of our directors and officers will reside outside of the United States and all of our assets will be located outside of the United States. As a result, it may be difficult, or in some cases not possible, for investors in the United States to enforce their legal rights, to effect service of process upon all of our directors or officers or to enforce judgments of United States courts predicated upon civil liabilities and criminal penalties on our directors and officers under United States laws.
General Risk Factors
We are a recently 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 organized blank check company incorporated as a Cayman Islands exempted company 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 independent registered public accounting firm’s report contains an explanatory paragraph that expresses substantial doubt about our ability to continue as a “going concern” absent the consummation of this offering.
As of June 30, 2021, we had no cash and a working capital deficiency of $133,209. Further, we expect to incur significant costs in pursuit of our initial business combination. Management’s plans to address this need for capital through this offering are discussed in the section of this prospectus titled “Management’s Discussion and Analysis of Financial Condition and Results of Operations.” Our plans to raise capital and to consummate our initial business combination may not be successful. These factors, among others,
raise substantial doubt about our ability to continue as a going concern absent the consummation of this offering. The financial statements contained elsewhere in this prospectus do not include any adjustments that might result from our inability to consummate this offering or our inability to continue as a going concern.
Past performance by members of our management team or any of their respective affiliates may not be indicative of future performance of an investment in us.
Information regarding performance by, or businesses associated with members of our management team are presented for informational purposes only. Any past experience or performance of members of our management team or their respective affiliates is not a guarantee of either (i) our ability to successfully identify and execute a transaction or (ii) success with respect to any business combination that we may consummate. You should not rely on the historical record of our management team or any of their respective affiliates as indicative of the future performance of an investment in us or the returns we will, or are likely to, generate going forward.
Our search for a business combination, and any target business with which we ultimately consummate a business combination, may be materially adversely affected by the recent coronavirus (COVID-19) outbreak and the status of debt and equity markets.
In March 2020, the World Health Organization declared the novel coronavirus disease 2019 (COVID-19) a global pandemic. The COVID-19 pandemic has negatively impacted the global economy, disrupted global supply chains, lowered equity market valuations, created significant volatility and disruption in financial markets and increased unemployment levels, all of which may become heightened concerns upon additional waves of infection or future developments. In addition, the pandemic has resulted in temporary closures of many businesses and the institution of social distancing and sheltering in place requirements in many states and communities. The COVID-19 pandemic has, and a significant outbreak of other infectious diseases could, result in a widespread health crisis that could adversely affect the economies and financial markets worldwide, and the business of any potential partner business with which we consummate a business combination could be materially and adversely affected.
Furthermore, we may be unable to complete a business combination if concerns relating to COVID-19 continue to restrict travel, limit the ability to have meetings with potential investors or the partner business’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 matters of global concern continue for an extensive period of time, our ability to consummate a business combination, or the operations of a partner 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, 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.
If, after we distribute the proceeds in the trust account to our public shareholders, we file a bankruptcy or winding-up petition or an involuntary bankruptcy or winding-up petition is filed against us that is not dismissed, a bankruptcy or insolvency court may seek to recover such proceeds, and it may be alleged that the members of our board of directors 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 shareholders, we file a bankruptcy or winding-up petition or an involuntary bankruptcy or winding-up petition is filed against us that is not dismissed, any distributions received by shareholders could be viewed under applicable debtor/creditor and/or bankruptcy or insolvency laws as either a “preferential transfer” or a “fraudulent conveyance.” As a result, a bankruptcy or insolvency court could seek to recover some or all amounts received by our shareholders. In addition, it may be alleged that our board of directors breached its fiduciary duty to our creditors and/or acted in bad faith, thereby exposing itself and us to claims of punitive damages, by paying public shareholders from the trust account prior to addressing the claims of creditors.
If, before distributing the proceeds in the trust account to our public shareholders, we file a bankruptcy or winding-up petition or an involuntary bankruptcy or winding-up petition is filed against us that is not dismissed, the claims of creditors in such proceeding may have priority over the claims of our shareholders and the
per- share amount that would otherwise be received by our shareholders in connection with our liquidation may be reduced.
If, before distributing the proceeds in the trust account to our public shareholders, we file a bankruptcy or winding-up petition or an involuntary bankruptcy or winding-up petition is filed against us that is not dismissed, the proceeds held in the trust account could be subject to applicable bankruptcy or insolvency law, and may be included in our bankruptcy or insolvency estate and subject to the claims of third parties with priority over the claims of our shareholders. To the extent any bankruptcy or insolvency claims deplete the
trust account, the per-share amount that would otherwise be received by our shareholders in connection with our liquidation may be reduced.
We are subject to changing law and regulations regarding regulatory matters, corporate governance and public disclosure that have increased both our costs and the risk of non-compliance, which 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. Our efforts to comply with new and changing laws and regulations have resulted in, and are likely to continue to result in, increased general and administrative expenses and a diversion of management time and attention from seeking a business combination target. Such laws and regulations and their interpretation and application may also change from time to time as new guidance becomes available 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.
Our shareholders may be held liable for claims by third parties against us to the extent of distributions received by them upon redemption of their shares.
If we are forced to enter into an insolvent liquidation, any distributions received by shareholders could be viewed as an unlawful payment if it was proved that immediately following the date on which the distribution was made, we were unable to pay our debts as they fall due in the ordinary course of business. As a result, a liquidator could seek to recover some or all amounts received by our shareholders. Furthermore, it may be alleged that our directors breached their fiduciary duties to us or our creditors and/or acted in bad faith, thereby exposing themselves and our company to claims, by paying public shareholders 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. We and our directors and officers who knowingly and willfully authorized or permitted any distribution to be paid out of our share premium account while we were unable to pay our debts as they fall due in the ordinary course of business would be guilty of an offense and may be liable for a fine of US$18,293 and imprisonment for five years in the Cayman Islands.
We may not hold an annual general meeting until after the consummation of our initial business combination.
In accordance with the Nasdaq corporate governance requirements, we are not required to hold an annual general meeting until one year after our first fiscal year end following our listing on the Nasdaq. There is no requirement under the Companies Act for us to hold annual or extraordinary general meetings to appoint directors. Until we hold an annual general meeting, public shareholders may not be afforded the opportunity to appoint directors and to discuss company affairs with management. Our board of directors is divided into three classes with only one class of directors being appointed in each year and each class (except for those directors appointed prior to our first annual general meeting) serving a three-year term.
We may be a passive foreign investment company, or “PFIC”, which could result in adverse U.S. federal income tax consequences to U.S. investors.
If we are a PFIC for any taxable year (or portion thereof) that is included in the holding period of a U.S. Holder (as defined in the section of this prospectus captioned “Taxation — United States Federal Income Tax Considerations — General”) of our Class A ordinary shares or warrants, the U.S. Holder may be subject to adverse U.S. federal income tax consequences and may be subject to additional reporting requirements. Our PFIC status for our current and subsequent taxable years may depend on whether we qualify for the PFIC start-up exception (see the section of this prospectus captioned “Taxation — United States Federal Income Tax Considerations — U.S. Holders — Passive Foreign Investment Company Rules”). Depending on the particular circumstances the application of the start-up exception may be subject to uncertainty, and there cannot be any assurance that we will qualify for the start-up exception. Accordingly, there can be no assurances with respect to our status as a PFIC for our current taxable year or any subsequent taxable year. Our actual PFIC status for any taxable year, however, will not be determinable until after the
end of such taxable year. Moreover, if we determine we are a PFIC for any taxable year, upon written request, we will endeavor to provide to a U.S. Holder such information as the Internal Revenue Service (“IRS”) may require, including a PFIC Annual Information Statement, in order to enable the U.S. Holder to make and maintain a “qualified electing fund” election, but there can be no assurance that we will timely provide such required information, and such election would be unavailable with respect to our warrants in all cases. We urge U.S. investors to consult their tax advisors regarding the possible application of the PFIC rules. For a more detailed discussion of the tax consequences of PFIC classification to U.S. Holders, see the section of this prospectus captioned “Taxation — United States Federal Income Tax Considerations — U.S. Holders — Passive Foreign Investment Company Rules”.
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 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 nonbinding advisory vote on executive compensation and shareholder approval of any golden parachute payments not previously approved. As a result, our shareholders 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 Class A ordinary shares held by non-affiliates equals or exceeds $700 million as of the last business day of any second fiscal quarter before that time, 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 would find our securities less attractive in the event that we 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 an 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 ordinary shares held by non-affiliates exceeds $250 million as of the last business day 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 ordinary shares held by non-affiliates equals or exceeds $700 million as of the last business day 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.
Because we are incorporated under the laws of the Cayman Islands, you may face difficulties in protecting your interests, and your ability to protect your rights through the U.S. federal courts may be limited.
We are an exempted company incorporated under the laws of the Cayman Islands. As a result, it may be difficult for investors to effect service of process within the United States upon our directors or officers, or enforce judgments obtained in the United States courts against our directors or officers.
Our corporate affairs will be governed by our amended and restated memorandum and articles of association, the Companies Act (as the same may be supplemented or amended from time to time) and the common law of the Cayman Islands. We will also be subject to the federal securities laws of the United States. The rights of shareholders to take action against the directors, actions by minority shareholders and the fiduciary responsibilities of our directors to us under Cayman Islands law are to a large extent governed by the common law of the Cayman Islands. The common law of the Cayman Islands is derived in part from comparatively limited judicial precedent in the Cayman Islands as well as from English common law, the decisions of whose courts are of persuasive authority, but are not binding on a court in the Cayman Islands. The rights of our shareholders and the fiduciary responsibilities of our directors under Cayman Islands law are different from what they would be under statutes or judicial precedent in some jurisdictions in the United States. In particular, the Cayman Islands has a different body of securities laws as compared to the United States, and certain states, such as Delaware, may have more fully developed and judicially interpreted bodies of corporate law. In addition, Cayman Islands companies may not have standing to initiate a shareholders derivative action in a Federal court of the United States.
We have been advised by Maples and Calder (Cayman) LLP our Cayman Islands legal counsel, that the courts of the Cayman Islands are unlikely (i) to recognize or enforce against us judgments of courts of the United States predicated upon the civil liability provisions of the federal securities laws of the United States or any state; and (ii) in original actions brought in the Cayman Islands, to impose liabilities against us predicated upon the civil liability provisions of the federal securities laws of the United States or any state, so far as the liabilities imposed by those provisions are penal in nature. Although there is no statutory enforcement in the Cayman Islands of judgments obtained in the United States, the courts of the Cayman Islands will recognize and enforce a foreign money judgment of a foreign court of competent jurisdiction without retrial on the merits based on the principle that a judgment of a competent foreign court imposes upon the judgment debtor an obligation to pay the sum for which judgment has been given provided certain conditions are met. For a foreign judgment to be enforced in the Cayman Islands, such judgment must be final and conclusive and for a liquidated sum, and must not be in respect of taxes or a fine or penalty, inconsistent with a Cayman Islands judgment in respect of the same matter, impeachable on the grounds of fraud or obtained in a manner, or be of a kind the enforcement of which is, contrary to natural justice or the public policy of the Cayman Islands (awards of punitive or multiple damages may well be held to be contrary to public policy). A Cayman Islands court may stay enforcement proceedings if concurrent proceedings are being brought elsewhere.
As a result of all of the above, public shareholders may have more difficulty in protecting their interests in the face of actions taken by management, members of the board of directors or controlling shareholders than they would as public shareholders of a United States company.
Provisions in our amended and restated memorandum and articles of association may inhibit a takeover of us, which could limit the price investors might be willing to pay in the future for our Class A ordinary shares and could entrench management.
Our amended and restated memorandum and articles of association contain provisions that may discourage unsolicited takeover proposals that shareholders may consider to be in their best interests. These provisions will include a staggered board of directors, the ability of the board of directors to designate the terms of, and issue, new series of preference shares, and the fact that prior to the completion of our initial business combination only holders of our Class B ordinary shares, which have been issued to our initial shareholders, are entitled to vote on the appointment and removal of directors, 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.
An investment in this offering may result in uncertain or adverse U.S. federal income tax consequences.
An investment in this offering may result in uncertain U.S. federal income tax consequences. For instance, because there are no authorities that directly address instruments similar to the units we are issuing in this offering, the allocation an investor makes with respect to the purchase price of a unit between the Class A ordinary shares and the one-half of a warrant to purchase one Class A ordinary share included in each unit could be challenged by the IRS or courts. Furthermore, the U.S. federal income tax consequences of a cashless exercise of warrants included in the units we are issuing in this offering is unclear under current law. In addition, as discussed above, there is uncertainty about whether we are or will be a PFIC and the consequences if we are or become one. Finally, it is unclear whether the redemption rights with respect to our ordinary shares suspend the running of a U.S. Holder’s (as defined below in “Taxation — United States Federal Income Tax Considerations — General”) holding period for purposes of determining whether any gain or loss realized by such holder on the sale or exchange of Class A ordinary shares is long-term capital gain or loss and for determining whether any dividend we pay would be considered “qualified dividends” for U.S. federal income tax purposes. See the section titled “Taxation — United States Federal Income Tax Considerations” for a summary of the U.S. federal income tax considerations of an investment in our securities. Prospective investors are urged to consult their tax advisors with respect to these and other tax consequences when purchasing, holding or disposing of our securities.
Cyber incidents or attacks directed at us could result in information theft, data corruption, operational disruption and/or financial loss.
We depend on digital technologies, including information systems, infrastructure and cloud applications and services, including those of third parties with which we may deal. Sophisticated and deliberate attacks on, or security breaches in, our systems or infrastructure, or the systems or infrastructure of third parties
or the cloud, could lead to corruption or misappropriation of our assets, proprietary information and sensitive or confidential data. As an early-stage company without significant investments in data security protection, we may not be sufficiently protected against such occurrences. We may not have sufficient resources to adequately protect against, or to investigate and remediate any vulnerability to, cyber incidents. It is possible that any of these occurrences, or a combination of them, could have adverse consequences on our business and lead to financial loss.
Since only holders of our founder shares will have the right to vote on the appointment of directors, upon the listing of our shares on the Nasdaq, the Nasdaq may consider us to be a “controlled company” within the meaning of the Nasdaq rules and, as a result, we may qualify for exemptions from certain corporate governance requirements.
After completion of this offering and until the completion of our initial business combination, only holders of our founder shares will have the right to vote on the appointment of directors. As a result, the Nasdaq will consider us to be a “controlled company” within the meaning of the Nasdaq corporate governance standards. Under the Nasdaq corporate governance standards, a company of which more than 50% of the voting power is held by an individual, group or another company is a “controlled company” and may elect not to comply with certain corporate governance requirements, including the requirements that:
•
we have a board that includes a majority of “independent directors”, as defined under the rules of the Nasdaq; and
•
we have a compensation committee of our board that is comprised entirely of independent directors with a written charter addressing the committee’s purpose and responsibilities.
We do not intend to utilize these exemptions and intend to comply with the corporate governance requirements of the Nasdaq, subject to applicable phase-in rules. However, if we determine in the future to utilize some or all of these exemptions, you will not have the same protections afforded to shareholders of companies that are subject to all of the Nasdaq corporate governance requirements.
Certain agreements related to this offering may be amended without shareholder approval.
Each of the agreements related to this offering to which we are a party, other than the warrant agreement and the investment management trust agreement, may be amended without shareholder approval. Such agreements are:
•
the underwriting agreement;
•
the letter agreement among us, our initial shareholders and each member of our management team;
•
the registration rights agreement among us and our initial shareholders;
•
the placement units purchase agreement between us and our sponsor; and
•
the administrative support agreement among us, our sponsor and an affiliate of our sponsor.
These agreements contain various provisions that our public shareholders might deem to be material. For example, our letter agreement and the underwriting agreement contain certain lock-up provisions with respect to the founder shares, placement units and other securities held by our initial shareholders, our management team and their respective permitted transferees. Amendments to such agreements would require the consent of the applicable parties thereto. While we do not expect our board of directors to approve any amendment to any of these agreements 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 any such agreement. Any amendment entered into in connection with the consummation of our initial business combination will be disclosed in our proxy materials or tender offer documents, as applicable, related to such initial business combination, and any other material amendment to any of our material agreements will be disclosed in a filing with the SEC. Any such amendments would not require approval from our shareholders, 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. For example, amendments to the lock-up provision discussed above may result in our initial shareholders selling their securities earlier than they would otherwise be permitted, which may have an adverse effect on the price of our securities.
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
Some of the statements contained in this prospectus may constitute “forward-looking statements” for purposes of the federal securities laws. Our forward-looking statements include, but are not limited to, statements regarding our or our management team’s expectations, hopes, beliefs, intentions or strategies regarding the future. In addition, any statements that refer to projections, forecasts or other characterizations of future events or circumstances, including any underlying assumptions, are forward-looking statements. The words “anticipate”, “believe”, “continue”, “could”, “estimate”, “expect”, “intends”, “may”, “might”, “plan”, “possible”, “potential”, “predict”, “project”, “shall”, “should”, “will”, “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 officers and directors 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;
•
our ability to consummate an initial business combination due to the uncertainty resulting from the COVID-19 pandemic;
•
the ability of our officers and directors 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 30,000,000 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 placement units, will be used as set forth in the following table:
| |
|
|
Without
Exercise of
Over-Allotment
Option
|
|
|
Over-Allotment
Option Fully
Exercised
|
|
|
Gross Proceeds
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross proceeds from units offered to public(1)
|
|
|
|
$ |
300,000,000 |
|
|
|
|
$ |
345,000,000 |
|
|
|
Gross proceeds from placement units offered in the private placement
|
|
|
|
$ |
13,600,000 |
|
|
|
|
$ |
14,500,000 |
|
|
|
Total gross proceeds
|
|
|
|
$ |
313,600,000 |
|
|
|
|
$ |
359,500,000 |
|
|
|
Estimated offering expenses(2)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Underwriting discounts and commissions (2.0% of gross proceeds from units offered to public, excluding deferred portion)(3)
|
|
|
|
$ |
6,000,000 |
|
|
|
|
$ |
6,000,000 |
|
|
|
Legal fees and expenses
|
|
|
|
|
250,000 |
|
|
|
|
|
250,000 |
|
|
|
Printing and engraving expenses
|
|
|
|
|
30,000 |
|
|
|
|
|
30,000 |
|
|
|
Accounting fees and expenses
|
|
|
|
|
35,000 |
|
|
|
|
|
35,000 |
|
|
|
SEC/FINRA Expenses
|
|
|
|
|
84,232 |
|
|
|
|
|
84,232 |
|
|
|
Nasdaq listing and filing fees
|
|
|
|
|
75,000 |
|
|
|
|
|
75,000 |
|
|
|
Miscellaneous expenses
|
|
|
|
|
25,768 |
|
|
|
|
|
25,768 |
|
|
|
Total estimated offering expenses (excluding underwriting discounts and commissions)
|
|
|
|
$ |
500,000 |
|
|
|
|
$ |
500,000 |
|
|
|
Proceeds after estimated offering expenses
|
|
|
|
$ |
307,100,000 |
|
|
|
|
$ |
353,000,000 |
|
|
|
Held in trust account(3)
|
|
|
|
$ |
306,000,000 |
|
|
|
|
$ |
351,900,000 |
|
|
|
% of public offering size
|
|
|
|
|
102% |
|
|
|
|
|
102% |
|
|
|
Not held in trust account
|
|
|
|
$ |
1,100,000 |
|
|
|
|
$ |
1,100,000 |
|
|
The following table shows the use of the estimated $1,100,000 of net proceeds not held in the trust account.(5)(6)
| |
|
|
Amount
|
|
|
% of Total
|
|
|
Legal, accounting, due diligence, travel and other expenses in connection with any
business combination(7)
|
|
|
|
$ |
100,000 |
|
|
|
|
|
9.09% |
|
|
|
Legal and accounting fees related to regulatory reporting obligations
|
|
|
|
$ |
75,000 |
|
|
|
|
|
6.82% |
|
|
|
Director & officer liability insurance premiums(4)
|
|
|
|
$ |
650,000 |
|
|
|
|
|
59.09% |
|
|
|
Payment for office space and administrative and support services ($10,000 per month for up to 15 months)
|
|
|
|
$ |
150,000 |
|
|
|
|
|
13.64% |
|
|
|
Nasdaq continued listing fees
|
|
|
|
$ |
58,000 |
|
|
|
|
|
5.27% |
|
|
|
Working capital to cover miscellaneous expenses and reserves (including franchise taxes net of anticipated interest income)
|
|
|
|
$ |
67,000 |
|
|
|
|
|
6.09% |
|
|
|
Total
|
|
|
|
$ |
1,100,000 |
|
|
|
|
|
100% |
|
|
(1)
Includes amounts payable to public shareholders who properly redeem their shares in connection with our successful completion of the initial business combination.
(2)
A portion of the offering expenses will be paid from the proceeds of loans from our sponsor of up to $300,000 as described in this prospectus. As of June 30, 2021, we have borrowed $81,534 under the promissory note with our sponsor. These loans are non-interest bearing, unsecured and are due at
the earlier of December 31, 2021 and the closing of this offering. These amounts will be repaid out of the portion of the proceeds from this offering and the sale of placement units that have been allocated for the payment of offering expenses (other than underwriting discounts and commissions) and will not be held in the trust account. In the event that 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 of 4.0% of the gross proceeds of this offering. Upon and concurrently with the completion of our initial business combination, $12,000,000, which constitutes the underwriters’ deferred commissions (or $14,700,000 if the underwriters’ over-allotment option is exercised in full) will be paid to the underwriters from the funds held in the trust account. See “Underwriting”. The remaining funds, less amounts released to the trustee to pay redeeming shareholders, will be released to us and can be used to pay all or a portion of the purchase 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 commissions.
(4)
This amount represents the approximate amount of annual director and officer liability insurance premiums that we anticipate paying following the completion of this offering until we complete an initial business combination.
(5)
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 our initial business combination based upon the level of complexity of such business combination. In the event we identify a business combination 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. The proceeds held in the trust account will be invested only in U.S. government treasury obligations 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 which invest only in direct U.S. government treasury obligations. Assuming an interest rate of 0.02% per year, we estimate the interest earned on the trust account will be approximately $61,200 per year; however, we can provide no assurances regarding this amount.
(6)
Assumes the underwriters do not exercise the over-allotment option.
(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.
Of the $313,600,000 in gross proceeds we receive from this offering and the sale of the placement units described in this prospectus, or $359,500,000 if the underwriters’ over-allotment option is exercised in full, $306,000,000 ($10.20 per unit), or $351,900,000 if the underwriters’ over-allotment option is exercised in full ($10.20 per unit), will be deposited into a trust account with Continental Stock Transfer & Trust Company acting as trustee, after deducting underwriting discounts and commissions payable upon the closing of this offering of $6,000,000 (regardless of whether the underwriters’ over-allotment option is exercised in full) and an aggregate of $1,600,000 will be available to pay fees and expenses in connection with the closing of this offering and for working capital following the closing of this offering.
We will not be permitted to withdraw any of the principal or interest held in the trust account, 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, until the earliest of (i) the completion of our initial business combination, (ii) the redemption of our public shares if we have not consummated an initial business combination within 15 months from the closing of this offering or during any Extension Period, subject to applicable law, or (iii) the redemption of our public shares properly submitted in connection with a shareholder vote to approve an amendment to our
amended and restated memorandum and articles of association (A) that would modify the substance or timing of our obligation to provide holders of our Class A ordinary shares the right to have their shares redeemed 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 15 months from the closing of this offering or (B) with respect to any other provision relating to the rights of holders of our Class A ordinary shares. Based on current interest rates, we expect that interest income earned on the trust account (if any) will be sufficient to pay our income 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. If 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 from the trust account for general corporate purposes, including for maintenance or expansion of operations of the post-business combination 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. 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 or an affiliate of our sponsor or certain of our officers and directors although they are under no obligation to advance funds to us in such circumstances.
We will reimburse an affiliate of our sponsor for office space and administrative and support services provided to members of our management team, in the amount of $10,000 per month. Upon completion of our initial business combination or our liquidation, we expect to cease paying these monthly fees.
Prior to the consummation of this offering, our sponsor has agreed to loan us up to $300,000 to be used for a portion of the expenses of this offering. As of June 30, 2021, we have borrowed $81,534 under the promissory note with our sponsor. These loans are non-interest bearing, unsecured and are due at the earlier of December 31, 2021 and the closing of this offering. The loan will be repaid upon the closing of this offering out of the portion of the proceeds from this offering and the sale of placement units that have been allocated for the payment of offering expenses (other than underwriting discounts and commissions) and will not be held in the trust account.
DIVIDEND POLICY
We have not paid any cash dividends on our ordinary shares 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. If we increase the size of this offering, we will effect a share capitalization or other appropriate mechanism immediately prior to the consummation of this offering in such amount as to maintain the number of founder shares, on an as-converted basis, at 25% of our issued and outstanding ordinary shares upon the consummation of this offering and issuance of placement units. Further, if we incur any indebtedness, 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 Class A ordinary share, assuming no value is attributed to the warrants included in the units we are offering pursuant to this prospectus or the placement warrants included in the placement units, and the pro forma net tangible book value per Class A ordinary share 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 placement warrants, which would cause the actual dilution to the public shareholders 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 Class A ordinary shares which may be redeemed for cash), by the number of outstanding Class A ordinary shares.
At June 30, 2021, our net tangible book deficit was $133,209, or approximately $(0.01) per ordinary share. After giving effect to the sale of 30,000,000 Class A ordinary shares included in the units we are offering by this prospectus (or 34,500,000 Class A ordinary shares if the underwriters’ over-allotment option is exercised in full), the sale of the placement units and the deduction of underwriting discounts and commissions and estimated expenses of this offering, our pro forma net tangible book value at June 30, 2021 would have been $(11,736,299) or $(0.99) per share (or $(14,492,549) or $(1.08) per share if the underwriters’ over-allotment option is exercised in full), representing an immediate increase in net tangible book value (as decreased by the value of 30,000,000 Class A ordinary shares that may be redeemed for cash, or 34,500,000 Class A ordinary shares if the underwriters’ over-allotment option is exercised in full) of $(0.98) per share (or $(1.07) per share if the underwriters’ over-allotment option is exercised in full) to our sponsor as of the date of this prospectus and an immediate dilution to public shareholders from this offering of $10.00 per public share. Total dilution to public shareholders from this offering will be $10.99 per share (or $11.08 if the underwriters’ over-allotment option is exercised in full).
The following table illustrates the dilution to the public shareholders on a per-share basis, assuming no value is attributed to the warrants included in the units or the placement warrants included in the placement units:
| |
|
|
Without
Over-allotment
|
|
|
With
Over-allotment
|
|
|
Public offering price
|
|
|
|
$ |
10.00 |
|
|
|
|
$ |
10.00 |
|
|
|
Net tangible book value before this offering
|
|
|
|
$ |
(0.01) |
|
|
|
|
$ |
(0.01) |
|
|
|
Increase attributable to public shareholders and sale of the placement units
|
|
|
|
$ |
(0.98) |
|
|
|
|
$ |
(1.07) |
|
|
|
Pro forma net tangible book value after this offering
|
|
|
|
$ |
(0.99) |
|
|
|
|
$ |
(1.08) |
|
|
|
Dilution to public shareholders
|
|
|
|
$ |
10.99 |
|
|
|
|
$ |
11.08 |
|
|
|
Percentage of dilution to public shareholders
|
|
|
|
|
109.9% |
|
|
|
|
|
110.8% |
|
|
For purposes of presentation, we have reduced our pro forma net tangible book value after this offering (assuming the underwriters do not exercise the over-allotment option) by $306,000,000 because holders of up to 100.0% 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 as set forth in our tender offer or proxy materials (initially anticipated to be the aggregate amount held in trust two business days prior to the consummation of our initial business combination, including interest earned on the funds held in the trust account and not previously released to us to pay our taxes, if any, divided by the number of the then-outstanding public shares, subject to the limitations set forth in “Proposed Business — Effecting Our Initial Business Combination — Limitations on Redemptions”). In the event the aggregate cash consideration we would be required to pay for all Class A ordinary 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, all Class A ordinary shares submitted for redemption will be returned to the holders thereof, and we instead may search for an alternate business combination or seek to revise the terms of such business combination.
The following table sets forth information with respect to our initial shareholders and the public shareholders:
| |
|
|
Shares Purchased
|
|
|
Total Consideration
|
|
|
Average Price
Per Share
|
|
| |
|
|
Number
|
|
|
Percentage
|
|
|
Amount
|
|
|
Percentage
|
|
|
Class B ordinary shares(1)
|
|
|
|
|
10,453,333 |
|
|
|
|
|
25.0% |
|
|
|
|
$ |
25,000 |
|
|
|
|
|
0.01% |
|
|
|
|
$ |
0.002 |
|
|
|
Holders of placement shares(1)
|
|
|
|
|
1,360,000 |
|
|
|
|
|
3.3% |
|
|
|
|
|
13,600,000 |
|
|
|
|
|
4.33% |
|
|
|
|
$ |
10.00 |
|
|
|
Public Shareholders
|
|
|
|
|
30,000,000 |
|
|
|
|
|
71.7% |
|
|
|
|
|
300,000,000 |
|
|
|
|
|
95.66% |
|
|
|
|
$ |
10.00 |
|
|
| |
|
|
|
|
41,813,333 |
|
|
|
|
|
100% |
|
|
|
|
$ |
313,625,000 |
|
|
|
|
|
100.000% |
|
|
|
|
|
|
|
|
(1)
Assumes the underwriters do not exercise the over-allotment option and the corresponding forfeiture of 1,530,000 Class B ordinary shares held by our sponsor.
The pro forma net tangible book value per share after this offering (assuming that the underwriters do not exercise their over-allotment option) is calculated as follows:
| |
|
|
Without Over-
allotment
|
|
|
With Over-
allotment
|
|
|
Numerator:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net tangible book value before this offering
|
|
|
|
$ |
(133,209) |
|
|
|
|
$ |
(133,209) |
|
|
|
Net proceeds from this offering and sale of the placement units, net of expenses
|
|
|
|
$ |
307,100,000 |
|
|
|
|
|
353,000,000 |
|
|
|
Plus: Offering costs accrued in advance, excluded from tangible book value
|
|
|
|
|
146,910 |
|
|
|
|
|
146,910 |
|
|
|
Less: Deferred underwriting commissions
|
|
|
|
|
(12,000,000) |
|
|
|
|
|
(14,700,000) |
|
|
|
Less: Warrant liability
|
|
|
|
|
(850,000) |
|
|
|
|
|
(906,250) |
|
|
|
Less: Proceeds held in trust subject to redemption to maintain net tangible
assets of $5,000,001
|
|
|
|
|
(306,000,000) |
|
|
|
|
|
(351,900,000) |
|
|
| |
|
|
|
$ |
(11,736,299) |
|
|
|
|
$ |
(14,492,549) |
|
|
|
Denominator:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ordinary shares outstanding prior to this offering
|
|
|
|
|
11,983,333 |
|
|
|
|
|
11,983,333 |
|
|
|
Less: Ordinary shares forfeited if over-allotment is not exercised
|
|
|
|
|
(1,530,000) |
|
|
|
|
|
— |
|
|
|
Ordinary shares included in the placement units
|
|
|
|
|
1,360,000 |
|
|
|
|
|
1,450,000 |
|
|
|
Ordinary shares underlying the rights to be included in the public units
|
|
|
|
|
30,000,000 |
|
|
|
|
|
34,500,000 |
|
|
|
Less: Shares subject to redemption
|
|
|
|
|
(30,000,000) |
|
|
|
|
|
(34,500,000) |
|
|
| |
|
|
|
|
11,813,333 |
|
|
|
|
|
13,433,333 |
|
|
(1)
Expenses applied against gross proceeds include offering expenses of $500,000 and underwriting discounts and commissions of $6,000,000, excluding deferred underwriting fees. See “Use of Proceeds.”
(2)
We will account for the 680,000 private warrants to be issued in connection with this offering in accordance with the guidance contained in ASC 815-40. Such guidance provides that because the private warrants do not meet the criteria for equity treatment thereunder, each private warrant must be recorded as a liability. Accordingly, we will classify each private warrant as a liability at its fair value. This liability is subject to re-measurement at each balance sheet date. With each such re-measurement, the private warrant liability will be adjusted to fair value, with the change in fair value recognized in our statement of operations.
(3)
If we seek shareholder approval of our initial business combination and we do not conduct redemptions in connection with our initial business combination pursuant to the tender offer rules, our sponsor, management team, advisors or 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. In the event of any such purchases of our shares prior to the completion of our initial business combination, the number of Class A ordinary shares subject to redemption will be reduced by the amount of any such purchases, increasing the pro forma net tangible book value per share. See “Proposed Business — Effecting Our Initial Business Combination — Permitted Purchases and Other Transactions with Respect to Our Securities.”
CAPITALIZATION
The following table sets forth our capitalization at June 30, 2021 on an (i) actual basis and (ii) as adjusted basis to give effect to the filing of our amended and restated memorandum and articles of association, the sale of our units in this offering and the placement units and the application of the estimated net proceeds derived from the sale of such securities:
| |
|
|
June 30, 2021
|
|
| |
|
|
Actual
|
|
|
As Adjusted
|
|
|
Notes payable to related party
|
|
|
|
$ |
81,534 |
|
|
|
|
$ |
— |
|
|
|
Deferred underwriting commissions
|
|
|
|
|
— |
|
|
|
|
|
12,000,000 |
|
|
|
Warrant liability
|
|
|
|
|
— |
|
|
|
|
|
850,000 |
|
|
|
Class A ordinary shares, $0.0001 par value, 200,000,000 shares authorized; -0- and 30,000,000 shares are subject to possible redemption, respectively
|
|
|
|
|
— |
|
|
|
|
|
306,000,000 |
|
|
|
Preference shares, $0.0001 par value, 1,000,000 shares authorized; none issued and outstanding, actual and as adjusted.
|
|
|
|
|
— |
|
|
|
|
|
— |
|
|
|
Class B ordinary shares, $0.0001 par value, 20,000,000 shares authorized, 11,983,333 and 10,453,333 shares issued and outstanding, actual and as adjusted, respectively.
|
|
|
|
|
1,198 |
|
|
|
|
|
1,045 |
|
|
|
Additional paid-in capital
|
|
|
|
|
23,802 |
|
|
|
|
|
— |
|
|
|
Accumulated deficit
|
|
|
|
|
(11,299) |
|
|
|
|
|
(11,737,344) |
|
|
|
Total shareholders’ equity
|
|
|
|
|
13,701 |
|
|
|
|
|
(11,736,299) |
|
|
|
Total capitalization
|
|
|
|
$ |
95,235 |
|
|
|
|
$ |
307,113,701 |
|
|
(1)
Assumes the underwriters do not exercise the over-allotment option and the corresponding forfeiture of 1,530,000 Class B ordinary shares held by our sponsor.
(2)
Our sponsor has agreed to loan us up to $300,000 to be used for a portion of the expenses of this offering. As of June 30, 2021, we have borrowed $81,534 under the promissory note with our sponsor.
(3)
We will account for the 680,000 private warrants to be issued in connection with this offering in accordance with the guidance contained in ASC 815-40. Such guidance provides that because the private warrants do not meet the criteria for equity treatment thereunder, each private warrant must be recorded as a liability. Accordingly, we will classify each private warrant as a liability at its fair value. This liability is subject to re-measurement at each balance sheet date. With each such re-measurement, the private warrant liability will be adjusted to fair value, with the change in fair value recognized in our statement of operations.
(4)
Upon the completion of our initial business combination, we will provide our shareholders 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 the initial business combination including interest earned on the funds held in the trust account and not previously released to us to pay our taxes, subject to the limitations described herein whereby our net tangible assets will be maintained at a minimum of $5,000,001 and any limitations (including, but not limited to, cash requirements) created by the terms of the proposed business combination.
(5)
The “as adjusted” value of shares of ordinary shares, subject to redemption equals the “as adjusted” total assets of $307,113,701, less “as adjusted” total liabilities of $12,850,000 (including deferred underwriting commissions of $12,000,000 and warrant liability of $850,000) and “as adjusted” total shareholders’ equity of $(11,736,299).
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
Overview
Semper Paratus Acquisition Corporation is a newly organized blank check company, incorporated as a Cayman Islands exempted company for the purpose of effecting a merger, share exchange, asset acquisition, share purchase, reorganization or similar business combination with one or more businesses. We believe the growth-oriented subsectors of the transportation, supply chain and logistics industry present particularly attractive investment opportunities, though we will not be limited to a particular industry or geographic region in our identification and acquisition of a target company. We have not selected any potential business combination target and we have not, nor has anyone on our behalf, initiated any substantive discussions, directly or indirectly, with any potential business combination target. To date, our efforts have been limited to organizational activities.
We intend to effectuate our initial business combination using cash from the proceeds of this offering and the sale of the placement units, our shares, debt or a combination of cash, equity and debt. The issuance of additional shares 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 Class B ordinary shares resulted in the issuance of Class A ordinary shares on a greater than one-to-one basis upon conversion of the Class B ordinary shares;
•
may subordinate the rights of holders of Class A ordinary shares if preference shares are issued with rights senior to those afforded to our Class A ordinary shares;
•
could cause a change of control if a substantial number of our Class A ordinary shares are 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 officers and directors;
•
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, Class A ordinary shares 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 debt, 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 our Class A ordinary shares;
•
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 our Class A ordinary shares 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.
As indicated in the accompanying financial statements, as of June 30, 2021, we had no cash and deferred offering costs of $146,910. Further, we expect to incur significant costs in the pursuit of our initial business combination. 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 absent the consummation of this offering.
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 (i) $25,000 paid by our sponsor to cover certain of our offering and formation costs in exchange for the issuance of the founder shares to our sponsor and (ii) the receipt of loans of up to $300,000 made by our sponsor under an unsecured promissory note. As of June 30, 2021, we have borrowed $81,534 under the promissory note with our sponsor. We estimate that the net proceeds from (i) the sale of the units in this offering, after deducting estimated offering expenses of $500,000, underwriting discounts and commissions of $6,000,000 (excluding deferred underwriting commissions of $12,000,000, or $14,700,000 if the underwriters’ over-allotment option is exercised in full), and (ii) the sale of the placement units for a purchase price of $13,600,000 (or $14,500,000 if the underwriters’ exercise their over-allotment option in full) will be $307,100,000 (or $353,000,000 if the underwriters’ over- allotment option is exercised in full). Of this amount, $306,000,000 (or $351,900,000 if the underwriters’ over- allotment option is exercised in full) will be held in the trust account, which includes the deferred underwriting commissions described above. The proceeds held in the trust account will be invested only in U.S. government treasury obligations 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 which invest only in direct U.S. government treasury obligations. The remaining $1,100,000 will not be held in the trust account. In the event that our offering expenses exceed our estimate of $500,000, 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 $500,000, 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 (less taxes payable and deferred underwriting commissions), to complete our initial business combination. We may withdraw interest income (if any) to pay taxes, if any. 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 interest income earned on the amount in the trust account (if any) will be sufficient to pay our income taxes. Any 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 $1,100,000 of proceeds held outside the trust account. We will use these funds to primarily 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, and structure, negotiate and complete a business combination.
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 may, but is not obligated to, loan us additional 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. 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 for such repayment. Up to $1,500,000 of such loans made available from our sponsor or its affiliates may be convertible into units of the post-business combination entity at a price of $10.00 per unit at the option of the lender. The units would be identical to the placement units. Except for the foregoing, the terms of such additional loans have not been determined and no written agreements exist with respect to such loans. Prior to the completion of our initial business combination, we do not expect to seek loans from parties other than our sponsor or its affiliates 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 $100,000 for legal, accounting, due diligence, travel and other expenses associated with structuring, negotiating and documenting successful business combinations; $75,000 for legal and accounting fees related to regulatory reporting obligations; $150,000 for office space and administrative and support services; $58,000 for Nasdaq continued listing fees; $650,000 for directors’ and officers’ liability premiums; and $67,000 for general working capital that will be used for miscellaneous expenses and reserves.
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 with respect to a particular proposed business combination, although we do not have any current intention to do so.
Moreover, we may need to obtain additional financing to complete our initial business combination, either because the transaction requires more cash than is available from the proceeds held in our trust account, or because we become obligated to redeem a significant number of our public shares upon completion of the business combination, in which case we may issue additional securities or incur debt in connection with such business combination. If we have not consummated our initial business combination within the required time period because we do not have sufficient funds available to us, we would be forced to cease operations and liquidate the trust account.
Controls and Procedures
We are not currently required to certify 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 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 would we be required to comply with the independent registered public accounting firm attestation requirement on internal control over financial reporting. Further, for as long as we remain an emerging growth company as defined in the JOBS Act, 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 auditors tested our systems, of our 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:
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staffing for financial, accounting and external reporting areas, including segregation of duties;
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reconciliation of accounts;
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proper recording of expenses and liabilities in the period to which they relate;
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evidence of internal review and approval of accounting transactions;
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documentation of processes, assumptions and conclusions underlying significant estimates; and
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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 independent auditors 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 placement units held in the trust account will be invested in U.S. government treasury obligations 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 which invest only in direct U.S. government treasury obligations. Due to the short-term nature of these investments, we believe there will be no associated material exposure to interest rate risk. However, if the interest rates of U.S. Treasury obligations become negative, we may have less interest income available to us for payment of taxes, and a decline in the value of the assets held in the trust account could reduce the principal below the amount initially deposited in the trust account.
Off-balance Sheet Arrangements; Commitments and Contractual Obligations; Quarterly Results
As of June 30, 2021, 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 not conducted any operations to date.
JOBS Act
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, (i) provide an auditor’s attestation report on our system of internal controls over financial reporting pursuant to Section 404 of the Sarbanes-Oxley Act, (ii) 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, (iii) 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 (iv) disclose certain executive compensation related items such as the correlation between executive compensation and performance and comparisons of the chief executive officer’s compensation to median employee compensation. These exemptions will apply for a period of five years following the completion of our initial public offering or until we are no longer an “emerging growth company”, whichever is earlier.
PROPOSED BUSINESS
General
Semper Paratus Acquisition Corporation (“Semper Paratus”) is a newly organized, blank check company incorporated as an exempted company in the Cayman Islands and formed for the purpose of effecting a merger, share exchange, asset acquisition, share purchase, reorganization or similar business combination with one or more businesses, which we refer to throughout this prospectus as our initial business combination. To date, our efforts have been limited to organizational activities related to this offering. We have generated no operating revenues to date and we do not expect that we will generate operating revenues until we consummate our initial business combination. We have not identified any potential 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 with a company in any business, industry, sector or geographic location, we currently intend to concentrate our efforts to pursue an acquisition opportunity in the transportation, supply chain and logistics industry in any stage of the target’s corporate evolution. Traditional and next-generation supply chain solutions, physical or digital, are driving essential changes across end markets as business leaders around the world navigate unprecedented supply chain disruption caused by the COVID-19 pandemic. We plan to capitalize on our management team’s extensive experience in our target sectors, along with their valuable networks of seasoned venture capital and private equity investors, veteran operational partners and others to identify these unique acquisition opportunities. Our management team has a distinguished history of accomplishments across a broad spectrum of subsectors within the transportation, supply chain, and logistics industry, growing businesses into industry-leading enterprises by structurally improving their strategic position, growth trajectory and profitability. Our board of directors also has a significant track record in our target sectors and expertise in corporate strategy, technological innovation and operational enhancement. We expect their knowledge will enhance the management team’s perspective as we evaluate potential initial business combinations and support the target’s management after completing an initial business combination, to the extent they remain on our board following the completion of our initial business combination.
Our Management Team
Our management team is led by Richard N. Peretz, our Executive Chairman, Hooman Yazhari, our Vice Chairman, Ben Baldanza, our Chief Executive Officer, Jeff Rogers, our President, and Philippe J. Kurzweil, our Chief Financial Officer. The team has significant operational and transactional experience, primarily in the transportation, mobility and supply chain management industries. We believe our management team has complementary skills and deep operational experience relevant to our target industries with a strong history of working productively and creatively with stakeholders and labor groups, which represent a prominent and sustainable competitive advantage. Enriching this differentiated characteristic is management’s well-connected network, extending from leadership of the largest industrial and transportation enterprises to founders at early-stage technology ventures across our target markets as well as consultants, private equity and venture capital firms, and more. Our team is a flat, consensus-driven organization with a focus on seeking business combination opportunities that we hope will meaningfully benefit from accessing capital via the public market and more importantly, have the potential to become a world-class, industry leading organization with help from the wide-ranging set of competencies of our officers and directors.
Richard N. Peretz serves as Executive Chairman. Mr. Peretz currently serves on the Board of Directors for Tribe Capital Growth Corp. I and Tribe Capital Growth Corp. II, both special purpose acquisition companies, as well as for ELMS — Electric Last Mile, Inc., an EV company and is a director nominee for Altus Power, a clean energy C&I company. Mr. Peretz also serves as a venture partner for Playground Global, an early-stage investment firm. From 1981 to 2020, Mr. Peretz held a number of executive roles at United Parcel Service, Inc. (“UPS”) in US and Global operations as well as in Supply Chain Management. From 2015 to 2019, he served as Chief Financial Officer (CFO) and a member of the UPS Executive Leadership Team. The senior leadership team was responsible for the global company’s strategy and day to day operations in over 220 countries. Mr. Peretz oversaw all global financial operations and acted as senior liaison to the financial community. He spearheaded the move into technology-based operational capital investments and
improved the capital structure along with the working capital for UPS. Prior to serving as CFO, Mr. Peretz was both the corporate Controller and Treasurer, leading all global M&A for UPS, overseeing nearly $3 billion in acquisitions globally in areas including healthcare logistics, truckload brokerage, business-to-business shipping and business-to-consumer shipping. Acquisitions at UPS included third-party logistics provider Coyote Logistics and healthcare logistics companies such as Marken, Polar Speed (UK), Poltraf (Poland), Cemelog (Hungary) and Pieffe Group (Italy). He helped strengthen UPS’s business-to-consumer portfolio with the acquisitions of iParcel (US) and Kiala (Europe). Mr. Peretz also helped expand the company’s international small package footprint in Turkey, Slovenia, Romania, South Korea, Vietnam and Costa Rica.
Mr. Peretz also served on the team responsible for taking UPS public in 1999, the largest IPO in U.S. history at the time. Mr. Peretz served as an investment committee member for the UPS Strategic Venture Fund. Previously, he was a member of the Board of Directors for First International Bancorp. Mr. Peretz holds a BBA in Accounting (1985) from the University of Texas in San Antonio and an MBA (1995) from the Goizueta Business School at Emory University. We believe Mr. Peretz is well qualified to serve as a member of our board of directors due to his extensive strategic, operational and management experience.
Hooman Yazhari serves as Vice Chairman. Mr. Yazhari is the Founder and CEO of Mobility Capital Group, an impact aligned investment manager providing credit-oriented capital for the next generation of enterprises and assets in mobility, logistics and transportation. Mr. Yazhari has served as an Independent Director of Voyager Aviation, a global aircraft lessor since 2017. He also has been a Co-Founder and Chairman of Beyond Capital Fund, an early stage and emerging market focused impact investment fund, since 2010. From February 2018 to March 2019, Mr. Yazhari served as Chief Executive Officer and a member of the Board of Directors of Waypoint Leasing, the largest independent global helicopter lessor and financier, where he led an operational and balance sheet restructuring and transformation and successful strategic sale of its operating assets and business, pursuant to a voluntary filing under Chapter 11 of the United States Bankruptcy Code, in March 2019. From 2015 to 2018, he served as General Counsel and Chief Administrative Officer for CHC Helicopter Corporation (“CHC”), a global helicopter services company, while taking on a leadership role in the operational and balance sheet restructuring and related turnaround, pursuant to a voluntary filing under Chapter 11 of the United States Bankruptcy Code. From 2012 to 2014, Mr. Yazhari served as General Counsel for International Lease Finance Corporation (“ILFC”), the largest global aircraft lessor, serving as part of the team that rebuilt and renewed the lessor after the global financial crisis and led it to a strategic sale. Mr. Yazhari previously served as an Independent Director of Speedcast Americas, Inc., a global telecommunication enterprise (2020-2021) and Vice Chairman and Lead Independent Director of Bristow Group, a global helicopter services company. Mr. Yazhari holds an LLM in Corporate and Commercial Law (1995) from the London School of Economics and Political Science, and a BA in Law (1994) from Jesus College, Oxford University. We believe Mr. Yazhari is well qualified to serve as a member of our board of directors due to his extensive strategic, operational and management experience.
B. Ben Baldanza will serve as Chief Executive Officer. Mr. Baldanza is currently the CEO of Diemacher LLC, an advisory firm focused on business restructuring, revenue optimization and cost containment. Mr. Baldanza currently serves on the Board of Directors for JetBlue Airways, where he serves as Chair of the Audit Committee, GoAir Limited, where he serves as Vice Chairman, and Six Flags Entertainment. From 2006 to 2016, Mr. Baldanza served as the President and CEO, and as a director, of Spirit Airlines, Inc. (“Spirit Airlines”), a low-cost airline, where he oversaw revenue growth from $500 million to $2.1 billion. During his time at Spirit Airlines, he led an IPO in 2011 while also managing an operational turnaround that resulted in industry leading margins. Recruited by Oaktree Capital in 2004, Mr. Baldanza transformed Spirit into an ‘Ultra Low Cost Carrier,’ leveraging a new aircraft fleet, establishment of a defensible franchise network, unbundling of pricing and reduction of costs per seat mile. Mr. Baldanza was twice named to the list of Business Travel News’s 25 Most Influential.
Prior to 2005, Mr. Baldanza held executive roles with American Airlines, Northwest Airlines, Continental Airlines, TACA Airlines (“TACA”) and US Airways where he was responsible for finance, marketing and revenue management. While at Continental Airlines, Mr. Baldanza assisted with applying innovations in scheduling, pricing and revenue management, increasing unit revenues, underpinning a rise in the share price and improvements in profitability. With US Airways, Mr. Baldanza led the rationalization of duplicative hubs, rapid Caribbean expansion and shift to monetize frequent flier rewards on a profit, as opposed to usage, basis.
Mr. Baldanza also worked at UPS, where he supervised the improvement of revenues and capital cost savings. Mr. Baldanza also currently serves as an Operating Partner for Sterling Investment Partners, a private equity firm, and as an Adjunct Professor of Economics at George Mason University. He holds a BA in Policy Studies and Economics (1984) from Syracuse University and an MPA (1986) from Princeton University in Urban and Regional Planning and Transportation Economics.
Jeff Rogers will serve as President. Mr. Rogers is currently a strategic advisor to TruckPark, an inventory management and booking platform for the trucking industry, and an operating advisor to Red Arts Capital, a private equity firm focused on supply chain and industrial businesses. From 2015 to 2020, Mr. Rogers served as CEO and director of Universal Logistics Holdings (“Universal Logistics”), a global asset-light provider of transport and logistics solutions. During an 18-month period at Universal Logistics, Mr. Rogers led multiple acquisitions in the International Intermodal space that provided strategic footprints and positively contributed to growth and profitability. From 1998 to 2013, Mr. Rogers held several executive positions at YRC Worldwide including CFO of YRC Regional Transportation (2006-2008), President of USF Holland Inc. (“Holland”) (2008-2011), a YRC subsidiary and President of YRC Freight (2011-2013). While President of USF Holland, Mr. Rogers led a significant turnaround, closing unprofitable locations and shrinking Holland’s footprint to focus on next-day and two-day lanes. From 1984 to 1998, Mr. Rogers held numerous finance and operations related roles at UPS. He holds a BS in Accounting (1988) from Kansas Newman University and an MBA (1995) from Baker University. Mr. Rogers is also an Army veteran and served as an Airborne Ranger from 1980 to 1984.
Philippe J. Kurzweil will serve as Chief Financial Officer. From 2020 to 2021, Mr. Kurzweil was a part of the investment team at Arch Companies, a real estate private equity firm, where he was responsible for deal sourcing, due diligence and financing. From 2013 to 2020, he was a Research Analyst at Corsair Capital Management LP, an investment advisor, where he was responsible for idea generation and investment underwriting. From 2008 to 2013, Mr. Kurzweil was a Senior Associate at Morgan Stanley Investment Management, an investment advisor, where he was responsible for macroeconomic research and the management of fixed income portfolios. He holds a BSE (2008) in Operations Research and Financing Engineering from Princeton University with highest honors.
Paul P. Jebely serves as an Independent Director and chair of the Compensation Committee. Currently, Mr. Jebely is a managing partner at Pillsbury Winthrop Shaw Pittman, where he also serves in various leadership positions, such as co-chair of aviation finance and co-chair of private wealth. His law practice is focused exclusively on the private and commercial aviation industry. He has served as counsel on billions of dollars of deals involving financing, acquisition, disposal and merger transactions in addition to handling numerous dispute, enforcement and restructuring situations. Mr. Jebely is well regarded in the aviation and legal industries, and has been named top private client attorney in Asia (2020) and rated top private aircraft attorney in Asia (2016 – 2020).
From 2011 to 2016, Mr. Jebely held numerous positions at Clyde & Co where he rose to Senior Equity Partner and Global Head of Aviation Finance. From 2008 to 2011, Mr. Jebely held numerous positions at Ashurst, where he rose to head of their AMEA aviation practice. Mr. Jebely holds a JD (2005) from Osgoode Hall Law School at York University and a BA (2002) from Trinity Collage at the University of Toronto.We believe Mr. Jebely is well qualified to serve as a member of our board of directors due to his extensive strategic, legal and transactional experience.
Parizad Olver Parchi will serve as Independent Director and Chair of the Audit Committee. Ms. Olver is currently the Founder and Managing Partner of Panorama Aero, a US-based special mission aerospace lessor and end-to-end logistics provider. Panorama Aero was founded in 2018 through the management buyout of Cowen Aviation Finance, a company Ms. Olver established and led while at Cowen. Immediately after founding Panorama Aero, she established a funding relationship with Fortress Investment Group, called Triangle Aero. From 2009 to 2018, Ms. Olver held numerous executive roles at Cowen Inc., a multinational investment bank, where she most recently served as President and CEO of Cowen Aviation Finance, an operating lessor funded by Cowen Inc. From 2007 to 2009, Ms. Olver served as a senior strategist at Fortress Investment Group’s Drawbridge Special Opportunities Fund, whose investment portfolio included structured product securities and related investments in the aircraft, equipment and specialty finance sectors.
Ms. Olver’s investment experience began in 2005 at Ramius Capital Group, a multi-strategy hedge fund, where she was a special situations investor and co-managed an investment strategy that included a leasing book of distressed narrow body aircraft. She began her career at Morgan Stanley as an investment banking analyst from 2002 to 2005. Ms. Olver holds a BS (2001) from UC Berkley’s Haas School of Business and an MBA (2011) from Columbia University and London Business School. We believe Ms. Olver is well qualified to serve as a member of our board of directors due to her extensive strategic, operational, management, and financial experience.
Brad Stewart will serve as Independent Director. Mr. Stewart is currently CEO and board member of Fair.com, a US-based automotive marketplace and technology company. Previously, from 2011 to 2019, Mr. Stewart held numerous executive roles at XOJet, the largest on-demand private jet services company in North America, most recently serving as Chairman and CEO. While leading XOJet, he oversaw a highly complex and regulated business with three separate business units: aircraft fleet ownership and operations; branded direct-to-consumer brokerage with membership/subscription; and shuttle operations. Concurrent with his tenure at XOJet, from 2014 to 2019, Mr. Stewart served as Senior Advisor to TPG Growth, the growth equity and venture capital division of a global private equity company, where he served on multiple portfolio company boards. From 2007 to 2010, Mr. Stewart served as Vice President and then Portfolio Company Advisor at Parthenon Capital, a middle market private equity company with expertise in financial, healthcare and business services. Mr. Stewart began his career as a consultant working at both McKinsey & Company (2004-2007) and Deloitte Consulting (1999-2002). Mr. Stewart holds an MBA from Columbia Business School (2004) and a BS in Corporate Finance from University of Minnesota’s Carlson School of Management (1999). We believe Mr. Stewart is well qualified to serve as a member of our board of directors due to his extensive strategic, operational, and management experience.
The past performance of the members of our management team or their affiliates is not a guarantee that we will be able to identify a suitable candidate for our initial business combination or of success with respect to any business combination we may consummate. Mr. Peretz has had management experience with blank check companies or special purpose acquisition companies, including Tribe Capital Growth Corp. I and Tribe Capital Growth Corp. II. Although Tribe Capital Growth Corp. I and Tribe Capital Growth Corp. II are both special purpose acquisition companies, both entities focus on the technology sector rather than the transportation, supply chain and logistics industry. In addition, Tribe Capital Growth Corp. II, as of the date of this prospectus, has not yet consummated its initial public offering. Except for Mr. Peretz, at this time, none of our other officers or directors, our sponsor, nor its respective officers, directors, employees, or affiliates, have had management experience with blank check companies or special purpose acquisition companies in the past. You should not rely on the historical record of the performance of our management or any of their affiliates’ performance as indicative of our future performance.
Our Independent Director and Independent Director Nominees
Our efforts to seek a suitable business combination target will be complemented and augmented by the expertise and network of the relationships of our independent director, Paul P. Jebely, and our independent director nominees, Parizad Olver Parchi and Brad Stewart, each of whom has extensive experience in business and financial matters, as well as a deep understanding of the transportation, supply chain and logistics sector.
For additional information regarding our independent director nominees, see “Management — Officers, Directors and Director Nominees.”
Industry Opportunity
The COVID-19 pandemic has significantly challenged the resilience of global supply chains, putting a signification portion of global companies’ earnings and cash flows at risk. We believe that the pandemic has highlighted the urgency and significance of supply chain innovations, as company executives seek to instill flexibility into their logistics networks and deliver productivity improvements. We believe companies must recognize the fundamental shifts in how customers spend and how transportation and logistics infrastructures should operate differently to meet customer expectations and foster trust and loyalty. The global logistics industry was worth $6.255 trillion in 2020 and is projected to grow at a 4.7% compound annual growth
rate from 2020 to 2024 according to Transport Intelligence.2 Multiple macroeconomic trends, such as the globalization of trade, acceleration of e-commerce adoption, rise of Internet-of-Things (IoT) enabled devices, focus on energy efficiency/carbon footprint and emergence of specialty outsourced transportation and logistics providers, are expected to be the driving force of market growth for logistics services providers.
The e-commerce industry relies on exceptionally competent logistics services to manage its supply chains and meet its consumer promises. Since the onset of the COVID-19 pandemic, widespread stay-at-home orders and concerns over the virus have compressed 10 years of adoption of e-commerce into three months, according to McKinsey. The impact of this acceleration is significant to both business-to-business (B2B) and business-to-consumer (B2C) enterprises. As companies prepare for this structural uplift and large influx of online traffic, new technologies and operation innovations are strategically imperative for navigating fulfillment challenges and associated reverse logistics volume.
As global supply chains become increasingly integrated, innovations around logistics automation, big data analytics, and network optimization have gained traction across the industry. Interoperability is playing an increasingly critical role for service providers today. We believe that companies view digital interoperability, through data analytics and information exchanges, as the key enabler of the next-generation supply chain. We believe logistics of tomorrow will heavily rely upon artificial intelligence, autonomous systems, and digitalization to help connect and coordinate for improved visibility, productivity, and predictability. We also believe logistics management via multi-modal transport requires handovers between stakeholders and numerous document exchanges. As global trade volume grows, we anticipate that demand for faster processing and communication across electronic interfaces will follow. We believe that digitally-enabled supply chains can provide real-time tracking of shipments, delivery time prediction, and much higher automation-enabled throughput. In order to remain competitive, we believe transportation service providers must embrace and adopt digital transformation to deliver expected business results.
We intend to source our potential combination opportunities by proactively approaching our extensive network of contacts, including private equity and venture capital sponsors, executives of public and private companies, merger and acquisition advisory firms, investment banks, capital markets desks, lenders and other financial intermediaries. We believe the prior operational and investment experience of our team will give us a competitive advantage when accessing potential initial business combination opportunities. Collectively, our management team and directors have extensive experience in the following areas:
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Broad experience in both the public and private companies over the last three decades providing guidance on managing a wide range of challenges, including strategy, operations, finance, marketing and regulatory affairs.
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Established networks across the global transportation, supply chain and logistics sectors providing a deep sourcing network and due diligence acumen.
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Extensive operating and investing experience and a strong track record of creating shareholder value, with clear focus on operations and organizational alignment with management for progressive growth.
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Scaling companies with compelling competitive moats and unit economics models through organic and acquisition-based strategic investments.
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Ability to attract, assess and develop talented, high performing and resilient management teams, with an emphasis on mentoring and values-based leadership, excellence and integrity.
Following the completion of this offering, we intend to begin the process of communicating with the network of relationships of our management team and their affiliates to articulate the parameters for our search for a potential initial business combination target and begin the process of pursuing and reviewing potential opportunities.
Our Acquisition Criteria
Consistent with our business strategy, we have identified the following general criteria and guidelines that we believe are important in evaluating prospective targets for our acquisition opportunities. We intend
2
Converted to USD from €5.275 trillion at a rate of 1:1.1858 as of June 30, 2021.
to use these criteria and guidelines in evaluating initial business combination opportunities, but we may decide to enter into our acquisition with a target business that does not meet any or all of these criteria and guidelines.
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Asset or Non-Asset Based Companies: Innovative companies with unique assets or intellectual property, disruptive platforms and product offerings, will be at the forefront of our evaluation process. Our management team and our board have extensive operational, commercial and transactional experience with technology-driven companies in our target sectors, and we intend to use these skills to identify market leaders;
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Defensible Forward Looking Business Model: Companies exposed to attractive trends in an emerging space that will continue to evolve in a post-COVID world, with differentiated technology aimed at solving critical challenges in their areas of focus, efficiency, customer experience and sustainability;
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Scalable Business with Opportunity to Produce Attractive Financial Returns: Marketability to support significant growth while also driving margin expansion through technological or operational advancements;
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Significant Opportunity for Near-and Long-Term Growth: Fundamentally sound business that is underperforming its full potential and can benefit from applications and use of modern technology and tools, which can be leveraged in novel and transformative ways;
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Capable and Creative Management Team: Qualified leadership team that is open to mentorship, with a demonstrated track record of driving organic revenue growth and margin improvement;
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Partnership Approach: Companies that will benefit from our management team’s knowledge of industry dynamics, proven collection of operational strategies and tools, access to capital and relationships with key players in target industries and ability to rapidly scale businesses; and
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Value Proposition as a Public Company: Companies that will benefit from being publicly traded and having access to the public capital markets, enhancing its ability to pursue accretive acquisitions, high- return capital projects, and/or strengthen its balance sheet.
These criteria are not intended to be exhaustive. Any evaluation relating to the merits of a particular initial business combination may be based, to the extent relevant, on these general guidelines as well as other considerations, factors and criteria that our management team may deem relevant. In the event that we decide to enter into our initial business combination with a target business that does not meet any or all of the above criteria and guidelines, we intend to disclose that the target business does not meet the above criteria in our shareholder communications related to our initial business combination, which, as discussed in this prospectus, would be in the form of proxy solicitation or tender offer materials that we would file with the SEC.
Our Acquisition Process
In evaluating a prospective target business, we intend to conduct a comprehensive due diligence review. That due diligence review may include, among other things, financial statement analysis, document reviews, meetings with the target’s management and other employees, consultations with relevant industry experts, competitors, customers and suppliers, as well as a review of additional information that we will seek to obtain as part of our analysis of a target company.
We are not prohibited from pursuing an initial business combination with a business that is affiliated with our sponsor or a member of our management team. In the event we seek to complete our initial business combination with a business that is affiliated with our sponsor or a member of our management team, we, or a committee of independent and disinterested directors, intend to obtain an opinion from an independent investment banking firm that is a member of the Financial Industry Regulatory Authority (“FINRA”) or an independent accounting firm that our 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.
We currently do not have any specific business combination under consideration. Our officers and directors have neither individually selected nor considered a target business nor have they had any substantive
discussions regarding possible target businesses among themselves or with our underwriters or other advisors. Our management team is regularly made aware of potential business opportunities, one or more of which we may desire to pursue for a business combination, but we have not (nor has anyone on our behalf) contacted any prospective target business or had any substantive discussions, formal or otherwise, with respect to a business combination transaction with our company. Additionally, we have not, nor has anyone on our behalf, taken any substantive measure, directly or indirectly, to identify or locate any suitable acquisition candidate for us, nor have we engaged or retained any agent or other representative to identify or locate any such acquisition candidate.
Certain of our directors, director nominees 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 entities.
Initial Business Combination
So long as our securities are then listed on the Nasdaq, our initial business combination must occur with one or more target businesses that together have an aggregate fair market value of at least 80% of the net assets held in the trust account (excluding the deferred underwriting commissions and taxes payable on the interest earned on the trust account) at the time of signing a definitive agreement in connection with our initial business combination. Our board of directors intends to make the determination as to fair market value of our initial business combination. While we consider it unlikely that our board of directors will not be able to make an independent determination of the fair market value of a target business or businesses, it may be unable to do so if the board of directors is less familiar or experienced with the target business, there is a significant amount of uncertainty as to the value of the target’s assets or prospects, including if such target is at an early stage of development, operations or growth, or if the anticipated transaction involves a complex financial analysis or other specialized skills and the board of directors determines that outside expertise would be helpful or necessary in conducting such analysis. If our board of directors is unable to independently determine the fair market value of the target business or businesses, we intend to obtain an opinion from an independent investment banking firm that is a member of FINRA or an independent accounting firm with respect to the satisfaction of such criteria. Unless such opinion includes material information regarding the valuation of a target business or the consideration to be provided, it is not anticipated that copies of such opinion would be distributed to our shareholders. However, if required under applicable law, any proxy statement that we deliver to shareholders and file with the SEC in connection with a proposed transaction will include such opinion. We have also agreed not to enter into a definitive agreement regarding an initial business combination without the prior consent of our sponsor. Additionally, pursuant to Nasdaq rules, any initial business combination must be approved by a majority of our independent directors.
We anticipate structuring our initial business combination so that the post-business combination company in which our public shareholders own shares will own or acquire 100% of the equity interests or assets of the target business or businesses. We may, however, structure our initial business combination such that the post-business combination company owns or acquires less than 100% of such interests or assets of the target business in order to meet certain objectives of the target management team or shareholders or for other reasons, but we will only complete such business combination if the post-business combination company owns or acquires 50% or more of the outstanding voting securities of the target or otherwise acquires a controlling interest in the target sufficient for it not to be required to register as an investment company under the Investment Company Act of 1940, as amended, which we refer to as the Investment Company Act. Even if the post-business combination company owns or acquires 50% or more of the voting securities of the target, our shareholders prior to the business combination may collectively own a minority interest in the post-business combination company, depending on valuations ascribed to the target and us in the business combination. For example, we could pursue a transaction in which we issue a substantial number of new shares in exchange for all of the outstanding capital stock, shares or other equity interests of a target. In this case, we would acquire a 100% controlling interest in the target. However, as a result of the issuance of a substantial number of new shares, our shareholders immediately prior to our initial business combination could own less than a majority of our 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-business combination 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 the 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. If our securities are not then listed on the Nasdaq for whatever reason, we would no longer be required to meet the foregoing 80% of net assets test.
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.
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 a target business an alternative to the traditional initial public offering through a merger or other business combination with us. In a business combination transaction with us, the owners of the target business may, for example, exchange their shares of stock, shares or other equity interests in the target business for our Class A ordinary shares (or shares of a new holding company) or for a combination of our Class A ordinary shares and cash, allowing us to tailor the consideration to the specific needs of the sellers.
Although there are various costs and obligations associated with being a public company, we believe target businesses will find this method a more expeditious and cost effective method to becoming a public company than the typical initial public offering. The typical initial public offering process takes a significantly longer period of time than the typical business combination transaction process, and there are significant expenses in the initial public offering process, including underwriting discounts and commissions, 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 or have negative valuation consequences. Once public, we believe the target business would then have greater access to capital, an additional means of providing management incentives consistent with shareholders’ interests and the ability to use its shares as currency for acquisitions. Being a public company can offer further benefits by enhancing a company’s profile among potential new customers and vendors and aid in attracting talented employees.
While we believe that our structure and our management team’s backgrounds will make us an attractive business partner, some potential target businesses may view our status as a blank check company, such as our lack of an operating history and our ability to seek shareholder approval of any proposed initial business combination, negatively.
We are an “emerging growth company”, as defined in Section 2(a) of the Securities Act, as modified by the JOBS Act. As such, we are eligible to take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not “emerging growth companies” including, but not limited to, not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements, and exemptions from the requirements of holding a non-binding advisory vote on executive compensation and shareholder 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 Class A ordinary shares that are held by non-affiliates equals or exceeds $700 million as of the last business day of the preceding second fiscal quarter, and (2) the date on which we have issued more than $1.0 billion in non-convertible debt securities during the prior three-year period.
Additionally, we are a “smaller reporting company” as defined in Item 10(f)(1) of Regulation S-K. Smaller reporting companies may take advantage of certain reduced disclosure obligations, including, among other things, providing only two years of audited financial statements. We will remain a smaller reporting company until the last day of the fiscal year in which (1) the market value of our ordinary shares held by non-affiliates exceeds $250 million as of the last business day 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 ordinary shares held by non-affiliates equals or exceeds $700 million as of the last business day of that year’s second fiscal quarter.
After completion of this offering and until the completion of our initial business combination, only holders of our founder shares will have the right to vote on the appointment of directors. As a result, the Nasdaq will consider us to be a “controlled company” within the meaning of the Nasdaq corporate governance standards. Under the Nasdaq corporate governance standards, a company of which more than 50% of the voting power is held by an individual, group or another company is a “controlled company” and may elect not to comply with certain corporate governance requirements. We do not intend to utilize these exemptions and intend to comply with the corporate governance requirements of the Nasdaq, subject to applicable phase-in rules. However, if we determine in the future to utilize some or all of these exemptions, you will not have the same protections afforded to shareholders of companies that are subject to all of the Nasdaq corporate governance requirements.
Financial Position
With funds available for a business combination initially in the amount of $294,000,000, after payment of the estimated expenses of this offering and $12,000,000 of deferred underwriting commissions (or $337,200,000 after payment of the estimated expenses of this offering and $14,700,000 of deferred underwriting commissions if the underwriters’ over-allotment option is exercised in full), we offer a target business a variety of options such as creating a liquidity event for its owners, providing capital for the potential growth and expansion of its operations or strengthening its balance sheet by reducing its debt ratio. Because we are able to complete our initial business combination using our cash, debt or equity securities, or a combination of the foregoing, we have the flexibility to use the most efficient combination that will allow us to tailor the consideration to be paid to the target business to fit its needs and desires. However, we have not taken any steps to secure third-party financing and there can be no assurance it will be available to us.
Effecting Our Initial Business Combination
General
We are not presently engaged in, and we will not engage in, any operations for an indefinite period of time following this offering. We intend to effectuate our initial business combination using cash from the proceeds of this offering and the sale of the placement units, our equity, 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 not all of the funds released from the trust account are used for payment of the consideration in connection with our initial business combination or used for redemptions of our Class A ordinary shares, we may 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 may seek to raise additional funds through a private offering of debt or equity securities in connection with the completion of our initial business combination (which may include a specified future issuance), and we may effectuate our initial business combination using the proceeds of such offering rather than using the amounts held in the trust account. In addition, we intend to target businesses larger than we could acquire with the net proceeds of this offering and the sale of the placement units, and in such circumstance we will be required to seek additional financing to complete such proposed initial business combination. Subject to compliance with applicable securities laws, we would expect to complete such financing only simultaneously with the completion of our initial business combination. In the case of an initial business combination funded with assets other than the trust account assets, our proxy materials or tender offer documents disclosing the initial business combination would disclose the terms of the financing and, only if required by law, we would seek shareholder approval of such financing. There are no prohibitions on our ability to raise funds privately, including pursuant to any specified future issuance, or through loans in connection with our initial business combination. At this time, 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.
We have not selected any business combination target and we have not, nor has anyone on our behalf, initiated any substantive discussions with any business combination target. Additionally, we have not engaged or retained any agent or other representative to identify or locate any suitable acquisition candidate, to conduct any research or take any measures, directly or indirectly, to locate or contact a target business, other than our officers and directors. Accordingly, there is no current basis for investors in this offering to evaluate the possible merits or risks of the target business with which we may ultimately complete our initial business combination. Although our management will assess the risks inherent in a particular target business with which we may combine, we cannot assure you that this assessment will result in our identifying all risks that a target business may encounter. Furthermore, some of those risks may be outside of our control, meaning that we can do nothing to control or reduce the chances that those risks will adversely affect a target business.
Sources of Target Businesses
We plan to utilize the network and industry experience of our management team in seeking an initial business combination and employing our acquisition strategy. Over the course of their careers, the members of our management team and their affiliates have developed a broad network of contacts and corporate relationships that we believe will serve as a robust source of acquisition opportunities and a competitive strength. This network has been developed through our management team’s:
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extensive experience in sourcing, structuring, acquiring, operating, integrating, developing, growing, financing and selling businesses;
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significant experience in providing financial advice across a range of sectors, setting and changing strategies and identifying, monitoring and recruiting world-class talent;
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deep relationships with sellers, financing providers and target management teams;
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experience negotiating transactions favorable to investors;
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experience in executing transactions in a broad range of sectors under varying economic and financial market conditions; and
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significant experience in analyzing company fundamentals and producing proprietary asset management research.
In addition, we anticipate that target business candidates will be brought to our attention by various unaffiliated sources, including investment market participants, private equity groups, investment banking firms, consultants, accounting firms and large business enterprises. Target businesses may be brought to our attention by such unaffiliated sources as a result of being solicited by us through calls or mailings. These sources may also introduce us to target businesses in which they think we may be interested on an unsolicited basis, since some of these sources will have read this prospectus and know what types of businesses we are targeting. Our officers and directors, as well as their affiliates, may also bring to our attention target business candidates that they become aware of through their business contacts as a result of formal or informal
inquiries or discussions they may have, as well as attending trade shows or conventions. In addition, we expect to receive a number of proprietary deal flow opportunities that would not otherwise necessarily be available to us as a result of the business relationships of our officers and directors. While we do not presently anticipate engaging the services of professional firms or other individuals that specialize in business acquisitions on any formal basis, we may engage these firms or other individuals in the future, in which event we may pay a finder’s fee, consulting fee or other compensation to be determined in an arm’s length negotiation based on the terms of the transaction. We will engage a finder only to the extent our management determines that the use of a finder may bring opportunities to us that may not otherwise be available to us or if finders approach us on an unsolicited basis with a potential transaction that our management determines is in our best interest to pursue. Payment of finder’s fees is customarily tied to completion of a transaction, in which case any such fee will be paid out of the funds held in the trust account. There will be no finder’s fees, reimbursements or cash payments made by us to our sponsor, our management team or 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 portion of the proceeds of this offering and the sale of placement units, in each case held in the trust account, prior to the completion of our initial business combination:
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the repayment of a promissory note in an aggregate principal amount of up to $300,000 made to us by our sponsor to cover offering-related and organizational expenses;
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payments of $10,000 per month to an affiliate of our sponsor for office space and administrative and support services;
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reimbursement for any out-of-pocket expenses related to identifying, investigating, negotiating and completing an initial business combination;
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repayment of loans in the future may be, made by our sponsor or an affiliate of our sponsor to finance transaction costs in connection with an initial business combination. Up to $1,500,000 of such loans may be convertible into units of the post-business combination entity at a price of $10.00 per unit at the option of the lender. The units would be identical to the placement units. Except for the foregoing, the terms of such additional loans, if any, have not been determined and no written agreements exist with respect to such loans.
In addition, some of our officers and directors may enter into employment or consulting agreements with the post-transaction company following our initial business combination. The presence or absence of any such fees or arrangements will not be used as a criterion in our selection process of an acquisition candidate.
We are not prohibited from pursuing an initial business combination with a company that is affiliated with our sponsor or a member of our management team. In the event we seek to complete our initial business combination with a company that is affiliated with our sponsor or a member of our management team, we, or a committee of independent and disinterested directors, will obtain an opinion from an independent investment banking firm that is a member of FINRA or an independent accounting firm that such 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.
Each of our officers and directors presently has, and any of them in the future may have, additional fiduciary or contractual obligations to other entities, including entities that are affiliates of our sponsor, and due to such fiduciary or contractual obligations such officer or director may be required to present a business combination opportunity to such entity. Our management team is also not prohibited from sponsoring, investing or otherwise becoming involved with, any other special purpose acquisition companies, including in connection with their initial business combinations, prior to us completing our initial business combination. A special purpose acquisition company sponsored by an affiliate of our sponsor or with certain members of our management team also serving on its management team could pursue a business combination opportunity in the same or similar businesses or industries as us, the pursuit of which could create an actual or potential conflict of interest relating to what would otherwise be an opportunity for us. Accordingly, if any of our officers or directors becomes aware of a business combination opportunity which is suitable for an entity to which he or she has then-current fiduciary or contractual obligations, then, subject to their fiduciary duties under Cayman Islands law, he or she will honor his or her fiduciary or
contractual obligations to present such business combination opportunity to such entity. See “Management — Conflicts of Interest.”
Evaluation of a Target Business and Structuring of Our Initial Business Combination
In evaluating a prospective target business, we expect to conduct an extensive due diligence review which may encompass, as applicable and among other things, meetings with incumbent management and employees, document reviews, interviews of customers and suppliers and a review of financial and other information about the target and its industry. We will also utilize our management team’s operational and capital planning experience. If we determine to move forward with a particular target, we will proceed to structure and negotiate the terms of the business combination transaction.
The time required to select and evaluate a target business and to structure and complete our initial business combination, and the costs associated with this process, are not currently ascertainable with any degree of certainty. Any costs incurred with respect to the identification and evaluation of, and negotiation with, a prospective target business with which our initial business combination is not ultimately completed will result in our incurring losses and will reduce the funds we can use to complete another business combination. The company will not pay any consulting fees to members of our management team, or their respective affiliates, for services rendered to or in connection with our initial business combination. We have also agreed not to enter into a definitive agreement regarding an initial business combination without the prior consent of our sponsor.
See “— Our Acquisition Criteria”, “— Our Acquisition Process” and “— Initial Business Combination” for additional information regarding the contemplated evaluation of a target business and structuring of our initial business combination.
Lack of Business Diversification
For an indefinite period of time after the completion of our initial business combination, the prospects for our success may depend entirely on the future performance of a single business.
Unlike other entities that have the resources to complete business combinations with multiple entities in one or several industries, it is probable that we will not have the resources to diversify our operations and mitigate the risks of being in a single line of business. By completing our initial business combination with only a single entity, our lack of diversification may:
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subject us to negative economic, competitive and regulatory developments, any or all of which may have a substantial adverse impact on the particular industry in which we operate after our initial business combination; and
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cause us to depend on the marketing and sale of a single product or limited number of products or services.
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. The determination as to whether any of the members of our management team will remain with the combined company will be made at the time of our initial business combination as any future roles cannot be stated with 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 an 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.
Shareholders May Not Have the Ability to Approve Our Initial Business Combination
We may conduct redemptions without a shareholder vote pursuant to the tender offer rules of the SEC subject to the provisions of our amended and restated memorandum and articles of association. However, we will seek shareholder approval if it is required by applicable law or stock exchange listing requirement, or we may decide to seek shareholder approval for business or other reasons.
Under the Nasdaq listing rules, shareholder approval would typically be required for our initial business combination if, for example:
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we issue ordinary shares that will be equal to or in excess of 20% of the number of our ordinary shares then-outstanding (other than in a public offering);
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any of our directors, officers or substantial security holder (as defined by the Nasdaq rules) has a 5% or greater interest, directly or indirectly, in the target business or assets to be acquired or otherwise and the present or potential issuance of ordinary shares could result in an increase in issued and outstanding ordinary shares or voting power of 1% or more (or 5% or more if the related party involved is classified as such solely because such person is a substantial security holder); or
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the issuance or potential issuance of ordinary shares will result in our undergoing a change of control.
The decision as to whether we will seek shareholder approval of a proposed business combination in those instances in which shareholder approval is not required by law will be made by us, solely in our discretion, and will be based on business 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 shareholder approval would require additional time and there is either not enough time to seek shareholder approval or doing so would place the company at a disadvantage in the transaction or result in other additional burdens on the company;
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the expected cost of holding a shareholder vote;
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the risk that the shareholders 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 shareholders.
Permitted Purchases and Other Transactions with Respect to Our Securities
If we seek shareholder approval of our initial business combination and we do not conduct redemptions in connection with our initial business combination pursuant to the tender offer rules, our sponsor, management team, advisors or 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.
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, management team, advisors or 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 in the trust account will be used to purchase public shares or warrants in such transactions. If they engage in such transactions, they will be restricted from making any such purchases when they are in
possession of any material non-public information not disclosed to the seller or if such purchases are prohibited by Regulation M under the Exchange Act.
In the event that our sponsor, management team, advisors or their respective affiliates purchase shares in privately negotiated transactions from public shareholders who have already elected to exercise their redemption rights or submitted a proxy to vote against our initial business combination, such selling shareholders 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 any such transaction could be to (i) vote in favor of the business combination and thereby increase the likelihood of obtaining shareholder approval of the business combination, (ii) 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 (iii) 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. Any such purchases of our securities 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 Class A ordinary shares or public warrants may be reduced and the number of beneficial holders of our securities may be reduced, which may make it difficult to maintain or obtain the quotation, listing or trading of our securities on a national securities exchange.
Our sponsor, management team and/or their respective affiliates anticipate that they may identify the shareholders with whom our sponsor, management team or their respective affiliates may pursue privately negotiated transactions by either the shareholders contacting us directly or by our receipt of redemption requests submitted by shareholders (in the case of Class A ordinary shares) following our mailing of tender offer or proxy materials in connection with our initial business combination. To the extent that our sponsor, management team, advisors or their respective affiliates enter into a private transaction, they would identify and contact only potential selling or redeeming shareholders 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, whether or not such shareholder has already submitted a proxy with respect to our initial business combination but only if such shares have not already been voted at the general meeting related to our initial business combination. Our sponsor, management team, advisors or their respective affiliates will select which shareholders to purchase shares from based on the negotiated price and number of shares and any other factors that they may deem relevant, and 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.
Our sponsor, management team and their respective affiliates will be restricted from making purchases of shares if the purchases would violate Section 9(a)(2) or Rule 10b-5 of the Exchange Act. We expect any such purchases would be reported by such person pursuant to Section 13 and Section 16 of the Exchange Act to the extent such purchasers are subject to such reporting requirements.
Redemption Rights for Public Shareholders upon Completion of Our Initial Business Combination
We will provide our public shareholders with the opportunity to redeem all or a portion of their Class A ordinary 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 earned on the funds held in the trust account and not previously released to us to pay our taxes, if any, 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 $10.20 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. Further, we will not proceed with redeeming our
public shares, even if a public shareholder has properly elected to redeem its shares, if a business combination does not close. Our initial shareholders and each member of our management team have entered into an 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 (i) the completion of our initial business combination and (ii) a shareholder vote to approve an amendment to our amended and restated memorandum and articles of association (A) that would modify the substance or timing of our obligation to provide holders of our Class A ordinary shares the right to have their shares redeemed 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 15 months from the closing of this offering or (B) with respect to any other provision relating to the rights of holders of our Class A ordinary shares.
Limitations on Redemptions
Our amended and restated memorandum and articles of association will provide 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 either prior to or upon consummation of an initial business combination (so that we do not then become subject to the SEC’s “penny stock” rules). However, the proposed business combination may require: (i) cash consideration to be paid to the target or its owners, (ii) cash to be transferred to the target for working capital or other general corporate purposes or (iii) 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 Class A ordinary 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 Class A ordinary shares submitted for redemption will be returned to the holders thereof. In addition, if accepting all properly submitted redemption requests in connection with an amendment we seek to make to our amended and restated memorandum and articles of association would cause our net tangible assets to be less than $5,000,001, we would not proceed with the amendment or the related redemption of our public shares at such time.
Manner of Conducting Redemptions
We will provide our public shareholders with the opportunity to redeem all or a portion of their Class A ordinary shares upon the completion of our initial business combination either (i) in connection with a general meeting called to approve the business combination or (ii) by means of a tender offer. The decision as to whether we will seek shareholder 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 shareholder approval under applicable law or stock exchange listing requirement. Asset acquisitions and share purchases would not typically require shareholder approval, while direct mergers with our company and any transactions where we issue more than 20% of our outstanding ordinary shares or seek to amend our amended and restated memorandum and articles of association would typically require shareholder approval. We intend to conduct redemptions in connection with a shareholder vote unless shareholder approval is not required by applicable law or stock exchange listing requirement or we choose to conduct redemptions pursuant to the tender offer rules of the SEC. So long as we obtain and maintain a listing for our securities on the Nasdaq, we will be required to comply with the Nasdaq rules.
If we held a shareholder vote to approve our initial business combination, we will, pursuant to our amended and restated memorandum and articles of association: 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 file proxy materials with the SEC.
In the event that we seek shareholder approval of our initial business combination, we will distribute proxy materials and, in connection therewith, provide our public shareholders with the redemption rights described above upon completion of the initial business combination.
If we seek shareholder approval, we will complete our initial business combination only if we obtain the approval of an ordinary resolution under Cayman Islands law, which requires the affirmative vote of a majority of the shareholders who attend and who vote at a quorate general meeting of the company. In such
case, our initial shareholders and each member of our management team have agreed to vote their founder shares, public shares, and placement shares in favor of our initial business combination. As a result, in addition to shares held by our initial shareholders and members of our management team, we would need 9,243,335 shares, or 30.8% (assuming all issued and outstanding shares are voted and the over-allotment option is not exercised) of the 30,000,000 public shares sold in this offering to be voted in favor of an initial business combination in order to have our initial business combination approved. However, assuming only the minimum number of shares representing a quorum (20,906,668 shares or 50.1% of our issued and outstanding shares) are voted, and assuming the over-allotment option is not exercised, no affirmative votes from other public shareholders would be required to approve our initial business combination because our initial shareholders will own 11,663,333 shares in the aggregate (including 10,453,333 founder shares and 1,210,000 placement shares), which number exceeds the 10,453,335 votes (representing a majority of the 20,906,668 shares present and voting) needed to approve the initial business combination.
Upon consummation of this offering, and assuming the over-allotment option is not exercised, our initial shareholders and Cantor will own an aggregate of 11,813,333 shares, or 28.3% of our issued and outstanding shares, including 10,453,333 founder shares and 1,210,000 placement shares held by our initial shareholders and 150,000 placement shares held by Cantor. Each public shareholder may elect to redeem their public shares irrespective of whether they vote for or against the proposed transaction or vote at all. In addition, our initial shareholders and each member of our management team have entered into an 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 (i) the completion of an initial business combination, and (ii) a shareholder vote to approve an amendment to our amended and restated memorandum and articles of association (A) that would modify the substance or timing of our obligation to provide holders of our Class A ordinary shares the right to have their shares redeemed 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 15 months from the closing of this offering or (B) with respect to any other provision relating to the rights of holders of our Class A ordinary shares.
If we conduct redemptions pursuant to the tender offer rules of the SEC, we will, pursuant to our amended and restated memorandum and articles of association:
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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 Class A ordinary shares 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 shareholders not tendering more than the number of public shares we are permitted to redeem. If public shareholders tender more shares than we have offered to purchase, we will withdraw the tender offer and not complete such initial business combination.
Limitation on Redemption upon Completion of Our Initial Business Combination If We Seek Shareholder Approval
If we seek shareholder approval of our initial business combination and we do not conduct redemptions in connection with our initial business combination pursuant to the tender offer rules, our amended and restated memorandum and articles of association will provide that a public shareholder, together with any affiliate of such shareholder or any other person with whom such shareholder 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 “Excess Shares”, without our prior consent. We believe this restriction will discourage shareholders 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, our sponsor or our management team to purchase their shares at a significant premium to the then-current market price or on other undesirable terms. Absent this provision, a public shareholder 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, our sponsor or our management team at a premium to the then-current market price or on other undesirable terms. By limiting our shareholders’ ability to redeem no more than 15% of the shares sold in this offering without our prior consent, we believe we will limit the ability of a small group of shareholders 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 shareholders’ ability to vote all of their shares (including Excess Shares) for or against our initial business combination.
Tendering Share Certificates in Connection with a Tender Offer or Redemption Rights
Public shareholders seeking to exercise their redemption rights, whether they are record holders or hold their shares in “street name”, will be required to either tender their certificates (if any) to our transfer agent prior to the date set forth in the proxy solicitation or tender offer materials, as applicable, mailed to such holders, 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, in each case up to two business days prior to the initially scheduled vote to approve the business combination. The proxy solicitation or tender offer materials, as applicable, that we will furnish to holders of our public shares in connection with our initial business combination will indicate the applicable delivery requirements, which will include the requirement that a beneficial holder must identify itself in order to validly redeem its shares. Accordingly, a public shareholder 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 initially scheduled vote on the proposal to approve the business combination if we distribute proxy materials, as applicable, to tender its shares if it wishes to seek to exercise its redemption rights. Given the relatively short period in which to exercise redemption rights, it is advisable for shareholders 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.
The foregoing is different from the procedures used by many blank check companies. In order to perfect redemption rights in connection with their business combinations, many blank check companies would distribute proxy materials for the shareholders’ 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 shareholder to arrange for him or her to deliver his or her certificate to verify ownership. As a result, the shareholder 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 shareholders were aware they needed to commit before the general 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 shareholder’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 two business days prior to the initially scheduled vote on the proposal to approve the business combination, unless otherwise
agreed to by us. 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 shareholders 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 15 months from the closing of this offering.
Redemption of Public Shares and Liquidation If No Initial Business Combination
Our amended and restated memorandum and articles of association will provide that we will have only 15 months from the closing of this offering to consummate an initial business combination. If we have not consummated an initial business combination within 15 months from the closing of this offering or during any Extension Period, we will: (i) cease all operations except for the purpose of winding up; (ii) as promptly as reasonably possible but not more than ten business days thereafter, redeem the public shares, at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the trust account, including interest earned on the funds held in the trust account and not previously released to us to pay our taxes, if any (less up to $100,000 of interest to pay dissolution expenses), divided by the number of the then-outstanding public shares, which redemption will completely extinguish public shareholders’ rights as shareholders (including the right to receive further liquidation distributions, if any); and (iii) as promptly as reasonably possible following such redemption, subject to the approval of our remaining shareholders and our board of directors, liquidate and dissolve, subject in each case to our obligations under Cayman Islands law to provide for claims of creditors and the requirements of other applicable law. There will be no redemption rights or liquidating distributions with respect to our warrants, which will expire worthless if we fail to consummate an initial business combination within 15 months from the closing of this offering or during any Extension Period. Our amended and restated memorandum and articles of association will provide that, if we wind up for any other reason prior to the consummation of our initial business combination, we will follow the foregoing procedures with respect to the liquidation of the trust account as promptly as reasonably possible but not more than ten business days thereafter, subject to applicable Cayman Islands law.
Our initial shareholders and each member of our management team have entered into an 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 and placement shares (but will retain such rights for any public shares) they hold if we fail to consummate an initial business combination within 15 months from the closing of this offering or during any Extension Period (although the initial shareholders, and each member of our management team 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).
Our initial shareholders and each member of our management team have agreed, pursuant to a written agreement with us, that they will not propose any amendment to our amended and restated memorandum and articles of association (A) that would modify the substance or timing of our obligation to provide holders of our Class A ordinary shares the right to have their shares redeemed 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 15 months from the closing of this offering or (B) with respect to any other provision relating to the rights of holders of our Class A ordinary shares, unless we provide our public shareholders with the opportunity to redeem their public 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 earned on the funds held in the trust account and not previously released to us to pay our taxes, if any, divided by the number of the then-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 either prior to or upon consummation of an initial business combination (so that we do not then become subject to the SEC’s
“penny stock” rules). If this optional redemption right is exercised with respect to an excessive number of public shares such that we cannot satisfy the net tangible asset requirement, we would not proceed with the amendment or the related redemption of our public shares at such time. This redemption right shall apply in the event of the approval of any such amendment, whether proposed by our initial shareholders, any member of our management team or any other person.
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 $1,100,000 held outside the trust account, together with up to $100,000 of funds from the trust account available to us to pay dissolution expenses, although we cannot assure you that there will be sufficient funds for such purpose.
If we were to expend all of the net proceeds of this offering and the sale of the placement units, 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 shareholders upon our dissolution would be $10.20. 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 shareholders. We cannot assure you that the actual per-share redemption amount received by shareholders will not be less than $10.20. 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, 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 shareholders, there is no guarantee that such parties will execute such agreements or, even if such parties execute such agreements, that such parties would be prevented from bringing claims against the trust account for, among other things, 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 only enter into an agreement with a third-party that has not executed a waiver 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 significantly superior to those of other consultants that would agree to execute a waiver or in cases where management is unable to find a service provider willing to execute a waiver. In addition, the underwriters of this offering and our independent registered public accounting firm will not execute agreements with us waiving such claims to the monies held in the trust account. Further, 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. In order to protect the amounts held in the trust account, our sponsor has agreed that it will be liable to us if and to the extent any claims by (A) a third-party for services rendered or products sold to us (other than our independent registered public accounting firm), or (B) a prospective target business with which we have discussed entering into a transaction agreement, reduce the amounts in the trust account to below the lesser of (i) $10.20 per public share and (ii) 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 $10.20 per public share due to reductions in the value of the trust assets, in each case net of the interest that may be withdrawn to pay our tax obligations, provided that such liability will not apply to any claims by a third-party or prospective target business that executed a waiver of any and all rights to seek access to the trust account nor will it apply 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, our sponsor will not be responsible to the extent of any liability for such third-party claims. However, we have not asked our sponsor to reserve for such indemnification obligations, nor have we independently verified whether our sponsor has sufficient funds to satisfy its indemnity obligations and we believe that our sponsor’s only assets are securities of our company. Therefore, we cannot assure you that our sponsor would be able to satisfy those obligations. None of our officers, directors or other affiliates will
indemnify us for claims by third parties including, without limitation, claims by vendors and prospective target businesses. Recourse against us and our sponsor will be limited as noted herein; there will not be any recourse against any of our affiliates other than sponsor as noted herein.
In the event that the proceeds in the trust account are reduced below the lesser of (i) $10.20 per public share and (ii) 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 $10.20 per public share due to reductions in the value of the trust assets, in each case net of the amount of interest which may be withdrawn to pay our tax obligations, 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 less than $10.20 per public 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, 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 monies held in the trust account. However, there is no guarantee that such parties will execute such agreements or, even if such parties execute such agreements, that such parties would be prevented from bringing claims against the trust account for, among other things, 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. 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 $1,100,000 following this offering and the sale of the placement units 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, shareholders who received funds from our trust account could be liable for claims made by creditors, however such liability will not be greater than the amount of funds from our trust account received by any such shareholder. In the event that our offering expenses exceed our estimate of $500,000, 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 $500,000, the amount of funds we intend to be held outside the trust account would increase by a corresponding amount.
If we file a bankruptcy or winding-up petition or an involuntary bankruptcy or winding-up petition is filed against us that is not dismissed, the proceeds held in the trust account could be subject to applicable bankruptcy or insolvency law, and may be included in our bankruptcy or insolvency estate and subject to the claims of third parties with priority over the claims of our shareholders. To the extent any bankruptcy or insolvency claims deplete the trust account, we cannot assure you we will be able to return $10.20 per public share to our public shareholders. Additionally, if we file a bankruptcy or winding-up petition or an involuntary bankruptcy or winding-up petition is filed against us that is not dismissed, any distributions received by shareholders could be viewed under applicable debtor/creditor and/or bankruptcy or insolvency laws as either a “preferential transfer” or a “fraudulent conveyance.” As a result, a bankruptcy or insolvency court could seek to recover some or all amounts received by our shareholders. 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 shareholders 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 shareholders will be entitled to receive funds from the trust account only (i) in the event of the redemption of our public shares if we do not complete our initial business combination within 15 months from the closing of this offering or during any Extension Period, (ii) in connection with a shareholder vote to amend our amended and restated memorandum and articles of association (A) to modify the substance or
timing of our obligation to provide holders of our Class A ordinary shares the right to have their shares redeemed 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 15 months from the closing of this offering or (B) with respect to any other provision relating to the rights of holders of our Class A ordinary shares, or (iii) if they redeem their respective shares for cash upon the completion of the initial business combination. Public shareholders who redeem their Class A ordinary shares in connection with a shareholder vote described in clause (ii) in the preceding sentence shall not be entitled to funds from the trust account upon the subsequent completion of an initial business combination or liquidation if we have not consummated an initial business combination within 15 months from the closing of this offering or during any Extension Period with respect to such Class A ordinary shares so redeemed. In no other circumstances will a shareholder have any right or interest of any kind to or in the trust account. In the event we seek shareholder approval in connection with our initial business combination, a shareholder’s voting in connection with the business combination alone will not result in a shareholder’s redeeming its shares to us for an applicable pro rata share of the trust account. Such shareholder must have also exercised its redemption rights described above. These provisions of our amended and restated memorandum and articles of association, like all provisions of our amended and restated memorandum and articles of association, may be amended with a shareholder 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 consummated an initial business combination within 15 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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Redemption 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 shareholder vote. The redemption price will be the same whether we conduct redemptions pursuant to a tender offer or in connection with a shareholder vote.
In either case, our public shareholders 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
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If we seek shareholder approval of our initial business combination, our sponsor, directors, officers, advisors or their affiliates may purchase shares in privately negotiated transactions or in the open market prior to or following 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
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If we have not completed our initial business combination within 15 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 account (which is initially anticipated to be $10.20 per public share), including interest (which interest shall be net of taxes payable, and less up to $100,000 of interest to pay dissolution expenses), divided by the number of then outstanding public shares.
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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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Redemption if We Fail to
Complete an Initial Business
Combination
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be $10.20 per public share), including interest (which interest shall be net of taxes payable), divided by the number of then 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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account will be used to purchase shares in such transactions.
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Impact to remaining shareholders
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The redemptions in connection with our initial business combination will reduce the book value per share for our remaining shareholders, who will bear the burden of the deferred underwriting commissions and interest withdrawn in order to pay our 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 would be no impact to our remaining shareholders 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 sponsor, who will be our only remaining shareholder 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 discounts and 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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$306,000,000 of the net proceeds of this offering and the sale of the placement units will be deposited into a trust account located in the United States with Continental Stock Transfer & Trust Company acting as trustee.
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$253,800,000 of the offering proceeds 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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$306,000,000 of the net proceeds of this offering and the sale of the placement units held in trust will be invested only in U.S. government treasury obligations 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 which invest only in direct U.S. government treasury obligations.
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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 shareholders is reduced by (i) any taxes paid or payable and (ii) 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 income 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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Limitation on fair market value or net assets of target business
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The Nasdaq rules require that our initial business combination must occur with one or more target businesses that together have an aggregate fair market value of at least 80% of our assets held in the trust account (excluding the amount of deferred underwriting commissions held in trust and
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The fair market value or net assets of a target business must represent at least 80% of the maximum offering proceeds.
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Terms of Our Offering
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Terms Under a Rule 419 Offering
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taxes payable on the income earned on the trust account) at the time of signing the agreement to enter into the initial business combination. If our securities are not then listed on the for whatever reason, we would no longer be required to meet the foregoing 80% of net assets test.
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Trading of securities issued
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The units are expected to begin trading on or promptly after the date of this prospectus. The Class A ordinary shares and warrants comprising 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 Cantor informs us of its 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.
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No trading of the units or the underlying Class A ordinary shares 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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If the 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 over-allotment option.
The units will automatically separate into their component parts and will not be traded after completion of our initial business combination.
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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 twelve 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 shareholders with the
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A prospectus containing information pertaining to the
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Terms of Our Offering
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Terms Under a Rule 419 Offering
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opportunity to redeem their public shares for cash at a per share price 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 earned on the funds held in the trust account and not previously released to us to pay our taxes, if any, divided by the number of the then- outstanding public shares, 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 listing requirement to hold a shareholder vote. If we are not required by applicable law or stock exchange listing requirement and do not otherwise decide to hold a shareholder vote, we will, pursuant to our amended and restated memorandum and articles of association, 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 shareholder 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. If we seek shareholder approval, we will complete our initial business combination only if we obtain the approval of an ordinary resolution under Cayman Islands law, which requires the affirmative vote of a majority of the shareholders who attend and
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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 shareholder 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 shareholder. 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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vote at a quorate general meeting of the company. Additionally, each public shareholder may elect to redeem their public shares irrespective of whether they vote for or against the proposed transaction or vote at all. Our amended and restated memorandum and articles of association will require that at least five days’ notice be given of any such general meeting.
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Business combination deadline
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If we have not consummated an initial business combination within 15 months from the closing of this offering or during any Extension Period, we will (i) cease all operations except for the purpose of winding up; (ii) as promptly as reasonably possible but not more than ten business days thereafter, redeem 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 pay our taxes, if any (less up to $100,000 of interest to pay dissolution expenses), divided by the number of the then- outstanding public shares, which redemption will completely extinguish public shareholders’ rights as shareholders (including the right to receive further liquidation distributions, if any); and (iii) as promptly as reasonably possible following such redemption, subject to the approval of our remaining shareholders and our board of directors, liquidate and dissolve, subject in each case to our obligations under Cayman Islands law to provide for claims of creditors and the requirements of other applicable law.
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If an acquisition has not been completed within 15 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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Release of funds
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Except for the withdrawal of interest income (if any) to pay our taxes, if any, none of the funds held in trust will be released from the trust account until the earliest of:
(i) the completion of our initial business combination,
(ii) the redemption of our public shares if we have not consummated an initial business combination within 15 months from the closing of this offering or during any Extension Period, subject to applicable law, and
(iii) the redemption of our public shares properly submitted in connection with a shareholder vote to approve an amendment to our amended and restated memorandum and articles of association (A) that would modify the substance or timing of our obligation to provide holders of our Class A ordinary shares the right to have their shares redeemed 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 15 months from the closing of this offering or (A) with respect to any other provision relating to the rights of holders of our Class A ordinary shares.
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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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Limitation on redemption rights of shareholders holding more than 15% of the shares sold in this offering if we hold a shareholder vote
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If we seek shareholder approval of our initial business combination and we do not conduct redemptions in connection with our initial business combination pursuant to the tender offer rules, our amended and restated memorandum and articles of association will provide that a public shareholder, together with any affiliate of such shareholder
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Many blank check companies provide no restrictions on the ability of shareholders to redeem shares based on the number of shares held by such shareholders in connection with an initial business combination.
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Terms of Our Offering
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Terms Under a Rule 419 Offering
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or any other person with whom such shareholder 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. Our shareholders’ inability to redeem the Excess Shares will reduce their influence over our ability to complete our initial business combination, and such shareholders could suffer a material loss in their investment if they sell such Excess Shares on the open market.
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Tendering share certificates in connection with a tender offer or redemption rights
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We intend to require our public shareholders 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 shareholders to satisfy such delivery requirements, which will include the requirement that a beneficial holder must identify itself in order to validly redeem its shares.
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Many blank check companies provide that a shareholder can vote against a proposed business combination and check a box on the proxy card indicating that such shareholder is seeking to exercise its redemption rights. After the business combination is approved, the company would contact such shareholder to arrange for delivery of its share certificates to verify ownership.
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Competition
In identifying, evaluating and selecting a target business for our initial business combination, we may encounter intense competition from other entities having a business objective similar to ours, including other blank check companies. Many of these entities are well established and have extensive experience identifying and effecting business combinations directly or through affiliates. Moreover, many of these competitors possess financial, technical, human and other resources greater than ours. Our ability to acquire larger target businesses will be limited by our available financial resources. This inherent limitation gives others an advantage in pursuing the acquisition of a target business.
Furthermore, our obligation to pay cash in connection with our public shareholders who exercise their redemption rights may reduce the resources available to us for our initial business combination and our outstanding warrants, and the future dilution they potentially represent, may not be viewed favorably by certain target businesses. Either of these factors may place us at a competitive disadvantage in successfully negotiating an initial business combination.
Facilities
We currently maintain our executive offices at 767 Third Avenue, 38th Floor, New York, New York 10017. The cost for our use of this space is included in the $10,000 per month fee we will pay to an affiliate of our sponsor for office space and administrative and support services. We consider our current office space adequate for our current operations.
Employees
We currently have three officers. These individuals are not obligated to devote any specific number of hours to our matters but they intend to devote as much of their time as they deem necessary to our affairs until we have completed our initial business combination. The amount of time they will devote in any time period will vary based on whether a target business has been selected for our initial business combination and the stage of the business combination process we are in. We do not intend to have any full time employees prior to the completion of our initial business combination.
Periodic Reporting and Financial Information
We will register our units, Class A ordinary shares 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 accountants.
We will provide shareholders with audited financial statements of the prospective target business as part of the proxy solicitation or tender offer materials, as applicable, sent to shareholders. These financial statements may be required to be prepared in accordance with, or reconciled to, GAAP, or IFRS, depending on the circumstances, and the historical financial statements may be required to be audited in accordance with the standards of the 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 statements in time for us to disclose such statements in accordance with federal proxy rules and complete our initial business combination within the prescribed time frame. We cannot assure you that any particular target business identified by us as a potential acquisition candidate will have financial statements prepared in accordance with the requirements outlined above, or that the potential target business will be able to prepare its financial statements in accordance with the requirements outlined above. To the extent that these requirements cannot be met, we may not be able to acquire the proposed target business. While this may limit the pool of potential acquisition 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 would 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 a Cayman Islands exempted company. Exempted companies are Cayman Islands companies conducting business mainly outside the Cayman Islands and, as such, are exempted from complying with certain provisions of the Companies Act. As an exempted company, we have applied for and received a tax exemption undertaking from the Cayman Islands government that, in accordance with Section 6 of the Tax Concessions Act (2018 Revision) of the Cayman Islands, for a period of 30 years from the date of the undertaking, no law which is enacted in the Cayman Islands imposing any tax to be levied on profits, income, gains or appreciations will apply to us or our operations and, in addition, that no tax to be levied on profits, income, gains or appreciations or which is in the nature of estate duty or inheritance tax will be payable (i) on or in respect of our shares, debentures or other obligations or (ii) by way of the withholding in whole or in part of a payment of dividend or other distribution of income or capital by us to our shareholders or a payment of principal or interest or other sums due under a debenture or other obligation of us.
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 shareholder 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 Class A ordinary shares that are held by non-affiliates equals or exceeds $700 million as of the last business day of the preceding second fiscal quarter, and (2) the date on which we have issued more than $1.0 billion in non-convertible debt securities during the prior three-year period. Additionally, we are a “smaller reporting company” as defined in Item 10(f)(1) of Regulation S-K. Smaller reporting companies may take advantage of certain reduced disclosure obligations, including, among other things, providing only two years of audited financial statements. We will remain a smaller reporting company until the last day of the fiscal year in which (1) the market value of our ordinary shares held by non-affiliates exceeds $250 million as of the last business day 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 ordinary shares held by non-affiliates equals or exceeds $700 million as of the last business day 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.
MANAGEMENT
Officers, Directors and Director Nominees
Our officers, directors and director nominees are as follows:
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Name
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Age
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Position
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Richard N. Peretz
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59
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Executive Chairman
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Hooman Yazhari
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48
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Vice Chairman
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Ben Baldanza
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59
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Chief Executive Officer
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Jeff Rogers
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58
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President
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Philippe J. Kurzweil
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35
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Chief Financial Officer
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Paul P. Jebely
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40
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Independent Director
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Brad Stewart
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44
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Independent Director*
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Parizad Olver Parchi
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41
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Independent Director*
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*
This individual will occupy the indicated position on the effective date of the registration statement of which this prospectus is a part.
Our management team is led by Richard N. Peretz, our Executive Chairman, Hooman Yazhari, our Vice Chairman, Ben Baldanza, our Chief Executive Officer, Jeff Rogers, our President, and Philippe J. Kurzweil, our Chief Financial Officer. The team has significant operational and transactional experience, primarily in the transportation, mobility and supply chain management industries. We believe our management team has complementary skills and deep operational experience relevant to our target industries with a strong history of working productively and creatively with stakeholders and labor groups, which represent a prominent and sustainable competitive advantage. Enriching this differentiated characteristic is management’s well-connected network, extending from leadership of the largest industrial and transportation enterprises to founders at early-stage technology ventures across our target markets as well as consultants, private equity and venture capital firms, and more. Our team is a flat, consensus-driven organization with a focus on seeking business combination opportunities that we hope will meaningfully benefit from accessing capital via the public market and more importantly, have the potential to become a world-class, industry leading organization with help from the wide-ranging set of competencies of our officers and directors.
Richard N. Peretz serves as Executive Chairman. Mr. Peretz currently serves on the Board of Directors for Tribe Capital Growth Corp. I and Tribe Capital Growth Corp. II, both special purpose acquisition companies, as well as for ELMS — Electric Last Mile, Inc., an EV company and is a director nominee for Altus Power, a clean energy C&I company. Mr. Peretz also serves as a venture partner for Playground Global, an early-stage investment firm. From 1981 to 2019, Mr. Peretz held a number of executive roles at United Parcel Service, Inc. (“UPS”) in US and Global operations as well as in Supply Chain Management. From 2015 to 2019, he served as Chief Financial Officer (CFO) and a member of the UPS Executive Leadership Team. The senior leadership team was responsible for the global company’s strategy and day to day operations in over 220 countries. Mr. Peretz oversaw all global financial operations and acted as senior liaison to the financial community. He spearheaded the move into technology-based operational capital investments and improved the capital structure along with the working capital for UPS. Prior to serving as CFO, Mr. Peretz was both the corporate Controller and Treasurer, leading all global M&A for UPS, overseeing nearly $3 billion in acquisitions globally in areas including healthcare logistics, truckload brokerage, business-to-business shipping and business-to-consumer shipping. Acquisitions at UPS included third-party logistics provider Coyote Logistics and healthcare logistics companies such as Marken, Polar Speed (UK), Poltraf (Poland), Cemelog (Hungary) and Pieffe Group (Italy). He helped strengthen UPS’s business-to-consumer portfolio with the acquisitions of iParcel (US) and Kiala (Europe). Mr. Peretz also helped expand the company’s international small package footprint in Turkey, Slovenia, Romania, South Korea, Vietnam and Costa Rica.
Mr. Peretz also served on the team responsible for taking UPS public in 1999, the largest IPO in U.S. history at the time. Mr. Peretz served as an investment committee member for the UPS Strategic Venture
Fund. Previously, he was a member of the Board of Directors for First International Bancorp. Mr. Peretz holds a BBA in Accounting (1985) from the University of Texas in San Antonio and an MBA (1995) from the Goizueta Business School at Emory University. We believe Mr. Peretz is well qualified to serve as a member of our board of directors due to his extensive strategic, operational and management experience.
Hooman Yazhari serves as Vice Chairman. Mr. Yazhari is the Founder and CEO of Mobility Capital Group, an impact aligned investment manager providing credit-oriented capital for the next generation of enterprises and assets in mobility, logistics and transportation. Mr. Yazhari has served as an Independent Director of Voyager Aviation, a global aircraft lessor since 2017. He also has been a Co-Founder and Chairman of Beyond Capital Fund, an early stage and emerging market focused impact investment fund, since 2010. From February 2018 to March 2019, Mr. Yazhari served as Chief Executive Officer and a member of the Board of Directors of Waypoint Leasing, the largest independent global helicopter lessor and financier, where he led an operational and balance sheet restructuring and transformation and successful strategic sale of its operating assets and business, pursuant to a voluntary filing under Chapter 11 of the United States Bankruptcy Code, in March 2019. From 2015 to 2018, he served as General Counsel and Chief Administrative Officer for CHC Helicopter Corporation (“CHC”), a global helicopter services company, while taking on a leadership role in the operational and balance sheet restructuring and related turnaround, pursuant to a voluntary filing under Chapter 11 of the United States Bankruptcy Code. From 2012 to 2014, Mr. Yazhari served as General Counsel for International Lease Finance Corporation (“ILFC”), the largest global aircraft lessor, serving as part of the team that rebuilt and renewed the lessor after the global financial crisis and led it to a strategic sale. Mr. Yazhari previously served as an Independent Director of Speedcast Americas, Inc., a global telecommunication enterprise (2020-2021) and Vice Chairman and Lead Independent Director of Bristow Group, a global helicopter services company. Mr. Yazhari holds an LLM in Corporate and Commercial Law (1995) from the London School of Economics and Political Science, and a BA in Law (1994) from Jesus College, Oxford University. We believe Mr. Yazhari is well qualified to serve as a member of our board of directors due to his extensive strategic, operational and management experience.
B. Ben Baldanza will serve as Chief Executive Officer. Mr. Baldanza is currently the CEO of Diemacher LLC, an advisory firm focused on business restructuring, revenue optimization and cost containment. Mr. Baldanza currently serves on the Board of Directors for JetBlue Airways, where he serves as Chair of the Audit Committee, GoAir Limited, where he serves as Vice Chairman, and Six Flags Entertainment. From 2006 to 2016, Mr. Baldanza served as the President and CEO, and as a director, of Spirit Airlines, Inc. (“Spirit Airlines”), a low-cost airline, where he oversaw revenue growth from $500 million to $2.1 billion. During his time at Spirit Airlines, he led an IPO in 2011 while also managing an operational turnaround that resulted in industry leading margins. Recruited by Oaktree Capital in 2004, Mr. Baldanza transformed Spirit into an ‘Ultra Low Cost Carrier,’ leveraging a new aircraft fleet, establishment of a defensible franchise network, unbundling of pricing and reduction of costs per seat mile. Mr. Baldanza was twice named to the list of Business Travel News’s 25 Most Influential.
Prior to 2005, Mr. Baldanza held executive roles with American Airlines, Northwest Airlines, Continental Airlines, TACA Airlines (“TACA”) and US Airways where he was responsible for finance, marketing and revenue management. While at Continental Airlines, Mr. Baldanza assisted with applying innovations in scheduling, pricing and revenue management, increasing unit revenues, underpinning a rise in the share price and improvements in profitability. With US Airways, Mr. Baldanza led the rationalization of duplicative hubs, rapid Caribbean expansion and shift to monetize frequent flier rewards on a profit, as opposed to usage, basis.
Mr. Baldanza also worked at UPS, where he supervised the improvement of revenues and capital cost savings. Mr. Baldanza also currently serves as an Operating Partner for Sterling Investment Partners, a private equity firm, and as an Adjunct Professor of Economics at George Mason University. He holds a BA in Policy Studies and Economics (1984) from Syracuse University and an MPA (1986) from Princeton University in Urban and Regional Planning and Transportation Economics.
Jeff Rogers will serve as President. Mr. Rogers is currently a strategic advisor to TruckPark, an inventory management and booking platform for the trucking industry, and an operating advisor to Red Arts Capital, a private equity firm focused on supply chain and industrial businesses. From 2015 to 2020,
Mr. Rogers served as CEO and director of Universal Logistics Holdings (“Universal Logistics”), a global asset-light provider of transport and logistics solutions. During an 18-month period at Universal Logistics, Mr. Rogers led multiple acquisitions in the International Intermodal space that provided strategic footprints and positively contributed to growth and profitability. From 1998 to 2013, Mr. Rogers held several executive positions at YRC Worldwide including CFO of YRC Regional Transportation (2006-2008), President of USF Holland Inc. (“Holland”) (2008-2011), a YRC subsidiary and President of YRC Freight (2011-2013). While President of USF Holland, Mr. Rogers led a significant turnaround, closing unprofitable locations and shrinking Holland’s footprint to focus on next-day and two-day lanes. From 1984 to 1998, Mr. Rogers held numerous finance and operations related roles at UPS. He holds a BS in Accounting (1988) from Kansas Newman University and an MBA (1995) from Baker University. Mr. Rogers is also an Army veteran and served as an Airborne Ranger from 1980 to 1984.
Philippe J. Kurzweil will serve as Chief Financial Officer. From 2020 to 2021, Mr. Kurzweil was a part of the investment team at Arch Companies, a real estate private equity firm, where he was responsible for deal sourcing, due diligence and financing. From 2013 to 2020, he was a Research Analyst at Corsair Capital Management LP, an investment advisor, where he was responsible for idea generation and investment underwriting. From 2008 to 2013, Mr. Kurzweil was a Senior Associate at Morgan Stanley Investment Management, an investment advisor, where he was responsible for macroeconomic research and the management of fixed income portfolios. He holds a BSE (2008) in Operations Research and Financing Engineering from Princeton University with highest honors.
Paul P. Jebely serves as an Independent Director and chair of the Compensation Committee. Currently, Mr. Jebely is a managing partner at Pillsbury Winthrop Shaw Pittman, where he also serves in various leadership positions, such as co-chair of aviation finance and co-chair of private wealth. His law practice is focused exclusively on the private and commercial aviation industry. He has served as counsel on billions of dollars of deals involving financing, acquisition, disposal and merger transactions in addition to handling numerous dispute, enforcement and restructuring situations. Mr. Jebely is well regarded in the aviation and legal industries, and has been named top private client attorney in Asia (2020) and rated top private aircraft attorney in Asia (2016 — 2020).
From 2011 to 2016, Mr. Jebely held numerous positions at Clyde & Co where he rose to Senior Equity Partner and Global Head of Aviation Finance. From 2008 to 2011, Mr. Jebely held numerous positions at Ashurst, where he rose to head of their AMEA aviation practice. Mr. Jebely holds a JD (2005) from Osgoode Hall Law School at York University and a BA (2002) from Trinity Collage at the University of Toronto.We believe Mr. Jebely is well qualified to serve as a member of our board of directors due to his extensive strategic, legal and transactional experience.
Parizad Olver Parchi will serve as Independent Director and Chair of the Audit Committee. Ms. Olver is currently the Founder and Managing Partner of Panorama Aero, a US-based special mission aerospace lessor and end-to-end logistics provider. Panorama Aero was founded in 2018 through the management buyout of Cowen Aviation Finance, a company Ms. Olver established and led while at Cowen. Immediately after founding Panorama Aero, she established a funding relationship with Fortress Investment Group, called Triangle Aero. From 2009 to 2018, Ms. Olver held numerous executive roles at Cowen Inc., a multinational investment bank, where she most recently served as President and CEO of Cowen Aviation Finance, an operating lessor funded by Cowen Inc. From 2007 to 2009, Ms. Olver served as a senior strategist at Fortress Investment Group’s Drawbridge Special Opportunities Fund, whose investment portfolio included structured product securities and related investments in the aircraft, equipment and specialty finance sectors.
Ms. Olver’s investment experience began in 2005 at Ramius Capital Group, a multi-strategy hedge fund, where she was a special situations investor and co-managed an investment strategy that included a leasing book of distressed narrow body aircraft. She began her career at Morgan Stanley as an investment banking analyst from 2002 to 2005. Ms. Olver holds a BS (2001) from UC Berkley’s Haas School of Business and an MBA (2011) from Columbia University and London Business School. We believe Ms. Olver is well qualified to serve as a member of our board of directors due to her extensive strategic, operational, management, and financial experience.
Brad Stewart will serve as Independent Director. Mr. Stewart is currently CEO and board member of Fair.com, a US-based automotive marketplace and technology company. Previously, from 2011 to 2019, Mr. Stewart held numerous executive roles at XOJet, the largest on-demand private jet services company in North America, most recently serving as Chairman and CEO. While leading XOJet, he oversaw a highly complex and regulated business with three separate business units: aircraft fleet ownership and operations; branded direct-to-consumer brokerage with membership/subscription; and shuttle operations. Concurrent with his tenure at XOJet, from 2014 to 2019, Mr. Stewart served as Senior Advisor to TPG Growth, the growth equity and venture capital division of a global private equity company, where he served on multiple portfolio company boards. From 2007 to 2010, Mr. Stewart served as Vice President and then Portfolio Company Advisor at Parthenon Capital, a middle market private equity company with expertise in financial, healthcare and business services. Mr. Stewart began his career as a consultant working at both McKinsey & Company (2004-2007) and Deloitte Consulting (1999-2002). Mr. Stewart holds an MBA from Columbia Business School (2004) and a BS in Corporate Finance from University of Minnesota’s Carlson School of Management (1999). We believe Mr. Stewart is well qualified to serve as a member of our board of directors due to his extensive strategic, operational, and management experience.
The past performance of the members of our management team or their affiliates is not a guarantee that we will be able to identify a suitable candidate for our initial business combination or of success with respect to any business combination we may consummate. Mr. Peretz has had management experience with blank check companies or special purpose acquisition companies, including Tribe Capital Growth Corp. I and Tribe Capital Growth Corp. II. Although Tribe Capital Growth Corp. I and Tribe Capital Growth Corp. II are both special purpose acquisition companies, both entities focus on the technology sector rather than the transportation, supply chain and logistics industry. In addition, Tribe Capital Growth Corp. II, as of the date of this prospectus, has not yet consummated its initial public offering. Except for Mr. Peretz, at this time, none of our other officers or directors, our sponsor, nor its respective officers, directors, employees, or affiliates, have had management experience with blank check companies or special purpose acquisition companies in the past. You should not rely on the historical record of the performance of our management or any of their affiliates’ performance as indicative of our future performance.
Number and Terms of Office of Officers and Directors
Our Directors
Our board of directors is divided into three classes, with only one class of directors being appointed in each year, and with each class (except for those directors appointed prior to our first annual general meeting) serving a three-year term. In accordance with the Nasdaq corporate governance requirements, we are not required to hold an annual general meeting until one year after our first fiscal year end following our listing on the Nasdaq.
The term of office of the first class of directors, consisting of Paul P. Jebely, will expire at our first annual general meeting. The term of office of the second class of directors, consisting of Parizad Olver Parchi and Brad Stewart, will expire at our second annual general meeting. The term of office of the third class of directors, consisting of Richard N. Peretz and Hooman Yazhari will expire at our third annual general meeting.
Prior to the completion of an initial business combination, any vacancy on the board of directors may be filled by a nominee chosen by holders of a majority of our founder shares or by the affirmative vote of a majority of the directors present and voting at a meeting of our board. In addition, prior to the completion of an initial business combination, holders of a majority of our founder shares may remove a member of the board of directors for any reason. Holders of our public shares will not have the right to vote on the appointment or removal of directors prior to the completion of an initial business combination.
Pursuant to an agreement to be entered into on or prior to the closing of this offering, our sponsor, upon and following consummation of an initial business combination, will be entitled to nominate three individuals for appointment to our board of directors, as long as our sponsor holds any securities covered by the registration and shareholder rights agreement.
Our Officers
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 memorandum and articles of association as it deems appropriate. Our amended and restated memorandum and articles of association will provide that our officers may consist of one or more chairman of the board, chief executive officer, president, chief financial officer, vice presidents, secretary, treasurer and such other offices as may be determined by the board of directors.
Director Independence
The Nasdaq listing standards require that a majority of our board of directors be independent, subject to certain phase-in provisions. An “independent director” is defined generally as a person other than an officer or employee of the company or its subsidiaries or any other individual having a relationship which, in the opinion of the company’s board of directors, would interfere with the director’s exercise of independent judgment in carrying out the responsibilities of a director. Our board of directors has determined that each of Paul P. Jebely, Parizad Olver Parchi and Brad Stewart are “independent directors” as defined in the Nasdaq listing standards. Our independent directors will have regularly scheduled meetings at which only independent directors are present.
Controlled Company Status
After completion of this offering and until the completion of our initial business combination, only holders of our founder shares will have the right to vote on the appointment of directors. As a result, the Nasdaq will consider us to be a “controlled company” within the meaning of the Nasdaq corporate governance standards. Under the Nasdaq corporate governance standards, a company of which more than 50% of the voting power is held by an individual, group or another company is a “controlled company” and may elect not to comply with certain corporate governance requirements. We do not intend to utilize these exemptions and intend to comply with the corporate governance requirements of the Nasdaq, subject to applicable phase-in rules. However, if we determine in the future to utilize some or all of these exemptions, you will not have the same protections afforded to shareholders of companies that are subject to all of the Nasdaq corporate governance requirements.
Officer and Director Compensation
None of our officers or directors have received any cash compensation for services rendered to us.
In May 2021, our sponsor allocated (i) 25,000 founder shares to each of our independent director and independent director nominees in exchange for the payment of $84, or approximately $0.0034 per share; and (ii) 30,000 founder shares to Mr. Kurzweil in exchange for the payment of $100, or approximately $0.0033 per share. None of these granted founder shares are subject to forfeiture in the event that the underwriters’ over-allotment option is not exercised in full. Commencing on the date that our securities are first listed on the Nasdaq through the earlier of consummation of our initial business combination and our liquidation, we will reimburse an affiliate of our sponsor for office space and administrative and support services provided to us in the amount of $10,000 per month. In addition, our sponsor, members of our management team and 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, any member of our management team or their respective affiliates. Any such payments prior to an initial business combination will be made using funds held outside the trust account. Other than quarterly audit committee review of such reimbursements, we do not expect to have any additional controls in place governing our reimbursement payments to our directors and officers for their out-of-pocket expenses incurred in connection with our activities on our behalf in connection with identifying and consummating an initial business combination.
After the completion of our initial business combination, members of our management team who remain with us may be paid consulting or management fees from the combined company. All of these fees
will be described, to the extent then known, in the proxy solicitation materials or tender offer materials furnished to our shareholders in connection with a proposed business combination. We have not established any limit on the amount of such fees that may be paid by the combined company to our directors or members of management. It is unlikely the amount of such compensation will be known at the time of the proposed business combination, because the directors of the post-transaction business will be responsible for determining officer and director compensation. Any compensation to be paid to our officers will be determined, or recommended to the board of directors for determination, either by a compensation committee constituted solely by independent directors or by a majority of the independent directors on our board of directors.
We do not intend to take any action to ensure that members of our management team maintain their positions with us after the consummation of our initial business combination, although it is possible that some or all of our officers and directors may negotiate employment or consulting arrangements to remain with us after our initial business combination. The existence or terms of any such employment or consulting arrangements to retain their positions with us may influence our management’s motivation in identifying or selecting a target business, but we do not believe that the ability of our management to remain with us after the consummation of our initial business combination will be a determining factor in our decision to proceed with any potential business combination. We are not party to any agreements with our officers and directors that provide for benefits upon termination of employment.
Committees of the Board of Directors
Upon the effectiveness of the registration statement of which this prospectus forms a part, our board of directors will have two standing committees: an audit committee and a compensation committee. Subject to phase-in rules and a limited exception, the rules of the Nasdaq and Rule 10A-3 of the Exchange Act require that the audit committee of a listed company be comprised solely of independent directors. Subject to phase-in provisions, the rules of the Nasdaq require that the compensation committee and the nominating committee of a listed company be comprised solely of independent directors; provided that if no such nominating committee exists, such selection or recommendation may be made by independent directors constituting a majority of the board’s independent directors.
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. Under the Nasdaq listing standards and applicable SEC rules, we are required to have at least three members of the audit committee, all of whom must be independent, subject to certain phase-in provisions. Parizad Olver Parchi, Paul P. Jebely, and Brad Stewart will serve as members of our audit committee, and Parizad Olver Parchi will serve as the chairman of the audit committee. Our board of directors has determined that each of Parizad Olver Parchi, Paul P. Jebely, and Brad Stewart are independent under the Nasdaq listing standards and applicable SEC rules. Each member of the audit committee is financially literate and our board of directors has determined that Parizad Olver Parchi qualifies as an “audit committee financial expert” as defined in applicable SEC rules.
We will adopt an audit committee charter, which will be available on our website following the closing of this offering and details the principal functions of the audit committee, including:
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meeting with our independent registered public accounting firm regarding, among other issues, audits, and adequacy of our accounting and control systems;
•
monitoring the independence of the independent registered public accounting firm;
•
verifying the rotation of the lead (or coordinating) audit partner having primary responsibility for the audit and the audit partner responsible for reviewing the audit as required by law;
•
inquiring and discussing with management our compliance with applicable laws and regulations;
•
pre-approving all audit services and permitted non-audit services to be performed by our independent registered public accounting firm, including the fees and terms of the services to be performed;
•
appointing or replacing the independent registered public accounting firm;
•
determining the compensation and oversight of the work of the independent registered public accounting firm (including resolution of disagreements between management and the independent auditor regarding financial reporting) for the purpose of preparing or issuing an audit report or related work;
•
establishing procedures for the receipt, retention and treatment of complaints received by us regarding accounting, internal accounting controls or reports which raise material issues regarding our financial statements or accounting policies;
•
monitoring compliance on a quarterly basis with the terms of this offering and, if any noncompliance is identified, immediately taking all action necessary to rectify such noncompliance or otherwise causing compliance with the terms of this offering; and
•
reviewing and approving all payments made to our sponsor, officers or directors and their respective affiliates. Any payments made to members of our audit committee will be reviewed and approved by our board of directors, with the interested director or directors abstaining from such review and approval.
Director Nominations
We do not have a standing nominating committee though we intend to form a corporate governance and nominating committee as and when required to do so by law or Nasdaq rules. In accordance with Rule 5605(e)(1)(A) of the Nasdaq rules, a majority of the independent directors may recommend a director nominee for selection by our board of directors. Our board of directors believes that the independent directors can satisfactorily carry out the responsibility of properly selecting or approving director nominees without the formation of a standing nominating committee. The directors who will participate in the consideration and recommendation of director nominees will, upon the effectiveness of the registration statement of which this prospectus forms a part, be Parizad Olver Parchi and Paul P. Jebely. In accordance with Rule 5605 of the Nasdaq rules, each of Parizad Olver Parchi and Paul P. Jebely is independent. As there is no standing nominating committee, we do not have a nominating committee charter in place.
Our board of directors will also consider director candidates recommended for nomination by our shareholders during such times as they are seeking proposed nominees to stand for election at the next annual meeting of shareholders (or, if applicable, an extraordinary general meeting of shareholders). Our shareholders that wish to nominate a director for election to our board of directors should follow the procedures set forth in our amended and restated memorandum and articles of association. However, 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.
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, our board of directors considers a number of qualifications relating to management and leadership experience, background and integrity and professionalism in evaluating a person’s candidacy for membership on the board of directors. Our board of directors may require certain skills or attributes, such as financial or accounting experience, to meet specific board needs that arise from time to time and will also consider the overall experience and makeup of its members to obtain a broad and diverse mix of board members.
Compensation Committee
Upon the effectiveness of the registration statement of which this prospectus forms a part, we will establish a compensation committee of our board of directors. The members of our compensation committee will be Parizad Olver Parchi and Paul P. Jebely. Paul P. Jebely will serve as chairman of the compensation committee.
Under the Nasdaq listing standards, we are required to have a compensation committee composed entirely of independent directors, subject to certain phase-in provisions. Our board of directors has determined that each of Parizad Olver Parchi and Paul P. Jebely are independent. We will adopt a compensation committee charter, which will be available on our website following the closing of this offering and will detail the principal functions 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 approving the compensation of all of our other Section 16 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, 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 the Nasdaq and the SEC.
Compensation Committee Interlocks and Insider Participation
None of our officers currently serves, or in the past year has served, as a member of the compensation committee of any entity that has one or more officers serving on our board of directors.
Code of Ethics
Upon the effectiveness of the registration statement of which this prospectus forms a part, we will have adopted a Code of Ethics applicable to our directors, officers and employees. A copy of the 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.
Conflicts of Interest
Under Cayman Islands law, directors and officers owe the following fiduciary duties:
•
duty to act in good faith in what the director or officer believes to be in the best interests of the company as a whole;
•
duty to exercise powers for the purposes for which those powers were conferred and not for a collateral purpose;
•
directors should not improperly fetter the exercise of future discretion;
•
duty to exercise powers fairly as between different sections of shareholders;
•
duty not to put themselves in a position in which there is a conflict between their duty to the company and their personal interests; and
•
duty to exercise independent judgment.
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 of that director.
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 ratified and/or authorized in advance by the shareholders; provided that there is full disclosure by the directors. This can be done by way of permission granted in the amended and restated memorandum and articles of association or alternatively by shareholder approval at general meetings.
Our amended and restated memorandum and articles of association will provide that, subject to his or her fiduciary duties under Cayman Islands law, no director shall be disqualified or prevented from contracting with the company nor shall any contract or transaction entered into by or on behalf of the company in which any director shall have an interest be liable to be avoided. A director shall be at liberty to vote in respect of any contract or transaction in which he or she is interested provided that the nature of such interest shall be disclosed at or prior to its consideration or any vote thereon by the board of directors.
Certain of our officers, directors and director nominees presently have, and any of them in the future may have, additional fiduciary and contractual duties to other entities. Our management team is also not prohibited from sponsoring, investing or otherwise becoming involved with, any other special purpose acquisition companies, including in connection with their initial business combinations, prior to us completing our initial business combination. A special purpose acquisition company sponsored by an affiliate of our sponsor or with certain members of our management team also serving on its management team could pursue a business combination opportunity in the same or similar businesses or industries as us, the pursuit of which could create an actual or potential conflict of interest relating to what would otherwise be an opportunity for us. As a result, if any of our officers or directors becomes aware of a business combination opportunity which is suitable for an entity to which he or she has then-current fiduciary or contractual obligations, then, subject to their fiduciary duties under Cayman Islands law, he or she will need to honor such fiduciary or contractual obligations to present such business combination opportunity to such entity, before we can pursue such opportunity. If these other entities decide to pursue any such opportunity, we may be precluded from pursuing the same. Our amended and restated memorandum and articles of association will provide that, to the fullest extent permitted by applicable law: (i) no individual serving as a director or an officer shall have any duty, except to the extent expressly assumed by contract, to refrain from engaging directly or indirectly in the same or similar business activities or lines of business as us; and (ii) we renounce any interest or expectancy in, or in being offered an opportunity to participate in, any potential transaction or matter which may be a corporate opportunity for any director or officer, on the one hand, and us, on the other. We do not believe, however, that the fiduciary duties or contractual obligations of our officers and directors will materially affect our ability to complete our initial business combination.
Our sponsor and our management team may sponsor, form or participate in other blank check companies similar to ours during the period in which we are seeking an initial business combination. Any such companies may present additional conflicts of interest in pursuing an acquisition target, particularly in the event there is overlap among investment mandates. However, we do not currently expect that any such other blank check company would materially affect our ability to complete our initial business combination. In addition, our sponsor and our management team are not required to commit any specified amount of time or resources to our affairs, including our management team who will be spending material business time on their other duties, and, accordingly, will have conflicts of interest in allocating management time and resources among various business activities, including identifying potential business combinations and monitoring the related due diligence.
Below is a table summarizing the entities to which our officers, directors and director nominees currently have fiduciary duties, contractual obligations or other material management relationships:
|
Individual
|
|
|
Entity
|
|
|
Entity’s Business
|
|
|
Affiliation
|
|
|
Richard N. Peretz
|
|
|
•
Electric Last Mile, Inc.
|
|
|
•
Electrical vehicle company
|
|
|
•
Director
|
|
| |
|
|
•
Tribe Capital Growth Corp. I
|
|
|
•
Special purpose acquisition company focusing on the technology sector
|
|
|
•
Director
|
|
| |
|
|
•
Tribe Capital Growth Corp. II
|
|
|
•
Special purpose acquisition company focusing on the technology sector
|
|
|
•
Director
|
|
| |
|
|
•
Altus Power America, Inc.
|
|
|
•
Clean energy commercial and industrial sector
|
|
|
•
Director nominee
|
|
| |
|
|
•
Nauto, Inc.
|
|
|
•
Artificial intelligence-enabled fleet services
|
|
|
•
Director
|
|
| |
|
|
•
9th Gear Technologies, Inc.
|
|
|
•
Tech-enabled foreign exchange trading platform
|
|
|
•
Advisor
|
|
| |
|
|
•
Playground Global
|
|
|
•
Venture capital
|
|
|
•
Venture Partner
|
|
|
Hooman Yazhari
|
|
|
•
Mobility Capital
|
|
|
•
Venture capital
|
|
|
•
Founder and Chief Executive Officer
|
|
| |
|
|
•
Bain & Company
|
|
|
•
Consulting
|
|
|
•
Senior Advisor
|
|
| |
|
|
•
Voyager Aviation
|
|
|
•
Global aircraft lessor
|
|
|
•
Non-Executive Director
|
|
| |
|
|
•
Beyond Capital Fund
|
|
|
•
Investment fund
|
|
|
•
Co-Founder and Chairman
|
|
| |
|
|
•
Lazard Financial Advisors
|
|
|
•
Advisory firm
|
|
|
•
Advisor
|
|
|
B. Ben Baldanza
|
|
|
•
Diemacher LLC
|
|
|
•
Advisory firm
|
|
|
•
Chief Executive Officer
|
|
| |
|
|
•
JetBlue Airways
|
|
|
•
Airline
|
|
|
•
Director and Chair of the Audit Committee
|
|
| |
|
|
•
GoAir Limited
|
|
|
•
Airline
|
|
|
•
Director and Vice Chairman
|
|
| |
|
|
•
Six Flags Entertainment
|
|
|
•
Entertainment
|
|
|
•
Director
|
|
| |
|
|
•
All My Sons Moving
|
|
|
•
Moving and storage
|
|
|
•
Director
|
|
| |
|
|
•
Aurora Parts
|
|
|
•
Provider of trailer parts
|
|
|
•
Director
|
|
|
Jeff Rogers
|
|
|
•
TruckPark
|
|
|
•
Management platform for trucking industry
|
|
|
•
Strategic Advisor
|
|
| |
|
|
•
Red Arts Capital
|
|
|
•
Private equity
|
|
|
•
Operating Advisor
|
|
|
Brad Stewart
|
|
|
•
Fair.com
|
|
|
•
Automotive and technology
|
|
|
•
Chief Executive Officer and Director
|
|
|
Individual
|
|
|
Entity
|
|
|
Entity’s Business
|
|
|
Affiliation
|
|
|
Parizad Olver Parchi
|
|
|
•
Panorama Aero
|
|
|
•
Aerospace
|
|
|
•
Founder, Managing Partner, and Director
|
|
| |
|
|
•
SMASS, Inc.
|
|
|
•
Aircraft
|
|
|
•
Director
|
|
|
Paul P. Jebely
|
|
|
•
Pillsbury Winthrop Shaw Pittman
|
|
|
•
Legal
|
|
|
•
Managing Partner
|
|
Potential investors should also be aware of the following other potential conflicts of interest:
•
Our officers and directors 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 and directors is engaged in several other business endeavors for which he or she may be entitled to substantial compensation, and our officers and directors are not obligated to contribute any specific number of hours per week to our affairs.
•
Our sponsor subscribed for founder shares prior to the date of this prospectus and will purchase placement units in a transaction that will close simultaneously with the closing of this offering. In addition, all of our officers and directors are members of our sponsor.
•
Our initial shareholders, each member of our management team, and Cantor have entered into an 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 (i) the completion of our initial business combination, and (ii) a shareholder vote to approve an amendment to our amended and restated memorandum and articles of association (A) that would modify the substance or timing of our obligation to provide holders of our Class A ordinary shares the right to have their shares redeemed 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 15 months from the closing of this offering or (B) with respect to any other provision relating to the rights of holders of our Class A ordinary shares. Additionally, our initial shareholders and each member of our management team has agreed to waive its rights to liquidating distributions from the trust account with respect to its founder shares if we fail to complete our initial business combination within the prescribed time frame. If we do not complete our initial business combination within the prescribed time frame, the proceeds from the sale of the placement units held in the trust account will be used to fund the redemption of our public shares, and the placement warrants will expire worthless. Except as described herein, our initial shareholders and each member of our management team have agreed not to transfer, assign or sell any of their founder shares until the earliest of (A) one year after the completion of our initial business combination and (B) subsequent to our initial business combination, (x) if the closing price of our Class A ordinary shares equals or exceeds $12.00 per share (as adjusted for share subdivisions, share capitalizations, 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 on which we complete a liquidation, merger, share exchange or other similar transaction that results in all of our public shareholders having the right to exchange their ordinary shares for cash, securities or other property (except as described herein under the section of this prospectus entitled “Principal Shareholders — Restrictions on Transfers of Founder Shares and Placement Units”). Except as described herein, the placement units (including the placement shares, the placement warrants and Class A ordinary shares issuable upon the exercise of such warrants) will not be transferable until 30 days following the completion of our initial business combination. Because each of our officers, directors and director nominees will own ordinary shares or warrants directly or indirectly, they 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 officers and directors may have a conflict of interest with respect to evaluating a particular business combination if the retention or resignation of any such officers and directors is included by a target business as a condition to any agreement with respect to our initial business combination.
In addition, our sponsor and members of our management team may sponsor, form or participate in other blank check companies similar to ours during the period in which we are seeking an initial business combination. Our management team is also not prohibited from sponsoring, investing or otherwise becoming involved with, any other special purpose acquisition companies, including in connection with their initial business combinations, prior to us completing our initial business combination. A special purpose acquisition company sponsored by an affiliate of our sponsor or with certain members of our management team also serving on its management team could pursue a business combination opportunity in the same or similar businesses or industries as us, the pursuit of which could create an actual or potential conflict of interest relating to what would otherwise be an opportunity for us. Any such companies may present additional conflicts of interest in pursuing an acquisition target, particularly in the event there is overlap among investment mandates.
We are not prohibited from pursuing an initial business combination with a company that is affiliated with our sponsor or members of our management team. In the event we seek to complete our initial business combination with a company that is affiliated with our sponsor or members of our management team, we, or a committee of independent and disinterested directors, will obtain an opinion from an independent investment banking firm that is a member of FINRA or an independent accounting firm that such 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.
There will be no finder’s fees, reimbursements or cash payments made by us to our sponsor, our management team or 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 portion of the proceeds of this offering and the sale of placement units, in each case held in the trust account, prior to the completion of our initial business combination:
•
repayment of a promissory note in an aggregate principal amount of up to $300,000 made to us by our sponsor to cover offering-related and organizational expenses;
•
payments of $10,000 per month to an affiliate of our sponsor for office space and administrative and support services;
•
reimbursement for any out-of-pocket expenses related to identifying, investigating, negotiating and completing an initial business combination; and
•
payment to Cantor or its affiliates of fees for any financial advisory or other similar investment banking services provided to our company, and reimbursement of Cantor or its affiliates for any out-of-pocket expenses incurred by Cantor or its affiliates in connection with the performance of such services; and
•
repayment of loans which may be made by our sponsor or an affiliate of our sponsor, if any, to finance transaction costs in connection with an intended initial business combination. Up to $1,500,000 of any such loans may be convertible into units of the post-business combination entity at a price of $10.00 per unit at the option of the lender. The units would be identical to the placement units. Except for the foregoing, the terms of such additional loans, if any, have not been determined and no written agreements exist with respect to such loans.
We cannot assure you that any of the above mentioned conflicts will be resolved in our favor.
If we seek shareholder approval, we will complete our initial business combination only if we obtain the approval of an ordinary resolution under Cayman Islands law, which requires the affirmative vote of a majority of the shareholders who attend and who vote at a quorate general meeting of the company. In such case, our initial shareholders and each member of our management team have agreed to vote their founder shares and public shares, in favor of our initial business combination.
Limitation on Liability and Indemnification of Officers and Directors
Cayman Islands law does not limit the extent to which a company’s memorandum and articles of association may provide for indemnification of officers and directors, except to the extent any such provision may be held by the Cayman Islands courts to be contrary to public policy, such as to provide
indemnification against willful default, willful neglect, civil fraud or the consequences of committing a crime. Our amended and restated memorandum and articles of association will provide for indemnification of our officers and directors to the maximum extent permitted by law, including for any liability incurred in their capacities as such, except through their own actual fraud, willful default or willful neglect.
We will enter into agreements with our directors and officers to provide contractual indemnification in addition to the indemnification provided for in our amended and restated memorandum and articles of association. We expect to purchase 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.
Our officers and directors have agreed to waive any right, title, interest or claim of any kind in or to any monies in the trust account, and have agreed to waive any right, title, interest or claim of any kind they may have in the future as a result of, or arising out of, any services provided to us and will not seek recourse against the trust account for any reason whatsoever (except to the extent they are entitled to funds from the trust account due to their ownership of public shares). Accordingly, any indemnification provided will only be able to be satisfied by us if (i) we have sufficient funds outside of the trust account or (ii) we consummate an initial business combination.
Our indemnification obligations may discourage shareholders from bringing a lawsuit against our officers or directors for breach of their fiduciary duty. These provisions also may have the effect of reducing the likelihood of derivative litigation against our officers and directors, even though such an action, if successful, might otherwise benefit us and our shareholders. Furthermore, a shareholder’s investment may be adversely affected to the extent we pay the costs of settlement and damage awards against our 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.
PRINCIPAL SHAREHOLDERS
The following table sets forth information regarding the beneficial ownership of our ordinary shares as of the date of this prospectus and as adjusted to reflect the sale of our Class A ordinary shares included in the units offered by this prospectus (assuming none of the individuals listed purchase units in this offering), by:
•
each person known by us to be the beneficial owner of more than 5% of our issued and outstanding ordinary shares;
•
each of our officers, directors and director nominees that beneficially owns ordinary shares; and
•
all our officers, directors 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 of our ordinary shares beneficially owned by them. The following table does not reflect record or beneficial ownership of the placement warrants as these warrants are not exercisable within 60 days of the date of this prospectus.
On April 22, 2021, our sponsor paid an aggregate purchase price of $25,000, or approximately $0.0029 per share, to subscribe for an aggregate of 8,625,000 Class B ordinary shares, par value $0.0001. Prior to the initial investment in the company of $25,000 by our sponsor, our company had no assets, tangible or intangible. The per share price of the founder shares was determined by dividing the amount contributed to our company by the number of founder shares issued. In May 2021, our sponsor allocated (i) 25,000 founder shares to each of our independent director and independent director nominees in exchange for the payment of $84, or approximately $0.0034 per share; and (ii) 30,000 founder shares to Mr. Kurzweil in exchange for the payment of $100, or approximately $0.0033 per share. None of these granted founder shares are subject to forfeiture in the event that the underwriters’ over-allotment option is not exercised in full. On August 9, 2021, we effected a dividend of approximately 0.3628 shares for each outstanding Class B ordinary share, such that there was an aggregate of 11,754,150 founder shares, worth approximately $0.0021 per share. On October 1, 2021, we effected a dividend of approximately 0.0195 shares for each outstanding Class B ordinary share, such that our sponsor owns an aggregate of 11,983,333 founder shares, for approximately $0.0021 per share.
The following table presents the number of shares and percentage of our ordinary shares owned by our initial shareholders before and after this offering. The post-offering percentages in the following table assume that the underwriters do not exercise their over-allotment option, that our sponsor forfeits 1,530,000 founder shares and that there are 41,813,333 ordinary shares issued and outstanding after this offering.
| |
|
|
Prior to Offering
|
|
|
After Offering
|
|
|
Name and Address of Beneficial Owner(1)
|
|
|
Amount and
Nature of
Beneficial
Ownership(2)
|
|
|
Approximate
Percentage of
Outstanding
Ordinary
Shares
|
|
|
Amount and
Nature of
Beneficial
Ownership(3)
|
|
|
Approximate
Percentage of
Outstanding
Ordinary
Shares
|
|
|
Semper Paratus Sponsor LLC (our sponsor)(4)
|
|
|
|
|
11,983,333 |
|
|
|
|
|
100.00% |
|
|
|
|
|
11,663,333 |
|
|
|
|
|
27.89% |
|
|
|
Phillippe J. Kurzweil(4)
|
|
|
|
|
11,983,333 |
|
|
|
|
|
100.00% |
|
|
|
|
|
11,663,333 |
|
|
|
|
|
27.89% |
|
|
|
Brad Stewart
|
|
|
|
|
— |
|
|
|
|
|
— |
|
|
|
|
|
— |
|
|
|
|
|
— |
|
|
|
Parizad Olver Parchi
|
|
|
|
|
— |
|
|
|
|
|
— |
|
|
|
|
|
— |
|
|
|
|
|
— |
|
|
|
Paul P. Jebely
|
|
|
|
|
— |
|
|
|
|
|
— |
|
|
|
|
|
— |
|
|
|
|
|
— |
|
|
|
Richard N. Peretz
|
|
|
|
|
— |
|
|
|
|
|
— |
|
|
|
|
|
— |
|
|
|
|
|
— |
|
|
|
Hooman Yazhari
|
|
|
|
|
— |
|
|
|
|
|
— |
|
|
|
|
|
— |
|
|
|
|
|
— |
|
|
|
Ben Baldanza
|
|
|
|
|
— |
|
|
|
|
|
— |
|
|
|
|
|
— |
|
|
|
|
|
— |
|
|
|
Jeff Rogers
|
|
|
|
|
— |
|
|
|
|
|
— |
|
|
|
|
|
— |
|
|
|
|
|
— |
|
|
|
All executive officers, directors and director nominees as a group (8 individuals)
|
|
|
|
|
11,983,333 |
|
|
|
|
|
100.00% |
|
|
|
|
|
11,663,333 |
|
|
|
|
|
27.89% |
|
|
*
Less than 1%
(1)
Unless otherwise noted, the business address of each of the following entities or individuals is c/o Semper Paratus Acquisition Corp., 767 Third Avenue, 38th Floor, New York, New York 10017.
(2)
Interests shown consist solely of founder shares, classified as Class B ordinary shares. Such shares will automatically convert into Class A ordinary shares at the time of our initial business combination on a one-for-one basis, subject to adjustment, as described in the section of this prospectus entitled “Description of Securities.”
(3)
Assumes no exercise of over-allotment option and, therefore, the forfeiture of an aggregate of 1,530,000 founder shares held by our initial shareholders. Interests shown consist of founder shares, classified as Class B ordinary shares, which shall automatically convert into Class A ordinary shares at the time of our initial business combination on a one-for-one basis, subject to adjustment (as described in the section of this prospectus entitled “Description of Securities”) and placement shares.
(4)
Our sponsor is the record holder of such shares. Phillippe J. Kurzweil is the managing member of our sponsor, and as such has voting and investment discretion with respect to the ordinary shares held of record by our sponsor and may be deemed to have beneficial ownership of the ordinary shares held directly by our sponsor. Mr. Kurzweil disclaims any beneficial ownership of the reported shares other than to the extent of any pecuniary interest he may have therein, directly or indirectly. In addition, all of our officers and directors are members of our sponsor. The membership interests not owned by our officers and directors are held by third-party investors that are not affiliated with our management.
Immediately after this offering, our initial shareholders and their permitted transferees will beneficially own 25% of the then-issued and outstanding ordinary shares (excluding the placement shares underlying the placement units and assuming they do not purchase any units in this offering) and will have the right to appoint all of our directors prior to our initial business combination. 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. Because of this ownership block, our sponsor may be able to effectively influence the outcome of all other matters requiring approval by our shareholders, including amendments to our amended and restated memorandum and articles of association and approval of significant corporate transactions including our initial business combination. If we increase or decrease the size of this offering, we will effect a share capitalization or a share surrender or redemption or other appropriate mechanism, as applicable, with respect to our Class B ordinary shares immediately prior to the consummation of this offering in such amount as to maintain the number of founder shares, on an as-converted basis, at 25% of our issued and outstanding ordinary shares upon the consummation of this offering and issuance of placement units.
Our initial shareholders and each member of our management team have agreed (a) to vote any founder shares and public shares held by them in favor of any proposed initial business combination and (b) not to redeem any founder shares or public shares held by them in connection with a shareholder vote to approve a proposed initial business combination.
Transfers of Founder Shares and Placement Units
The founder shares, placement units, placement shares, placement warrants and any Class A ordinary shares issued upon conversion or exercise thereof are each subject to transfer restrictions pursuant to lock-up provisions in the agreement entered into by our initial shareholders and each member of our management team. Our initial shareholders and each member of our management team have agreed not to transfer, assign or sell any of their founder shares until the earliest of (A) one year after the completion of our initial business combination and (B) subsequent to our initial business combination, (x) if the closing price of our Class A ordinary shares equals or exceeds $12.00 per share (as adjusted for share subdivisions, share capitalizations, 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 on which we complete a liquidation, merger, share exchange or other similar transaction that results in all of our public shareholders having the right to exchange their ordinary shares for cash, securities or other property (except as described herein under the section of this prospectus entitled “Principal Shareholders — Restrictions on Transfers of Founder Shares and Placement Units”). The placement units,
placement shares, placement warrants, and the respective Class A ordinary shares underlying such warrants are not transferable or salable until 30 days after the completion of our initial business combination. The foregoing restrictions are not applicable to transfers (a) to our officers or directors or those of Cantor, any affiliates or family members of any of our officers or directors of Cantor, any members or partners of our sponsor or Cantor or their affiliates, any affiliates of our sponsor or Cantor, or any employees or directors of such affiliates, or any funds or accounts advised by our sponsor or Cantor or their affiliates; (b) in the case of an individual, by gift to a member of one 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 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 founder shares, placement units or Class A ordinary shares, as applicable, were originally purchased; (f) by virtue of our sponsor’s organizational documents upon liquidation or dissolution of our sponsor or the organizational documents of Cantor upon dissolution of Cantor; (g) to the company for no value for cancellation in connection with the consummation of our initial business combination; (h) in the event of our liquidation prior to the completion of our initial business combination; or (i) in the event of our completion of a liquidation, merger, share exchange or other similar transaction which results in all of our public shareholders having the right to exchange their Class A ordinary shares 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 (f) these permitted transferees must enter into a written agreement agreeing to be bound by these transfer restrictions and the other restrictions contained in the letter agreement.
CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS
On April 22, 2021, our sponsor paid an aggregate purchase price of $25,000, or approximately $0.0029 per share, to subscribe for an aggregate of 8,625,000 Class B ordinary shares, par value $0.0001. Prior to the initial investment in the company of $25,000 by our sponsor, our company had no assets, tangible or intangible. The per share price of the founder shares was determined by dividing the amount contributed to our company by the number of founder shares issued. In May 2021, our sponsor allocated (i) 25,000 founder shares to each of our independent director and independent director nominees in exchange for the payment of $84, or approximately $0.0034 per share; and (ii) 30,000 founder shares to Mr. Kurzweil in exchange for the payment of $100, or approximately $0.0033 per share. None of these granted founder shares are subject to forfeiture in the event that the underwriters’ over-allotment option is not exercised in full. On August 9, 2021, we effected a dividend of approximately 0.3628 shares for each outstanding Class B ordinary share, such that our sponsor owned an aggregate of 11,754,150 founder shares, for approximately $0.0021 per share. On October 1, 2021, we effected a dividend of approximately 0.0195 shares for each outstanding Class B ordinary share, such that our sponsor owns an aggregate of 11,983,333 founder shares, for approximately $0.0021 per share. If we increase or decrease the size of this offering, we will effect a share capitalization or a share surrender or redemption or other appropriate mechanism, as applicable, with respect to our Class B ordinary shares immediately prior to the consummation of this offering in such amount as to maintain the number of founder shares, on an as-converted basis, at 25% of our issued and outstanding ordinary shares upon the consummation of this offering and issuance of placement units. Up to 1,530,000 founder shares are subject to forfeiture by our sponsor, depending on the extent to which the underwriters’ over-allotment option is exercised.
Our sponsor and Cantor have committed, pursuant to written agreements, to purchase an aggregate of 1,360,000 placement units (or 1,450,000 placement units if the underwriters exercise their over-allotment option in full) for a purchase price of $10.00 per whole unit in a private placement that will occur simultaneously with the closing of this offering. Of those 1,360,000 placement units, our sponsor has agreed to purchase 1,210,000 placement units (or 1,300,000 placement units if the underwriters exercise their over-allotment option in full) and Cantor has agreed to purchase 150,000 placement units (regardless of whether the underwriters’ over-allotment option is exercised in full). As such, our sponsor’s interest in this transaction is valued up to $13,000,000 and Cantor’s interest in this transaction is valued up to $1,500,000, depending on the number of placement units purchased. The placement units (including the placement shares and placement warrants) may not, subject to certain limited exceptions, be transferred, assigned or sold by the holder until 30 days after the completion of our initial business combination.
As more fully discussed in the section of this prospectus entitled “Management — Conflicts of Interest”, if any of our officers or directors 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, then, subject to his or her fiduciary duties under Cayman Islands law, he or she will honor his or her fiduciary or contractual obligations to present such opportunity to such entity. Our officers and directors currently have certain relevant fiduciary duties or contractual obligations that may take priority over their duties to us.
In addition, all of our officers and directors are members of our sponsor. The membership interests not owned by our officers and directors are held by third-party investors that are not affiliated with our management.
We currently maintain our executive offices at 767 Third Avenue, 38th Floor, New York, New York 10017. The cost for our use of this space is included in the $10,000 per month fee we will pay to an affiliate of our sponsor for office space and administrative and support services, commencing on the date that our securities are first listed on the Nasdaq. Upon completion of our initial business combination or our liquidation, we expect to cease paying these monthly fees.
Our sponsor, members of our management team or 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, any member of our management team or 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.
Prior to the consummation of this offering, our sponsor has agreed to loan us up to $300,000 to be used for a portion of the expenses of this offering. These loans are non-interest bearing, unsecured and are due at the earlier of December 31, 2021 and the closing of this offering. The loan will be repaid upon the closing of this offering out of the portion of the proceeds from this offering and the sale of placement units that have been allocated for the payment of offering expenses (other than underwriting discounts and commissions) and will not be held in the trust account.
In addition, our sponsor or an affiliate of our sponsor may, but is not obligated to, loan us additional funds as may be required. If we complete an initial business combination, we may repay such loaned amounts out of the proceeds of the trust account released to us. In the event that the 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 for such repayment. Up to $1,500,000 of such loans made available by our sponsor or its affiliates may be convertible into units at a price of $10.00 per unit at the option of the lender. The units would be identical to the placement units, including as to exercise price, exercisability and exercise period. Except for the foregoing, the terms of such additional 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 its affiliates 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.
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. All of these fees will be described, to the extent then known, in the tender offer or proxy solicitation materials, as applicable, furnished to our shareholders. 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 general meeting held to consider our initial business combination, as applicable, as it will be up to the directors of the post-transaction business to determine officer and director compensation.
We will enter into a registration and shareholder rights agreement pursuant to which (i) our initial shareholders will be entitled to certain registration rights with respect to the placement units, the units issuable upon conversion of working capital loans (if any) and the Class A ordinary shares included in the units and issuable upon exercise of the warrants included in the units, and (ii) our sponsor, upon consummation of our initial business combination, will be entitled to nominate individuals for appointment to our board of directors, as long as our sponsor holds any securities covered by the registration and shareholder rights agreement, which is described under the section of this prospectus entitled “Description of Securities — Registration and Shareholder Rights.” We will bear the expenses incurred in connection with the filing of any such registration statements.
Policy for Approval of Related Party Transactions
The audit committee of our board of directors will adopt a charter providing for the review, approval and/or ratification of “related party transactions”, which are those transactions required to be disclosed pursuant to Item 404 of Regulation S-K as promulgated by the SEC, by the audit committee. At its meetings, the audit committee shall be provided with the details of each new, existing, or proposed related party transaction, including the terms of the transaction, any contractual restrictions that the company has already committed to, the business purpose of the transaction, and the benefits of the transaction to the company and to the relevant related party. Any member of the committee who has an interest in the related party transaction under review by the committee shall abstain from voting on the approval of the related party transaction, but may, if so requested by the chairman of the committee, participate in some or all of the committee’s discussions of the related party transaction. Upon completion of its review of the related party transaction, the committee may determine to permit or to prohibit the related party transaction.
DESCRIPTION OF SECURITIES
We are a Cayman Islands exempted company and our affairs will be governed by our amended and restated memorandum and articles of association, the Companies Act and the common law of the Cayman Islands. Pursuant to our amended and restated memorandum and articles of association, which will be adopted prior to the consummation of this offering, we will be authorized to issue 200,000,000 Class A ordinary shares, par value $0.0001, 20,000,000 Class B ordinary shares, par value $0.0001, and 1,000,000 preference shares, par value $0.0001. The following description summarizes the material terms of our shares as set out more particularly in our amended and restated memorandum and articles of association. 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 Class A ordinary share and one-half of one redeemable warrant. Each whole warrant entitles the holder thereof to purchase one Class A ordinary share 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 Class A ordinary shares. This means only a whole warrant may be exercised at any given time by a warrant holder.
The Class A ordinary shares and warrants comprising the units are expected to 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 Cantor informs 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 Class A ordinary shares 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 Class A ordinary shares 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 two units, you will not be able to receive or trade a whole warrant.
In no event will the Class A ordinary shares and warrants be traded separately until we have filed with the SEC a Current Report on Form 8-K that includes an audited balance sheet reflecting our receipt of the gross proceeds at the closing of this offering and the sale of the placement units. We will file a Current Report on Form 8-K that includes this audited balance sheet promptly after the completion 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.
Additionally, the units will automatically separate into their component parts and will not be traded after completion of our initial business combination.
Placement Units
The placement units (including the placement shares, the placement warrants and Class A ordinary shares issuable upon exercise of such warrants) will not be transferable or salable until 30 days after the completion of our initial business combination (except, among other limited exceptions as described under “Principal Shareholders — Transfers of Founder Shares and Placement Units,” to our officers and directors and other persons or entities affiliated with our sponsor) and the placement warrants included therein will not be redeemable by us (except as described below under “— Warrants — Public Shareholders’ Warrants — Redemption of warrants when the price per Class A ordinary share equals or exceeds $10.00”) so long as they are held by our sponsor, Cantor, or their permitted transferees. Holders of our placement units are entitled to certain registration rights. If we do not consummate an initial business combination within 15 months from the closing of this offering, the proceeds from the sale of the placement units 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 placement units (and the underlying securities) will expire worthless. Further, if we seek shareholder approval, we will complete our initial business combination only if we receive an ordinary resolution under Cayman Islands law, which requires the affirmative vote of
a majority of the shareholders who attend and vote at a general meeting of the company. In such case, our initial holders, sponsor and each member of our management team have agreed to vote their founder shares, placement shares and any public shares purchased during or after this offering in favor of our initial business combination. Otherwise, the placement units are identical to the units sold in this offering.
In addition, for as long as the placement units are held by Cantor or its designees or affiliates, they will be subject to the lock-up and registration rights limitations imposed by FINRA Rule 5110 and the warrants that are part of the placement units may not be exercised after five years from the effective date of the registration statement of which this prospectus forms a part.
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, but are not obligated to, loan us funds as may be required. Up to $1,500,000 of such loans may be convertible into units at a price of $10.00 per unit at the option of the lender at the time of the business combination. The units would be identical to the placement units sold in the private placement.
Ordinary Shares
Prior to the date of this prospectus, there were 11,983,333 Class B ordinary shares issued and outstanding, all of which were held of record by our initial shareholders and their permitted transferees, so that our initial shareholders and their permitted transferees will own 25% of our issued and outstanding shares after this offering (excluding the placement shares underlying the placement units and assuming our initial shareholders and their permitted transferees do not purchase any units in this offering). Upon the closing of this offering, 41,813,333 of our ordinary shares will be outstanding (assuming the underwriters do not exercise the over-allotment option and the corresponding forfeiture of 1,530,000 Class B ordinary shares held by our sponsor), including:
•
30,000,000 Class A ordinary shares underlying the units issued as part of this offering; and
•
1,360,000 Class A ordinary shares underlying the placement units being sold in the private placement; and
•
10,453,333 Class B ordinary shares held by our initial shareholders.
If we increase or decrease the size of this offering, we will effect a share capitalization or a compulsory redemption or share surrender or other appropriate mechanism, as applicable, with respect to our Class B ordinary shares immediately prior to the consummation of this offering in such amount as to maintain the number of founder shares, on an as-converted basis, at 25% of our issued and outstanding ordinary shares upon the consummation of this offering and issuance of placement units.
Ordinary shareholders of record are entitled to one vote for each ordinary share held on all matters to be voted on by shareholders, subject to certain exceptions. Except as described below, holders of Class A ordinary shares and holders of Class B ordinary shares will vote together as a single class on all matters submitted to a vote of our shareholders except as required by law. Unless specified in our amended and restated memorandum and articles of association, or as required by applicable provisions of the Companies Act or applicable stock exchange rules, the affirmative vote of a majority of our shareholders who attend and who vote at a quorate general meeting of the company is required to approve any such matter voted on by our shareholders. Approval of certain actions will require a special resolution under Cayman Islands law, which requires the affirmative vote of at least two-thirds of our shareholders who attend and who vote at a quorate general meeting of the company (except where our amended and restated memorandum and articles of association specify a higher approval requirement); such actions include amending our amended and restated memorandum and articles of association and approving a statutory merger or consolidation with another company. Our board of directors is divided into three classes, each of which will generally serve for a term of three years with only one class of directors being appointed in each year. There is no cumulative voting with respect to the election of directors, with the result that the holders of more than 50% of the shares voted for the election of directors can appoint all of the directors. Our shareholders are entitled to receive ratable dividends when, as and if declared by the board of directors out of funds legally available therefor. Prior to our initial business combination, only holders of our founder shares will have the right to vote on the appointment of directors. Holders of our public shares will not be entitled to vote on the
election of directors during such time. In addition, prior to the completion of an initial business combination, holders of a majority of our founder shares may remove a member of the board of directors for any reason. The provisions of our amended and restated memorandum and articles of association governing the election or removal of directors prior to our initial business combination may only be amended by a special resolution passed by not less than 90% of our ordinary shares shareholders who attend and vote at our general meeting.
Because our amended and restated memorandum and articles of association authorize the issuance of up to 200,000,000 Class A ordinary shares, 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 Class A ordinary shares which we will be authorized to issue at the same time as our shareholders vote on the business combination to the extent we seek shareholder approval in connection with our initial business combination.
Our board of directors is divided into three classes with only one class of directors being appointed in each year and each class (except for those directors appointed prior to our first annual general meeting) serving a three-year term. In accordance with the Nasdaq corporate governance requirements, we are not required to hold an annual general meeting until one year after our first fiscal year end following our listing on the Nasdaq. There is no requirement under the Companies Act for us to hold annual or general meetings to appoint directors. We may not hold an annual general meeting to appoint new directors prior to the consummation of our initial business combination. Prior to the completion of an initial business combination, any vacancy on the board of directors may be filled by a nominee chosen by holders of a majority of our founder shares or by the affirmative vote of a majority of the directors present and voting at a meeting of our board. In addition, prior to the completion of an initial business combination, holders of a majority of our founder shares may remove a member of the board of directors for any reason.
We will provide our public shareholders 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 earned on the funds held in the trust account and not previously released to us to pay our taxes, if any, divided by the number of the then-outstanding public shares, subject to the limitations described herein. The amount in the trust account is initially anticipated to be $10.20 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 owner must identify itself in order to validly redeem its shares. Our initial shareholders and each member of our management team have entered into an 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 (i) the completion of our initial business combination, and (ii) a shareholder vote to approve an amendment to our amended and restated memorandum and articles of association (A) that would modify the substance or timing of our obligation to provide holders of our Class A ordinary shares the right to have their shares redeemed 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 15 months from the closing of this offering or (B) with respect to any other provision relating to the rights of holders of our Class A ordinary shares.
Unlike many blank check companies that hold shareholder 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 law, if a shareholder vote is not required by applicable law or stock exchange listing requirements and we do not decide to hold a shareholder vote for business or other reasons, we will, pursuant to our amended and restated memorandum and articles of association, 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 memorandum and articles of association 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 shareholder approval of the transaction is required by applicable law or stock exchange listing requirements, or we decide to obtain shareholder 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 shareholder approval, we will complete our initial business combination only if we obtain the approval of an ordinary resolution under Cayman Islands law, which requires the affirmative vote of a majority of the shareholders who attend and who vote at a quorate general meeting of the company. However, the participation of our sponsor, management team, advisors or their 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 shareholders vote, or indicate their intention to vote, against such initial business combination. For purposes of seeking approval of the majority of our issued and outstanding ordinary shares, non-votes will have no effect on the approval of our initial business combination once a quorum is obtained. Our amended and restated memorandum and articles of association will require that at least five days’ notice be given of any general meeting.
If we seek shareholder approval of our initial business combination and we do not conduct redemptions in connection with our initial business combination pursuant to the tender offer rules, our amended and restated memorandum and articles of association will provide that a public shareholder, together with any affiliate of such shareholder or any other person with whom such shareholder 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. However, we would not be restricting our shareholders’ ability to vote all of their shares (including Excess Shares) for or against our initial business combination. Our shareholders’ inability to redeem the Excess Shares will reduce their influence over our ability to complete our initial business combination, and such shareholders could suffer a material loss in their investment if they sell such Excess Shares on the open market. Additionally, such shareholders will not receive redemption distributions with respect to the Excess Shares if we complete our initial business combination. And, as a result, such shareholders will continue to hold that number of shares exceeding 15% and, in order to dispose such shares would be required to sell their shares in open market transactions, potentially at a loss.
If we seek shareholder approval, we will complete our initial business combination only if we obtain the approval of an ordinary resolution under Cayman Islands law, which requires the affirmative vote of a majority of shareholders who attend and vote at a quorate general meeting of the company. In such case, our initial shareholders and each member of our management team have agreed to vote their founder shares and public shares in favor of our initial business combination. As a result, in addition to shares held by our initial shareholders and members of our management team, we would need 9,243,335 shares, or 30.8% (assuming all issued and outstanding shares are voted and the over-allotment option is not exercised) of the 30,000,000 public shares sold in this offering to be voted in favor of an initial business combination in order to have our initial business combination approved. However, assuming only the minimum number of shares representing a quorum (20,906,668 shares or 50.1% of our issued and outstanding shares) are voted, and assuming the over-allotment option is not exercised, no affirmative votes from other public shareholders would be required to approve our initial business combination because our initial shareholders will own 11,663,333 shares in the aggregate (including 10,453,333 founder shares and 1,210,000 placement shares), which number exceeds the 10,453,335 votes (representing a majority of the 20,906,668 shares present and voting) needed to approve the initial business combination.
Upon consummation of this offering, and assuming the over-allotment option is not exercised, our initial shareholders and Cantor will own an aggregate of 11,813,333 shares, or 28.3% of our issued and outstanding shares, including 10,453,333 founder shares and 1,210,000 placement shares held by our initial shareholders and 150,000 placement shares held by Cantor. Additionally, each public shareholder may elect to redeem their public shares irrespective of whether they vote for or against the proposed transaction or vote at all..
Pursuant to our amended and restated memorandum and articles of association, if we have not consummated an initial business combination within 15 months from the closing of this offering or during any Extension Period, we will (i) cease all operations except for the purpose of winding up; (ii) as promptly as reasonably possible but not more than ten business days thereafter, redeem the public shares, at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the trust account, including interest earned on the funds held in the trust account and not previously released to us to pay our taxes, if any (less up to $100,000 of interest to pay dissolution expenses), divided by the number of the then-outstanding public shares, which redemption will completely extinguish public shareholders’ rights as shareholders
(including the right to receive further liquidation distributions, if any); and (iii) as promptly as reasonably possible following such redemption, subject to the approval of our remaining shareholders and our board of directors, liquidate and dissolve, subject in each case to our obligations under Cayman Islands law to provide for claims of creditors and the requirements of other applicable law. Our initial shareholders and each member of our management team have entered into an 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 and placement shares (but will retain such rights for any public shares) they hold if we fail to consummate an initial business combination within 15 months from the closing of this offering or during any Extension Period (although the initial shareholders and each member of our management team 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). Our amended and restated memorandum and articles of association will provide that, if we wind up for any other reason prior to the consummation of our initial business combination, we will follow the foregoing procedures with respect to the liquidation of the trust account as promptly as reasonably possible but not more than ten business days thereafter, subject to applicable Cayman Islands law.
In the event of a liquidation, dissolution or winding up of the company after a business combination, our shareholders 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 shares, if any, having preference over the ordinary shares. Our shareholders have no preemptive or other subscription rights. There are no sinking fund provisions applicable to the ordinary shares, except that we will provide our public shareholders with the opportunity to redeem their public shares for cash at a per share price 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 pay our taxes, if any, divided by the number of the then-outstanding public shares, upon the completion of our initial business combination, subject to the limitations described herein.
Founder Shares
The founder shares are designated as Class B ordinary shares and, except as described below, are identical to the Class A ordinary shares included in the units being sold in this offering, and holders of founder shares have the same shareholder rights as public shareholders, except that: (a) 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; (b) the founder shares are subject to certain transfer restrictions, as described in more detail below; (c) our initial shareholders and each member of our management team have entered into an agreement with us, pursuant to which they have agreed to (i) waive their redemption rights with respect to their founder shares and public shares in connection with the completion of our initial business combination; (ii) waive their redemption rights with respect to their founder shares and public shares in connection with a shareholder vote to approve an amendment to our amended and restated memorandum and articles of association (A) that would modify the substance or timing of our obligation to provide holders of our Class A ordinary shares the right to have their shares redeemed 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 15 months from the closing of this offering or (B) with respect to any other provision relating to the rights of holders of our Class A ordinary shares; and (iii) waive their rights to liquidating distributions from the trust account with respect to any founder shares and placement shares (but will retain such rights for any public shares) they hold if we fail to consummate an initial business combination within 15 months from the closing of this offering or during any Extension Period (although the initial shareholders and members of our management team, 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); (d) the founder shares will automatically convert into our Class A ordinary shares at the time of our initial business combination or earlier at the option of the holders thereof on a one- for-one basis, subject to adjustment pursuant to certain anti-dilution rights, as described herein; and (e) the founder shares are entitled to registration rights. If we seek shareholder approval, we will complete our initial business combination only if we obtain the approval of an ordinary resolution under Cayman Islands law, which requires the affirmative vote of a majority of the shareholders who attend and who vote at a quorate general meeting of the company. In such case, our initial shareholders and each member of our management team have agreed to vote their founder shares and public shares in favor of our initial business combination.
The founder shares will automatically convert into Class A ordinary shares (which such Class A ordinary shares delivered upon conversion will not have redemption rights or be entitled to liquidating distributions from the trust account if we do not consummate an initial business combination) at the time of our initial business combination or earlier at the option of the holders thereof at a ratio such that the number of Class A ordinary shares issuable upon conversion of all founder shares will equal, in the aggregate, on an as-converted basis, 25% of the sum of (i) the total number of ordinary shares issued and outstanding upon completion of this offering, plus (ii) the total number of Class A ordinary shares issued or deemed issued or issuable upon conversion or exercise of any equity-linked securities or rights issued or deemed issued, by the company in connection with or in relation to the consummation of the initial business combination, excluding Class A ordinary shares or equity- linked securities exercisable for or convertible into Class A ordinary shares issued, deemed issued, or to be issued, to any seller in the initial business combination and any placement units issued to our sponsor or its affiliates upon conversion of working capital loans. In no event will the Class B ordinary shares convert into Class A ordinary shares at a rate of less than one-to-one.
Except as described herein, our initial shareholders and each member of our management team have agreed not to transfer, assign or sell any of their founder shares until the earliest of (A) one year after the completion of our initial business combination and (B) subsequent to our initial business combination, (x) if the closing price of our Class A ordinary shares equals or exceeds $12.00 per share (as adjusted for share subdivisions, share capitalizations, 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 on which we complete a liquidation, merger, share exchange or other similar transaction that results in all of our public shareholders having the right to exchange their ordinary shares for cash, securities or other property (except as described herein under the section of this prospectus entitled “Principal Shareholders — Restrictions on Transfers of Founder Shares and Placement Units”). Any permitted transferees would be subject to the same restrictions and other agreements of our initial shareholders and our management team with respect to any founder shares.
Prior to our initial business combination, only holders of our founder shares will have the right to vote on the appointment of directors. Holders of our public shares will not be entitled to vote on the election of directors during such time. In addition, prior to the completion of an initial business combination, 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 memorandum and articles of association may only be amended by a special resolution passed by not less than 90% of our ordinary shares shareholders who attend and vote at our general meeting. With respect to any other matter submitted to a vote of our shareholders, including any vote in connection with our initial business combination, except as required by law, 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.
Register of Members
Under Cayman Islands law, we must keep a register of members (shareholders) and there will be entered therein:
•
the names and addresses of the members, a statement of the shares held by each member, and of the amount paid or agreed to be considered as paid, on the shares of each member and the voting rights of shares of each member;
•
whether voting rights are attached to the shares in issue;
•
the date on which the name of any person was entered on the register as a member; and
•
the date on which any person ceased to be a member.
Under Cayman Islands law, the register of members of our company is prima facie evidence of the matters set out therein (i.e., the register of members will raise a presumption of fact on the matters referred to above unless rebutted) and a member registered in the register of members will be deemed as a matter of Cayman Islands law to have legal title to the shares as set against its name in the register of members. Upon the closing of this offering, the register of members will be immediately updated to reflect the issue of
shares by us. Once our register of members has been updated, the shareholders recorded in the register of members will be deemed to have legal title to the shares set against their name. However, there are certain limited circumstances where an application may be made to a Cayman Islands court for a determination on whether the register of members reflects the correct legal position. Further, the Cayman Islands court has the power to order that the register of members maintained by a company should be rectified where it considers that the register of members does not reflect the correct legal position. If an application for an order for rectification of the register of members were made in respect of our ordinary shares, then the validity of such shares may be subject to re-examination by a Cayman Islands court.
Preference Shares
Our amended and restated memorandum and articles of association authorize 1,000,000 preference shares and provide that preference shares 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 shareholder approval, issue preference shares with voting and other rights that could adversely affect the voting power and other rights of the holders of the ordinary shares and could have anti-takeover effects. The ability of our board of directors to issue preference shares without shareholder 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 preference shares issued and outstanding at the date hereof. Although we do not currently intend to issue any preference shares, we cannot assure you that we will not do so in the future. No preference shares are being issued or registered in this offering.
Warrants
Public Shareholders’ Warrants
Each whole warrant entitles the registered holder to purchase one Class A ordinary share at a price of $11.50 per share, subject to adjustment as discussed below, at any time commencing on the later of one year from the closing of this offering and 30 days after the completion of our initial business combination, except as discussed in the immediately succeeding paragraph. Pursuant to the warrant agreement, a warrant holder may exercise its warrants only for a whole number of Class A ordinary shares. 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 two 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 Class A ordinary shares 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 with respect to the Class A ordinary shares underlying 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. No warrant will be exercisable and we will not be obligated to issue a Class A ordinary share upon exercise of a warrant unless the Class A ordinary share issuable upon such warrant exercise has been registered, qualified or deemed to be exempt under the securities laws of the state of residence of the registered holder of the warrants. 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 no event will we be required to net cash settle any warrant. 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 Class A ordinary share underlying such unit.
We are not registering the Class A ordinary shares 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 Class A ordinary shares issuable upon exercise of the warrants, to
cause such registration statement to become effective and to maintain a current prospectus relating to those Class A ordinary shares until the warrants expire or are redeemed, as specified in the warrant agreement. If a registration statement covering the Class A ordinary shares issuable upon exercise of the warrants is not effective by the later of twelve months from the closing of this offering and the 60th business day after the closing of our initial business combination, warrantholders may, until such time as there is an effective registration statement and during any period when we will have failed to maintain an effective registration statement, exercise warrants on a “cashless basis” in accordance with Section 3(a)(9) of the Securities Act or another exemption. Notwithstanding the foregoing, if a registration statement covering the Class A ordinary shares issuable upon exercise of the warrants is not effective within a specified period following the consummation of our initial business combination, warrantholders may, until such time as there is an effective registration statement and during any period when we shall have failed to maintain an effective registration statement, exercise warrants on a cashless basis pursuant to the exemption provided by Section 3(a)(9) of the Securities Act, provided that such exemption is available. If that exemption, or another exemption, is not available, holders will not be able to exercise their warrants on a cashless basis.
Redemption of warrants when the price per Class A ordinary share equals or exceeds $18.00.
Once the warrants become exercisable, we may redeem the outstanding warrants except as described herein with respect to the placement warrants:
•
in whole and not in part;
•
at a price of $0.01 per warrant;
•
upon a minimum of 30 days’ prior written notice of redemption to each warrant holder; and
•
if, and only if, the closing price of the Class A ordinary shares 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 “— Warrants — Public Shareholders’ Warrants — Anti-Dilution Adjustments”) 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.
We will not redeem the warrants as described above unless a registration statement under the Securities Act covering the issuance of the Class A ordinary shares issuable upon exercise of the warrants is then effective and a current prospectus relating to those Class A ordinary shares 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 Class A ordinary shares 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 “— Warrants — Public Shareholders’ Warrants — Anti-dilution Adjustments”) as well as the $11.50 (for whole shares) warrant exercise price after the redemption notice is issued.
If we call the warrants for redemption as described above, our management will have the option to require all holders that wish to exercise warrants to do so on a “cashless basis.” In determining whether to require all holders to exercise their warrants on a “cashless basis,” our management will consider, among other factors, our cash position, the number of warrants that are outstanding and the dilutive effect on our shareholders of issuing the maximum number of Class A ordinary shares issuable upon the exercise of our warrants. In such event, each holder would pay the exercise price by surrendering the warrants for that number of Class A ordinary shares equal to the lesser of (A) the quotient obtained by dividing (x) the product of the number of Class A ordinary shares underlying the warrants, multiplied by the excess of the fair market value of our Class A ordinary shares over the exercise price of the warrants by (y) the fair market value and (B) 0.361 per warrant.
Redemption of warrants when the price per Class A ordinary share equals or exceeds $10.00.
Once the warrants become exercisable, we may redeem the outstanding warrants except as described herein with respect to the placement warrants:
•
in whole and not in part;
•
at a price of $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 our Class A ordinary shares, except as otherwise described below; and
•
if, and only if, the closing price of our Class A ordinary shares equals or exceeds $10.00 per public 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 “— Warrants — Public Shareholders’ Warrants — Anti- Dilution Adjustments”) on the trading day prior to the date on which we send the notice of redemption to the warrant holders.
Beginning on the date the notice of redemption is given until the warrants are redeemed or exercised, holders may elect to exercise their warrants on a cashless basis. The numbers in the table below represent the number of Class A ordinary shares 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 our Class A ordinary shares 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 our Class A ordinary shares for the 10 trading days ending on the third trading day prior to 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 Class A ordinary shares shall include a security other than Class A ordinary shares into which the Class A ordinary shares 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 Class A ordinary shares 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 exercise price of the warrant after such adjustment and the denominator of which is the price of the warrant immediately prior to such adjustment. In such an event, the number of shares in the table below shall be adjusted by multiplying such share amounts 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. 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.
| |
|
|
Fair Market Value of Class A Ordinary Shares
|
|
|
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 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 Class A ordinary shares 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 our Class A ordinary shares for the 10 trading days ending on the third trading day prior to 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 Class A ordinary shares 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 our Class A ordinary shares for the 10 trading days ending on the third trading day prior to 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 Class A ordinary shares for each whole warrant. In no event will the warrants be exercisable on a cashless basis in connection with this redemption feature for more than 0.361 Class A ordinary shares 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 Class A ordinary shares.
This redemption feature differs from the typical warrant redemption features used in many other blank check offerings, which typically only provide for a redemption of warrants for cash when the trading price for the Class A ordinary shares 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 Class A ordinary shares are trading at or above $10.00 per public share, which may be at a time when the trading price of our
Class A ordinary shares 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 Class A ordinary share 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 Class A ordinary shares 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 Class A ordinary shares are trading at a price below the exercise price of the warrants, this could result in the warrant holders receiving fewer Class A ordinary shares than they would have received if they had chosen to wait to exercise their warrants for Class A ordinary shares if and when such Class A ordinary shares were trading at a price higher than the exercise price of $11.50.
No fractional Class A ordinary shares 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 Class A ordinary shares to be issued to the holder. If, at the time of redemption, the warrants are exercisable for a security other than the Class A ordinary shares 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 Class A ordinary shares, 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 Class A ordinary shares issued and outstanding immediately after giving effect to such exercise.
Anti-dilution Adjustments.
If the number of outstanding Class A ordinary shares is increased by a capitalization or share dividend payable in Class A ordinary shares, or by a split-up of ordinary shares or other similar event, then, on the effective date of such capitalization or share dividend, split-up or similar event, the number of Class A ordinary shares issuable on exercise of each warrant will be increased in proportion to such increase in the outstanding ordinary shares. A rights offering made to all or substantially all holders of ordinary shares entitling holders to purchase Class A ordinary shares at a price less than the “historical fair market value” (as defined below) will be deemed a share dividend of a number of Class A ordinary shares equal to the product of (i) the number of Class A ordinary shares 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 Class A ordinary shares) and (ii) one minus the quotient of (x) the price per Class A ordinary share paid in such rights offering and (y) the historical fair market value. For these purposes, (i) if the rights offering is for securities convertible into or exercisable for Class A ordinary shares, in determining the price payable for Class A ordinary shares, there will be taken into account any consideration received for such rights, as well as any additional amount payable upon exercise or conversion and (ii) “historical fair market value” means the volume weighted average price of Class A ordinary shares as reported during the 10 trading day period
ending on the trading day prior to the first date on which the Class A ordinary shares 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 a dividend or make a distribution in cash, securities or other assets to all or substantially all of the holders of the Class A ordinary shares on account of such Class A ordinary shares (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 Class A ordinary shares during the 365-day period ending on the date of declaration of such dividend or distribution does not exceed $0.50 (as adjusted to appropriately reflect any other adjustments and excluding cash dividends or cash distributions that resulted in an adjustment to the exercise price or to the number of Class A ordinary shares issuable on exercise of each warrant) 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 Class A ordinary shares in connection with a proposed initial business combination, (d) to satisfy the redemption rights of the holders of Class A ordinary shares in connection with a shareholder vote to amend our amended and restated memorandum and articles of association (A) to modify the substance or timing of our obligation to provide holders of our Class A ordinary shares the right to have their shares redeemed 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 15 months from the closing of this offering or (B) with respect to any other provision relating to the rights of holders of our Class A ordinary shares, 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 Class A ordinary share in respect of such event.
If the number of outstanding Class A ordinary shares is decreased by a consolidation, combination, reverse share sub-division or reclassification of Class A ordinary shares or other similar event, then, on the effective date of such consolidation, combination, reverse share sub-division, reclassification or similar event, the number of Class A ordinary shares issuable on exercise of each warrant will be decreased in proportion to such decrease in outstanding Class A ordinary shares.
Whenever the number of Class A ordinary shares 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 Class A ordinary shares purchasable upon the exercise of the warrants immediately prior to such adjustment and (y) the denominator of which will be the number of Class A ordinary shares so purchasable immediately thereafter.
In addition, if (x) we issue additional Class A ordinary shares 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 ordinary share (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 initial shareholders or their affiliates, without taking into account any founder shares held by our initial shareholders 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 consummation of our initial business combination (net of redemptions), and (z) the volume weighted average trading price of our Class A ordinary shares 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 Class A ordinary share equals or exceeds $18.00” 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 Class A ordinary share 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 outstanding Class A ordinary shares (other than those described above or that solely affects the par value of such Class A ordinary shares), or in the case of any merger or consolidation of us with or into another corporation or entity (other than a consolidation or merger in which we are the continuing corporation and that does not result in any reclassification or reorganization of our outstanding Class A ordinary shares), 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 the Class A ordinary shares immediately theretofore purchasable and receivable upon the exercise of the rights represented thereby, the kind and amount of Class A ordinary shares 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 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 consolidation or merger, 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 consolidation or merger 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 shareholders of the company as provided for in the company’s amended and restated memorandum and articles of association or as a result of the redemption of Class A ordinary shares by the company if a proposed initial business combination is presented to the shareholders 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 Class A ordinary shares, 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 shareholder 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 Class A ordinary shares 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. If less than 70% of the consideration receivable by the holders of Class A ordinary shares in such a transaction is payable in the form of Class A ordinary shares 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 thirty days following public disclosure of such transaction, the warrant exercise price will be reduced as specified in the warrant agreement based on the Black-Scholes value (as defined in the warrant agreement) of the warrant. The purpose of such exercise price reduction is to provide additional value to holders of the warrants when an extraordinary transaction occurs during the exercise period of the warrants pursuant to which the holders of the warrants otherwise do not receive the full potential value of the warrants.
The warrants will be issued in registered form under a warrant agreement between Continental Stock Transfer & Trust Company, as warrant agent, and us. The warrant agreement provides that 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, (ii) amending the provisions relating to cash dividends on ordinary shares as contemplated by and in accordance with the warrant agreement or (iii) 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, provided that the approval by the holders of at least 50% of the then-outstanding public warrants is required to make any change that adversely affects the interests of the registered holders. 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 holders do not have the rights or privileges of holders of ordinary shares and any voting rights until they exercise their warrants and receive Class A ordinary shares. After the issuance of Class A ordinary shares 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 shareholders.
No fractional warrants will be issued upon separation of the units and only whole warrants will trade. If, upon exercise of the warrants, a holder would be entitled to receive a fractional interest in a share, we will, upon exercise, round down to the nearest whole number the number of Class A ordinary shares to be issued to the warrant holder.
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.
Placement Warrants
Except as described below, the placement warrants have terms and provisions that are identical to those of the warrants being sold as part of the units in this offering. The placement warrants (including the Class A ordinary shares issuable upon exercise of the placement warrants) will not be transferable, assignable or salable until 30 days after the completion of our initial business combination (except pursuant to limited exceptions as described under “Principal Shareholders — Transfers of Founder Shares and Placement Units”, to our officers and directors and other persons or entities affiliated with the initial purchasers of the placement warrants) and they will not be redeemable by us so long as they are held by our sponsor, Cantor or their permitted transferees. Our sponsor, Cantor or their permitted transferees have the option to exercise the placement warrants on a cashless basis. If the placement warrants are held by holders other than our sponsor, Cantor and their permitted transferees, the 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. Any amendment to the terms of the placement warrants or any provision of the warrant agreement with respect to the placement warrants will require a vote of holders of at least 50% of the number of the then outstanding placement warrants.
If holders of the 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 Class A ordinary shares equal to the quotient obtained by dividing (x) the product of the number of Class A ordinary shares underlying the warrants, multiplied by the excess of the “Sponsor fair market value” (defined below) over the exercise price of the warrants by (y) the Sponsor fair market value. For these purposes, the “Sponsor fair market value” shall mean the average reported closing price of the Class A ordinary shares 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, Cantor or their 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 shareholders who could exercise their warrants and sell the Class A ordinary shares 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 may, but is not obligated to, loan us additional funds as may be required. Up to $1,500,000 of such loans made available from our sponsor or its affiliates may be convertible into units of the post business combination entity at a price of $10.00 per unit at the option of the lender. Such units would be identical to the placement units.
Dividends
We have not paid any cash dividends on our ordinary shares 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. If we increase the size of this offering, we will effect a share capitalization or other appropriate mechanism immediately prior to the consummation of this offering in such amount as to maintain the number of founder shares, on an as-converted basis, at 25% of our issued and outstanding ordinary shares upon the consummation of this offering and issuance of placement units. Further, if we incur any indebtedness, 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 ordinary shares and warrant agent for our warrants is Continental Stock Transfer & Trust Company. We have agreed to indemnify Continental Stock Transfer & Trust Company in its roles as transfer agent and warrant agent, its agents and each of its shareholders, directors, officers and employees against all claims and losses that may arise out of acts performed or omitted for its activities in that capacity, except for any claims and losses due to any gross negligence or intentional misconduct of the indemnified person or entity.
Certain Differences in Corporate Law
Cayman Islands companies are governed by the Companies Act. The Companies Act is modeled on English law but does not follow recent English law statutory enactments, and differs from laws applicable to United States corporations and their shareholders. Set forth below is a summary of the material differences between the provisions of the Companies Act applicable to us and the laws applicable to companies incorporated in the United States and their shareholders.
Mergers and Similar Arrangements.
In certain circumstances, the Companies Act allows for mergers or consolidations between two Cayman Islands companies, or between a Cayman Islands company and a company incorporated in another jurisdiction; provided that it is facilitated by the laws of that other jurisdiction.
Where the merger or consolidation is between two Cayman Islands companies, the directors of each company must approve a written plan of merger or consolidation containing certain prescribed information. That plan of merger or consolidation must then be authorized by (a) a special resolution (usually a majority of 66 2/3% in value of the voting shares voted at a general meeting) of the shareholders of each company; and (b) such other authorization, if any, as may be specified in such constituent company’s articles of association. No shareholder resolution is required for a merger between a parent company (i.e., a company that owns at least 90% of the issued shares of each class in a subsidiary company) and its subsidiary company where the parent and subsidiary company are both incorporated under the Companies Act. The consent of each holder of a fixed or floating security interest of a constituent company must be obtained, unless the Cayman Islands court waives such requirement. If the Cayman Islands Registrar of Companies is satisfied that the requirements of the Companies Act (which includes certain other formalities) have been complied with, the Registrar of Companies will register the plan of merger or consolidation.
Where the merger or consolidation involves a foreign company, the procedure is similar, save that with respect to the foreign company, the directors of the Cayman Islands company are required to make a
declaration to the effect that, having made due inquiry, they are of the opinion that the requirements set out below have been met: (i) that the merger or consolidation is permitted or not prohibited by the constitutional documents of the foreign company and by the laws of the jurisdiction in which the foreign company is incorporated, and that those laws and any requirements of those constitutional documents have been or will be complied with; (ii) that no petition or other similar proceeding has been filed and remains outstanding or order made or resolution adopted to wind up or liquidate the foreign company in any jurisdictions; (iii) that no receiver, trustee, administrator or other similar person has been appointed in any jurisdiction and is acting in respect of the foreign company, its affairs or its property or any part thereof; and (iv) that no scheme, order, compromise or other similar arrangement has been entered into or made in any jurisdiction whereby the rights of creditors of the foreign company are and continue to be suspended or restricted.
Where the surviving company is the Cayman Islands company, the directors of the Cayman Islands company are further required to make a declaration to the effect that, having made due inquiry, they are of the opinion that the requirements set out below have been met: (i) that the foreign company is able to pay its debts as they fall due and that the merger or consolidated is bona fide and not intended to defraud unsecured creditors of the foreign company; (ii) that in respect of the transfer of any security interest granted by the foreign company to the surviving or consolidated company (a) consent or approval to the transfer has been obtained, released or waived; (b) the transfer is permitted by and has been approved in accordance with the constitutional documents of the foreign company; and (c) the laws of the jurisdiction of the foreign company with respect to the transfer have been or will be complied with; (iii) that the foreign company will, upon the merger or consolidation becoming effective, cease to be incorporated, registered or exist under the laws of the relevant foreign jurisdiction; and (iv) that there is no other reason why it would be against the public interest to permit the merger or consolidation.
Where the above procedures are adopted, the Companies Act provides for a right of dissenting shareholders to be paid a payment of the fair market value of their shares upon their dissenting to the merger or consolidation if they follow a prescribed procedure. In essence, that procedure is as follows: (a) the shareholder must give his written objection to the merger or consolidation to the constituent company before the vote on the merger or consolidation, including a statement that the shareholder proposes to demand payment for his shares if the merger or consolidation is authorized by the vote; (b) within 20 days following the date on which the merger or consolidation is approved by the shareholders, the constituent company must give written notice to each shareholder who made a written objection; (c) a shareholder must within 20 days following receipt of such notice from the constituent company, give the constituent company a written notice of his decision to dissent including, among other details, a demand for payment of the fair market value of his shares; (d) within seven days following the date of the expiration of the period set out in paragraph (b) above or seven days following the date on which the plan of merger or consolidation is filed, whichever is later, the constituent company, the surviving company or the consolidated company must make a written offer to each dissenting shareholder to purchase his shares at a price that the company determines is the fair market value and if the company and the shareholder agree the price within 30 days following the date on which the offer was made, the company must pay the shareholder such amount; and (e) if the company and the shareholder fail to agree a price within such 30 day period, within 20 days following the date on which such 30 day period expires, the company must (and any dissenting shareholder may) file a petition with the Cayman Islands Grand Court to determine the fair market value and the petition by the company must be accompanied by a list of the names and addresses of the dissenting shareholders with whom agreements as to the fair market value of their shares have not been reached by the company. At the hearing of that petition, the court has the power to determine the fair market value of the shares together with a fair rate of interest, if any, to be paid by the company upon the amount determined to be the fair market value. Any dissenting shareholder whose name appears on the list filed by the company may participate fully in all proceedings until the determination of fair market value is reached. These rights of a dissenting shareholder are not available in certain circumstances, for example, to dissenters holding shares of any class in respect of which an open market exists on a recognized stock exchange or recognized interdealer quotation system at the relevant date and where the consideration for such shares are shares of any company listed on a national securities exchange or shares of the surviving or consolidated company.
Moreover, Cayman Islands law has separate statutory provisions that facilitate the reconstruction or amalgamation of companies in certain circumstances. Such schemes of arrangement will generally be more suited for complex mergers or other transactions involving widely held companies. In the event that a merger
was sought pursuant to a scheme of arrangement (the procedures for which are more rigorous and take longer to complete than the procedures typically required to consummate a merger in the United States), the arrangement in question must be approved by a majority in number of each class of shareholders and creditors with whom the arrangement is to be made and who must in addition represent three-fourths in value of each such class of shareholders or creditors, as the case may be, that are present and voting either in person or by proxy at a meeting, or meeting summoned for that purpose. The convening of the meetings and subsequently the terms of the arrangement must be sanctioned by the Grand Court of the Cayman Islands. While a dissenting shareholder would have the right to express to the court the view that the transaction should not be approved, the court can be expected to approve the arrangement if it satisfies itself that:
•
we are not proposing to act illegally or beyond the scope of our corporate authority and the statutory provisions as to majority vote have been complied with;
•
the shareholders have been fairly represented at the meeting in question;
•
the arrangement is such as a businessman would reasonably approve; and
•
the arrangement is not one that would more properly be sanctioned under some other provision of the Companies Act or that would amount to a “fraud on the minority.”
If a scheme of arrangement or takeover offer (as described below) is approved, any dissenting shareholder would have no rights comparable to appraisal rights (providing rights to receive payment in cash for the judicially determined value of the shares), which would otherwise ordinarily be available to dissenting shareholders of United States corporations.
Squeeze-out Provisions.
When a takeover offer is made and accepted by holders of 90% of the shares to whom the offer relates within four months, the offeror may, within a two-month period, require the holders of the remaining shares to transfer such shares on the terms of the offer. An objection can be made to the Grand Court of the Cayman Islands, but this is unlikely to succeed unless there is evidence of fraud, bad faith, collusion or inequitable treatment of the shareholders.
Further, transactions similar to a merger, reconstruction and/or an amalgamation may in some circumstances be achieved through means other than these statutory provisions, such as a share capital exchange, asset acquisition or control, or through contractual arrangements of an operating business.
Shareholders’ Suits.
Maples and Calder (Cayman) LLP, our Cayman Islands legal counsel, is not aware of any reported class action having been brought in a Cayman Islands court.
Derivative actions have been brought in the Cayman Islands courts, and the Cayman Islands courts have confirmed the availability of such actions. In most cases, we will be the proper plaintiff in any claim based on a breach of duty owed to us, and a claim against (for example) our officers or directors usually may not be brought by a shareholder. However, based both on Cayman Islands authorities and on English authorities, which would in all likelihood be of persuasive authority and be applied by a court in the Cayman Islands, exceptions to the foregoing principle apply in circumstances in which:
•
a company is acting, or proposing to act, illegally or beyond the scope of its authority;
•
the act complained of, although not beyond the scope of the authority, could be effected if duly authorized by more than the number of votes which have actually been obtained; or
•
those who control the company are perpetrating a “fraud on the minority.”
A shareholder may have a direct right of action against us where the individual rights of that shareholder have been infringed or are about to be infringed.
Enforcement of Civil Liabilities.
The Cayman Islands has a different body of securities laws as compared to the United States and provides less protection to investors. Additionally, Cayman Islands companies may not have standing to sue before the Federal courts of the United States.
We have been advised by Maples and Calder (Cayman) LLP, our Cayman Islands legal counsel, that the courts of the Cayman Islands are unlikely (i) to recognize or enforce against us judgments of courts of the United States predicated upon the civil liability provisions of the federal securities laws of the United States or any state; and (ii) in original actions brought in the Cayman Islands, to impose liabilities against us predicated upon the civil liability provisions of the federal securities laws of the United States or any state, so far as the liabilities imposed by those provisions are penal in nature. Although there is no statutory enforcement in the Cayman Islands of judgments obtained in the United States, the courts of the Cayman Islands will recognize and enforce a foreign money judgment of a foreign court of competent jurisdiction without retrial on the merits based on the principle that a judgment of a competent foreign court imposes upon the judgment debtor an obligation to pay the sum for which judgment has been given provided certain conditions are met. For a foreign judgment to be enforced in the Cayman Islands, such judgment must be final and conclusive and for a liquidated sum, and must not be in respect of taxes or a fine or penalty, inconsistent with a Cayman Islands judgment in respect of the same matter, impeachable on the grounds of fraud or obtained in a manner, and or be of a kind the enforcement of which is, contrary to natural justice or the public policy of the Cayman Islands (awards of punitive or multiple damages may well be held to be contrary to public policy). A Cayman Islands court may stay enforcement proceedings if concurrent proceedings are being brought elsewhere.
Special Considerations for Exempted Companies.
We are an exempted company with limited liability under the Companies Act. The Companies Act distinguishes between ordinary resident companies and exempted companies. Any company that is registered in the Cayman Islands but conducts business mainly outside of the Cayman Islands may apply to be registered as an exempted company. The requirements for an exempted company are essentially the same as for an ordinary company except for the exemptions and privileges listed below:
•
an exempted company (other than an exempted company holding a license to carry on business in the Cayman Islands under applicable laws) does not have to file an annual return of its shareholders with the Registrar of Companies;
•
an exempted company does not have to file an annual return of its shareholders with the Registrar of Companies;
•
an exempted company’s register of members is not open to inspection;
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an exempted company does not have to hold an annual general meeting;
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an exempted company may issue shares with no par value;
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an exempted company may obtain an undertaking against the imposition of any future taxation (such undertakings are usually given for 20 years in the first instance);
•
an exempted company may register by way of continuation in another jurisdiction and be deregistered in the Cayman Islands;
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an exempted company may register as a limited duration company; and
•
an exempted company may register as a segregated portfolio company.
“Limited liability” means that the liability of each shareholder is limited to the amount unpaid by the shareholder on the shares of the company (except in exceptional circumstances, such as involving fraud, the establishment of an agency relationship or an illegal or improper purpose or other circumstances in which a court may be prepared to pierce or lift the corporate veil).
Amended and Restated Memorandum and Articles of Association
Our amended and restated memorandum and articles of association contain provisions designed to provide certain rights and protections relating to this offering that will apply to us until the completion of
our initial business combination. These provisions (other than amendments relating to provisions governing the election or removal of directors prior to the initial business combination, which require the approval of at least 90% of our ordinary shares attending and voting in a general meeting) cannot be amended without a special resolution under Cayman Islands law. As a matter of Cayman Islands law, a resolution is deemed to be a special resolution where it has been approved by either (i) the affirmative vote of at least two-thirds (or any higher threshold specified in a company’s articles of association) of a company’s shareholders entitled to vote and so voting at a general meeting for which notice specifying the intention to propose the resolution as a special resolution has been given; or (ii) if so authorized by a company’s articles of association, by a unanimous written resolution of all of the company’s shareholders entitled to vote at a general meeting. Other than as described above, our amended and restated memorandum and articles of association will provide that special resolutions must be approved either by at least two-thirds of our shareholders entitled to vote and who attend and vote at a general meeting of the company (i.e., the lowest threshold permissible under Cayman Islands law), or by a unanimous written resolution of all of our shareholders entitled to vote at a general meeting.
Our initial shareholders and their permitted transferees, if any, who will collectively beneficially own 25% of our ordinary shares upon the closing of this offering (excluding the placement shares underlying the placement units and assuming they do not purchase any units in this offering), will participate in any vote to amend our amended and restated memorandum and articles of association and will have the discretion to vote in any manner they choose; provided that our initial shareholders and each member of our management team have entered into an agreement with us, pursuant to which they have agreed to waive their redemption rights with respect to their founder shares and public shares in connection with a shareholder vote to approve an amendment to our amended and restated memorandum and articles of association (A) that would modify the substance or timing of our obligation to provide holders of our Class A ordinary shares the right to have their shares redeemed 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 15 months from the closing of this offering or (B) with respect to any other provision relating to the rights of holders of our Class A ordinary shares.. Specifically, our amended and restated memorandum and articles of association will provide, among other things, that:
•
If we have not consummated an initial business combination within 15 months from the closing of this offering or during any Extension Period, we will (i) cease all operations except for the purpose of winding up; (ii) as promptly as reasonably possible but no 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 earned on the funds held in the trust account and not previously released to us to pay our taxes that were paid by us or are payable by us, if any (less up to $100,000 of interest to pay dissolution expenses), divided by the number of the then-outstanding public shares, which redemption will completely extinguish public shareholders’ rights as shareholders (including the right to receive further liquidation distributions, if any); and (iii) as promptly as reasonably possible following such redemption, subject to the approval of our remaining shareholders and our board of directors, liquidate and dissolve, subject in each case to our obligations under Cayman Islands law to provide for claims of creditors and the requirements of other applicable law;
•
Prior to or in connection with our initial business combination, we may not issue additional securities that would entitle the holders thereof to (i) receive funds from the trust account or (ii) vote as a class with our public shares (a) on our initial business combination or on any other proposal presented to shareholders prior to or in connection with the completion of an initial business combination or (b) to approve an amendment to our amended and restated memorandum and articles of association to (x) extend the time we have to consummate a business combination beyond 15 months from the closing of this offering or (y) amend the foregoing provisions;
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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 or our management team, 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 that is a member of FINRA or an independent accounting firm that commonly renders valuation opinions that such a business combination is fair to our company from a financial point of view;
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If a shareholder vote on our initial business combination is not required by applicable law or stock exchange listing requirements and we do not decide to hold a shareholder 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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So long as our securities are then listed on the Nasdaq, our initial business combination must occur with one or more target businesses that together have an aggregate fair market value of at least 80% of the assets held in the trust account (excluding the amount of deferred underwriting commissions held in trust and taxes payable on the income earned on the trust account) at the time of signing a definitive agreement to enter into the initial business combination;
•
If our shareholders approve an amendment to our amended and restated memorandum and articles of association (A) that would modify the substance or timing of our obligation to provide holders of our Class A ordinary shares the right to have their shares redeemed 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 15 months from the closing of this offering or (B) with respect to any other provision relating to the rights of holders of our Class A ordinary shares, we will provide our public shareholders with the opportunity to redeem all or a portion of their Class A ordinary shares 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 earned on the funds held in the trust account and not previously released to us to pay our taxes, if any, divided by the number of the then-outstanding public shares, subject to the limitations described herein; 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 memorandum and articles of association will provide 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.
The Companies Act permits a company incorporated in the Cayman Islands to amend its memorandum and articles of association with the approval of a special resolution which requires the approval of the holders of at least two-thirds of such company’s issued and outstanding ordinary shares who attend and vote at a general meeting or by way of unanimous written resolution. A company’s articles of association may specify that the approval of a higher majority is required but, provided the approval of the required majority is obtained, any Cayman Islands exempted company may amend its memorandum and articles of association regardless of whether its memorandum and articles of association provide otherwise. Accordingly, although we could amend any of the provisions relating to our proposed offering, structure and business plan which are contained in our amended and restated memorandum and articles of association, we view all of these provisions as binding obligations to our shareholders and neither we, nor our officers or directors, will take any action to amend or waive any of these provisions unless we provide dissenting public shareholders with the opportunity to redeem their public shares.
Anti-Money Laundering — Cayman Islands
If any person resident in the Cayman Islands knows or suspects, or has reasonable grounds for knowing or suspecting, that another person is engaged in criminal conduct or money laundering is involved with terrorism or terrorist financing and property and the information for that knowledge or suspicion came to their attention in the course of business in the regulated sector or other trade, profession, business or employment, the person will be required to report such knowledge or suspicion to (i) the Financial Reporting Authority of the Cayman Islands, pursuant to the Proceeds of Crime Act (2020 Revision) of the Cayman Islands if the disclosure relates to criminal conduct or money laundering or (ii) a police officer of the rank of constable or higher, or the Financial Reporting Authority, pursuant to the Terrorism Act (2018 Revision) of the Cayman Islands, if the disclosure relates to involvement with terrorism or terrorist financing and property. Such a report shall not be treated as a breach of confidence or of any restriction upon the disclosure of information imposed by any enactment or otherwise.
We reserve the right to request such information as is necessary to verify the identity of a subscriber for our securities. In the event of delay or failure on the part of the subscriber in producing any information required for verification purposes, we may refuse to accept the application, in which case any funds received will be returned without interest to the account from which they were originally debited.
We also reserve the right to refuse to make any payment to a shareholder if our officers or directors suspect or are advised that the payment to such shareholder might result in a breach of applicable anti-money laundering or other laws or regulations by any person in any relevant jurisdiction, or if such refusal is considered necessary or appropriate to ensure our compliance with any such laws or regulations in any applicable jurisdiction.
Data Protection — Cayman Islands
We have certain duties under the Data Protection Act, 2017 of the Cayman Islands (the “DPA”) based on internationally accepted principles of data privacy.
Privacy Notice
Introduction
This privacy notice puts our shareholders on notice that through your investment in the company you will provide us with certain personal information which constitutes personal data within the meaning of the DPA (“personal data”). In the following discussion, the “company” refers to us and our affiliates and/or delegates, except where the context requires otherwise.
Investor Data
We will collect, use, disclose, retain and secure personal data to the extent reasonably required only and within the parameters that could be reasonably expected during the normal course of business. We will only process, disclose, transfer or retain personal data to the extent legitimately required to conduct our activities of on an ongoing basis or to comply with legal and regulatory obligations to which we are subject. We will only transfer personal data in accordance with the requirements of the DPA, and will apply appropriate technical and organizational information security measures designed to protect against unauthorized or unlawful processing of the personal data and against the accidental loss, destruction or damage to the personal data.
In our use of this personal data, we will be characterized as a “data controller” for the purposes of the DPA, while our affiliates and service providers who may receive this personal data from us in the conduct of our activities may either act as our “data processors” for the purposes of the DPA or may process personal information for their own lawful purposes in connection with services provided to us.
We may also obtain personal data from other public sources. Personal data includes, without limitation, the following information relating to a shareholder and/or any individuals connected with a shareholder as an investor: name, residential address, email address, contact details, corporate contact information, signature, nationality, place of birth, date of birth, tax identification, credit history, correspondence records, passport number, bank account details, source of funds details and details relating to the shareholder’s investment activity.
Who this Affects
If you are a natural person, this will affect you directly. If you are a corporate investor (including, for these purposes, legal arrangements such as trusts or exempted limited partnerships) that provides us with personal data on individuals connected to you for any reason in relation your investment in the company, this will be relevant for those individuals and you should transmit the content of this Privacy Notice to such individuals or otherwise advise them of its content.
How the Company May Use a Shareholder’s Personal Data
The company, as the data controller, may collect, store and use personal data for lawful purposes, including, in particular:
(a)
where this is necessary for the performance of our rights and obligations under any purchase agreements;
(b)
where this is necessary for compliance with a legal and regulatory obligation to which we are subject (such as compliance with anti-money laundering and FATCA/CRS requirements); and/or
(c)
where this is necessary for the purposes of our legitimate interests and such interests are not overridden by your interests, fundamental rights or freedoms.
Should we wish to use personal data for other specific purposes (including, if applicable, any purpose that requires your consent), we will contact you.
Why We May Transfer Your Personal Data
In certain circumstances we may be legally obliged to share personal data and other information with respect to your shareholding with the relevant regulatory authorities such as the Cayman Islands Monetary Authority or the Tax Information Authority. They, in turn, may exchange this information with foreign authorities, including tax authorities.
We anticipate disclosing personal data to persons who provide services to us and their respective affiliates (which may include certain entities located outside the United States, the Cayman Islands or the European Economic Area), who will process your personal data on our behalf.
The Data Protection Measures We Take
Any transfer of personal data by us or our duly authorized affiliates and/or delegates outside of the Cayman Islands shall be in accordance with the requirements of the DPA.
We and our duly authorized affiliates and/or delegates shall apply appropriate technical and organizational information security measures designed to protect against unauthorized or unlawful processing of personal data, and against accidental loss or destruction of, or damage to, personal data.
We shall notify you of any personal data breach that is reasonably likely to result in a risk to your interests, fundamental rights or freedoms or those data subjects to whom the relevant personal data relates.
Certain Anti-Takeover Provisions of our Amended and Restated Memorandum and Articles of Association
Our amended and restated memorandum and articles of association will provide that our board of directors will be classified into three classes of directors. As a result, in most circumstances, a person can gain control of our board only by successfully engaging in a proxy contest at two or more annual general meetings.
Our authorized but unissued ordinary shares and preference shares will be available for future issuances without shareholder 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 ordinary shares and preference shares could render more difficult or discourage an attempt to obtain control of us by means of a proxy contest, tender offer, merger or otherwise.
Our amended and restated memorandum and articles of association will provide for advance notice procedures with respect to shareholder proposals and the nomination of candidates for election as directors, other than nominations made by or at the direction of our board of directors or a committee of our board of directors. In order for any matter to be properly brought before a meeting, a shareholder will have to comply with advance notice requirements. Generally, to be timely, a shareholder notice must be received at our principal executive offices not less than 120 days prior to the date of our proxy statement released to shareholders in connection with the previous year’s annual general meeting or, if we did not hold an annual general meeting the previous year, or if the date of the current year’s annual general meeting has been changed by more than 30 days from the date of the previous year’s annual general meeting, then the deadline shall be set by the board of directors with such deadline being a reasonable time before we begin to print and send our related proxy materials. Our amended and restated memorandum and articles of
association will allow the chairman of the meeting at a meeting of the shareholders to adopt rules and regulations for the conduct of meetings which may have the effect of precluding the conduct of certain business at a meeting if the rules and regulations are not followed. These provisions may also defer, delay or discourage a potential acquirer from conducting a solicitation of proxies to elect the acquirer’s own slate of directors or otherwise attempting to influence or obtain control of us.
Securities Eligible for Future Sale
Immediately after this offering, we will have 41,813,333 Class A ordinary shares (or 47,933,333 Class A ordinary shares if the underwriters’ over-allotment option is exercised in full) issued and outstanding on an as- converted basis. Of these shares, the Class A ordinary shares sold in this offering (30,000,000 Class A ordinary shares if the underwriters’ over-allotment option is not exercised and 34,500,000 Class A ordinary shares if the underwriters’ over-allotment option is exercised in full) will be freely tradable without restriction or further registration under the Securities Act, except for (i) any Class A ordinary shares purchased by one of our affiliates within the meaning of Rule 144 under the Securities Act and (ii) any Class A ordinary shares included in units purchased by members of our management team in this offering, which would be subject to lock-up restrictions described in the letter agreement among us, our sponsor and the members of our management team. All of the outstanding founder shares ( 10,453,333 founder shares if the underwriters’ over-allotment option is not exercised and 11,983,333 founder shares if the underwriters’ over-allotment option is exercised in full) and all of the outstanding placement units (1,360,000 placement units, or 1,450,000 placement units if the underwriters’ over-allotment option is exercised in full) will be restricted securities under Rule 144, in that they were issued in private transactions not involving a public offering.
Rule 144
Pursuant to Rule 144, a person who has beneficially owned restricted shares or warrants for at least six months would be entitled to sell their securities, provided that (i) 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 (ii) 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 twelve months (or such shorter period as we were required to file reports) preceding the sale.
Persons who have beneficially owned restricted shares 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 Class A ordinary shares then-outstanding, which will equal 418,133 shares immediately after this offering (or 479,333 shares if the underwriters exercise their over-allotment option in full); or
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the average weekly reported trading volume of the Class A ordinary shares 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 twelve months (or such shorter period that the issuer was required to file such reports and materials), other than Form 8-K reports; and
•
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 shareholders will be able to sell their founder shares and placement units, as applicable, pursuant to Rule 144 without registration one year after we have completed our initial business combination.
Registration and Shareholder Rights
The holders of the founder shares, placement units (including securities contained therein) and any units (including any securities contained therein) that may be issued upon conversion of working capital loans (and any Class A ordinary shares issuable upon the exercise of the placement warrants and warrants that may be issued upon conversion of working capital loans) will be entitled to registration rights pursuant to a registration and shareholder rights agreement to be signed prior to or on the effective date of this offering. The holders of a majority of these securities are entitled to make up to three demands, excluding short form demands, that we register such securities. In addition, such holders have certain “piggy-back” registration rights with respect to registration statements filed subsequent to our completion of our initial business combination. However, the registration and shareholder rights agreement provides that we will not permit any registration statement filed under the Securities Act to become effective until termination of the applicable lockup period, which occurs (i) in the case of the founder shares, as described in the following paragraph, and (ii) in the case of the placement units and the respective Class A ordinary shares underlying such units, 30 days after the completion of our initial business combination. We will bear the expenses incurred in connection with the filing of any such registration statements. Notwithstanding the foregoing, Cantor or its designees or affiliates may not exercise their demand and “piggyback” registration rights after five and seven years, respectively, after the effective date of the registration statement of which this prospectus forms a part and may not exercise their demand rights on more than one occasion.
Except as described herein, our initial shareholders and each member of our management team have agreed not to transfer, assign or sell their founder shares until the earliest of (A) one year after the completion of our initial business combination and (B) subsequent to our initial business combination, (x) if the closing price of our Class A ordinary shares equals or exceeds $12.00 per share (as adjusted for share subdivisions, share capitalizations, 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 on which we complete a liquidation, merger, share exchange or other similar transaction that results in all of our public shareholders having the right to exchange their ordinary shares for cash, securities or other property (except as described herein under the section of this prospectus entitled “Principal Shareholders — Restrictions on Transfers of Founder Shares and Placement Units”). Any permitted transferees will be subject to the same restrictions and other agreements of our initial shareholders and our management team with respect to any founder shares.
In addition, pursuant to the registration and shareholder rights agreement, our sponsor, upon and following consummation of an initial business combination, will be entitled to nominate three individuals for appointment to our board of directors, as long as our sponsor holds any securities covered by the registration and shareholder rights agreement.
Listing of Securities
We intend to apply to have our units listed on the under the Nasdaq symbol “LGSTU.” Once the securities comprising the units begin separate trading, we expect that the Class A ordinary shares and warrants will be listed on the Nasdaq under the symbols “LGST” and “LGSTW”, respectively. The units will automatically separate into their component parts and will not be traded following the completion of our initial business combination.
TAXATION
The following summary of certain Cayman Islands and U.S. federal income tax considerations generally relevant to an investment in our units, each consisting of one Class A ordinary share and one-half of one redeemable warrant, which we refer to collectively as our securities, is based upon laws and relevant interpretations thereof in effect as of the date of this prospectus, all of which are subject to change. This summary does not deal with all possible tax consequences relating to an investment in our Class A ordinary shares and warrants, such as the tax consequences under state, local and other tax laws.
Prospective investors should consult their advisors on the possible tax consequences of investing in our securities under the laws of their country of citizenship, residence or domicile.
Cayman Islands Tax Considerations
The following is a discussion on certain Cayman Islands income tax consequences of an investment in the securities of the company. The discussion is a general summary of present law, which is subject to prospective and retroactive change. It is not intended as tax advice, does not consider any investor’s particular circumstances, and does not consider tax consequences other than those arising under Cayman Islands law.
Payments of dividends and capital in respect of our securities will not be subject to taxation in the Cayman Islands and no withholding will be required on the payment of a dividend or capital to any holder of the securities nor will gains derived from the disposal of the securities be subject to Cayman Islands income or corporate tax. The Cayman Islands currently has no income, corporate or capital gains tax and no estate duty, inheritance tax or gift tax.
No stamp duty is payable in respect of the issue of the warrants. An instrument of transfer in respect of a warrant is stampable if executed in or brought into the Cayman Islands.
No stamp duty is payable in respect of the issue of our Class A ordinary shares or on an instrument of transfer in respect of such shares.
Our company has been incorporated under the laws of the Cayman Islands as an exempted company with limited liability and, as such, has applied for and received an undertaking from the Governor in Cabinet of the Cayman Islands in the following form:
The Tax Concessions Act
Undertaking as to Tax Concessions
In accordance with The Tax Concessions Act (2018 Revision), the following undertaking is given to Semper Paratus Acquisition Corporation (“the Company”):
1. That no law which is hereafter enacted in the Islands imposing any tax to be levied on profits, income, gains or appreciations shall apply to the Company or its operations; and
2. In addition, that no tax to be levied on profits, income, gains or appreciations or which is in the nature of estate duty or inheritance tax shall be payable:
2.1 on or in respect of the shares, debentures or other obligations of the company; or
2.2 by way of the withholding in whole or part, of any relevant payment as defined in the Tax Concessions Act.
These concessions shall be for a period of TWENTY years from the 26th of April, 2021.
United States Federal Income Tax Considerations
General
The following discussion summarizes certain U.S. federal income tax considerations generally applicable to the acquisition ownership and disposition of our units (each consisting of one Class A ordinary share and
one-half of one redeemable warrant, which we refer to collectively as our securities) that are purchased in this offering by U.S. Holders (as defined below) and Non-U.S. Holders (as defined below). Because the components of a unit are generally separable at the option of the holder, the holder of a unit generally should be treated, for U.S. federal income tax purposes, as the owner of the underlying Class A ordinary share and warrant components of the unit. As a result, the discussion below with respect to holders of Class A ordinary shares and warrants should also apply to holders of units (as the deemed owners of the underlying Class A ordinary shares and warrants that constitute the units).
This discussion is limited to certain U.S. federal income tax considerations to beneficial owners of our securities who are initial purchasers of a unit pursuant to this offering and hold the unit and each component of the unit as a capital asset (generally, property held for investment) under the U.S. Internal Revenue Code of 1986, as amended (the “Code”). This discussion assumes that the Class A ordinary shares and warrants will trade separately and that any distributions made (or deemed made) by us on our Class A ordinary shares and any consideration received (or deemed received) by a holder in consideration for the sale or other disposition of our securities will be in U.S. dollars. This discussion is a summary only and does not consider all aspects of U.S. federal income taxation that may be relevant to the acquisition, ownership and disposition of our securities by a prospective investor in light of its particular circumstances, including the different consequences that may apply to investors that are subject to special rules under U.S. federal income tax laws, including but not limited to:
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Our founders, sponsor, management team, initial shareholders or holders of our Class B ordinary shares or placement units;
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banks, financial institutions or financial services entities;
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persons required to accelerate the recognition of any item of gross income with respect to Class A ordinary shares or warrants as a result of such income being recognized on an applicable financial statement;
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broker-dealers;
•
taxpayers that are subject to the mark-to-market accounting rules;
•
tax-exempt entities;
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governments or agencies or instrumentalities thereof;
•
insurance companies;
•
regulated investment companies;
•
real estate investment trusts;
•
expatriates or former long-term residents of the United States;
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persons that actually or constructively own five percent or more of our shares by vote or value;
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persons that acquired our securities pursuant to an exercise of employee share options, in connection with employee share incentive plans or otherwise as compensation or in connection with services;
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persons that hold our securities as part of a straddle, constructive sale, hedging, conversion or other integrated or similar transaction;
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U.S. Holders (as defined below) whose functional currency is not the U.S. dollar;
•
controlled foreign corporations;
•
passive foreign investment companies; or
•
partnerships (or entities or arrangements classified as partnerships or other pass-through entities for U.S. federal income tax purposes) and any beneficial owners of such partnerships.
Moreover, the discussion below is based upon the provisions of the Code, the Treasury regulations promulgated thereunder and administrative and judicial interpretations thereof, all as of the date hereof. Those authorities may be repealed, revoked, modified or subject to differing interpretations, possibly on a retroactive basis, so as to result in U.S. federal income tax consequences different from those discussed below.
Furthermore, this discussion does not address any aspect of U.S. federal non-income tax laws, such as alternative minimum, gift, estate or Medicare contribution tax laws, or state, local or non-U.S. tax laws.
We have not sought, and will not seek, a ruling from the IRS as to any U.S. federal income tax consequence described herein. The IRS may disagree with the discussion herein, and its determination may be upheld by a court. Moreover, there can be no assurance that future legislation, regulations, administrative rulings or court decisions will not adversely affect the accuracy of the statements in this discussion.
As used herein, the term “U.S. Holder” means a beneficial owner of units, Class A ordinary shares or warrants who or that is for U.S. federal income tax purposes:
•
an individual citizen or resident of the United States;
•
a corporation (or other entity treated as a corporation for U.S. federal income tax purposes) that is created or organized (or treated as created or organized) in or under the laws of the United States, any state thereof or the District of Columbia;
•
an estate the income of which is subject to U.S. federal income taxation regardless of its source; or
•
a trust if (A) a court within the United States is able to exercise primary supervision over the administration of the trust and one or more U.S. persons (as defined in the Code) have the authority to control all substantial decisions of the trust, or (B) it has in effect under applicable U.S. Treasury regulations a valid election to be treated as a U.S. person.
This discussion does not consider the tax treatment of partnerships or other pass-through entities or persons who hold our securities through such entities. If a partnership (or other entity or arrangement classified as a partnership or other pass-through entity for U.S. federal income tax purposes) is the beneficial owner of our securities, the U.S. federal income tax treatment of a partner or member in the partnership or other pass-through entity generally will depend on the status of the partner or member and the activities of the partner and the partnership or other pass-through entity. If you are a partner or member of a partnership or other pass-through entity holding our securities, we urge you to consult your own tax advisor.
THIS DISCUSSION IS FOR INFORMATIONAL PURPOSES ONLY, IS ONLY A SUMMARY OF CERTAIN U.S. FEDERAL INCOME TAX CONSIDERATIONS ASSOCIATED WITH THE ACQUISITION, OWNERSHIP AND DISPOSITION OF OUR SECURITIES AND IS NOT A SUBSTITUTE FOR CAREFUL TAX PLANNING. EACH PROSPECTIVE INVESTOR IN OUR SECURITIES IS URGED TO CONSULT ITS TAX ADVISOR WITH RESPECT TO THE PARTICULAR TAX CONSEQUENCES TO SUCH INVESTOR OF THE ACQUISITION, OWNERSHIP AND DISPOSITION OF OUR SECURITIES, INCLUDING THE APPLICABILITY AND EFFECT OF U.S. FEDERAL, STATE, LOCAL AND NON-UNITED STATES TAX LAWS, AS WELL AS UNDER ANY APPLICABLE TAX TREATY.
Allocation of Purchase Price and Characterization of a Unit
No statutory, administrative or judicial authority directly addresses the treatment of a unit or instruments similar to a unit for U.S. federal income tax purposes, and therefore, that 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 Class A ordinary share and one-half of one redeemable warrant, a whole one of which is exercisable to acquire one Class A ordinary share. We intend to treat the acquisition of a unit in this manner and, by purchasing a unit, you must adopt such treatment for applicable tax purposes. For U.S. federal income tax purposes, each holder of a unit must allocate the purchase price paid by such holder for such unit between the one Class A ordinary share and the one-half of one redeemable warrant based on the relative fair market value of each 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 relevant facts and circumstances. Therefore, we strongly urge each investor to consult his or her tax advisor regarding the determination of value for these purposes. The price allocated to each Class A ordinary share and one-half of one redeemable warrant should constitute the shareholder’s initial tax basis in such share or warrant. Any disposition of a unit should be treated for U.S. federal income tax purposes as a disposition of the Class A ordinary share and one-half of one redeemable warrant comprising the unit, and the amount realized on the disposition should be allocated between the Class A ordinary share and one-half of one redeemable warrant based on their
respective relative fair market values at the time of disposition (as determined by each such unit holder based on all relevant facts and circumstances). Neither the separation of the Class A ordinary share and the one-half of one redeemable warrant constituting a unit nor the combination of halves of warrants into a single warrant should be a taxable event for U.S. federal income tax purposes.
The foregoing treatment of the units, the Class A ordinary shares and warrants and a holder’s purchase price allocation are not binding on the IRS or the courts. Because there are no authorities that directly address 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 balance of this 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
Subject to the PFIC rules discussed below, a U.S. Holder generally will be required to include in gross income as dividends the amount of any distribution paid on our Class A ordinary shares to the extent the distribution is paid out of our current or accumulated earnings and profits (as determined under U.S. federal income tax principles). Such dividends paid by us will be taxable to a corporate U.S. Holder at regular rates and will not be eligible for the dividends-received deduction generally allowed to domestic corporations in respect of dividends received from other domestic corporations. Subject to the PFIC rules described below, distributions in excess of such earnings and profits generally will be applied against and reduce the U.S. Holder’s basis in its Class A ordinary shares (but not below zero) and, to the extent in excess of such basis, will be treated as gain from the sale or exchange of such Class A ordinary shares (see “— Gain or Loss on Sale, Taxable Exchange or Other Taxable Disposition of Class A Ordinary Shares and Warrants” below).
With respect to non-corporate U.S. Holders, under tax laws currently in effect and subject to certain exceptions (including, but not limited to, dividends treated as investment income for purposes of investment interest deduction limitations), dividends generally will be taxed at the lower applicable long-term capital gains rate (see “— Gain or Loss on Sale, Taxable Exchange or Other Taxable Disposition of Class A Ordinary Shares and Warrants” below) only if (i) our Class A ordinary shares are readily tradable on an established securities market in the United States, including the Nasdaq (on which we intend to list the Class A ordinary shares), (ii) the company is not treated as a PFIC at the time the dividend was paid or in the preceding year and (iii) certain holding period requirements are met. It is unclear, however, whether certain redemption rights described in this prospectus may suspend the running of the applicable holding period for this purpose. U.S. Holders should consult their tax advisors regarding the availability of such lower rate for any dividends paid with respect to our Class A ordinary shares.
Possible Constructive Distributions
The terms of each warrant provide for an adjustment to the number of Class A ordinary shares 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 — Warrants — Public Shareholders’ Warrants.” An adjustment which has the effect of preventing dilution generally is not taxable. 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 Class A ordinary shares that would be obtained upon exercise or through a decrease to the exercise price) which adjustment may be made as a result of a distribution of cash or other property to the holders of our Class A ordinary shares which is taxable to the U.S. Holders of such Class A ordinary shares as described under “— Taxation of Distributions” above. Such constructive distribution would be subject to tax as described under that section in the same manner as if the U.S. Holders of the warrants received a cash distribution from us equal to the fair market value of such increased interest. For certain information 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.
Gain or Loss on Sale, Taxable Exchange or Other Taxable Disposition of Class A Ordinary Shares and Warrants
Subject to the PFIC rules discussed below, a U.S. Holder generally will recognize capital gain or loss on the sale or other taxable disposition of our Class A ordinary shares or warrants (including redemption of Class A ordinary shares or warrants that is treated as a taxable disposition, including pursuant to our dissolution and liquidation if we do not complete our initial business combination within the required time period). Any such capital gain or loss generally will be long-term capital gain or loss if the U.S. Holder’s holding period for such Class A ordinary shares or warrants exceeds one year. It is unclear, however, whether certain redemption rights described in this prospectus may suspend the running of the applicable holding period for this purpose. If the running of the holding period for the Class A ordinary shares is suspended, then non-corporate U.S. Holders may not be able to satisfy the one-year holding period requirement for long-term capital gain treatment, in which case any gain on a sale or other taxable disposition of the Class A ordinary shares would be subject to short-term capital gain treatment and would be taxed at regular ordinary income tax rates.
The amount of gain or loss recognized by a U.S. Holder on a sale or other taxable disposition generally will be equal to the difference between (i) the sum of the amount of cash and the fair market value of any property received in such disposition (or, if the Class A ordinary shares 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 ordinary shares or warrants based upon the then relative fair market values of the Class A ordinary shares and the warrants included in the units) and (ii) the U.S. Holder’s adjusted tax basis in its Class A ordinary shares or warrants so disposed of. A U.S. Holder’s adjusted tax basis in its Class A ordinary shares and warrants generally will equal the U.S. Holder’s acquisition cost (that is, the portion of the purchase price of a unit allocated to a Class A ordinary share or one-half of one redeemable warrant, as described above under “— Allocation of Purchase Price and Characterization of a Unit”) reduced by any prior distributions treated as a return of capital. Long-term capital gain realized by a non-corporate U.S. Holder is currently eligible to be taxed at reduced rates. See “— Exercise, Lapse or Redemption of a Warrant” below for a discussion regarding a U.S. Holder’s tax basis in the Class A ordinary share acquired pursuant to the exercise of a warrant. The deduction of capital losses is subject to certain limitations.
Redemption of Class A Ordinary Shares
Subject to the PFIC rules discussed below, in the event that a U.S. Holder’s Class A ordinary shares are redeemed pursuant to the redemption provisions described in this prospectus under “Description of Securities — Ordinary Shares” or if we purchase a U.S. Holder’s Class A ordinary shares in an open market transaction (in either case referred to herein as a “redemption”), the treatment of the redemption for U.S. federal income tax purposes will depend on whether the redemption qualifies as a sale of the Class A ordinary shares under Section 302 of the Code. If the redemption qualifies as a sale of Class A ordinary shares, the U.S. Holder will be treated as described under “— Gain or Loss on Sale, Taxable Exchange or Other Taxable Disposition of Class A Ordinary Shares and Warrants” above. If the redemption does not qualify as a sale of Class A ordinary shares, the U.S. Holder will be treated as receiving a corporate distribution with the tax consequences described above under “— Taxation of Distributions.” Whether a redemption qualifies for sale treatment will depend largely on the total number of our shares treated as held by the U.S. Holder (including any shares constructively owned by the U.S. Holder described in the following paragraph) relative to all of our shares outstanding both before and after such redemption. The redemption of Class A ordinary shares generally will be treated as a sale of the Class A ordinary shares (rather than as a corporate distribution) if such redemption (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 our Class A ordinary shares actually owned by the U.S. Holder, but also our shares that are constructively owned by such U.S. Holder for this purpose. A U.S. Holder may constructively own, in addition to shares owned directly, shares 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 shares the U.S. Holder has a right to acquire by exercise of an option, which would generally include Class A ordinary shares which could be acquired
pursuant to the exercise of the warrants. In order to meet the substantially disproportionate test, the percentage of our outstanding voting shares actually and constructively owned by the U.S. Holder immediately following the redemption of Class A ordinary shares must, among other requirements, be less than 80 percent of the percentage of our outstanding voting shares actually and constructively owned by the U.S. Holder immediately before the redemption. Prior to our initial business combination, the Class A ordinary shares may not be treated as voting shares 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 our ordinary shares actually and constructively owned by the U.S. Holder are redeemed or (ii) all of our ordinary shares actually owned by the U.S. Holder are redeemed and the U.S. Holder is eligible to waive, and effectively waives in accordance with specific rules, the attribution of ordinary shares owned by certain family members and the U.S. Holder does not constructively own any other ordinary shares of ours. The redemption of the Class A ordinary shares will not be essentially equivalent to a dividend with respect to a U.S. Holder if it results in a “meaningful reduction” of the U.S. Holder’s proportionate interest in us. Whether the redemption 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 minority shareholder in a publicly held corporation who exercises no control over corporate affairs may constitute such a “meaningful reduction.” A U.S. Holder should consult with its tax advisors as to the qualification of any redemption under these rules.
If none of the foregoing tests are satisfied, then the redemption will be treated as a corporate distribution and the tax effects will be as described under “— Taxation of Distributions” above. After the application of those rules, any remaining tax basis of the U.S. Holder in the redeemed Class A ordinary shares will be added to the U.S. Holder’s adjusted tax basis in its remaining ordinary shares, or, if it has none, to the U.S. Holder’s adjusted tax basis in its warrants or possibly in other ordinary shares constructively owned by such U.S. Holder.
Exercise, Lapse or Redemption of a Warrant
Subject to the PFIC rules discussed below, a U.S. Holder generally will not recognize gain or loss upon the acquisition of a Class A ordinary share on the exercise of a warrant for cash. A U.S. Holder’s initial tax basis in a Class A ordinary share received upon exercise of the warrant generally will equal the sum of the U.S. Holder’s initial investment in the warrant (that is, the portion of the U.S. Holder’s purchase price for the units that is allocated to the warrant, as described above under “— Allocation of Purchase Price and Characterization of a Unit”) and the exercise price. It is unclear whether a U.S. Holder’s holding period for the Class A ordinary share will commence on the date of exercise of the warrant or the day following the date of exercise of the warrant; in either case, the holding period of such Class A ordinary share 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 generally will recognize a capital loss equal to such holder’s tax basis in the warrant.
The tax consequences of a cashless exercise of a warrant are not clear under current law. Subject to the PFIC rules discussed below, a cashless exercise may not be taxable, either because the exercise is not a realization event or because the exercise is treated as a “recapitalization” for U.S. federal income tax purposes. In either situation, a U.S. Holder’s tax basis in the Class A ordinary shares received generally would equal the U.S. Holder’s tax basis in the warrants. If the cashless exercise was not a realization event, it is unclear whether a U.S. Holder’s holding period for the Class A ordinary share will commence on the date of exercise of the warrant or the day following the date of exercise of the warrant. If the cashless exercise were treated as a recapitalization, the holding period of the Class A ordinary shares would include the holding period of the warrants.
It is also possible that a cashless exercise may be treated in part as a taxable exchange in which gain or loss would be recognized. In such event, a U.S. Holder may be deemed to have surrendered a number of warrants having an aggregate fair market value equal to the exercise price for the total number of warrants to be exercised. Subject to the PFIC rules discussed below, the U.S. Holder would recognize capital gain or loss in an amount equal to the difference between the fair market value of the warrants deemed surrendered 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 ordinary shares received would equal the sum of the U.S. Holder’s initial investment in the warrants deemed
surrendered (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 “— Allocation of Purchase Price and Characterization of a Unit”) and the exercise price of such warrants. It is unclear whether a U.S. Holder’s holding period for the Class A ordinary share would commence on the date of exercise of the warrant or the day following the date of exercise of the warrant.
Due to the absence of authority on the U.S. federal income tax treatment of a cashless exercise, 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, a U.S. Holder should consult its tax advisor regarding the tax consequences of a cashless exercise.
Subject to the PFIC rules described below, if we redeem warrants for cash pursuant to the redemption provisions described in the section of this prospectus entitled “Description of Securities — Warrants — Public Shareholders’ 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 “— Gain or Loss on Sale, Taxable Exchange or Other Taxable Disposition of Class A Ordinary Shares and Warrants.”
The tax consequences of an exercise of a warrant occurring after our giving notice of an intention to redeem the warrant for $0.01 or $0.10 as described in the section of this prospectus entitled “Description of Securities — Warrants — Public Shareholders’ Warrants”, are unclear under current law. In the case of an exercise of a warrant for cash, the tax treatment generally should be as described above in the first paragraph under the heading “U.S. Holders — Exercise, Lapse or Redemption of a Warrant.” In the case of a cashless exercise, the exercise may be treated either as if we redeemed such warrant for Class A ordinary shares or as an exercise of the warrant. In each case, the tax consequences should be the same as those described for a cashless exercise in the previous paragraphs. Due to the lack of clarity under current law regarding the treatment of an exercise of a warrant after our giving notice of an intention to redeem the warrant, there can be no assurance as to which, if any, of the alternative tax consequences described above would be adopted by the IRS or a court of law. Accordingly, U.S. Holders should consult their tax advisors regarding the tax consequences of the exercise of a warrant occurring after our giving notice of an intention to redeem the warrant as described above.
Passive Foreign Investment Company Rules
A foreign (i.e., non-U.S.) corporation for U.S. federal income tax purposes will be classified as a PFIC if either (i) at least 75% of its gross income in a taxable year, including its pro rata share of the gross income of any corporation in which it is considered to own at least 25% of the shares by value, is passive income or (ii) at least 50% of its assets in a taxable year (ordinarily determined based on fair market value and averaged quarterly over the year), including its pro rata share of the assets of any corporation in which it is considered to own at least 25% of the shares by value, are held for the production of, or produce, passive income. Passive income generally includes dividends, interest, rents and royalties (other than rents or royalties derived from the active conduct of a trade or business) and gains from the disposition of assets giving rise to passive income.
Because we are a blank check company, with no current active business, we believe that it is likely that we will meet the PFIC asset or income test for our current taxable year. However, pursuant to a start-up exception, a corporation will not be a PFIC for the first taxable year the corporation has gross income (the “start-up year”), if (1) no predecessor of the corporation was a PFIC; (2) the corporation satisfies the IRS that it will not be a PFIC for either of the two taxable years following the start-up year; and (3) the corporation is not in fact a PFIC for either of those years. The applicability of the start-up exception to us is uncertain and will not be known until after the close of our current taxable year (or possibly not until after the close of the first two taxable years following our start-up year). After the acquisition of a target business or assets in a business combination, we may still meet one of the PFIC tests depending on the timing of the acquisition and the amount of our passive income and assets as well as the passive income and assets of the acquired business. If the target business that we acquire in a business combination is a PFIC, then we will likely not qualify for the start-up exception and will be a PFIC for our current taxable year. Our actual PFIC status for our current taxable year or any subsequent taxable year, however, will not be
determinable until after the end of such taxable year. Accordingly, there can be no assurance with respect to our status as a PFIC for our current taxable year or any future taxable year.
Although our PFIC status is determined annually, an initial determination that our company is a PFIC will generally apply for subsequent years to a U.S. Holder who held Class A ordinary shares or warrants while we were a PFIC, whether or not we meet the test for PFIC status in those subsequent years. If we are determined to be a PFIC for any taxable year (or portion thereof) that is included in the holding period of a U.S. Holder of our Class A ordinary shares or warrants and, in the case of our Class A ordinary shares, the U.S. Holder did not make either a timely and valid qualified electing fund (“QEF”) election for our first taxable year as a PFIC in which the U.S. Holder held (or was deemed to hold) Class A ordinary shares, a QEF election along with a purging election, or a mark-to-market election, each as described below, such U.S. Holder generally will be subject to special rules with respect to (i) any gain recognized by the U.S. Holder on the sale or other disposition of its Class A ordinary shares or warrants (which may include gain realized by reason of transfers of Class A ordinary shares or warrants that would otherwise qualify as nonrecognition transactions for U.S. federal income tax purposes) and (ii) any “excess distribution” made to the U.S. Holder (generally, any distributions to such U.S. Holder during a taxable year of the U.S. Holder that are greater than 125% of the average annual distributions received by such U.S. Holder in respect of the Class A ordinary shares during the three preceding taxable years of such U.S. Holder or, if shorter, the portion of such U.S. Holder’s holding period for the Class A ordinary shares that preceded the taxable year of distribution).
Under these rules:
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the U.S. Holder’s gain or excess distribution will be allocated ratably over the U.S. Holder’s holding period for the Class A ordinary shares or warrants;
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the amount allocated to the U.S. Holder’s taxable year in which the U.S. Holder recognized the gain or received the excess distribution, or to the portion in the U.S. Holder’s holding period before the first day of our first taxable year in which we are a PFIC, will be taxed as ordinary income;
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the amount allocated to other taxable years (or portions thereof) of the U.S. Holder and included in its holding period will be taxed at the highest tax rate in effect for that year and applicable to the U.S. Holder without regard to the U.S. Holder’s other items of income and loss for such year; and
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an additional amount equal to the interest charge generally applicable to underpayments of tax will be imposed on the U.S. Holder with respect to the tax attributable to each such other taxable year of the U.S. Holder.
In general, if we are determined to be a PFIC, a U.S. Holder may avoid the PFIC tax consequences described above in respect of our Class A ordinary shares (but not our warrants) by making either (i) a timely and valid QEF election (if eligible to do so) to include in income its pro rata share of our net capital gains (as long-term capital gain) and other earnings and profits (as ordinary income), on a current basis, in each case whether or not distributed, in the taxable year of the U.S. Holder in which or with which our taxable year ends or (ii) a valid “mark-to-market” election. A U.S. Holder generally may make a separate election to defer the payment of taxes on undistributed income inclusions under the QEF rules, but if deferred, any such taxes will be subject to an interest charge.
It is not entirely clear how various aspects of the PFIC rules apply to the warrants. A U.S. Holder may not make a QEF election with respect to its warrants to acquire our Class A ordinary shares. As a result, if a U.S. Holder sells or otherwise disposes of such warrants (other than upon exercise of such warrants) and we were a PFIC at any time during the U.S. Holder’s holding period of such warrants, any gain recognized generally will be treated as an excess distribution and taxed as described above. If a U.S. Holder that exercises such warrants properly makes a QEF election with respect to the newly acquired Class A ordinary shares (or has previously made a QEF election with respect to our Class A ordinary shares), the QEF election will apply to the newly acquired Class A ordinary shares. Notwithstanding such QEF election, the adverse tax consequences relating to PFIC shares, adjusted to take into account the current income inclusions resulting from the QEF election, will continue to apply with respect to such newly acquired Class A ordinary shares (which generally will be deemed to have a holding period for purposes of the PFIC rules that includes the period the U.S. Holder held the warrants), unless the U.S. Holder makes a purging election under the
PFIC rules. Under one type of purging election, the U.S. Holder will be deemed to have sold such shares at their fair market value and any gain recognized on such deemed sale will be treated as an excess distribution as described above. As a result of this election, the U.S. Holder will have additional basis (to the extent of any gain recognized on the deemed sale) and, solely for purposes of the PFIC rules, a new holding period in the Class A ordinary shares acquired upon the exercise of the warrants. U.S. Holders are urged to consult their tax advisors as to the application of the rules governing purging elections to their particular circumstances (including a potential separate “deemed dividend” purging election that may be available if we are a controlled foreign corporation).
The QEF election is made on a shareholder-by-shareholder basis and, once made, can be revoked only with the consent of the IRS. A U.S. Holder generally makes a QEF election by attaching a completed IRS Form 8621 (Information Return by a Shareholder of a Passive Foreign Investment Company or Qualified Electing Fund), including the information provided in a PFIC Annual Information Statement, to a timely filed U.S. federal income tax return for the tax year to which the election relates. Retroactive QEF elections generally may be made only by filing a protective statement with such return and if certain other conditions are met or with the consent of the IRS. U.S. Holders should consult their tax advisors regarding the availability and tax consequences of a retroactive QEF election under their particular circumstances.
In order to comply with the requirements of a QEF election, a U.S. Holder must receive a PFIC Annual Information Statement from us. If we determine we are a PFIC for any taxable year, upon written request, we will endeavor to provide to a U.S. Holder such information as the IRS may require, including a PFIC Annual Information Statement, in order to enable the U.S. Holder to make and maintain a QEF election, but there is no assurance that we will timely provide such required information. There is also no assurance that we will have timely knowledge of our status as a PFIC in the future or of the required information to be provided.
If a U.S. Holder has made a QEF election with respect to our Class A ordinary shares, and the excess distribution rules discussed above do not apply to such shares (because of a timely QEF election for our first taxable year as a PFIC in which the U.S. Holder holds (or is deemed to hold) such shares or a purge of the PFIC taint pursuant to a purging election, as described above), any gain recognized on the sale of our Class A ordinary shares generally will be taxable as capital gain and no additional tax or interest charge will be imposed under the PFIC rules. As discussed above, if we are a PFIC for any taxable year, a U.S. Holder of our Class A ordinary shares that has made a QEF election will be currently taxed on its pro rata share of our earnings and profits, whether or not distributed for such year. A subsequent distribution of such earnings and profits that were previously included in income generally should not be taxable when distributed to such U.S. Holder. The tax basis of a U.S. Holder’s shares in a QEF will be increased by amounts that are included in income, and decreased by amounts distributed but not taxed as dividends, under the above rules. In addition, if we are not a PFIC for any taxable year, such U.S. Holder will not be subject to the QEF inclusion regime with respect to our Class A ordinary shares for such taxable year.
Alternatively, if we are a PFIC and our Class A ordinary shares constitute “marketable stock,” a U.S. Holder may avoid the adverse PFIC tax consequences discussed above if such U.S. Holder, for the first taxable year in which it holds (or is deemed to hold) our Class A ordinary shares, makes a mark-to-market election with respect to such shares for such taxable year. Such U.S. Holder generally will include for each of its taxable years as ordinary income the excess, if any, of the fair market value of its Class A ordinary shares at the end of such year over its adjusted basis in its Class A ordinary shares. These amounts of ordinary income would not be eligible for the favorable tax rates applicable to qualified dividend income or long term capital gains. The U.S. Holder also will recognize an ordinary loss in respect of the excess, if any, of its adjusted basis of its Class A ordinary shares over the fair market value of its Class A ordinary shares at the end of its taxable year (but only to the extent of the net amount of previously included income as a result of the mark-to-market election). Currently, a mark-to- market election may not be made with respect to warrants. The U.S. Holder’s basis in its Class A ordinary shares will be adjusted to reflect any such income or loss amounts, and any further gain recognized on a sale or other taxable disposition of its Class A ordinary shares in a taxable year in which we are treated as a PFIC will be treated as ordinary income. Any gain recognized on a sale or other taxable disposition of such shares in a taxable year in which we are treated as a PFIC will be treated as ordinary income, and any loss recognized on such sale or disposition will be treated as ordinary loss (but only to the extent of the net amount of previously included income as a result of the
mark-to-market election), and the remaining loss, if any, will generally be treated as capital loss. Any gain or loss recognized on a sale or other taxable disposition of such shares in a taxable year in which we are not treated as a PFIC will generally be treated as capital gain or loss. Special tax rules may also apply if a U.S. Holder makes a mark-to-market election for a taxable year after the first taxable year in which the U.S. Holder holds (or is deemed to hold) its Class A ordinary shares and for which we are treated as a PFIC.
The mark-to-market election is available only for “marketable stock”, which generally includes stock that is regularly traded on a national securities exchange that is registered with the SEC, including the Nasdaq (on which we intend to list the Class A ordinary shares), or on a foreign exchange or market that the IRS determines has rules sufficient to ensure that the market price represents a legitimate and sound fair market value. If made, a mark-to-market election would be effective for the taxable year for which the election was made and for all subsequent taxable years unless the Class A ordinary shares ceased to qualify as “marketable stock” for purposes of the PFIC rules or the IRS consented to the revocation of the election. U.S. Holders should consult their tax advisors regarding the availability and tax consequences of a mark-to-market election with respect to our Class A ordinary shares under their particular circumstances.
If we are a PFIC and, at any time, have a foreign subsidiary that is classified as a PFIC, U.S. Holders generally would be deemed to own a portion of the shares of such lower-tier PFIC, and generally could incur liability for the deferred tax and interest charge described above if we receive a distribution from, or dispose of all or part of our interest in, the lower-tier PFIC or the U.S. Holders otherwise were deemed to have disposed of an interest in the lower-tier PFIC. Upon written request, we will endeavor to cause any lower-tier PFIC to provide to a U.S. Holder the information that may be required to make or maintain a QEF election with respect to the lower-tier PFIC. There can be no assurance that we will have timely knowledge of the status of any such lower-tier PFIC. In addition, we may not hold a controlling interest in any such lower-tier PFIC and thus there can be no assurance we will be able to cause the lower-tier PFIC to provide such required information. A mark-to-market election generally would not be available with respect to such lower-tier PFIC. U.S. Holders are urged to consult their tax advisors regarding the tax issues raised by lower-tier PFICs.
A U.S. Holder that owns (or is deemed to own) shares in a PFIC during any taxable year of the U.S. Holder, may have to file an IRS Form 8621 (whether or not a QEF or mark-to-market election is made) and such other information as may be required by the U.S. Treasury Department. Failure to do so, if required, will extend the statute of limitations until such required information is furnished to the IRS.
The rules dealing with PFICs and with the QEF and mark-to-market elections are very complex and are affected by various factors in addition to those described above. Accordingly, U.S. Holders of our Class A ordinary shares and warrants should consult their own tax advisors concerning the application of the PFIC rules to our securities under their particular circumstances.
Tax Reporting
Certain U.S. Holders may be required to file an IRS Form 926 (Return by a U.S. Transferor of Property to a Foreign Corporation) to report a transfer of property (including cash) to us. Substantial penalties may be imposed on a U.S. Holder that fails to comply with this reporting requirement and the period of limitations on assessment and collection of U.S. federal income taxes will be extended in the event of a failure to comply. Furthermore, certain U.S. Holders who are individuals and certain entities will be required to report information with respect to such U.S. Holder’s investment in “specified foreign financial assets” on IRS Form 8938 (Statement of Specified Foreign Financial Assets), subject to certain exceptions. An interest in our company constitutes a specified foreign financial asset for these purposes. Persons who are required to report specified foreign financial assets and fail to do so may be subject to substantial penalties and the period of limitations on assessment and collection of U.S. federal income taxes will be extended in the event of a failure to comply. Potential investors are urged to consult their tax advisors regarding the foreign financial asset and other reporting obligations and their application to an investment in our Class A ordinary shares and warrants.
Non-U.S. Holders
This section applies to you if you are a “Non-U.S. Holder.” As used herein, the term “Non-U.S. Holder” means a beneficial owner of our units, Class A ordinary shares or warrants that is neither a U.S.
Holder nor a partnership or other entity or arrangement treated as a partnership for U.S. federal income tax purposes. A “Non-U.S. Holder” generally does not include an individual who is present in the United States for 183 days or more in the taxable year of disposition. If you are such an individual, you should consult your tax advisor regarding the U.S. federal income tax consequences of the sale or other disposition of our securities.
•
a non-resident alien individual (other than certain former citizens and residents of the United States subject to U.S. tax as expatriates);
•
a foreign corporation; or
•
an estate or trust that is not a U.S. Holder; but generally does not include an individual who is present in the United States for 183 days or more in the taxable year of disposition. If you are such an individual, you should consult your tax advisor regarding the U.S. federal income tax consequences of the sale or other disposition of our securities.
Dividends (including constructive dividends described in “— U.S. Holders — Possible Constructive Dividends” above) paid or deemed paid to a Non-U.S. Holder in respect of our Class A ordinary shares generally will not be subject to U.S. federal income tax, unless the dividends are effectively connected with the Non-U.S. Holder’s conduct of a trade or business within the United States (and, if required by an applicable income tax treaty, are attributable to a permanent establishment or fixed base that such holder maintains in the United States). In addition, a Non-U.S. Holder generally will not be subject to U.S. federal income tax on any gain attributable to a sale or other taxable disposition of our Class A ordinary shares or warrants unless such gain is effectively connected with its conduct of a trade or business in the United States (and, if required by an applicable income tax treaty, is attributable to a permanent establishment or fixed base that such holder maintains in the United States).
Dividends (including constructive dividends described in “— U.S. Holders — Possible Constructive Dividends” above) and gains that are effectively connected with the Non-U.S. Holder’s conduct of a trade or business in the United States (and, if required by an applicable income tax treaty, are attributable to a permanent establishment or fixed base in the United States) generally will be subject to U.S. federal income tax at the same regular U.S. federal income tax rates applicable to a comparable U.S. Holder and, in the case of a Non-U.S. Holder that is a corporation for U.S. federal income tax purposes, also may be subject to an additional branch profits tax at a 30% rate or a lower applicable tax treaty rate.
The characterization for U.S. federal income tax purposes of the redemption of a Non-U.S. Holder’s Class A ordinary shares generally will correspond to the U.S. federal income tax characterization of a redemption of a U.S. Holder’s Class A ordinary shares, as described above under “U.S. Holders — Redemption of Class A Ordinary Shares”, and the consequences of the redemption to the Non-U.S. Holder will be as described in the preceding paragraphs above under the heading “Non-U.S. Holders” based on such characterization.
The characterization for U.S. federal income tax purposes of a Non-U.S. Holder’s exercise of a warrant, the lapse of a warrant held by a Non-U.S. Holder or the redemption of a warrant held by a Non-U.S. Holder generally will correspond to the characterization described under “— U.S. Holders — Exercise, Lapse or Redemption of a Warrant” above, although to the extent a cashless exercise or redemption results in a taxable exchange, the consequences would be similar to those described in the preceding paragraphs above for a Non-U.S. Holder’s gain on the sale or other disposition of our Class A ordinary shares and warrants.
Information Reporting and Backup Withholding
Dividend payments with respect to our securities and proceeds from the sale, exchange or redemption of our securities may be subject to information reporting to the IRS and possible United States backup withholding. Backup withholding will not apply, however, to a U.S. Holder who furnishes a correct taxpayer identification number and makes other required certifications, or who is otherwise exempt from backup withholding and establishes such exempt status. A Non-U.S. Holder generally will eliminate the requirement for information reporting and backup withholding 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.
Backup withholding is not an additional tax. Amounts withheld as backup withholding may be credited against a holder’s U.S. federal income tax liability, and a holder generally may obtain a refund of any excess amounts withheld under the backup withholding rules by timely filing the appropriate claim for refund with the IRS and furnishing any required information.
THE U.S. FEDERAL INCOME TAX DISCUSSION SET FORTH ABOVE IS INCLUDED FOR GENERAL INFORMATION ONLY AND MAY NOT BE APPLICABLE DEPENDING UPON A HOLDER’S PARTICULAR SITUATION. HOLDERS ARE URGED TO CONSULT THEIR TAX ADVISORS WITH RESPECT TO THE TAX CONSEQUENCES TO THEM OF THE ACQUISITION, OWNERSHIP AND DISPOSITION OF OUR CLASS A ORDINARY SHARES AND WARRANTS, INCLUDING THE TAX CONSEQUENCES UNDER STATE, LOCAL, ESTATE, FOREIGN AND OTHER TAX LAWS AND TAX TREATIES AND THE POSSIBLE EFFECTS OF CHANGES IN U.S. OR OTHER TAX LAWS.
UNDERWRITING
Subject to the terms and conditions set forth in the underwriting agreement between us and Cantor, the representative of the underwriters, named below and the sole book-running manager of this offering, we have agreed to sell to the underwriters, and each of the underwriters has agreed, severally and not jointly, to purchase from us, the respective number of units shown opposite its name below:
|
Underwriters
|
|
|
Number of Units
|
|
|
Cantor Fitzgerald & Co.
|
|
|
|
|
|
|
|
|
Total
|
|
|
|
|
30,000,000 |
|
|
The underwriting agreement provides that the obligations of the several underwriters are subject to certain conditions precedent such as the receipt by the underwriters of officers’ certificates and legal opinions and approval of certain legal matters by their counsel. The underwriting agreement provides that the underwriters will purchase all of the units if any of them 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 and certain of their controlling persons against certain liabilities, including liabilities under the Securities Act, and to contribute to payments that the underwriters may be required to make in respect of those liabilities.
The underwriters are offering the units subject to their acceptance of the units from us and subject to prior sale. The underwriters reserve the right to withdraw, cancel or modify offers to the public and to reject orders in whole or in part.
Commission and Expenses
We have been advised by the underwriters that they propose to offer the units to the public at the initial public offering price set forth on the cover page of this prospectus. The underwriters may allow dealers concessions not in excess of $[ ] per unit and the dealers may reallow a concession not in excess of $[ ] per unit to other dealers. After the initial offering of the units, the representative may change the offering price and other selling terms. No such reduction will change the amount of proceeds to be received by us as set forth on the cover page of this prospectus. The offering of the units by the underwriters is subject to receipt and acceptance and subject to the underwriters’ right to reject any order in whole or in part. Sales of any units outside the United States may be made by affiliates of the underwriters.
The following table summarizes the compensation and estimated expenses that we will 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.
| |
|
|
Paid By Semper Paratus
Acquisition Corporation
|
|
| |
|
|
No
Exercise
|
|
|
Full
Exercise
|
|
|
Per Unit(1)
|
|
|
|
$ |
0.60 |
|
|
|
|
$ |
0.60 |
|
|
|
Total(1)
|
|
|
|
$ |
18,000,000 |
|
|
|
|
$ |
20,700,000 |
|
|
(1)
$0.20 per unit sold in the base offering, or $6,000,000 in the aggregate, is payable upon the closing of this offering. Includes $0.40 per unit sold in the base offering, or $12,000,000 in the aggregate (or up to $14,700,000 in the aggregate if the underwriters’ over-allotment option is exercised in full), payable to the underwriters for deferred underwriting commissions to be placed in a trust account located in the United States as described herein and released to Cantor Fitzgerald & Co. for its own account only upon the consummation of an initial business combination.
If we do not complete our initial business combination within 15 months from the closing of this offering, Cantor has agreed that (i) it will forfeit any rights or claims to the deferred underwriting discounts and commissions, including any accrued interest thereon, then in the trust account and (ii) that the deferred
underwriters’ discounts and commissions will be distributed on a pro rata basis, together with any accrued interest thereon (which interest will be net of taxes payable) to the public shareholders.
We estimate expenses payable by us in connection with this offering, other than the underwriting discounts and commissions referred to above, will be approximately $500,000.
We have agreed to reimburse the underwriters for certain of its out-of-pocket costs for this offering, including legal fees related to the review by FINRA, up to $15,000, and the expenses of investigations and background checks of our principals up to a maximum of $4,000 per principal (in the case of a U.S. jurisdiction) or $5,000 per principal (in the case of non-U.S. jurisdiction), or $50,000 in the aggregate for investigations and background checks.
Determination of Offering Price
Prior to this offering, there has not been a public market for our securities. Consequently, the initial public offering price for our units was determined by negotiations between us and the representative. Among the factors considered in these negotiations were 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.
We offer no assurances that the initial public offering price will correspond to the price at which the units will trade in the public market subsequent to the offering or that an active trading market for the units will develop and continue after the offering.
Listing
We intend to apply to have our units listed on the Nasdaq under the symbol “LGSTU” commencing on or promptly after the date of this prospectus. We cannot guarantee that our securities will be approved for listing on the Nasdaq. Once the securities comprising the units begin separate trading, we expect that the Class A ordinary shares and warrants will be listed on the Nasdaq under the symbols “LGST” and “LGSTW,” respectively.
Stamp Taxes
If you purchase units offered in this prospectus, you may be required to pay stamp taxes and other charges under the laws and practices of the country of purchase, in addition to the offering price listed on the cover page of this prospectus.
Option to Purchase Additional Units
If the underwriters sell more units than the total number set forth in the table above, we have granted to the underwriters an option, exercisable for 45 days from the date of this prospectus, to purchase up to 4,500,000 additional units at the public offering price less the underwriting discounts and commissions. The underwriters may exercise this option solely for the purpose of covering over-allotments, if any, in connection with this offering. To the extent the option is exercised, each underwriter must purchase a number of additional units approximately proportionate to that underwriter’s initial purchase commitment. Any units issued or sold under the option will be issued and sold on the same terms and conditions as the other units that are the subject of this offering.
Private Placement
Our sponsor and Cantor have committed, pursuant to written agreements, to purchase an aggregate of 1,360,000 placement units (or 1,450,000 placement units if the underwriters exercise their over-allotment option in full), at a price of $10.00 per unit ($13,600,000, or $14,500,000 if the underwriters exercise their over-allotment option in full, in the aggregate), in a private placement that will close simultaneously with the closing of this offering. Of those 1,360,000 placement units, our sponsor has agreed to purchase 1,210,000 placement units (or 1,300,000 placement units if the underwriters exercise their over-allotment option in full), and Cantor has agreed to purchase 150,000 (regardless of whether the underwriters’ over-allotment option
is exercised in full). If we do not complete our initial business combination within 15 months from the closing of this offering or during any Extension Period, the proceeds of the sale of the placement units held in trust account will be used to fund the redemption of our public shares (subject to the requirements of applicable law) and the placement warrants will expire worthless. The placement warrants included in the placement units will be non-redeemable by us and exercisable on a cashless basis so long as they are held by our sponsor, Cantor or their permitted transferees (see “Description of Securities — Warrants — Placement Warrants”). If the placement warrants are held by holders other than our sponsor, Cantor or their permitted transferees, the 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.
The placement units purchased by Cantor and the underlying placement shares and placement warrants securities are deemed underwriting compensation by FINRA. Pursuant to FINRA Rule 5110(e)(1), these securities may not be sold, transferred, assigned, pledged or hypothecated or be the subject of any hedging, short sale, derivative, put or call transaction that would result in the economic disposition of the securities by any person for a period of 180 days immediately following the commencement of sales of this offering except as permitted by FINRA Rule 5110(e)(2). In addition, for as long as the placement units and underlying warrants are held by Cantor or their designees or affiliates, pursuant to FINRA Rule 5110, such underlying warrants may not be exercised after five years from the effective date of the registration statement of which this prospectus forms a part. We have granted Cantor certain registration rights relating to these securities. Cantor or its designees or affiliates may exercise one demand and unlimited piggyback registration rights up to five and seven years, respectively, from the effective date of the registration statement of which this prospectus forms a part.
Letter Agreements
We, our initial shareholders and each member of our management team have agreed that we and they will not, subject to certain exceptions, for a period of 180 days after the date of this prospectus, without the prior written consent of Cantor, the representative of the underwriters, offer, sell, contract to sell, pledge or otherwise dispose of, directly or indirectly, any units, warrants, shares of ordinary shares or any other securities convertible into, or exercisable, or exchangeable for, shares of ordinary shares, provided, however, that we may (1) issue and sell the placement units, (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 placement units and Class A ordinary shares issuable upon exercise of the warrants and the founder shares, and (4) issue securities in connection with an initial business combination. Cantor, the representative of the underwriters, in its sole discretion, may release any of the securities subject to these lock-up agreements at any time without notice.
Our initial shareholders and each member of our management team have agreed not to transfer, assign or sell any of their founder shares until the earliest of (A) one year after the completion of our initial business combination and (B) subsequent to our initial business combination, (x) if the closing price of our Class A ordinary shares equals or exceeds $12.00 per share (as adjusted for share subdivisions, share capitalizations, 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 on which we complete a liquidation, merger, share exchange or other similar transaction that results in all of our public shareholders having the right to exchange their ordinary shares for cash, securities or other property (except as described herein under the section of this prospectus entitled “Principal Shareholders — Restrictions on Transfers of Founder Shares and Placement Units”). Any permitted transferees would be subject to the same restrictions and other agreements of our initial shareholders and our management team with respect to any founder shares.
The placement units (including placement shares, the placement warrants, and the Class A ordinary shares issuable upon exercise of the 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 Shareholders — Transfers of Founder Shares and Placement Units”).
Underwriter Expression of Interest
The representative has informed us that it and/or its affiliates or accounts over which it and/or its affiliates have discretionary authority have expressed an interest in purchasing up to 7.0% of the public units to be sold in this offering. However, because indications of interest are not binding agreements or commitments to purchase and are simply expressions of interest, these entities may determine to purchase more or fewer or no units at all in the offering or may purchase more units than they indicate an interest in purchasing (although they will not exceed 9.99% ownership in the aggregate). In addition, the representative may determine to allocate fewer units to any of these entities than the entities indicate an interest in purchasing or to not sell any units to these entities. The underwriters will receive the same underwriting discount on any units purchased by these entities as they will on any other units sold to the public in this offering. If the representative or any of its affiliates or accounts over which it and/or its affiliates have discretionary authority purchases any units in this offering or otherwise in the open market, it has no obligation to vote the underlying shares in favor of any business combination, nor does it have an obligation not to redeem any such shares or hold any such units or underlying shares beyond the consummation of an initial business combination, if any. Any trading decisions made by any of the foregoing entities will be made by them based on market conditions at the time of the proposed sale or redemption. The representative’s affiliates will not receive any economic or other interest in our sponsor.
Stabilization
The underwriters, pursuant to Regulation M under the Securities Exchange Act of 1934, as amended, may engage in short sale transactions, stabilizing transactions, syndicate covering transactions or the imposition of penalty bids in connection with this offering. These activities may have the effect of stabilizing or maintaining the market price of the units at a level above that which might otherwise prevail in the open market. Establishing short sales positions may involve either “covered” short sales or “naked” short sales.
“Covered” short sales are sales made in an amount not greater than the underwriters’ option to purchase additional units in this offering. The underwriters may close out any covered short position by either exercising their over-allotment option or purchasing our units in the open market or from market participants. 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 to purchase additional units.
“Naked” short sales are sales in excess of the option to purchase additional units. 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 our units in the open market after pricing that could adversely affect investors who purchase in this offering.
A stabilizing bid is a bid for the purchase of units on behalf of the underwriters for the purpose of fixing or maintaining the price of the units. A syndicate covering transaction is the bid for or the purchase of units on behalf of the underwriters to reduce a short position incurred by the underwriters in connection with the offering. Similar to other purchase transactions, the underwriter’s purchases to cover the syndicate short sales may have the effect of raising or maintaining the market price of our units or preventing or retarding a decline in the market price of our units. As a result, the price of our units may be higher than the price that might otherwise exist in the open market. A penalty bid is an arrangement permitting the underwriters to reclaim the selling concession otherwise accruing to a syndicate member in connection with the offering if the units originally sold by such syndicate member are purchased in a syndicate covering transaction and therefore have not been effectively placed by such syndicate member.
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 our units. The underwriters are not obligated to engage in these activities and, if commenced, any of the activities may be discontinued at any time. These transactions may be effected on Nasdaq, in the over-the-counter market or otherwise.
Market Making
The underwriters have advised us that, following the completion of this offering, they currently intend to make a market in the units as permitted by applicable laws and regulations. However, the underwriters are not obligated to do so, and the underwriters may discontinue any market-making activities at any time without notice in their sole discretion. Accordingly, no assurance can be given as to the liquidity of the trading market for the units, that you will be able to sell any of the units held by you at a particular time or that the prices that you receive when you sell will be favorable.
Electronic Distribution
A prospectus in electronic format may be made available by e-mail or on the web sites or through online services maintained by one or more of the underwriters or their affiliates. In those cases, prospective investors may view offering terms online and may be allowed to place orders online. The underwriters may agree with us to allocate a specific number of units for sale to online brokerage account holders. Any such allocation for online distributions will be made by the underwriters on the same basis as other allocations. Other than the prospectus in electronic format, the information on the underwriters’ web sites and any information contained in any other web site maintained by any of the underwriters is not part of this prospectus, has not been approved and/or endorsed by us or the underwriters and should not be relied upon by investors.
Other Activities and Relationships
We are not under any contractual obligation to engage any of the underwriters to provide any services for us after this offering, and have no present intent to do so. However, any of the underwriters may introduce us to potential target businesses or assist us in raising additional capital in the future. 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 60 days from the date of this prospectus, unless 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.
The underwriters and certain of their affiliates are full service financial institutions engaged in various activities, which may include securities trading, commercial and investment banking, financial advisory, investment management, investment research, principal investment, hedging, financing and brokerage activities. The underwriters and certain of their affiliates have, from time to time, performed, and may in the future perform, various commercial and investment banking and financial advisory services for us and our affiliates, for which they received or will receive customary fees and expenses.
In the ordinary course of their various business activities, the underwriters and certain of 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, and such investment and securities activities may involve securities and/or instruments issued by us and our affiliates. The underwriters and certain of their respective affiliates may also communicate independent investment recommendations, market color or trading ideas and/or publish or express independent research views in respect of such securities or instruments and may at any time hold, or recommend to clients that they acquire, long and/or short positions in such securities and instruments.
Selling Restrictions
Canada
This prospectus constitutes an “exempt offering document” as defined in and for the purposes of applicable Canadian securities laws. No prospectus has been filed with any securities commission or similar regulatory authority in Canada in connection with the offer and sale of the securities. No securities
commission or similar regulatory authority in Canada has reviewed or in any way passed upon this prospectus or on the merits of the securities and any representation to the contrary is an offence.
Canadian investors are advised that this prospectus has been prepared in reliance on section 3A.3 of National Instrument 33-105 Underwriting Conflicts (“NI 33-105”). Pursuant to section 3A.3 of NI 33-105, this prospectus is exempt from the requirement that the issuer and the underwriter(s) provide investors with certain conflicts of interest disclosure pertaining to “connected issuer” and/or “related issuer” relationships that may exist between the issuer and the underwriter(s) as would otherwise be required pursuant to subsection 2.1(1) of NI 33-105.
Resale Restrictions
The offer and sale of the securities in Canada is being made on a private placement basis only and is exempt from the requirement that the issuer prepares and files a prospectus under applicable Canadian securities laws. Any resale of the securities acquired by a Canadian investor in this offering must be made in accordance with applicable Canadian securities laws, which may vary depending on the relevant jurisdiction, and which may require resales to be made in accordance with Canadian prospectus requirements, pursuant to a statutory exemption from the prospectus requirements, in a transaction exempt from the prospectus requirements or otherwise under a discretionary exemption from the prospectus requirements granted by the applicable local Canadian securities regulatory authority. These resale restrictions may under certain circumstances apply to resales of the securities outside of Canada.
Representations of Purchasers
Each Canadian investor who purchases the securities will be deemed to have represented to the issuer and the underwriter(s) that the investor (i) is purchasing the securities as principal, or is deemed to be purchasing as principal in accordance with applicable Canadian securities laws, for investment only and not with a view to resale or redistribution; (ii) is an “accredited investor” as such term is defined in section 1.1 of National Instrument 45-106 Prospectus Exemptions (“NI 45-106”) or, in Ontario, as such term is defined in section 73.3(1) of the Securities Act (Ontario); and (iii) is a “permitted client” as such term is defined in section 1.1 of National Instrument 31-103 Registration Requirements, Exemptions and Ongoing Registrant Obligations.
Taxation and Eligibility for Investment
Any discussion of taxation and related matters contained in this prospectus does not purport to be a comprehensive description of all of the tax considerations that may be relevant to a Canadian investor when deciding to purchase the securities and, in particular, does not address any Canadian tax considerations. No representation or warranty is hereby made as to the tax consequences to a resident, or deemed resident, of Canada of an investment in the securities or with respect to the eligibility of the securities for investment by such investor under relevant Canadian federal and provincial legislation and regulations.
Rights of Action for Damages or Rescission
Securities legislation in certain of the Canadian jurisdictions provides certain purchasers of securities pursuant to an offering memorandum (such as this prospectus), including where the distribution involves an “eligible foreign security” as such term is defined in Ontario Securities Commission Rule 45-501 Ontario Prospectus and Registration Exemptions and in Multilateral Instrument 45-107 Listing Representation and Statutory Rights of Action Disclosure Exemptions, as applicable, with a remedy for damages or rescission, or both, in addition to any other rights they may have at law, where the offering memorandum, or other offering document that constitutes an offering memorandum, and any amendment thereto, contains a “misrepresentation” as defined under applicable Canadian securities laws. These remedies, or notice with respect to these remedies, must be exercised or delivered, as the case may be, by the purchaser within the time limits prescribed under, and are subject to limitations and defences under, applicable Canadian securities legislation. In addition, these remedies are in addition to and without derogation from any other right or remedy available at law to the investor.
Language of Documents
Upon receipt of this document, each Canadian investor hereby confirms that it has expressly requested that all documents evidencing or relating in any way to the sale of the securities described herein (including for greater certainty any purchase confirmation or any notice) be drawn up in the English language only. Par la réception de ce document, chaque investisseur Canadien confirme par les présentes qu’il a expressément exigé que tous les documents faisant foi ou se rapportant de quelque manière que ce soit à la vente des valeurs mobilières décrites aux présentes (incluant, pour plus de certitude, toute confirmation d’achat ou tout avis) soient rédigés en anglais seulement.
Australia
This document does not constitute a prospectus, product disclosure statement or other disclosure document under the Australia’s Corporations Act 2001 (Cth) (the “Corporations Act”) of Australia. This document has not been lodged with the Australian Securities & Investments Commission and is only directed to the categories of exempt persons set out below. Accordingly, if you receive this document in Australia:
You confirm and warrant that you are either:
•
a “sophisticated investor” under section 708(8)(a) or (b) of the Corporations Act;
•
a “sophisticated investor” under section 708(8)(c) or (d) of the Corporations Act and that you have provided an accountant’s certificate to the company which complies with the requirements of section 708(8)(c)(i) or (ii) of the Corporations Act and related regulations before the offer has been made; or
•
a “professional investor” within the meaning of section 708(11)(a) or (b) of the Corporations Act.
To the extent that you are unable to confirm or warrant that you are an exempt sophisticated investor or professional investor under the Corporations Act any offer made to you under this document is void and incapable of acceptance.
You warrant and agree that you will not offer any of the shares issued to you pursuant to this document for resale in Australia within 12 months of those securities being issued unless any such resale offer is exempt from the requirement to issue a disclosure document under section 708 of the Corporations Act.
European Economic Area
In relation to each member state of the European Economic Area (each a “Member State”), no securities have been offered or will be offered pursuant to the offer described herein in that Member State prior to the publication of a prospectus in relation to the securities which has been approved by the competent authority in that Member State or, where appropriate, approved in another Member State and notified to the competent authority in that Member State, all in accordance with the Prospectus Regulation, except that the securities may be offered to the public in that Member State at any time:
(i) to any legal entity which is a qualified investor as defined under Article 2 of the Prospectus Regulation;
(ii) to fewer than 150 natural or legal persons (other than qualified investors as defined under Article 2 of the Prospectus Regulation), subject to obtaining the prior consent of the underwriters for any such offer; or
(iii) in any other circumstances falling within Article 1(4) of the Prospectus Regulation,
provided that no such offer of securities shall require the issuer or any underwriter to publish a prospectus pursuant to Article 3 of the Prospectus Regulation or supplement a prospectus pursuant to Article 23 of the Prospectus Regulation.
Each person in a Member State who acquires any securities in the offer or to whom any offer is made will be deemed to have represented, acknowledged and agreed to and with the issuer and the underwriters that it is a qualified investor within the meaning of the Prospectus Regulation.
In the case of any securities being offered to a financial intermediary as that term is used in Article 5(1) of the Prospectus Regulation, each such financial intermediary will be deemed to have represented, acknowledged and agreed to and with the issuer and the underwriters that the securities acquired by it in the offer have not been acquired on a non-discretionary basis on behalf of, nor have they been acquired with a view to their offer or resale to, persons in circumstances which may give rise to an offer to the public other than their offer or resale in a Member State to qualified investors, in circumstances in which the prior consent of the underwriters has been obtained to each such proposed offer or resale. Neither the issuer nor the underwriters have authorised, nor do they authorise, the making of any offer of securities through any financial intermediary, other than offers made by the underwriters which constitute the final placement of securities contemplated in this document.
The issuer and the underwriters and their affiliates will rely upon the truth and accuracy of the foregoing representations, acknowledgements and agreements.
For the purposes of this provision, the expression an “offer to the public” in relation to any securities in any Member 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, or subscribe for, any securities and the expression “Prospectus Regulation” means Regulation (EU) 2017/1129.
In Member States, this document is being distributed only to, and is directed only at, persons who are “qualified investors” within the meaning of Article 2(e) of the Prospectus Regulation (“Qualified Investors”). This document must not be acted on or relied on in any Member State by persons who are not Qualified Investors. Any investment or investment activity to which this document relates is available in any Member State only to Qualified Investors and will be engaged in only with such persons.
Hong Kong
No securities have been, may be or will be offered or sold in Hong Kong, by means of any document, other than to persons whose ordinary business is to buy or sell shares or debentures, whether as principal or agent; or to “professional investors” as defined in the Securities and Futures Ordinance (Cap. 571) of Hong Kong (the “SFO”) and any rules made thereunder; or in other circumstances which do not result in the document being a “prospectus” as defined in the Companies (Winding UP and Miscellaneous Provisions) Ordinance (Cap. 32) of Hong Kong (the “C(WUMP)O”), or which do not constitute an offer to the public within the meaning of the C(WUMP)O. No document, invitation or advertisement relating to the securities has been issued or may be issued or will be issued or may be in the possession of any person for the purpose of issue (in each case 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 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 SFO and any rules made thereunder.
This document has not been and will not be registered with the Registrar of Companies in Hong Kong. Accordingly, this document may not be issued, circulated or distributed in Hong Kong, and the securities may not be offered for subscription to members of the public in Hong Kong. Each person acquiring the securities will be required, and is deemed by the acquisition of the securities, to confirm that he is aware of the restriction on offers of the securities described in this document and the relevant offering documents and that he is not acquiring, and has not been offered any securities in circumstances that contravene any such restrictions.
Japan
The offering has not been and will not be registered under the Financial Instruments and Exchange Act of Japan (Act No. 25 of 1948 of Japan, as amended) (the “FIEA”), and the Initial Purchaser will not offer or sell any securities, directly or indirectly, in Japan or to, or for the benefit of, any resident of Japan (which term as used herein means, unless otherwise provided herein, any person resident in Japan, including any corporation or other entity organized under the laws of Japan), or to others for re-offering or resale, directly or indirectly, in Japan or to a resident of Japan, except pursuant to an exemption from the registration
requirements of, and otherwise in compliance with, the FIEA and any other applicable laws, regulations and ministerial guidelines of Japan.
Singapore
This document has not been and will not be lodged or registered with the Monetary Authority of Singapore. Accordingly, this document and any other document or material in connection with the offer or sale, or the invitation for subscription or purchase of the securities may not be issued, circulated or distributed, nor may the securities be offered or sold, or be made the subject of an invitation for subscription or purchase, whether directly or indirectly, to any person in Singapore other than (i) to an institutional investor under Section 274 of the Securities and Futures Act, Chapter 289 of Singapore (the “SFA”), (ii) to a relevant person as defined under Section 275(2) 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 and where (where applicable) Regulation 3 of the Securities and Futures (Classes of Investors) Regulations 2018 , or (iii) otherwise pursuant to, and in accordance with the conditions of any other applicable provision of the SFA. In the event that you are not an investor falling within any of the categories set out above, please return this document immediately. You may not forward or circulate this document to any other person in Singapore.
No offer is made to you with a view to the securities being subsequently offered for sale to any other party. There are on-sale restrictions that may be applicable to investors who acquire securities. As such, investors are advised to acquaint themselves with the provisions of the SFA relating to resale restrictions and comply accordingly.
Where the securities are subscribed or purchased under Section 275 of the SFA by a relevant person which is:
•
a corporation (which is not an accredited investor as defined under 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
•
a trust (where the trustee is not an accredited investor) whose sole purpose is to hold investments and each beneficiary 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 transferable within six months after that corporation or that trust has acquired the securities under Section 275 of the SFA except:
•
to an institutional investor under Section 274 of the SFA or to a relevant person defined in Section 275(2) of the SFA, or to any person pursuant to an offer referred to in Section 275(1A) or Section 276(4)(i)(B) of the SFA;
•
where no consideration is given for the transfer;
•
where the transfer is by operation of law;
•
as specified in Section 276(7) of the SFA; or
•
as specified in Regulation 37A of the Securities and Futures (Offers of Investments) (Securities and Securities-based Derivatives Contracts) Regulations 2018 of Singapore.
Switzerland
The securities may not be publicly offered in Switzerland and will not be listed on the SIX Swiss Exchange, or 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 securities 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 issuer or the securities 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 securities will not be supervised by, the Swiss Financial Market Supervisory Authority FINMA, or FINMA, and the offer of securities has not been and will not be authorized under the Swiss Federal Act on Collective Investment Schemes, or CISA. The investor protection afforded to acquirers of interests in collective investment schemes under the CISA does not extend to acquirers of securities.
Israel
This document does not constitute a prospectus under the Israeli Securities Law, 5728-1968, or the Securities Law, and has not been filed with or approved by the Israel Securities Authority. In the State of Israel, this document is being distributed only to, and is directed only at, and any offer of the shares is directed only at, investors listed in the first addendum, or the Addendum, to the Israeli Securities Law, consisting primarily of joint investment in trust funds, provident funds, insurance companies, banks, portfolio managers, investment advisors, members of the Tel Aviv Stock Exchange, underwriters, venture capital funds, entities with equity in excess of NIS 50 million and “qualified individuals”, each as defined in the Addendum (as it may be amended from time to time), collectively referred to as qualified investors (in each case purchasing for their own account or, where permitted under the Addendum, for the accounts of their clients who are investors listed in the Addendum). Qualified investors will be required to submit written confirmation that they fall within the scope of the Addendum, are aware of the meaning of same and agree to it.
United Kingdom
In relation to the United Kingdom, no securities have been offered or will be offered pursuant to the offer described herein to the public in the United Kingdom prior to the publication of a prospectus in relation to the securities which has been approved by the UK Financial Conduct Authority, except that the securities may be offered to the public in the United Kingdom at any time:
(i) to any legal entity which is a qualified investor as defined under Article 2 of the UK Prospectus Regulation;
(ii) to fewer than 150 natural or legal persons (other than qualified investors as defined under Article 2 of the UK Prospectus Regulation), subject to obtaining the prior consent of the underwriters for any such offer; or
(iii) in any other circumstances falling within Section 86 of the Financial Services and Markets Act 2000 (as amended) (the “FSMA”),
provided that no such offer of the securities shall require the issuer or any underwriter to publish a prospectus pursuant to Section 85 of the FSMA or supplement a prospectus pursuant to Article 23 of the UK Prospectus Regulation.
Each person in the United Kingdom who acquires any securities in the offer or to whom any offer is made will be deemed to have represented, acknowledged and agreed to and with the issuer and the underwriters that it is a qualified investor within the meaning of the UK Prospectus Regulation.
In the case of any securities being offered to a financial intermediary as that term is used in Article 5(1) of the UK Prospectus Regulation, each such financial intermediary will be deemed to have represented, acknowledged and agreed to and with the issuer and the underwriters that the securities acquired by it in the offer have not been acquired on a non-discretionary basis on behalf of, nor have they been acquired with a view to their offer or resale to, persons in circumstances which may give rise to an offer to the public other than their offer or resale in the United Kingdom to qualified investors, in circumstances in which the prior consent of the underwriters has been obtained to each such proposed offer or resale. Neither the issuer nor the underwriters have authorised, nor do they authorise, the making of any offer of securities through any financial intermediary, other than offers made by the underwriters which constitute the final placement of securities contemplated in this document.
The issuer and the underwriters and their affiliates will rely upon the truth and accuracy of the foregoing representations, acknowledgements and agreements.
For the purposes of this provision, the expression an “offer to the public” in relation to the securities in the United Kingdom 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 or subscribe for any securities and the expression “UK Prospectus Regulation” means Regulation (EU) 2017/1129 as it forms part of United Kingdom law by virtue of the European Union (Withdrawal) Act 2018.
In the United Kingdom, this document is being distributed only to, and is directed only at, persons who are “qualified investors” within the meaning of Article 2(e) of the UK Prospectus Regulation who are also: (i) persons who fall within the definition of “investment professionals” in Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005, as amended (the “Order”); (ii) persons falling within Article 49(2) of the Order; or (iii) persons to whom it may otherwise lawfully be communicated (all such persons together being referred to as “relevant persons”). This document must not be acted on or relied on in the United Kingdom by persons who are not relevant persons. Any investment or investment activity to which this document relates is available in the United Kingdom only to relevant persons and will be engaged in only with such persons.
Any invitation or inducement to engage in investment activity (within the meaning of Section 21 of the FSMA) may only be communicated or caused to be communicated in connection with the issue or sale of the securities in circumstances in which Section 21(1) of the FSMA does not apply. All applicable provisions of the FSMA and the Order must be complied with in respect of anything done by any person in relation to the securities in, from or otherwise involving the United Kingdom.
LEGAL MATTERS
Reed Smith LLP, New York, New York, will pass upon the validity of the securities offered in this prospectus with respect to units and warrants. Maples and Calder (Cayman) LLP, Cayman Islands, will pass upon the validity of the securities offered in this prospectus with respect to the ordinary shares and matters of Cayman Islands law. Certain legal matters in connection with this offering will be passed upon for the underwriters by Ellenoff, Grossman & Schole LLP, New York, New York.
EXPERTS
The financial statements of Semper Paratus Acquisition Corporation as of April 30, 2021 and for the period from April 21, 2021 (inception) through April 30, 2021 appearing in this prospectus have been audited by Marcum LLP, independent registered public accounting firm, as set forth in their report thereon (which contains an explanatory paragraph relating to substantial doubt about the ability of Semper Paratus Acquisition Corporation to continue as a going concern absent the consummation of this offering as described in Note 1 to the Financial Statements), appearing elsewhere in this prospectus, and are included in reliance upon such report given on the authority of such firm as experts in accounting and auditing.
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.
Table of Contents
SEMPER PARATUS ACQUISITION CORPORATION
INDEX TO FINANCIAL STATEMENTS
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Page
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F-2 |
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Financial Statements:
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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 Shareholder and Board of Directors of Semper Paratus Acquisition Corporation
Opinion on the Financial Statements
We have audited the accompanying balance sheet of Semper Paratus Acquisition Corporation (the “Company”) as of April 30, 2021, the related statements of operations, shareholder’s equity and cash flows for the period from April 21, 2021 (inception) through April 30, 2021, 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 April 30, 2021, and the results of its operations and its cash flows for the period from April 21, 2021 (inception) through April 30, 2021, in conformity with accounting principles generally accepted in the United States of America.
Explanatory Paragraph — Going Concern
The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As more fully described in Note 1 to the financial statements, the Company’s ability to execute its business plan is dependent upon its completion of the proposed initial public offering described in Note 3 to the financial statements. The Company has a working capital deficit and lacks the financial resources it needs to sustain operations for a reasonable period of time, which is considered to be one year from the issuance date of the financial statements. These conditions raise substantial doubt about the Company’s ability to continue as a going concern. Management’s plans with regard to these matters are also described in Notes 1 and 3. The financial statements do not include any adjustments that might become necessary should the Company be unable to continue as a going concern.
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) (“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/ Marcum LLP
Marcum LLP
We have served as the Company’s auditor since 2021.
Los Angeles, CA
June 9, 2021, except for Note 6, as to which date is October 7, 2021 and for Note 8, as to which date is October 22, 2021
Semper Paratus Acquisition Corporation
BALANCE SHEETS
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As of June 30,
2021
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April 30,
2021
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(unaudited)
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ASSETS
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CURRENT ASSETS
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Prepaid expenses
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$ |
— |
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$ |
8,652 |
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Total current assets
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— |
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8,652 |
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OTHER ASSETS
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Deferred offering costs
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$ |
146,910 |
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$ |
34,787 |
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Total other assets
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146,910 |
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34,787 |
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TOTAL ASSETS
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$ |
146,910 |
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$ |
43,439 |
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LIABILITIES AND SHAREHOLDER’S EQUITY
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CURRENT LIABILITIES
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Accounts payable and accrued expenses
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$ |
814 |
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$ |
— |
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Accrued offering costs
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50,861 |
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— |
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Note payable – related party
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81,534 |
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25,422 |
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Total current liabilities
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133,209 |
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25,422 |
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TOTAL LIABILITIES
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133,209 |
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25,422 |
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COMMITMENTS AND CONTINGENCIES
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SHAREHOLDER’S EQUITY
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Preference shares, $0.0001 par value; 1,000,000 shares authorized; none issued and outstanding
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— |
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— |
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Class A ordinary shares; $0.0001 par value; 200,000,000 shares authorized; none
issued and outstanding
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— |
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— |
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Class B ordinary shares; $0.0001 par value; 20,000,000 shares authorized; 11,983,333 issued and outstanding(1),(2)
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1,198 |
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1,198 |
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Additional paid-in capital
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23,802 |
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23,802 |
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Accumulated deficit
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(11,299) |
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(6,983) |
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TOTAL SHAREHOLDERS’ EQUITY
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13,701 |
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18,017 |
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TOTAL LIABILITIES AND SHAREHOLDER’S EQUITY
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$ |
146,910 |
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$ |
43,439 |
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(1)
This number includes an aggregate of up to 1,530,000 Class B ordinary shares subject to forfeiture if the over-allotment option is not exercised in full or in part by the underwriter (see Note 4).
(2)
This number has been retroactively restated to reflect the recapitalization of the Company in the form of a dividend of approximately 0.3628 shares for each outstanding Class B ordinary share and a dividend of approximately 0.0195 shares for each outstanding Class B ordinary share (see Note 6).
The accompanying notes are an integral part of these financial statements
Semper Paratus Acquisition Corporation
STATEMENT OF OPERATIONS
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For the period
April 21, 2021
(inception)
through
June 30, 2021
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For the period
April 21, 2021
(inception)
through
April 30, 2021
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(unaudited)
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EXPENSES
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General and administrative expenses
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$ |
11,299 |
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$ |
6,983 |
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Total expenses
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11,299 |
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6,983 |
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NET LOSS
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$ |
(11,299) |
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$ |
(6,983) |
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WEIGHTED AVERAGE SHARES OUTSTANDING, BASIC AND DILUTED(1),(2)
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10,453,333 |
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10,453,333 |
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BASIC AND DILUTED NET LOSS PER SHARE
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$ |
(0.00) |
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$ |
(0.00) |
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(1)
This number excludes an aggregate of up to 1,530,000 Class B ordinary shares subject to forfeiture if the overallotment option is not exercised in full or in part by the underwriter (see Note 4).
(2)
This number has been retroactively restated to reflect the recapitalization of the Company in the form of a dividend of approximately 0.3628 shares for each outstanding Class B ordinary share and a dividend of approximately 0.0195 shares for each outstanding Class B ordinary share (see Note 6).
The accompanying notes are an integral part of these financial statements
Semper Paratus Acquisition Corporation
STATEMENT OF CHANGES IN SHAREHOLDER’S EQUITY
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Ordinary shares
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Additional
paid-in
capital
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Accumulated
deficit
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Total
shareholder’s
equity
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Class A
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Class B
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Shares
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Amount
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Shares
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Amount
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Balance, April 21, 2021 (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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$ |
— |
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$ |
— |
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Issuance of Class B ordinary shares to Sponsor(1),(2)
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— |
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— |
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11,983,333 |
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1,198 |
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23,802 |
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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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— |
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— |
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(6,983) |
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(6,983) |
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Balance, April 30, 2021
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— |
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— |
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11,983,333 |
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1,198 |
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23,802 |
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(6,983) |
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18,017 |
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Net loss
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|
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|
|
— |
|
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|
|
— |
|
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|
— |
|
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|
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— |
|
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(4,316) |
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|
|
(4,316) |
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|
|
Balance, June 30, 2021 (unaudited)
|
|
|
|
|
— |
|
|
|
|
$ |
— |
|
|
|
|
|
11,983,333 |
|
|
|
|
$ |
1,198 |
|
|
|
|
$ |
23,802 |
|
|
|
|
$ |
(11,299) |
|
|
|
|
$ |
13,701 |
|
|
(1)
This number includes an aggregate of up to 1,530,000 Class B ordinary shares subject to forfeiture if the overallotment option is not exercised in full or in part by the underwriter (see Note 4).
(2)
This number has been retroactively restated to reflect the recapitalization of the Company in the form of a dividend of approximately 0.3628 shares for each outstanding Class B ordinary share and a dividend of approximately 0.0195 shares for each outstanding Class B ordinary share (see Note 6).
The accompanying notes are an integral part of these financial statements
Semper Paratus Acquisition Corporation
STATEMENT OF CASH FLOWS
| |
|
|
For the period
April 21, 2021
(inception)
through
June 30, 2021
|
|
|
For the period
April 21, 2021
(inception)
through
April 30, 2021
|
|
| |
|
|
(unaudited)
|
|
|
|
|
|
|
|
|
CASH FLOWS FROM OPERATING ACTIVITIES
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss
|
|
|
|
$ |
(11,299) |
|
|
|
|
$ |
(6,983) |
|
|
|
Adjustments to reconcile net loss to net cash used in operating activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
General and administrative expenses paid by affiliate
|
|
|
|
|
10,485 |
|
|
|
|
|
6,983 |
|
|
|
Changes in operating assets and liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accounts payable
|
|
|
|
|
814 |
|
|
|
|
|
— |
|
|
|
Net cash flows used in operating activities
|
|
|
|
|
— |
|
|
|
|
|
— |
|
|
|
NET CHANGE IN CASH
|
|
|
|
|
— |
|
|
|
|
|
— |
|
|
|
CASH, BEGINNING OF PERIOD
|
|
|
|
|
— |
|
|
|
|
|
— |
|
|
|
CASH, END OF PERIOD
|
|
|
|
$ |
— |
|
|
|
|
$ |
— |
|
|
|
Supplemental disclosure of noncash activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Payment of deferred offering costs by note payable – related party
|
|
|
|
$ |
71,049 |
|
|
|
|
$ |
— |
|
|
|
Deferred offering costs included in accrued offering costs
|
|
|
|
$ |
50,861 |
|
|
|
|
$ |
— |
|
|
|
Payment of deferred offering costs by the Sponsor in exchange for the issuance of Class B ordinary shares
|
|
|
|
$ |
25,000 |
|
|
|
|
$ |
25,000 |
|
|
The accompanying notes are an integral part of these financial statements
NOTES TO FINANCIAL STATEMENTS
Note 1 — Description of Organization and Business Operations
Semper Paratus Acquisition Corporation (the “Company”) was incorporated as a Cayman Islands exempted company on April 21, 2021. The Company was incorporated for the purpose of effecting a merger, share exchange, asset acquisition, share purchase, reorganization or similar business combination with one or more businesses (the “Business Combination”). Although the Company is not limited to a particular industry or sector for purposes of consummating a Business Combination, the Company intends to concentrate their efforts to pursue an acquisition opportunity in the transportation, supply chain, and logistics management industry in any stage of the target’s corporate evolution or geographic location. The Company is an emerging growth company and, as such, the Company is subject to all of the risks associated with emerging growth companies.
As of June 30, 2021, the Company had not commenced any operations. All activity for the period from April 21, 2021 (inception) through June 30, 2021 relates to the Company’s formation and the proposed initial public offering described below. The Company will not generate any operating revenues until after the completion of its initial Business Combination, at the earliest. The Company will generate non-operating income in the form of interest income on investments held in trust from the proceeds derived from the Proposed Public Offering (as defined below). The Company has selected December 31 as its fiscal year end.
The Company’s sponsor is Semper Paratus Sponsor LLC, a Delaware limited liability company (the “Sponsor”). The Company’s ability to commence operations is contingent upon obtaining adequate financial resources through a proposed public offering (the “Proposed Public Offering”) of 30,000,000 units (each, a “Unit” and collectively, the “Units”) at $10.00 per Unit (or 34,500,000 units if the underwriters’ over-allotment option is exercised in full), which is discussed in Note 3, and the sale of 1,360,000 units (each, a “Private Placement Unit” and collectively, the “Private Placement Units”) at a price of $10.00 per Private Placement Unit $13,600,000 in the aggregate) in a private placement to the Sponsor and underwriter that will close simultaneously with the Proposed Public Offering. Each Private Placement Unit will be identical to the units sold in this offering, except as otherwise described in these financial statements.
The Company’s management has broad discretion with respect to the specific application of the net proceeds of the Proposed Public Offering and the sale of Private Placement Units although substantially all of the net proceeds are intended to be applied generally toward consummating a Business Combination. There is no assurance that the Company will be able to complete a Business Combination successfully. The Company must complete an initial Business Combination having an aggregate fair market value of at least 80% of the assets held in the Trust Account (as defined below) (excluding the deferred underwriting commissions and taxes payable on income earned on the Trust Account) at the time of the agreement to enter into the initial Business Combination.
However, the Company will only complete a Business Combination if the post-transaction company owns or acquires 50% or more of the outstanding voting securities of the target or otherwise acquires a controlling interest in the target sufficient for it not to be required to register as an investment company under the Investment Company Act 1940, as amended (the “Investment Company Act”). Upon the closing of the Proposed Public Offering, management has agreed that an amount equal to at least $10.20 per Unit sold in the Proposed Public Offering, including the proceeds of the Private Placement Units, will be held in a trust account (“Trust Account”), and invested only in U.S. government securities, within the meaning set forth in Section 2(a)(16) of the Investment Company Act, having a maturity of 185 days or less or in money market funds meeting certain conditions under Rule 2a-7 promulgated under the Investment Company Act which invest only in direct U.S. government treasury obligations, until the earlier of: (i) the completion of a Business Combination and (ii) the distribution of the Trust Account as described below.
The Company will provide holders (the “Public Shareholders”) of its Class A ordinary shares, par value $0.0001, sold in the Proposed Public Offering (the “Public Shares”), 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 shareholder meeting called to approve the Business Combination or (ii) by means of a tender offer. The decision as to whether the Company will seek shareholder approval of a Business Combination or conduct a tender offer will be made by the Company, solely in its discretion. The Public Shareholders will be
entitled to redeem their Public Shares for a pro rata portion of the amount then in the Trust Account (initially anticipated to be $10.20 per Public Share). The per-share amount to be distributed to Public Shareholders who redeem their Public Shares will not be reduced by the deferred underwriting commissions the Company will pay to the underwriters (as discussed in Note 5). In such case, the Company will proceed with a Business Combination if the Company has net tangible assets of at least $5,000,001 upon such consummation of a Business Combination and the approval of an ordinary resolution. The Public Shares subject to possible redemption will be classified as temporary equity upon the completion of the Proposed Public Offering in accordance with the Financial Accounting Standards Board’s (“FASB”) Accounting Standards Codification (“ASC”) Topic 480 “Distinguishing Liabilities from Equity.” If a shareholder vote is not required by law and the Company does not decide to hold a shareholder vote for business or other legal reasons, the Company will, pursuant to its Amended and Restated Memorandum and Articles of Association (the “Amended and Restated Memorandum and Articles of Association”), conduct the redemptions pursuant to the tender offer rules of the U.S. Securities and Exchange Commission (“SEC”) and file tender offer documents with the SEC prior to completing a Business Combination. If, however, shareholder approval of the transactions is required by law, or the Company decides to obtain shareholder approval for business or legal reasons, the Company will offer to redeem shares in conjunction with a proxy solicitation pursuant to the proxy rules and not pursuant to the tender offer rules. Additionally, each Public Shareholder may elect to redeem their Public Shares irrespective of whether they vote for or against the proposed transaction. If the Company seeks shareholder approval in connection with a Business Combination, the initial shareholders (as defined below) have agreed to vote their Founder Shares (as defined below in Note 4), the Class A ordinary shares underlying the Private Placement Units (the “Private Placement Shares”) and any Public Shares purchased during or after the Proposed Public Offering in favor of a Business Combination. In addition, the initial shareholders have agreed to waive their redemption rights with respect to their Founder Shares, Private Placement Shares and Public Shares in connection with the completion of a Business Combination.
Notwithstanding the foregoing, the Amended and Restated Memorandum and Articles of Association will provide that a Public Shareholder, together with any affiliate of such shareholder or any other person with whom such shareholder is acting in concert or as a “group” (as defined under Section 13 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)), will be restricted from redeeming its shares with respect to more than an aggregate of 15% or more of the Class A ordinary shares sold in the Proposed Public Offering, without the prior consent of the Company.
The Company’s Sponsor, officers and directors (the “initial shareholders”) have agreed not to propose an amendment to the Amended and Restated Memorandum and Articles of Association (a) that would modify the substance or timing of the Company’s obligation to redeem 100% of its Public Shares if the Company does not complete a Business Combination within 15 months from the closing of the Proposed Public Offering or during any Extension Period (the “Combination Period”) or (b) with respect to any other provision relating to shareholders’ rights or pre-initial Business Combination activity, unless the Company provides the Public Shareholders with the opportunity to redeem their Class A ordinary shares in conjunction with any such amendment.
If the Company is unable to complete a Business Combination within the Combination Period, 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 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 earned on the funds held in the Trust Account and not previously released to the Company (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 Shareholders’ rights as shareholders (including the right to receive further liquidation distributions, if any) and (iii) as promptly as reasonably possible following such redemption, subject to the approval of the Company’s remaining shareholders and the Company’s board of directors, liquidate and dissolve, subject, in each case, to the Company’s obligations under Cayman Islands law to provide for claims of creditors and in all cases subject to the other requirements of applicable law.
The initial shareholders will agree to waive their liquidation rights with respect to the Founder Shares and Private Placement Shares if the Company fails to complete a Business Combination within the
Combination Period. However, if the initial shareholders or members of the Company’s management team acquire Public Shares in or after the Proposed Public Offering, they will be entitled to liquidating distributions from the Trust Account with respect to such Public Shares if the Company fails to complete a Business Combination within the Combination Period. The underwriters will agree to waive their rights to its deferred underwriting commission (see Note 5) held in the Trust Account in the event the Company does not complete a Business Combination within in the Combination Period and, in such event, such amounts will be included with the other funds held in the Trust Account that will be available to fund the redemption of the Public Shares. 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 only $10.20 per share initially held in the Trust Account. In order to protect the amounts held in the Trust Account, the Sponsor has agreed to be liable to the Company if and to the extent any claims by a vendor 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. This liability will not apply with respect to any claims by a third party who executed a waiver of any right, title, interest or claim of any kind in or to any monies held in the Trust Account or 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 of 1933, as amended (the “Securities Act”). Moreover, in the event that an executed waiver is deemed to be unenforceable against a third party, the Sponsor will not be responsible to the extent of any liability for such third party claims. The Company will seek to reduce the possibility that the Sponsor will have to indemnify the Trust Account due to claims of creditors by endeavoring to have all vendors, service providers, prospective target businesses or other entities with which the Company does business, execute agreements with the Company waiving any right, title, interest or claim of any kind in or to monies held in the Trust Account.
Going Concern Consideration
As of June 30, 2021 the Company does not have sufficient liquidity to meet its anticipated obligations over the next year from the 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 these conditions raise substantial doubt about the Company’s ability to continue as a going concern for a reasonable period of time, which is considered one year after the date that the financial statements are issued. Management plans to address this uncertainty through a Proposed Public Offering as discussed in Note 3. The Company currently relies on the Sponsor to provide working capital needs until the consummation of the Proposed Public Offering.
Note 2 — Summary of Significant Accounting Policies
Basis of Presentation
The accompanying financial statements are presented in U.S. dollars in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and pursuant to the rules and regulations of the SEC.
Emerging Growth Company
The Company is an emerging growth company as defined under Section 102(b)(1) of the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”) which 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 an emerging growth 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 an 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 statement with another public company that is neither an emerging growth company nor an emerging growth company that has opted out of using the extended transition period difficult or impossible because of the potential differences in accounting standards used.
Net Loss Per Ordinary Share
The Company complies with accounting and disclosure requirements of FASB ASC Topic 260, “Earnings Per Share.” Net loss per share is computed by dividing net loss by the weighted average number of ordinary shares outstanding during the period excluding shares subject to forfeiture. Weighted average shares was reduced for the effect of an aggregate of 1,530,000 ordinary shares that are subject to forfeiture if the over-allotment option is not exercised by the underwriters. At June 30, 2021, the Company did not have any dilutive securities and other contracts that could, potentially, be exercised or converted into ordinary shares and then share in the earnings of the Company. As a result, diluted loss per share is the same as basic loss per 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.
Financial Instruments
The fair value of the Company’s assets and liabilities, which qualify as financial instruments under the FASB ASC 820, “Fair Value Measurements and Disclosures,” approximates the carrying amounts represented in the balance sheet.
Fair Value Measurements
Fair value is defined as the price that would be received for sale of an asset or paid for transfer of a liability, in an orderly transaction between market participants at the measurement date. GAAP establishes a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). These tiers include:
•
Level 1, defined as observable inputs such as quoted prices (unadjusted) for identical instruments in active markets;
•
Level 2, defined as inputs other than quoted prices in active markets that are either directly or indirectly observable such as quoted prices for similar instruments in active markets or quoted prices for identical or similar instruments in markets that are not active; and
•
Level 3, defined as unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions, such as valuations derived from valuation techniques in which one or more significant inputs or significant value drivers are unobservable. In some circumstances, the inputs used to measure fair value might be categorized within different levels of the fair value hierarchy. In those instances, the fair value measurement is categorized in its entirety in the fair value hierarchy based on the lowest level input that is significant to the fair value measurement.
Derivative Financial Instruments
The Company evaluates its financial instruments to determine if such instruments are derivatives or contain features that qualify as embedded derivatives in accordance with ASC Topic 815, “Derivatives and
Hedging”. Derivative instruments are initially recorded at fair value on the grant date and re-valued at each reporting date, with changes in the fair value reported in the statements of operations. Derivative assets and liabilities are classified in the balance sheet as current or non-current based on whether or not net-cash settlement or conversion of the instrument could be required within 12 months of the balance sheet dates.
Use of Estimates
The preparation of financial statements in conformity with U.S. GAAP requires the Company’s management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the financial statements and the reported amounts of expenses during the reporting period. Actual results could differ from those estimates.
Deferred Offering Costs Associated with the Proposed Public Offering
Deferred offering costs consist of legal, accounting, underwriting fees and other costs incurred through the balance sheet date that are directly related to the Proposed Public Offering and that will be charged to shareholder’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 to be incurred, will be charged to operations. As of June 30, 2021 and April 30, 2021, the Company had incurred $146,910 and $34,787 of deferred offering costs, respectively.
Income Taxes
The Company follows the asset and liability method of accounting for income taxes under FASB ASC 740, “Income Taxes.” Deferred tax assets and liabilities are recognized for the estimated future tax consequences attributable to differences between the financial statements carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that included the enactment date. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amount expected to be realized.
FASB ASC 740 prescribes a recognition threshold and a measurement attribute for the financial statement recognition and measurement of tax positions 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. There were no unrecognized tax benefits as of June 30, 2021 or April 30, 2021. The Company’s management determined that the Cayman Islands is the Company’s only major tax jurisdiction. The Company recognizes accrued interest and penalties related to unrecognized tax benefits as income tax expense. No amounts were accrued for the payment of interest and penalties for the period from April 21, 2021 (inception) through June 30, 2021. The Company is currently not aware of any issues under review that could result in significant payments, accruals or material deviation from its position. There is currently no taxation imposed on income by the Government of the Cayman Islands. In accordance with Cayman income tax regulations, income taxes are not levied on the Company. Consequently, income taxes are not reflected in the Company’s financial statements.
Recent Accounting Pronouncements
In August 2020, the FASB issued Accounting Standards Update (“ASU”) No. 2020-06, Debt — debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging — Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity (“ASU 2020-06”), which simplifies accounting for convertible instruments by removing major separation models required under current GAAP. The ASU also removes certain settlement conditions that are required for equity-linked contracts to qualify for the derivative scope exception, and it simplifies the diluted earnings per share calculation in certain areas. The Company adopted ASU 2020-06 on April 21, 2021 (inception). Adoption of the ASU did not impact the Company’s financial position, results of operations or cash flows.
Note 3 — Proposed Public Offering
Pursuant to the Proposed Public Offering, the Company intends to offer for sale 30,000,000 Units at a price of $10.00 per Unit (or 34,500,000 Units if the underwriters’ over-allotment option is exercised in full). Each Unit consists of one Class A ordinary share, and one-half of one redeemable warrant (each, a “Public Warrant”). Each Public Warrant entitles the holder to purchase one Class A ordinary share at a price of $11.50 per share, subject to adjustment (see Note 6).
Note 4 — Related Party Transactions
Founder Shares
Our Sponsor paid $25,000 to cover certain offering costs of the Company in consideration for 8,625,000 Class B ordinary shares (the “Founder Shares”) which were issued on April 22, 2021. In August 2021, the Company effectuated a dividend of approximately 0.3628 shares for each outstanding Class B ordinary share resulting in an aggregate of 11,754,150 Class B Founder shares outstanding. On October 1, 2021, the Company effectuated a dividend of approximately 0.0195 shares for each outstanding Class B ordinary share resulting in an aggregate of 11,983,333 Class B Founder shares outstanding (up to 1,530,000 of which are subject to forfeiture in the underwriters’ over-allotment option is exercised in full). The Founder Shares will automatically convert into Class A ordinary shares at the time of the Company’s initial Business Combination and are subject to certain transfer restrictions. The initial shareholders have agreed to forfeit up to 1,530,000 Founder Shares to the extent that the over-allotment option is not exercised in full by the underwriters. The forfeiture will be adjusted to the extent that the over-allotment option is not exercised in full by the underwriters so that the Founder Shares will represent approximately 25.0% of the Company’s issued and outstanding shares after the Proposed Public Offering. If the Company increases or decreases the size of the offering, the Company will effect a share capitalization or share contribution back to capital, as applicable, immediately prior to the consummation of the Proposed Public Offering in such amount as to maintain the Founder Share ownership of the Company’s shareholders at 25.0% of the Company’s issued and outstanding ordinary shares upon the consummation of the Proposed Public Offering.
The initial shareholders will agree, subject to limited exceptions, not to transfer, assign or sell any of their Founder Shares until the earliest of (A) one year after the completion of our initial business combination and (B) subsequent to our initial business combination, (x) if the closing price of our Class A ordinary shares equals or exceeds $12.00 per share (as adjusted for share subdivisions, share capitalizations, 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 on which we complete a liquidation, merger, share exchange or other similar transaction that results in all of our public shareholders having the right to exchange their ordinary shares for cash, securities or other property.
Private Placement Units
The Sponsor and underwriter has agreed to purchase an aggregate of 1,360,000 (the Sponsor has agreed to purchase 1,210,000 and underwriter 150,000 units) Private Placement Units at a price of $10.00 per Private Placement Unit, for an aggregate purchase price of $13,600,000, in a private placement that will occur simultaneously with the closing of the Proposed Public Offering. Each whole Private Placement Unit will consist of one Placement Share and one-half of a redeemable warrant (“Placement Warrant”). Each whole Placement Warrant will be exercisable to purchase one Class A ordinary share at a price of $11.50 per share. A portion of the proceeds from the Placement Units will be added to the proceeds from the Proposed Public Offering to be held in the Trust Account. If the Company does not complete a Business Combination within the Combination Period, the proceeds from the sale of the Placement Units will be used to fund the redemption of the Public Shares (subject to the requirements of applicable law), and the Placement Units and all underlying securities will be worthless.
Related Party Loans
On April 22, 2021, the Sponsor agreed to loan the Company an aggregate of up to $300,000 to cover expenses related to the Proposed Public Offering pursuant to a promissory note (the “Note”). This loan is non-interest bearing and payable on the earlier of December 31, 2021 or the completion of the Proposed Public
Offering. As of June 30, 2021 and April 30, 2021, we had borrowed $81,534 and $25,422 under the promissory note with our sponsor, respectively.
In addition, 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”). If the Company completes a Business Combination, the Company would repay the Working Capital Loans out of the proceeds of the Trust Account released to the Company. Otherwise, the Working Capital Loans would be repaid only out of funds held outside the Trust Account. 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. Except for the foregoing, the terms of such Working Capital Loans, if any, have not been determined and no written agreements exist with respect to such loans. The Working Capital Loans would either be repaid upon consummation of a Business Combination, without interest, or, at the lender’s discretion, up to $1.5 million of such Working Capital Loans may be convertible into private placement-equivalent units at a price of $10.00 per unit. To date, the Company had no borrowings under the Working Capital Loans.
Administrative Support Agreement
Commencing on the date of the final prospectus, the Company will agree to pay the Sponsor a total of $10,000 per month for office space and administrative and support services. Upon completion of the Initial Business Combination or the Company’s liquidation, the Company will cease paying these monthly fees.
Note 5 — Commitments & Contingencies
Registration Rights
The holders of Founder Shares, Private Placement Units (including the underlying securities), and securities that may be issued upon conversion of Working Capital Loans, if any, will be entitled to registration rights pursuant to a registration rights agreement to be signed upon consummation of the Proposed Public Offering. These holders will be entitled to certain demand and “piggyback” registration rights. However, the registration rights agreement provides that the Company will not permit any registration statement filed under the Securities Act to become effective until the termination of the applicable lock-up period for the securities to be registered. 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 from the final prospectus relating to the Proposed Public Offering to purchase up to 4,500,000 additional Units to cover over-allotments, if any, at the Proposed Public Offering price less the underwriting discounts and commissions.
The underwriters will be entitled to an underwriting discount of $0.20 per unit, or $6,000,000 in the aggregate (or $6,900,000 in the aggregate if the underwriters’ over-allotment option is exercised in full; however the $900,000 additional fee payable will be deferred until the Company completes a Business Combination), payable upon the closing of the Proposed Public Offering. In addition, $0.40 per unit, or $12,000,000 in the aggregate (or $14,700,000, which includes the $900,000 noted above, in the aggregate if the underwriters’ over-allotment option is exercised in full) will be payable to the underwriters for deferred underwriting commissions. The deferred fee is 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 6 — Shareholder’s Equity
Recapitalization
In August 2021, the Company effectuated a recapitalization of the Company, which included a dividend of approximately 0.3628 shares for each outstanding Class B ordinary share resulting in an
aggregate of 11,754,150 Class B Founder Shares outstanding. On October 1, 2021, the Company effectuated a recapitalization of the Company, which included a dividend of approximately 0.0195 shares for each outstanding Class B ordinary share resulting in an aggregate of 11,983,333 founder shares (up to 1,530,000 of which are subject to forfeiture if the underwriters’ over- allotment option is not exercised in full). Class B shares and per share information contained in the financial statements has been retroactively adjusted for this dividend.
Class A Ordinary Shares
The Company is authorized to issue 200,000,000 Class A ordinary shares with a par value of $0.0001 per share. As of June 30, 2021 and April 30, 2021, there were no Class A ordinary shares issued or outstanding.
Class B Ordinary Shares
The Company is authorized to issue 20,000,000 Class B ordinary shares with a par value of $0.0001 per share. Holders of Class B ordinary shares are entitled to one vote for each share of Class B ordinary shares. As of June 30, 2021 and April 30, 2021, there were 11,754,150 Class B ordinary shares outstanding. Of the 11,754,150 Class B ordinary shares, an aggregate of up to 1,530,000 shares are subject to forfeiture to the Company by the Sponsor for no consideration to the extent that the underwriters’ over-allotment option is not exercised in full or in part, so that the initial shareholders will collectively own 25% of the Company’s issued and outstanding ordinary shares after the Proposed Public Offering (excluding the Private Placement Shares and any shares underlying the Placement Warrants).
Prior to our initial Business Combination, only holders of our Class B ordinary shares will have the right to vote on the appointment of directors. Holders of our Class A ordinary shares will not be entitled to vote on the election of directors during such time. In addition, prior to the completion of an initial Business Combination, holders of a majority of our Class B ordinary shares may remove a member of the board of directors for any reason. These provisions of our Amended and Restated Memorandum and Articles of Association may only be amended by a special resolution passed by not less than 90% of our ordinary share shareholders who attend and vote at our general meeting. With respect to any other matter submitted to a vote of our shareholders, including any vote in connection with our initial Business Combination, except as required by law, holders of our Class B ordinary shares and holders of our Class A ordinary shares will vote together as a single class, with each share entitling the holder to one vote.
The Class B ordinary shares will automatically convert into Class A ordinary shares at the time of the initial Business Combination on a one-for-one basis, subject to adjustment. In the case that additional Class A ordinary shares, or equity-linked securities, are issued or deemed issued in excess of the amounts offered in the Proposed Public Offering and related to the closing of the initial Business Combination, the ratio at which Class B ordinary shares shall convert into Class A ordinary shares will be adjusted (unless the holders of a majority of the outstanding Class B ordinary shares agree to waive such adjustment with respect to any such issuance or deemed issuance) so that the number of Class A ordinary shares issuable upon conversion of all Class B ordinary shares will equal, in the aggregate, on an as-converted basis, 25% of the sum of the total number of all shares of ordinary shares outstanding upon the completion of the Proposed Public Offering plus all Class A ordinary shares and equity-linked securities issued or deemed issued in connection with the initial Business Combination (excluding any shares or equity-linked securities issued, or to be issued, to any seller in the initial Business Combination and any private placement-equivalent warrants issued to the Sponsor or its affiliates upon conversion of loans made to the Company).
Preference Shares
The Company is authorized to issue 1,000,000 preference shares with such designations, voting and other rights and preferences as may be determined from time to time by the Company’s board of directors. As of June 30, 2021 and April 30, 2021, there were no preferred shares issued or outstanding.
Note 7 — Warrants
The Company will account for the 680,000 Placement Warrants that are included in the Private Placement Units in connection with the Proposed Public Offering (or 725,000 if the underwriters’ over-allotment option is exercised in full) in accordance with the guidance contained in ASC 815-40. Such guidance
provides that because the warrants do not meet the criteria for equity treatment thereunder, each warrant must be recorded as a liability. Accordingly, the Company will classify each warrant as a liability at its fair value. This liability is subject to re-measurement at each balance sheet date. With each such re-measurement, the warrant liability will be adjusted to fair value, with the change in fair value recognized in the Company’s statement of operations.
The Public Warrants will become exercisable on the later of (i) 30 days after the completion of a Business Combination and (ii) one year from the closing of the Proposed Public Offering. No warrants will be exercisable for cash unless the Company has an effective and current registration statement covering the ordinary shares issuable upon exercise of the warrants and a current prospectus relating to such ordinary shares. Notwithstanding the foregoing, if a registration statement covering the ordinary shares issuable upon exercise of the Public Warrants is not effective within a specified period following the consummation of a Business Combination, warrant holders may, until such time as there is an effective registration statement and during any period when the Company shall have failed to maintain an effective registration statement, exercise warrants on a cashless basis pursuant to the exemption provided by Section 3(a)(9) of the Securities Act, provided that such exemption is available. If that exemption, or another exemption, is not available, holders will not be able to exercise their warrants on a cashless basis. The Public Warrants will expire five years after the completion of a Business Combination or earlier upon redemption or liquidation.
Once the warrants become exercisable, the Company may redeem the Public 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;
•
if, and only if, the reported last sale price of the ordinary shares equals or exceeds $18.00 per share (as adjusted for share subdivisions, share dividends, reorganizations and recapitalizations), for any 20 trading days within a 30 trading day period commencing at any time after the warrants become exercisable and ending on the third business day prior to the notice of redemption to warrant holders; and
if, and only if, there is a current registration statement in effect with respect to the ordinary shares underlying the warrants.
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 Private Warrants will be identical to the Public Warrants underlying the Units being sold in the Proposed Public Offering, except that the Private Warrants and the ordinary shares issuable upon the exercise of the Private Warrants will not be transferable, assignable or salable until after the completion of a Business Combination, subject to certain limited exceptions. Additionally, the Private Warrants will be exercisable for cash or on a cashless basis, at the holder’s option, and be non-redeemable so long as they are held by the initial purchasers or their permitted transferees. If the Private Warrants are held by someone other than the initial purchasers or their permitted transferees, the Private Warrants will be redeemable by the Company and exercisable by such holders on the same basis as the Public Warrants.
The exercise price and number of ordinary shares issuable on exercise of the warrants may be adjusted in certain circumstances including in the event of a share dividend, extraordinary dividend or our recapitalization, reorganization, merger or consolidation. However, the warrants will not be adjusted for issuances of ordinary shares at a price below their respective exercise prices. 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 warrants will not receive any of such funds with respect to their warrants, nor will they receive any distribution from the Company’s assets held outside of the Trust Account with the respect to such warrants. Accordingly, the warrants may expire worthless.
In addition, if the Company issues additional ordinary shares or equity-linked securities for capital raising purposes in connection with the closing of a Business Combination at an issue price or effective
issue price of less than $9.20 per ordinary share (with such issue price or effective issue price to be determined in good faith by the Company’s board of directors, and in the case of any such issuance to the initial shareholders or their affiliates, without taking into account any Founder Shares held by them prior to such issuance), (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 a Business Combination on the date of the consummation of a Business Combination (net of redemptions), and (z) the volume weighted average trading price of the Company’s ordinary shares during the 20 trading day period starting on the trading day prior to the day on which the Company consummates 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 greater of (i) the Market Value or (ii) the price at which the Company issues the additional ordinary shares or equity-linked securities.
Note 8 — Subsequent Events
Management has evaluated subsequent events to determine if events or transactions occurring from the balance sheet date through October 7, 2021, the date these financial statements were available to be issued, require potential adjustment to or disclosure in the financial statements and has concluded that all such events that would require recognition or disclosure have been recognized or disclosed other than noted below.
In August 2021, the Company effectuated a recapitalization of the Company, which included a dividend of approximately 0.3628 shares for each outstanding Class B ordinary share resulting in an aggregate of 11,754,150 Class B Founder Shares outstanding. On October 1, 2021, the Company effectuated a recapitalization of the Company, which included a dividend of approximately 0.0195 shares for each outstanding Class B ordinary share resulting in an aggregate of 11,983,333 founder shares (up to 1,530,000 of which are subject to forfeiture if the underwriters’ over- allotment option is not exercised in full). Class B shares and per share information contained in the financial statements has been retroactively adjusted for this dividend.
$300,000,000
30,000,000 units
SEMPER PARATUS ACQUISITION CORPORATION
PRELIMINARY PROSPECTUS
[•], 2021
Cantor
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 dealer’s obligation to deliver a prospectus when acting as an underwriter and with respect to 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 discounts and commissions) will be as follows:
| |
SEC expenses
|
|
|
|
$ |
31,981.50 |
|
|
| |
FINRA expenses
|
|
|
|
|
52,250.00 |
|
|
| |
Accounting fees and expenses
|
|
|
|
|
35,000.00 |
|
|
| |
Printing and engraving expenses
|
|
|
|
|
30,000.00 |
|
|
| |
Legal fees and expenses
|
|
|
|
|
250,000.00 |
|
|
| |
Nasdaq listing and filing fees
|
|
|
|
|
75,000.00 |
|
|
| |
Miscellaneous expenses
|
|
|
|
|
25,768.50 |
|
|
| |
Total
|
|
|
|
$ |
500,000.00 |
|
|
Item 14. Indemnification of Directors and Officers.
Cayman Islands law does not limit the extent to which a company’s memorandum and articles of association may provide for indemnification of officers and directors, except to the extent any such provision may be held by the Cayman Islands courts to be contrary to public policy, such as to provide indemnification against willful default, willful neglect, civil fraud or the consequences of committing a crime. Our amended and restated memorandum and articles of association will provide for indemnification of our officers and directors to the maximum extent permitted by law, including for any liability incurred in their capacities as such, except through their own actual fraud, willful default or willful neglect.
We will enter into agreements with our directors and officers to provide contractual indemnification in addition to the indemnification provided for in our amended and restated memorandum and articles of association. We expect to purchase 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.
Our officers and directors have agreed to waive any right, title, interest or claim of any kind in or to any monies in the trust account, and have agreed to waive any right, title, interest or claim of any kind they may have in the future as a result of, or arising out of, any services provided to us and will not seek recourse against the trust account for any reason whatsoever (except to the extent they are entitled to funds from the trust account due to their ownership of public shares). Accordingly, any indemnification provided will only be able to be satisfied by us if (i) we have sufficient funds outside of the trust account or (ii) we consummate an initial business combination.
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.
Item 15. Recent Sales of Unregistered Securities.
On April 22, 2021, our sponsor paid an aggregate purchase price of $25,000, or approximately $0.0029 per share, to subscribe for an aggregate of 8,625,000 Class B ordinary shares, par value $0.0001. On August 9, 2021, we effected a dividend of approximately 0.3628 shares for each outstanding Class B ordinary share, such that our sponsor owned an aggregate of 11,754,150 founder shares, for approximately $0.0021 per share. On October 1, 2021, we effected a dividend of approximately 0.0195 shares for each outstanding Class B ordinary share, such that our sponsor owns an aggregate of 11,983,333 founder shares, for approximately $0.0021 per share. Our sponsor is an accredited investor for purposes of Rule 501 of Regulation D. Each of
the equity holders in our sponsor is an accredited investor under Rule 501 of Regulation D. The sole business of our sponsor is to act as our company’s sponsor in connection with this offering.
Our sponsor and Cantor have committed, pursuant to written agreements, to purchase an aggregate of 1,360,000 placement units (or 1,450,000 placement units if the underwriters exercise their over-allotment option in full), at a price of $10.00 per unit ($13,600,000, or $14,500,000 if the underwriters exercise their
over-allotment option in full, in the aggregate), in a private placement that will close simultaneously with the closing of this 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.
The Exhibit Index is incorporated herein by reference.
Item 17. Undertakings.
i.
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.
ii.
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 Securities 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 Securities Act of 1933 and will be governed by the final adjudication of such issue.
iii.
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.
EXHIBIT INDEX
| |
Exhibit No.
|
|
|
Description
|
|
| |
1.1
|
|
|
Form of Underwriting Agreement.**
|
|
| |
3.1
|
|
|
Memorandum and Articles of Association.*
|
|
| |
3.2
|
|
|
Form of Amended and Restated Memorandum and Articles of Association.*
|
|
| |
4.1
|
|
|
Specimen Unit Certificate.*
|
|
| |
4.2
|
|
|
Specimen Class A Ordinary Share Certificate.*
|
|
| |
4.3
|
|
|
Specimen Warrant Certificate.*
|
|
| |
4.4
|
|
|
Form of Warrant Agreement.*
|
|
| |
5.1
|
|
|
Opinion of Reed Smith LLP.**
|
|
| |
5.2
|
|
|
Opinion of Maples and Calder (Cayman) LLP, Cayman Islands Legal Counsel to the Registrant.**
|
|
| |
10.1
|
|
|
Form of Investment Management Trust Agreement between Continental Stock Transfer & Trust Company and the Registrant.**
|
|
| |
10.2
|
|
|
Form of Registration and Shareholder Rights Agreement among the Registrant, the Sponsor, Cantor and the holders signatory thereto.**
|
|
| |
10.3
|
|
|
Form of Private Placement Units Purchase Agreement between the Registrant and the Sponsor.**
|
|
| |
10.4
|
|
|
Form of UnitSubscription Agreement between the Registrant and Cantor.**
|
|
| |
10.5
|
|
|
Form of Indemnity Agreement.*
|
|
| |
10.6
|
|
|
Promissory Note, dated as of April 22, 2021, between the Registrant and the Sponsor.*
|
|
| |
10.7
|
|
|
Securities Subscription Agreement, dated as of April 22, 2021, between the Registrant and the Sponsor.*
|
|
| |
10.8
|
|
|
Form of Administrative Support Agreement between the Registrant and the Sponsor.*
|
|
| |
10.9
|
|
|
Form of Letter Agreement between the Registrant, the Sponsor, the other holders signatory thereto and each director and officer of the Registrant.*
|
|
| |
14
|
|
|
Form of Code of Ethics.*
|
|
| |
23.1
|
|
|
Consent of Marcum LLP.**
|
|
| |
23.2
|
|
|
Consent of Reed Smith LLP (included in its form of opinion filed as Exhibit 5.1 hereto).**
|
|
| |
23.3
|
|
|
Consent of Maples and Calder (Cayman) LLP (included in its form of opinion filed as Exhibit 5.2 hereto).**
|
|
| |
24
|
|
|
Power of Attorney (included on signature page to the initial filing of this Registration Statement).*
|
|
| |
99.1
|
|
|
Consent of Parizad Olver Parchi.*
|
|
| |
99.2
|
|
|
Consent of Brad Stewart.*
|
|
| |
99.3
|
|
|
Form of Audit Committee Charter.*
|
|
| |
99.4
|
|
|
Form of Compensation Committee Charter.**
|
|
*
Previously filed
**
Filed herewith
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended, the registrant has duly caused this Amendment No. 1 to Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of New York, State of New York, on the 22nd day of October, 2021.
| |
|
|
|
SEMPER PARATUS ACQUISITION CORPORATION
|
|
| |
|
|
|
By:
|
|
|
/s/ B. Ben Baldanza
Name: B. Ben Baldanza
Title: Chief Executive Officer
|
|
Pursuant to the requirements of the Securities Act of 1933, as amended, this Amendment No. 1 to Registration Statement has been signed below by the following persons in the capacities and on the dates indicated.
| |
Signature
|
|
|
Name
|
|
|
Title
|
|
|
Date
|
|
| |
/s/ B. Ben Baldanza
|
|
|
B. Ben Baldanza
|
|
|
Chief Executive Officer (Principal Executive Officer)
|
|
|
October 22, 2021
|
|
| |
/s/ Philippe J. Kurzweil
|
|
|
Philippe J. Kurzweil
|
|
|
Chief Financial Officer
(Principal Financial Officer and Principal Accounting Officer)
|
|
|
October 22, 2021
|
|
| |
*
|
|
|
Richard N. Peretz
|
|
|
Executive Chairman
|
|
|
October 22, 2021
|
|
| |
*
|
|
|
Hooman Yazhari
|
|
|
Vice Chairman
|
|
|
October 22, 2021
|
|
| |
*
|
|
|
Paul P. Jebely
|
|
|
Director
|
|
|
October 22, 2021
|
|
| |
*
|
|
|
By:
|
|
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/s/ Phillippe J. Kurzweil
Name: Phillippe J. Kurzweil
Title: Attorney-in-Fact
|
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Exhibit 1.1
UNDERWRITING AGREEMENT
between
SEMPER PARATUS ACQUISITION CORPORATION
and
CANTOR FITZGERALD & CO.
Dated: [*], 2021
SEMPER PARATUS ACQUISITION CORPORATION
UNDERWRITING AGREEMENT
New York, New York
[*], 2021
Cantor Fitzgerald & Co.
499 Park Avenue
New York, New York 10022
As Representative of the Several Underwriters
named on Schedule A hereto
Ladies and Gentlemen:
The undersigned, Semper Paratus Acquisition Corporation, a Cayman Islands
exempted company (the “Company”), hereby confirms its agreement with Cantor Fitzgerald & Co. (“Cantor
Fitzgerald” or the “Representative”) and with the other underwriters named on Schedule A hereto
(if any), for which the Representative is acting as representative (the Representative and such other underwriters being collectively
referred to herein as the “Underwriters” or, each underwriter individually, an “Underwriter,” provided
that if only Cantor Fitzgerald is listed on such Schedule A, any references to Underwriters shall refer exclusively to Cantor
Fitzgerald)) as follows:
1. Purchase and Sale of Securities.
1.1 Firm Securities.
1.1.1 Purchase of Firm Units. On the basis of the representations
and warranties contained herein, but subject to the terms and conditions herein set forth herein, the Company agrees to issue and sell
to the several Underwriters, severally and not jointly, and the Underwriters agree to purchase from the Company, severally and not jointly,
an aggregate of 30,000,000 units (the “Firm Units”) of the Company, as set forth opposite the respective names of the
Underwriters on Schedule A hereto, at a purchase price (net of discounts and commissions and the Deferred Underwriting Commission
described in Section 1.3 below) of $9.40 per Firm Unit. The Firm Units are to be offered initially to the public (the “Offering”)
at the offering price of $10.00 per Firm Unit. Each Firm Unit consists of one Class A ordinary share, $0.0001 par value, of the Company
(the “Ordinary Share”), and one-half of one redeemable warrant (the “Warrants”). The Ordinary Shares
and the Warrants included in the Firm Units will trade separately on the fifty second (52nd) day following the date hereof (or if such
date is not a Business Day (as defined in Section 1.1.2), the following Business Day) unless the Representative determines
to allow earlier separate trading. Notwithstanding the immediately preceding sentence, in no event will the Ordinary Shares and the Warrants
included in the Firm Units trade separately until (i) the Company has filed with the Securities and Exchange Commission (the “Commission”)
a Current Report on Form 8-K that includes an audited balance sheet reflecting the Company’s receipt of the proceeds of the
Offering and the Unit Private Placement (as defined in Section 1.4.2) and updated financial information with respect to any
proceeds the Company receives from the exercise of the Over-allotment Option (defined below) if such option is exercised prior to the
filing of the Form 8-K, and (ii) the Company has filed with the Commission a Current Report on Form 8-K and has issued
a press release announcing when such separate trading will begin. Each whole Warrant entitles its holder to purchase one Ordinary Share
for $11.50 per share, subject to adjustment, commencing on the later of twelve months from the Closing Date (as defined below) or 30 days
after the consummation by the Company of a merger, capital share exchange, asset acquisition, share purchase, reorganization, or similar
business combination with one or more businesses (the “Business Combination”) and expiring on the five year anniversary
of the consummation by the Company of its initial Business Combination, or earlier upon redemption of the Ordinary Shares or liquidation
of the Company.
1.1.2 Payment and Delivery. Delivery and payment for the Firm
Units shall be made at 10:00 a.m., New York City time, on the second (2nd) Business Day (as defined below) following the commencement
of trading of the Units, or at such earlier time as shall be agreed upon by the Representative and the Company, at the offices of Ellenoff
Grossman & Schole LLP, counsel to the Underwriters (“EG&S”), or at such other place as shall be agreed
upon by the Representative and the Company. The hour and date of delivery and payment for the Firm Units is called the “Closing
Date.” Payment for the Firm Units shall be made on the Closing Date by wire transfer in Federal (same day) funds, payable as
follows: $306,000,000 of the proceeds received by the Company for the Firm Units and the sale of Placement Units (as defined in Section 1.4.2)
shall be deposited in the trust account (“Trust Account”) established by the Company for the benefit of the Public
Shareholders (as defined below), as described in the Registration Statement (as defined in Section 2.1.1) pursuant to the
terms of an Investment Management Trust Agreement (the “Trust Agreement”) between the Company and Continental Stock
Transfer & Trust Company (“CST”). The funds deposited in the Trust Account shall include an aggregate of $12,000,000($0.40
per Firm Unit), payable to the Representative as Deferred Underwriting Commission, in accordance with Section 1.3 hereof.
The remaining proceeds received by the Company for the Firm Units (less commissions and actual expense payments or other fees payable
pursuant to this Agreement), if any, shall be paid to the order of the Company upon delivery to the Representative of certificates (in
form and substance satisfactory to the Representative) representing the Firm Units (or through the facilities of the Depository Trust
Company (“DTC”)) for the account of the Underwriters. The Firm Units shall be registered in such name or names and
in such authorized denominations as the Representative may request in writing at least two (2) full Business Days prior to the Closing
Date. If delivery is not made through the facilities of DTC, the Company will permit the Representative to examine and package the Firm
Units for delivery, at least one (1) full Business Day prior to the Closing Date. The Company shall not be obligated to sell or deliver
any of the Firm Units except upon tender of payment by the Representative for all the Firm Units. As used herein, the term “Public
Shareholders” means the holders of Ordinary Shares sold as part of the Units in the Offering or acquired in the aftermarket,
including the Sponsor (defined below) and any officer or director of the Company, to the extent, he, she or it acquires such Ordinary
Shares in the aftermarket (and solely with respect to such Ordinary Shares). “Business Day” means any day other than
a Saturday, a Sunday, or other day on which commercial banks in The City of New York are authorized or required by law to remain closed;
provided, however, that for clarification, commercial banks shall not be deemed to be authorized or required by law to remain closed due
to “stay at home”, “shelter-in-place”, “non-essential employee” or any other similar orders or restrictions
or the closure of any physical branch locations at the direction of any governmental authority so long as the electronic funds transfer
systems (including for wire transfers) of commercial banks in The City of New York are generally open for use by customers on such day.
1.2 Over-Allotment Option.
1.2.1 Option Units. The Representative is hereby granted
an option (the “Over-allotment Option”) to purchase up to an additional 4,500,000 units (the “Option
Units”), the gross proceeds of which will be deposited in the Trust Account, solely for the purposes of covering any
over-allotments, if any, in connection with the distribution and sale of the Firm Units. Such Option Units shall be identical in all
respects to the Firm Units. Such Option Units shall, at the Representative’s election, be purchased for each account of the
several Underwriters in the same proportion as the number of Firm Units, set forth opposite such Underwriter’s name on
Schedule A hereto, bears to the total number of Firm Units (subject to adjustment by the Representative to eliminate fractions). The
Firm Units and the Option Units are hereinafter collectively referred to as the “Units,” and the Units, the
Ordinary Shares, the Warrants included in the Units, and the Ordinary Shares issuable upon exercise of the Warrants are hereinafter
referred to collectively as the “Public Securities.” No Option Units shall be sold or delivered unless the Firm
Units previously have been, or simultaneously are, sold and delivered. The right to purchase the Option Units, or any portion
thereof, may be exercised from time to time and to the extent not previously exercised may be surrendered and terminated at any time
upon notice by the Representative to the Company. The purchase price to be paid for each Option Unit will be the same price per Firm
Unit set forth in Section 1.1.1 hereof.
1.2.2 Exercise of Option. The Over-allotment Option granted
pursuant to Section 1.2.1 hereof may be exercised by the Representative as to all (at any time) or any part (from time to
time) of the Option Units within 45 days after the effective date (“Effective Date”) of the Registration Statement
(as defined in Section 2.1.1 hereof). The Underwriters will not be under any obligation to purchase any Option Units prior
to the exercise of the Over-allotment Option. The Over-allotment Option granted hereby may be exercised by the giving of oral notice to
the Company by the Representative, which must be confirmed in accordance with Section 10.1 herein setting forth the number
of Option Units to be purchased and the date and time for delivery of and payment for the Option Units (the “Option Closing Date”),
which will not be later than five (5) full Business Days after the date of the notice or such other time and in such other manner
as shall be agreed upon by the Company and the Representative, at the offices of EG&S or at such other place (including remotely by
facsimile or other electronic transmission) as shall be agreed upon by the Company and the Representative. If such delivery and payment
for the Option Units does not occur on the Closing Date, the Option Closing Date will be as set forth in the notice. Upon exercise of
the Over-allotment Option, the Company will become obligated to convey to the Underwriters, and, subject to the terms and conditions set
forth herein, the Underwriters will become obligated to purchase, the number of Option Units specified in such notice.
1.2.3 Payment and Delivery. Payment for the Option Units shall
be made on the Option Closing Date by wire transfer in Federal (same day) funds, payable as follows: (i) $10.00 per Option Unit shall
be deposited in the Trust Account pursuant to the Trust Agreement upon delivery to the Representative of certificates (in form and substance
satisfactory to the Representative) representing the Option Units (or through the facilities of DTC) for the account of the Representative
and (ii) such amount from the sale of the additional Placement Units so that the amount to be deposited in trust equals $10.20 per
Option Unit sold. The amount of the payments for the Units to be deposited in the Trust Account will include $0.60 per Option Unit (up
to $2,700,000 payable to the Representative, as Deferred Underwriting Commission, in accordance with Section 1.3 hereof. The
certificates representing the Option Units to be delivered will be in such denominations and registered in such names as the Representative
requests in writing not less than two full Business Days prior to the Closing Date or the Option Closing Date, as the case may be, and
will be made available to the Representative for inspection, checking and packaging at the aforesaid office of the Company’s transfer
agent or correspondent not less than one full Business Day prior to such Closing Date. The Company shall not be obligated to sell or deliver
the Option Units except upon tender of payment by the Underwriters for applicable Option Units.
1.3 Deferred Underwriting Commission.
1.3.1 The Underwriters agree that 4.0% of the gross proceeds from
the sale of the Firm Units ($12,000,000) and 6.0% of the gross proceeds from the sale of the
Option Units (up to $2,700,000 ) (collectively, the “Deferred Underwriting Commission”) will be deposited and
held in the Trust Account and payable directly from the Trust Account, without accrued interest, to the Representative for its own
account upon consummation of the Company’s initial Business Combination. The Trust Agreement shall provide that the trustee is
required to obtain a joint written instruction signed by both the Company and the Representative with respect to the transfer of the
funds held in the Trust Account, including the payment of the Deferred Underwriting Commission from the Trust Account, prior to
commencing any liquidation of the assets of the Trust Account in connection with the consummation of any Business Combination, and
such provision of the Trust Agreement shall not be permitted to be amended without the prior written consent of the Representative.
In the event that the Company is unable to consummate a Business Combination and CST, as the trustee of the Trust Account (in this
context, the “Trustee”), commences liquidation of the Trust Account as provided in the Trust Agreement, the
Representative agrees that: (i) the Representative shall forfeit any rights or claims to the Deferred Underwriting Commission,
including any accrued interest thereon; and (ii) the Deferred Underwriting Commission, together with all other amounts on
deposit in the Trust Account, shall be distributed on a pro-rata basis among the Public Shareholders. The Representative shall have
the right to agree to any further modifications to the Deferred Underwriting Commission on behalf of the Underwriters and any
decisions relating to such modifications shall be made exclusively by the Representative on behalf of the Underwriters.
1.4 Private Placements.
1.4.1 Founder Shares. In April 2021, Semper Paratus Sponsor
LLC (the “Sponsor”) paid an aggregate purchase price of $25,000 to subscribe for 8,625,000
of the Company’s Class B ordinary shares, par value $0.0001 per share (the “Founder Shares”), in
a private placement exempt from registration under Section 4(a)(2) of the Securities Act of 1933, as amended (the “Act”).
In May 2021, the Sponsor allocated 25,000 Founder Shares to the Company’s independent director and each of the Company’s
independent director nominees, in exchange for the payment of $84, and (ii) 30,000 Founder Shares to the Chief Financial Officer
in exchange for the payment of $100 (collectively, the “Allocated Founder Shares”). In August 2021, the Company effected
a dividend of approximately 0.3628 shares for each outstanding Founder Share, such that the Sponsor
owned an aggregate of 11,754,150 Founder Shares. In October 2021, the Company effected a dividend of
approximately 0.0195 shares for each outstanding Founder Share, such that the Sponsor owned an aggregate of 11,983,333 Founder
Shares. No underwriting discounts, commissions or placement fees have been or will be payable in connection with the purchase of Founder
Shares. Except as described in the Registration Statement, none of the Founder Shares may be sold, assigned or transferred by the Sponsor
or any member of the Company’s management team until the earliest of (A) one year after the completion of the Business Combination
and (B) subsequent to the Business Combination, (x) if the closing price of the Class A ordinary shares equals or exceeds
$12.00 per share (as adjusted for share subdivisions, share capitalizations, reorganizations, recapitalizations and the like) for any
20 trading days within any 30-trading day period commencing at least 150 days after the Business Combination, or (y) the date on
which the Company completes a liquidation, merger, share exchange or other similar transaction that results in all of our public shareholders
having the right to exchange their ordinary shares for cash, securities or other property. The holders of Founder Shares shall have no
right to any liquidating distributions with respect to any portion of the Founder Shares in the event the Company fails to consummate
a Business Combination. The holders of the Founder Shares shall not have redemption rights with respect to the Founder Shares. In the
event that the Over-allotment Option is not exercised in full, the Sponsor will be required to forfeit such number of Founder Shares (up
to 1,530,000 Founder Shares) such that the Founder Shares then outstanding will comprise 25% of the
issued and outstanding shares of the Company after giving effect to the Offering and exercise, if any, of the Over-allotment Option (including
any Placement Shares (defined below)). None of the Allocated Founder Shares shall be subject to forfeiture in the event the Underwriters’
over-allotment option is not exercised.
1.4.2 Unit Private Placement. Simultaneously with the Closing
Date, the Sponsor and the Representative will purchase from the Company pursuant to Purchase Agreements (as defined in Section 2.21.2
hereof) an aggregate of 1,360,000 units (or up to 1,450,000 units if the Over-allotment Option is exercised in full) (1,210,000 units,
or up to 1,300,000 units if the Over-allotment Option is exercised in full, by the Sponsor and 150,000 units by the Representative), which
units are identical to the Firm Units, subject to certain exceptions (collectively, the “Placement Units”), at a purchase
price of $10.00 per Placement Unit, in a private placement intended to be exempt from registration under the Act pursuant to Section 4(a)(2) of
the Act. The private placement of the Placement Units is referred to herein as the “Unit Private Placement.” None of
the Placement Units nor the underlying Ordinary Shares (“Placement Shares”) and Warrants (“Placement Warrants”)
may be sold, assigned or transferred by the Sponsor, the Representative or their permitted transferees until thirty (30) days after consummation
of a Business Combination. Certain proceeds from the sale of the Placement Units shall be deposited into the Trust Account. The Representative
acknowledges and agrees that the Placement Units to be purchased by the Representative and the underlying component securities will be
deemed compensation by the Financial Industry Regulatory Authority (“FINRA”) and will therefore be subject to lock-up
for a period of 180 days immediately following the commencement of sales of the Offering, subject to certain limited exceptions, pursuant
to FINRA Rule 5110(e)(1). Accordingly, the Placement Units and the underlying component securities may not be sold, transferred,
assigned, pledged or hypothecated nor may they be the subject of any hedging, short sale, derivative, put, or call transaction that would
result in the effective economic disposition of the securities by any person for 180 days immediately following the commencement of sales
of the Offering except to any FINRA member participating in the Offering and the officers or partners, registered persons or affiliates
thereof, if all securities so transferred remain subject to the lock-up restriction for the remainder of the time period.
1.4.3 The Placement Units, Ordinary Shares and Warrants included within
the Placement Units and Ordinary Shares issuable upon exercise of the Warrants included within the Placement Units are hereinafter referred
to collectively as the “Placement Securities”. No underwriting discounts, commissions, or placement fees have been
or will be payable in connection with the Placement Securities. The Placement Units are identical to the Firm Units except that the Placement
Units (i) are subject to certain transfer restrictions, as described in the Prospectus (as defined below), and (ii) the Placement
Units will not be subject to any redemption rights or any rights to distributions from the Trust Account (a) in connection with the
consummation of a Business Combination, (b) if the Company fails to consummate a Business Combination within the time period set
forth in the Charter Documents or (c) upon liquidation prior to, or upon the expiration of, such time period. Other than to a permitted
transferee, none of the Placement Securities may be sold, assigned or transferred by the Sponsor or Cantor Fitzgerald until 30 days after
consummation of a Business Combination. The Public Securities, the Placement Securities, and the Founder Shares are hereinafter referred
to collectively as the “Securities”. Cantor Fitzgerald has agreed that it shall have the right to exercise Placement
Warrants until and shall forfeit to the Company for cancellation any Placement Warrants held by it on the date that is five years after
the Effective Date.
1.5 Working Capital. Upon consummation of the Offering, it is
intended that approximately $1,100,000 of the proceeds from the Offering and Unit Private Placement will be available to the Company and
held outside of the Trust Account to fund the working capital requirements of the Company.
1.6 Interest Income. Prior to the Company’s consummation
of a Business Combination or the Company’s liquidation, interest earned on the Trust Account may be released to the Company from
the Trust Account in accordance with the terms of the Trust Agreement to pay any taxes incurred by the Company and up to $100,000 for
the liquidation expenses, all as more fully described in the Prospectus.
2. Representations and Warranties of the Company. The Company
represents and warrants to the Underwriters as follows:
2.1 Filing of Registration Statement.
2.1.1 Pursuant to the Act. The Company has filed with the Commission
a registration statement and an amendment or amendments thereto, on Form S-1 (File No. 333-260113), including any related preliminary
prospectus (“Preliminary Prospectus”), including any prospectus that is included in the Registration Statement immediately
prior to the effectiveness of the Registration Statement), for the registration of the Units, Ordinary Shares and Warrants under the Act,
which registration statement and amendment or amendments have been prepared by the Company in conformity with the requirements of the
Act, and the rules and regulations (the “Regulations”) of the Commission under the Act. The conditions for use
of Form S-1 to register the Offering under the Act, as set forth in the General Instructions to such Form, have been satisfied. Except
as the context may otherwise require, such registration statement, as amended, on file with the Commission at the time the registration
statement becomes effective (including the prospectus, financial statements, schedules, exhibits and all other documents filed as a part
thereof or incorporated therein and all information deemed to be a part thereof as of such time pursuant to Rule 430A of the Regulations),
is hereinafter called the “Registration Statement,” and the form of the final prospectus dated the Effective Date included
in the Registration Statement (or, if applicable, the form of final prospectus containing information permitted to be omitted at the time
of effectiveness by Rule 430A of the Regulations, filed by the Company with the Commission pursuant to Rule 424 of the Regulations),
is hereinafter called the “Prospectus.” For purposes of this Agreement, “Time of Sale,” as used
in the Act, means 5:00 p.m. New York City time, on the date of this Agreement. Prior to the Time of Sale, the Company prepared a
Preliminary Prospectus, which was included in the Registration Statement filed on [*], 2021, for distribution by the Underwriters (such
Preliminary Prospectus used most recently prior to the Time of Sale, the “Sale Preliminary Prospectus”). If the Company
has filed, or is required pursuant to the terms hereof to file, a Registration Statement pursuant to Rule 462(b) under the Act
registering additional securities of any type or an amendment to a Registration Statement (a “Rule 462(b) Registration
Statement”), then, unless otherwise specified, any reference herein to the term “Registration Statement” shall be
deemed to include such Rule 462(b) Registration Statement. Other than a Rule 462(b) Registration Statement, which,
if filed, becomes effective upon filing, no other document with respect to the Registration Statement has been filed with the Commission.
All of the Public Securities have been registered for public sale under the Act pursuant to the Registration Statement and, if any Rule 462(b) Registration
Statement is filed, will be duly registered for public sale under the Act with the filing of such Rule 462(b) Registration Statement.
The Registration Statement has been declared effective by the Commission on the date hereof. If, subsequent to the date of this Agreement,
the Company or the Representative determines that at the Time of Sale, the Sale Preliminary Prospectus included an untrue statement of
a material fact or omitted a statement of material fact necessary to make the statements therein, in light of the circumstances under
which they were made, not misleading, and the Company and the Representative have agreed to provide an opportunity to purchasers of the
Units to terminate their old purchase contracts and enter into new purchase contracts, then the Sale Preliminary Prospectus will be deemed
to include any additional information available to purchasers at the time of entry into the first such new purchase contract.
2.1.2 Pursuant to the Exchange Act. The Company has filed with
the Commission a Registration Statement on Form 8-A (File Number 001-[*]) providing for the registration under the Securities Exchange
Act of 1934, as amended (the “Exchange Act”), of the Units, the Ordinary Shares and the Warrants. The registration
of the Units, Ordinary Shares and Warrants under the Exchange Act has been declared effective by the Commission on the date hereof and
the Units, the Ordinary Shares and the Warrants have been registered pursuant to Section 12(b) of the Exchange Act.
2.1.3 No Stop Orders, Etc. Neither the Commission nor, to the
Company’s knowledge, assuming reasonable inquiry, any federal, state, or other regulatory authority has issued any order or threatened
to issue any order preventing or suspending the use of the Registration Statement, any Preliminary Prospectus, the Sale Preliminary Prospectus,
or Prospectus or any part thereof, or has instituted or, to the Company’s knowledge, assuming reasonable inquiry, threatened to
institute any proceedings with respect to such an order.
2.2 Disclosures in Registration Statement.
2.2.1 10b-5 Representation. At the time of effectiveness of
the Registration Statement (or at the time of any post-effective amendment to the Registration Statement) and at all times subsequent
thereto up to the Closing Date and the Option Closing Date, if any, the Registration Statement, the Sale Preliminary Prospectus and the
Prospectus do and will contain all material statements that are required to be stated therein in accordance with the Act and the Regulations,
and did or will, in all material respects, conform to the requirements of the Act and the Regulations. The Registration Statement, as
of the Effective Date, did not, and the amendments and supplements thereto, as of their respective dates, will not contain any untrue
statement of a material fact or omit to state any material fact required to be stated therein, or necessary to make the statements therein,
not misleading. The Prospectus, as of its date and the Closing Date or the Option Closing Date, as the case may be, did not, and the amendments
and supplements thereto, as of their respective dates, 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, in the light of the circumstances under which they were made, not misleading.
The Sale Preliminary Prospectus, as of the Time of Sale (or such subsequent Time of Sale pursuant to Section 2.1.1), did not include
any untrue statement of a material fact or 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. When any Preliminary Prospectus or the Sale Preliminary Prospectus was
first filed with the Commission (whether filed as part of the Registration Statement for the registration of the Public Securities or
any amendment thereto or pursuant to Rule 424(a) of the Regulations) and when any amendment thereof or supplement thereto was
first filed with the Commission, such Preliminary Prospectus or the Sale Preliminary Prospectus and any amendments thereof and supplements
thereto complied or will have been corrected in the Sale Preliminary Prospectus and the Prospectus to comply in all material respects
with the applicable provisions of the Act and the Regulations and did not and will not contain an untrue statement of a material fact
or omit to state any material fact required to be stated therein or necessary in order to make the statements therein, in the light of
the circumstances under which they were made, not misleading. The representation and warranty made in this Section 2.2.1 does
not apply to statements made or statements omitted in reliance upon and in conformity with written information furnished to the Company
with respect to the Underwriters by the Underwriters expressly for use in the Registration Statement, the Sale Preliminary Prospectus
or the Prospectus or any amendment thereof or supplement thereto. The parties acknowledge and agree that such information provided by
or on behalf of the Underwriters consists solely of the following: the names of the Underwriters, the information with respect to dealers’
concessions and reallowances contained in the fourth paragraph of the section entitled “Underwriting,” the information with
respect to short positions and stabilizing transactions contained in the twentieth through twenty-fourth paragraphs of the section entitled
“Underwriting” and the identity of counsel to the Underwriters contained in the section entitled “Legal Matters”
(such information, collectively, the “Underwriters’ Information”).
2.2.2 Disclosure of Agreements. The agreements and documents
described in the Registration Statement, the Sale Preliminary Prospectus and the Prospectus conform to the descriptions thereof contained
therein in all material respects and there are no agreements or other documents required to be described in the Registration Statement,
the Sale Preliminary Prospectus or the Prospectus or to be filed with the Commission as exhibits to the Registration Statement, that have
not been so described or filed. Each agreement or other instrument (however characterized or described) to which the Company is a party
or by which its property or business is or may be bound or affected and (i) that is referred to in the Registration Statement, Sale
Preliminary Prospectus or the Prospectus or attached as an exhibit thereto, or (ii) that is material to the Company’s business,
has been duly authorized and validly executed by the Company, is in full force and effect and is enforceable against the Company and,
to the Company’s knowledge, assuming reasonable inquiry, the other parties thereto, in accordance with its terms, except (x) as
such enforceability may be limited by bankruptcy, insolvency, reorganization or similar laws affecting creditors’ rights generally,
(y) as enforceability of any indemnification or contribution provision may be limited under the foreign, federal and state securities
laws, and (z) that the remedy of specific performance and injunctive and other forms of equitable relief may be subject to the equitable
defenses and to the discretion of the court before which any proceeding therefor may be brought, and no such agreement or instrument has
been assigned by the Company, and neither the Company nor, to the Company’s knowledge, assuming reasonable inquiry, any other party
is in breach or default thereunder and, to the Company’s knowledge, assuming reasonable inquiry, no event has occurred that, with
the lapse of time or the giving of notice, or both, would constitute a breach or default thereunder. To the Company’s knowledge,
assuming reasonable inquiry, the performance by the Company of the material provisions of such agreements or instruments will not result
in a violation of any existing applicable law, rule, regulation, judgment, order or decree of any governmental agency or court, domestic
or foreign, having jurisdiction over the Company or any of its assets or businesses, including, without limitation, those relating to
environmental laws and regulations.
2.2.3 Prior Securities Transactions. No securities of the Company
have been sold by the Company or by or on behalf of, or for the benefit of, any person or persons controlling, controlled by, or under
common control with the Company since the date of the Company’s formation, except as disclosed in the Registration Statement.
2.2.4 Regulations. The disclosures in the Registration Statement,
the Sale Preliminary Prospectus, and Prospectus concerning the effects of federal, foreign, state, and local regulation on the Company’s
business as currently contemplated are correct in all material respects and do not omit to state a material fact necessary to make the
statements therein, in the light of the circumstances in which they were made, not misleading.
2.3 Changes After Dates in Registration Statement.
2.3.1 No Material Adverse Change. Since the respective
dates as of which information is given in the Registration Statement, the Sale Preliminary Prospectus and the Prospectus, except as
otherwise specifically stated therein, (i) there has been no material adverse change in the condition, financial or otherwise,
or business prospects of the Company, (ii) there have been no material transactions entered into by the Company, other than as
contemplated pursuant to this Agreement, (iii) no member of the Company’s board of directors (the “Board of
Directors”) or management has resigned from any position with the Company and (iv) no event or occurrence has taken place
which materially impairs, or would likely materially impair, with the passage of time, the ability of the members of the Board of
Directors or management to act in their capacities with the Company as described in the Registration Statement, the Sale Preliminary
Prospectus and the Prospectus.
2.3.2 Recent Securities Transactions. Subsequent to the respective
dates as of which information is given in the Registration Statement, the Sale Preliminary Prospectus and the Prospectus, and except as
may otherwise be indicated or contemplated herein or therein, the Company has not (i) issued any securities or incurred any liability
or obligation, direct or contingent, for borrowed money; or (ii) declared or paid any dividend or made any other distribution on
or in respect to its share capital.
2.4 Independent Accountants. To the Company’s knowledge,
assuming reasonable inquiry, Marcum LLP (“Marcum”), whose report is filed with the Commission as part of, and is included
in, the Registration Statement, the Sale Preliminary Prospectus, and the Prospectus, is an independent registered public accounting firm
as required by the Act, the Regulations and the Public Company Accounting Oversight Board (the “PCAOB”), including
the rules and regulations promulgated by such entity. To the Company’s knowledge, assuming reasonable inquiry, Marcum is currently
registered with the PCAOB. Marcum has not, during the periods covered by the financial statements included in the Registration Statement,
the Sale Preliminary Prospectus and the Prospectus, provided to the Company any non-audit services, as such term is used in Section 10A(g) of
the Exchange Act.
2.5 Financial Statements; Statistical Data.
2.5.1 Financial Statements. The financial statements, including
the notes thereto and supporting schedules (if any) included in the Registration Statement, the Sale Preliminary Prospectus and the Prospectus
fairly present the financial position, the results of operations and the cash flows of the Company at the dates and for the periods to
which they apply; such financial statements have been prepared in conformity with United States generally accepted accounting principles
(“GAAP”), consistently applied throughout the periods involved; and the supporting schedules included in the Registration
Statement, the Sale Preliminary Prospectus and the Prospectus present fairly the information required to be stated therein in conformity
with the Regulations. No other financial statements or supporting schedules are required to be included or incorporated by reference in
the Registration Statement, the Sale Preliminary Prospectus or the Prospectus. The Registration Statement, the Sale Preliminary Prospectus
and the Prospectus disclose all material off-balance sheet transactions, arrangements, obligations (including contingent obligations),
and other relationships of the Company with unconsolidated entities or other persons that may have a material current or future effect
on the Company’s financial condition, changes in financial condition, results of operations, liquidity, capital expenditures, capital
resources, or significant components of revenues or expenses. There are no pro forma or as adjusted financial statements that are required
to be included in the Registration Statement, the Sale Preliminary Prospectus and the Prospectus in accordance with Regulation S-X or
Form S-1 that have not been included as required.
2.5.2 Statistical Data. The statistical, industry-related and
market-related data included in the Registration Statement, the Sale Preliminary Prospectus, and/or the Prospectus are based on or derived
from sources that the Company reasonably and in good faith believes are reliable and accurate, and such data materially agree with the
sources from which they are derived.
2.6 Authorized Capital; Options. The Company had at the date
or dates indicated in each of the Registration Statement, the Sale Preliminary Prospectus, and the Prospectus, as the case may be, duly
authorized, issued and outstanding capitalization as set forth in the Registration Statement, the Sale Preliminary Prospectus, and the
Prospectus. Based on the assumptions stated in the Registration Statement, the Sale Preliminary Prospectus, and the Prospectus, the Company
will have on the Closing Date or on the Option Closing Date, as the case may be, the adjusted share capitalization set forth therein.
Except as set forth in, or contemplated by the Registration Statement, the Sale Preliminary Prospectus and the Prospectus, on the Effective
Date and on the Closing Date or Option Closing Date, as the case may be, there will be no options, warrants, or other rights to purchase
or otherwise acquire any authorized but unissued Ordinary Shares or any security convertible into Ordinary Shares, or any contracts or
commitments to issue or sell Ordinary Shares or any such options, warrants, rights or convertible securities.
2.7 Valid Issuance of Securities.
2.7.1 Outstanding Securities. All issued and outstanding securities
of the Company issued prior to the transactions contemplated by this Agreement have been duly authorized and validly issued and are fully
paid and non-assessable; the holders thereof have no rights of rescission with respect thereto, and are not subject to personal liability
by reason of being such holders; and none of such securities was 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 authorized and outstanding securities of the Company conform
in all material respects to all statements relating thereto contained in the Registration Statement, the Sale Preliminary Prospectus and
the Prospectus. All offers and sales and any transfers of the outstanding securities of the Company were at all relevant times either
registered under the Act and the applicable state securities or Blue Sky laws or, based in part on the representations and warranties
of the purchasers of such securities, exempt from such registration requirements.
2.7.2 Securities Sold. The Securities have been duly
authorized and reserved for issuance and when issued, will be fully paid for in accordance with this Agreement, will be validly
issued, fully paid and non-assessable; the holders thereof are not and will not be subject to personal liability by reason of being
such holders; the Securities are not and will not be subject to the preemptive rights of any holders of any security of the Company
or similar contractual rights granted by the Company; and all corporate action required to be taken for the authorization, issuance
and sale of the Public Securities has been duly and validly taken. The form of certificates for the Securities conform to the
corporate law of the jurisdiction of the Company’s incorporation and applicable securities laws. The Securities conform in all
material respects to the descriptions thereof contained in the Registration Statement, the Sale Preliminary Prospectus and the
Prospectus, as the case may be. When paid for and issued, the Warrants included in the Units will constitute valid and binding
obligations of the Company to issue and deliver the number and type of securities of the Company called for thereby in accordance
with the terms thereof and such Warrants are enforceable against the Company in accordance with their respective terms, except:
(i) as such enforceability may be limited by bankruptcy, insolvency, reorganization or similar laws affecting creditors’
rights generally; (ii) as enforceability of any indemnification or contribution provision may be limited under foreign, federal
and state securities laws; and (iii) that the remedy of specific performance and injunctive and other forms of equitable relief
may be subject to the equitable defenses and to the discretion of the court before which any proceeding therefor may be brought. The
Ordinary Shares issuable upon exercise of the Warrants have been reserved for issuance upon the exercise of the Warrants and upon
payment of the consideration therefor, and when issued and delivered in accordance with the terms thereof and the Warrant Agreement
(as defined in Section 2.23) such Ordinary Shares will be duly and validly authorized, validly issued, fully paid and
non-assessable, and the holders thereof are not and will not be subject to personal liability by reason of being such holders.
2.7.3 Placement Securities.
2.7.3.1 The Placement Units constitute valid and binding obligations
of the Company to issue the number and type of securities of the Company called for thereby in accordance with the terms thereof, and
are, or will be, enforceable against the Company in accordance with their respective terms, except: (i) as such enforceability may
be limited by bankruptcy, insolvency, reorganization or similar laws affecting creditors’ rights generally; (ii) as enforceability
of any indemnification or contribution provision may be limited under federal and state securities laws; and (iii) that the remedy
of specific performance and injunctive and other forms of equitable relief may be subject to the equitable defenses and to the discretion
of the court before which any proceeding therefor may be brought.
2.7.3.2 The Placement Warrants constitute, valid and binding obligations
of the Company to issue the number and type of securities of the Company called for thereby in accordance with the terms thereof, and
are, or will be, enforceable against the Company in accordance with their respective terms, except: (i) as such enforceability may
be limited by bankruptcy, insolvency, reorganization or similar laws affecting creditors’ rights generally; (ii) as enforceability
of any indemnification or contribution provision may be limited under federal and state securities laws; and (iii) that the remedy
of specific performance and injunctive and other forms of equitable relief may be subject to the equitable defenses and to the discretion
of the court before which any proceeding therefor may be brought.
2.7.3.3 The Placement Shares have been reserved for issuance and, when
issued in accordance with the terms of the Placement Units, will be duly and validly authorized, validly issued and upon payment therefor,
fully paid and non-assessable, and the holders thereof are not and will not be subject to personal liability by reason of being such holders.
2.7.3.4 The Ordinary Shares issuable upon exercise of the Placement
Warrants have been reserved for issuance and, when issued and delivered in accordance with the terms of the Placement Warrants and the
Warrant Agreement, such Ordinary Shares, will be duly and validly authorized, validly issued and upon payment therefor, fully paid and
non-assessable, and the holders thereof are not and will not be subject to personal liability by reason of being such holders.
2.7.4 No Integration. Neither the Company nor any of its affiliates
has, prior to the date hereof, made any offer or sale of any securities which are required to be or may be “integrated” pursuant
to the Act or the Regulations with the Offering.
2.8 Registration Rights of Third Parties. Except as set forth
in the Registration Statement, the Sale Preliminary Prospectus and the Prospectus, no holders of any securities of the Company or any
rights exercisable for or convertible or exchangeable into securities of the Company have the right to require the Company to register
any such securities of the Company under the Act or to include any such securities in a registration statement to be filed by the Company.
2.9 Validity and Binding Effect of Agreements. This Agreement,
the Warrant Agreement (as defined in Section 2.23), the Trust Agreement, the Services Agreement (as defined in Section 2.21.3),
the Registration Rights Agreement (as defined in Section 2.21.4), the Insider Letter (as defined in Section 2.21.1)
and the Purchase Agreements (collectively, the “Transaction Documents”) have been duly and validly authorized by the
Company and, when executed and delivered, will constitute the valid and binding agreements of the Company, enforceable against the Company
in accordance with their respective terms, except: (i) as such enforceability may be limited by bankruptcy, insolvency, reorganization
or similar laws affecting creditors’ rights generally, (ii) with respect to this Agreement only, as enforceability of any indemnification
or contribution provision may be limited under the foreign, federal and state securities laws and (iii) that the remedy of specific
performance and injunctive and other forms of equitable relief may be subject to the equitable defenses and to the discretion of the court
before which any proceeding therefor may be brought.
2.10 No Conflicts, Etc. The execution, delivery, and performance
by the Company of the Transaction Documents, the consummation by the Company of the transactions herein and therein contemplated and the
compliance by the Company with the terms hereof and thereof do not and will not, with or without the giving of notice or the lapse of
time or both: (i) result in a breach or violation of, or conflict with any of the terms and provisions of, or constitute a default
under, or result in the creation, modification, termination or imposition of any lien, charge or encumbrance upon any property or assets
of the Company pursuant to the terms of any agreement, obligation, condition, covenant or instrument to which the Company is a party or
bound or to which its property is subject except pursuant to the Trust Agreement; (ii) result in any violation of the provisions
of the Amended and Restated Memorandum and Articles of Association, as amended of the Company, each as may be amended (collectively, the
“Charter Documents”); or (iii) violate any existing applicable statute, law, rule, regulation, judgment, order
or decree of any governmental agency or court, domestic or foreign, having jurisdiction over the Company or any of its properties, assets
or business constituted as of the date hereof.
2.11 No Defaults; Violations. No default or violation exists
in the due performance and observance of any term, covenant or condition of any license, contract, indenture, mortgage, deed of trust,
note, loan or credit agreement, or any other agreement or instrument evidencing an obligation for borrowed money, or any other agreement
or instrument to which the Company is a party or by which the Company may be bound or to which any of the properties or assets of the
Company is subject. The Company is not in violation of any term or provision of its Charter Documents or in violation of any franchise,
license, permit, applicable law, rule, regulation, judgment or decree of any governmental agency or court, domestic or foreign, having
jurisdiction over the Company or any of its properties or businesses.
2.12 Corporate Power; Licenses; Consents.
2.12.1 Conduct of Business. The Company has all requisite corporate
power and authority, and has all necessary authorizations, approvals, orders, licenses, certificates and permits of and from all governmental
regulatory officials and bodies that it needs as of the date hereof to conduct its business for the purposes as described in the Registration
Statement, the Sale Preliminary Prospectus and the Prospectus. The disclosures in the Registration Statement, the Sale Preliminary Prospectus
and the Prospectus concerning the effects of foreign, federal, state and local regulation on the Offering and the Company’s business
purpose as currently contemplated are correct in all material respects and do not omit to state a material fact required to be stated
therein or necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading.
Since its formation, the Company has conducted no business and has incurred no liabilities other than in connection with its formation
and in furtherance of the Offering.
2.12.2 Transactions Contemplated Herein. The Company has all
requisite corporate power and authority to enter into this Agreement and to carry out the provisions and conditions hereof, and all consents,
authorizations, approvals and orders required in connection herewith have been obtained. No consent, authorization, or order of, and no
filing with, any court, government agency or other body, foreign or domestic, is required for the valid issuance, sale, and delivery,
of the Securities and the consummation of the transactions and agreements contemplated by the Transaction Documents and as contemplated
by the Registration Statement, the Sale Preliminary Prospectus and the Prospectus, except with respect to applicable foreign, federal
and state securities laws, the rules of the Nasdaq Global Market (“Nasdaq”), and the rules and regulations
promulgated by FINRA.
2.13 D&O Questionnaires. To the Company’s knowledge,
assuming reasonable inquiry, all information contained in the questionnaires (the “Questionnaires”) completed by each
of the Company’s officers, directors and shareholders (the “Insiders”) and provided to the Representative and
its counsel and the biographies of the Insiders contained in the Registration Statement, Sale Preliminary Prospectus and the Prospectus
(to the extent a biography is contained) is true and correct and the Company has not become aware of any information which would cause
the information disclosed in the Questionnaires completed by each Insider to become inaccurate, incorrect or incomplete.
2.14 Litigation; Governmental Proceedings. There is no action,
suit, proceeding, inquiry, arbitration, investigation, litigation or governmental proceeding pending, or to the Company’s knowledge,
assuming reasonable inquiry, threatened against or involving the Company or, to the Company’s knowledge, assuming reasonable inquiry,
any Insider or any shareholder or member of an Insider that has not been disclosed, that is required to be disclosed, in the Registration
Statement, the Sale Preliminary Prospectus, the Prospectus or the Questionnaires.
2.15 Good Standing. The Company has been duly organized and
is validly existing as a corporation and is in good standing under the laws of its jurisdiction of incorporation. The Company is duly
qualified to do business and is in good standing as a foreign corporation in each jurisdiction in which its ownership or lease of property
or the conduct of business requires such qualification, except where the failure to qualify would not have a material adverse effect on
the condition (financial or otherwise), earnings, assets, prospects, business, operations or properties of the Company, whether or not
arising from transactions in the ordinary course of business (a “Material Adverse Effect”).
2.16 No Contemplation of a Business Combination. As of the date
of this Agreement, the Company has not identified any specific Business Combination target (each a “Target Business”)
and it has not, nor has anyone on its behalf, initiated any substantive discussions, directly or indirectly, with any Business Combination
target.
2.17 Transactions Requiring Disclosure to FINRA.
2.17.1 Finder’s Fees. There are no claims, payments, arrangements,
agreements or understandings relating to the payment of a finder’s, consulting or origination fee by the Company or any Insider
with respect to the sale of the Securities hereunder or any other arrangements, agreements or understandings of the Company or to the
Company’s knowledge, assuming reasonable inquiry, any Insider that may affect the Underwriters’ compensation, as determined
by FINRA.
2.17.2.Payments Within 180 Days. The Company has not made any
direct or indirect payments (in cash, securities or otherwise) to: (i) 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; or (ii) any “participating member,” as defined in FINRA Rule 5110(j)(15) (a “Participating
Member”), within the 180-day period prior to the initial filing of the Registration Statement, other than the prior payments
to the Representative in connection with the Offering. The Company has not issued any warrants or other securities, or granted any options,
directly or indirectly, to anyone who is a Participating Member within the 180-day period prior to the initial filing date of the Registration
Statement. 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 has any relationship or affiliation or association with any Participating Member. Except with respect
to the Representative in connection with the Offering, the Company has not entered into any agreement or arrangement (including, without
limitation, any consulting agreement or any other type of agreement) during the 180-day period prior to the initial filing date of the
Registration Statement with the Commission, which arrangement or agreement provides for the receipt of any ”underwriting compensation,”
as defined in FINRA Rule 5110, by any Participating Member.
2.17.3. FINRA Affiliation. No officer or director or any direct
or indirect beneficial owner (including the Insiders) of any class of the Company’s unregistered securities (whether debt or equity,
registered or unregistered, regardless of the time acquired or the source from which derived) has any direct or indirect affiliation or
association with any Participating Member (as determined in accordance with the rules and regulations of FINRA). The Company will
advise the Representative and EG&S if it learns that any officer or director or any direct or indirect beneficial owner (including
the Insiders) is or becomes an affiliate or associated person of a Participating Member.
2.17.4. Share Ownership. No officer or director or any direct
or indirect beneficial owner (including the Insiders) of any class of the Company’s unregistered securities is an owner of shares
or other securities of any Participating Member (other than securities purchased on the open market).
2.17.5. Loans. No officer or director or any direct or indirect
beneficial owner (including the Insiders) of any class of the Company’s unregistered securities has made a subordinated loan to
any Participating Member.
2.17.6. Proceeds of the Offering. No proceeds from the sale
of the Public Securities (excluding underwriting compensation) or the Placement Units will be paid to any Participating Member, or any
persons associated or affiliated with a Participating Member, except as specifically authorized herein.
2.17.7. Conflicts of Interest. To the Company’s knowledge,
assuming reasonable inquiry, no Participating Member has a conflict of interest with the Company. For this purpose, a “conflict
of interest” exists when a Participating Member and/or its associated persons, parent or affiliates in the aggregate beneficially
own 10% or more of the Company’s outstanding subordinated debt or common equity, or 10% or more of the Company’s preferred
equity.
2.18 Taxes.
2.18.1 There are no transfer taxes or other similar fees or charges
under U.S. federal law or the laws of any U.S. state or any political subdivision of the United States, or under the laws of any non-U.S.
jurisdictions, required to be paid in connection with the execution and delivery of this Agreement or the issuance or sale by the Company
of the Public Securities.
2.18.2 The Company has filed all U.S. federal, state and local, and
non-U.S., tax returns required to be filed with taxing authorities prior to the date hereof in a timely manner or has duly obtained extensions
of time for the filing thereof. The Company has paid all taxes shown as due on such returns that were filed and has paid all taxes imposed
on it and any other assessment, fine or penalty levied against it, to the extent that any of the foregoing is due and payable. The Company
has made appropriate provisions in the applicable financial statements referred to in Section 2.5.1 above in respect of all
federal, state, local and foreign income and franchise taxes for all current or prior periods as to which the tax liability of the Company
has not been finally determined.
2.19 Foreign Corrupt Practices Act; Anti-Money Laundering; Patriot
Act.
2.19.1 Foreign Corrupt Practices Act. Neither the Company nor
to the Company’s knowledge, assuming reasonable inquiry, any of the Insiders or any other person acting on behalf of the Company
has, directly or indirectly, given or agreed to give any money, gift or similar benefit (other than legal price concessions to customers
in the ordinary course of business) to any customer, supplier, employee or agent of a customer or supplier, or official or employee of
any governmental agency or instrumentality of any government (domestic or foreign) or any political party or candidate for office (domestic
or foreign) or other person who was, is, or may be in a position to help or hinder the business of the Company (or assist it in connection
with any actual or proposed transaction) that (i) might subject the Company to any damage or penalty in any civil, criminal or governmental
litigation or proceeding, (ii) if not given in the past, might have had a Material Adverse Effect, or (iii) if not continued
in the future, might adversely affect the assets, business or operations of the Company. The Company has taken reasonable steps to ensure
that its accounting controls and procedures are sufficient to cause the Company to comply in all material respects with the Foreign Corrupt
Practices Act of 1977, as amended.
2.19.2 Currency and Foreign Transactions Reporting Act. The
operations of the Company are and have been conducted at all times in compliance with (i) the requirements of the U.S. Treasury Department
Office of Foreign Asset Control and (ii) applicable financial recordkeeping and reporting requirements of the Currency and Foreign
Transaction Reporting Act of 1970, as amended, including the Money Laundering Control Act of 1986, as amended, the rules and regulations
thereunder and any related or similar money laundering statutes, rules, regulations or guidelines, issued, administered or enforced by
any Federal governmental agency (collectively, the “Money Laundering Laws”) and no action, suit or proceeding by or
before any court or governmental agency, authority or body or any arbitrator involving the Company with respect to the Money Laundering
Laws is pending or, to the Company’s knowledge, assuming reasonable inquiry, threatened.
2.19.3 Patriot Act. Neither the Company nor to the Company’s
knowledge, assuming reasonable inquiry, any Insider has violated the Bank Secrecy Act of 1970, as amended, or Uniting and Strengthening
of America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism (USA PATRIOT ACT) Act of 2001, and/or the rules and
regulations promulgated under any such law, or any successor law.
2.20 Officers’ Certificate. Any certificate signed by
any duly authorized officer of the Company in connection with the Offering and delivered to the Representative or to EG&S shall be
deemed a representation and warranty by the Company to the Underwriters as to the matters covered thereby.
2.21 Agreements With Insiders.
2.21.1 Insider Letter. The Company has caused to be duly executed
a legally binding and enforceable agreement (except (i) as such enforceability may be limited by bankruptcy, insolvency, reorganization
or similar laws affecting creditors’ rights generally, (ii) as enforceability of any indemnification, contribution or non-compete
provision may be limited under foreign, federal and state securities laws, and (iii) that the remedy of specific performance and
injunctive and other forms of equitable relief may be subject to the equitable defenses and to the discretion of the court before which
any proceeding therefor may be brought), a form of which is annexed as an exhibit to the Registration Statement (the “Insider
Letter”), pursuant to which each of the Insiders of the Company agree to certain matters. The Insider Letter shall not be amended,
modified or otherwise changed without the prior written consent of the Representative.
2.21.2 Purchase Agreements. Each of the Sponsor and the Representative
have executed and delivered a Private Placement Units Purchase Agreement, the form of which is annexed as an exhibit to the Registration
Statement (the “Purchase Agreements”), pursuant to which the Sponsor and Representative will, among other things, on
the Closing Date, consummate the purchase of and deliver the purchase price for the Placement Units. Pursuant to the Purchase Agreements,
(i) the Sponsor and Representative have waived any and all rights and claims they may have to any proceeds, and any interest thereon,
held in the Trust Account in respect of the Placement Units, (ii) certain of the proceeds from the sale of the Placement Units to
the Sponsor will be deposited by the Company on or prior to the Effective Date in the Trust Account, in accordance with the terms of the
Trust Agreement and (iii) certain of the proceeds from the sale of the Placement Units to Cantor Fitzgerald will be deposited on
or prior to the Closing Date in the Trust Account in accordance with the terms of the Trust Agreement, in each case as provided for in
the respective Purchase Agreement.
2.21.3 Administrative Services. The Company and the Sponsor
have entered into an agreement (“Services Agreement”) substantially in the form annexed as an exhibit to the Registration
Statement pursuant to which the Sponsor will make available to the Company general and administrative services including office space
and administrative and support services for the Company’s use for $10,000 per month payable until the earlier of the consummation
by the Company of a Business Combination or the liquidation of the Trust Account, on the terms and subject to the conditions set forth
in the Services Agreement.
2.21.4 Registration Rights Agreement. The Company, the Sponsor,
and the Representative have entered into a Registration and Shareholder Rights Agreement (“Registration Rights Agreement”)
substantially in the form annexed as an exhibit to the Registration Statement, whereby such parties will be entitled to certain registration
rights with respect to the securities they hold or may hold, as set forth in such Registration Rights Agreement and described more fully
in the Registration Statement, the Sale Preliminary Prospectus and the Prospectus.
2.21.5 Loans. The Sponsor has agreed to make loans to the Company
in the aggregate amount of up to $300,000 (the “Insider Loans”) pursuant to a promissory note substantially in the
form annexed as an exhibit to the Registration Statement. The Insider Loans do not bear any interest and are repayable by the Company
on the earlier of December 31, 2021 or the consummation of the Offering.
2.22 Investment Management Trust Agreement. The Company has
entered into the Trust Agreement with respect to certain proceeds of the Offering and the Unit Private Placement substantially in the
form annexed as an exhibit to the Registration Statement.
2.23 Warrant Agreement. The Company has entered into a warrant
agreement with respect to the Warrants underlying the Units and the Placement Warrants and certain other warrants that may be issued by
the Company with CST substantially in the form filed as an exhibit to the Registration Statement (“Warrant Agreement”).
2.24 No Existing Non-Competition Agreements. No Insider is subject
to any non-competition agreement or non-solicitation agreement with any employer or prior employer which could materially affect his ability
to be an employee, officer and/or director of the Company, except as disclosed in the Registration Statement.
2.25 Investments. No more than 45% of the “value”
(as defined in Section 2(a)(41) of the Investment Company Act of 1940, as amended (the “Investment Company Act”))
of the Company’s total assets consist of, and no more than 45% of the Company’s net income after taxes is derived from, securities
other than “Government Securities” (as defined in Section 2(a)(16) of the Investment Company Act) or money market funds
meeting the conditions of Rule 2a-7 of the Investment Company Act.
2.26 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 Sale Preliminary Prospectus and Prospectus will not be required, to register as an “investment company”
under the Investment Company Act.
2.27 Subsidiaries. The Company does not own an interest in any
corporation, partnership, limited liability company, joint venture, trust or other business entity.
2.28 Related Party Transactions. No relationship, direct or
indirect, exists between or among the Company, on the one hand, and any Insider, on the other hand, which is required by the Act, the
Exchange Act or the Regulations to be described in the Registration Statement, the Sale Preliminary Prospectus and the Prospectus which
is not so described as required. There are no outstanding loans, advances (except normal advances for business expenses in the ordinary
course of business), or guarantees of indebtedness by the Company to or for the benefit of any of the officers or directors of the Company
or any of their respective family members, except as disclosed in the Registration Statement, the Sale Preliminary Prospectus and Prospectus.
The Company has not extended or maintained credit, arranged for the extension of credit, or renewed an extension of credit, in the form
of a personal loan to or for any director or officer of the Company.
2.29 No Influence. The Company has not offered, or caused the
Underwriters to offer, the Firm Units 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.
2.30 Sarbanes-Oxley. The Company is, and on the Closing Date
will be, in material compliance with the provisions of the Sarbanes-Oxley Act of 2002, as amended, and the rules and regulations
promulgated thereunder and related or similar rules or regulations promulgated by any governmental or self-regulatory entity or agency,
that are applicable to it as of the date hereof.
2.31 Distribution of Offering Material by the Company. The
Company has not distributed and will not distribute, prior to the later of the Closing Date and the completion of the distribution of
the Units, any offering material in connection with the offering and sale of the Units other than the Sale Preliminary Prospectus and
the Prospectus, in each case as supplemented and amended.
2.32 Nasdaq Global Market. The Public Securities have been authorized
for listing, subject to official notice of issuance and evidence of satisfactory distribution, on Nasdaq, and the Company knows of no
reason or set of facts that is likely to adversely affect such authorization.
2.33 Board of Directors. As of the Effective Date, the Board
of Directors of the Company will be comprised of the persons set forth as “Directors” or “Director nominees” under
the heading of the Sale Preliminary Prospectus and the Prospectus captioned “Management.” As of the Effective Date, the qualifications
of the persons serving as board members and the overall composition of the board will comply with the Sarbanes-Oxley Act of 2002 and the
rules promulgated thereunder and the rules of Nasdaq that are, in each case, applicable to the Company. As of the Effective
Date, the Company will have an Audit Committee that satisfies the applicable requirements under the Sarbanes-Oxley Act of 2002 and the
rules promulgated thereunder and the rules of Nasdaq.
2.34 Emerging Growth Company. From its formation through the
date hereof, the Company has been and is an “emerging growth company,” as defined in Section 2(a) of the Act (an
“Emerging Growth Company”).
2.35 No Disqualification Events. Neither the Company, nor any
of its predecessors or any affiliated issuer, nor any director, executive officer, or other officer of the Company participating in the
Offering, nor any beneficial owner of 20% or more of the Company’s outstanding voting equity securities, calculated on the basis
of voting power, nor any promoter (as that term is defined in Rule 405 under the Act) connected with the Company in any capacity
at the time of sale (each, a “Company Covered Person” and, together, “Company Covered Persons”)
is subject to any of the “Bad Actor” disqualifications described in Rule 506(d)(1)(i) to (viii) under the
Act (a “Disqualification Event”), except for a Disqualification Event covered by Rule 506(d)(2) or (d)(3).
The Company has exercised reasonable care to determine whether any Company Covered Person is subject to a Disqualification Event. The
Company has complied, to the extent applicable, with its disclosure obligations under Rule 506(e), and has furnished to the Underwriters
a copy of any disclosures provided thereunder.
2.36 Free-Writing Prospectus and Testing-the-Waters. The Company
has not made any offer relating to the Public Securities that would constitute an issuer free writing prospectus, as defined in Rule 433
under the Act, or that would otherwise constitute a “free writing prospectus” as defined in Rule 405. The Company: (a) has
not engaged in any Testing-the-Waters Communication other than Testing-the-Waters Communications with the consent of the Representative
with entities that are qualified institutional buyers within the meaning of Rule 144A under the Act or institutions that are accredited
investors within the meaning of Rule 501 under the Act and (b) has not authorized anyone to engage in Testing-the-Waters Communications
other than its officers and the Representative and individuals engaged by the Representative. The Company has not distributed any written
Testing-the-Waters Communications other than those listed on Schedule B hereto. “Testing-the-Waters Communication”
means any oral or written communication with potential investors undertaken in reliance on Section 5(d) of the Act.
2.37 Other Covered Persons. The Company is not aware of any
person (other than any Company Covered Person or Underwriter) that has been or will be paid (directly or indirectly) remuneration for
solicitation of purchasers in connection with the sale of any Securities.
3. Covenants of the Company. The Company covenants and agrees
as follows:
3.1 Amendments to Registration Statement. The Company will deliver
to the Representative, prior to filing, any amendment or supplement to the Registration Statement, any Preliminary Prospectus or the Prospectus
proposed to be filed after the Effective Date and the Company shall not file any such amendment or supplement to which the Representative
reasonably objects in writing.
3.2 Federal Securities Laws.
3.2.1 Compliance. During the time when a Prospectus is required
to be delivered under the Act, the Company will use its best efforts to comply with all requirements imposed upon it by the Act, the Regulations,
and the Exchange Act, and by the regulations under the Exchange Act, as from time to time in force, so far as necessary to permit the
continuance of sales of or dealings in the Securities in accordance with the provisions hereof and the Sale Preliminary Prospectus and
the Prospectus. If at any time when a Prospectus relating to the Securities is required to be delivered under the Act, any event shall
have occurred as a result of which, in the opinion of counsel for the Company or counsel for the Underwriters, the Prospectus, as then
amended or supplemented, includes an untrue statement of a material fact or omits to state any material fact required to be stated therein
or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading, or if it is
necessary at any time to amend or supplement the Prospectus to comply with the Act, the Company will notify the Representative promptly
and prepare and file with the Commission, subject to Section 3.1 hereof, an appropriate amendment or supplement in accordance
with Section 10 of the Act.
3.2.2 Filing of Final Prospectus. The Company will file the
Prospectus (in form and substance satisfactory to the Underwriters) with the Commission pursuant to the requirements of Rule 424
of the Regulations.
3.2.3 Exchange Act Registration. The Company will use its best
efforts to maintain the registration of the Public Securities under the provisions of the Exchange Act (except in connection with a going-private
transaction) for a period of five years from the Effective Date, or until the Company is required to be liquidated or is acquired, if
earlier, or, in the case of the Warrants, until the Warrants expire and are no longer exercisable or have been exercised or redeemed in
full. The Company will not deregister the Public Securities under the Exchange Act (except in connection with a going private transaction
after the completion of a Business Combination) without the prior written consent of the Representative.
3.2.4 Exchange Act Filings. From the Effective Date until the
earlier of the Company’s initial Business Combination, or its liquidation and dissolution, the Company shall timely file with the
Commission via the Electronic Data Gathering, Analysis and Retrieval System (“EDGAR”) such statements and reports as
are required to be filed by a company registered under Section 12(b) of the Exchange Act.
3.2.5 Sarbanes-Oxley Compliance. As soon as it is legally required
to do so, the Company shall take all actions necessary to obtain and thereafter maintain material compliance with each applicable provision
of the Sarbanes-Oxley Act of 2002 and the rules and regulations promulgated thereunder and related or similar rules and regulations
promulgated by any other governmental or self-regulatory entity or agency with jurisdiction over the Company.
3.3 Free-Writing Prospectus; Emerging Growth Company
Status. The Company agrees that it will not make any offer relating to the Public Securities that would constitute an issuer
free writing prospectus, as defined in Rule 433 under the Act, or that would otherwise constitute a “free writing
prospectus” as defined in Rule 405, without the prior consent of the Underwriters. The Company will promptly notify the
Representative if the Company ceases to be an Emerging Growth Company at any time prior to the earlier of the time period set forth
in the Charter Documents (the “Termination Date” or, if the Company extends the period during which it may enter
into a Business Combination, the “Extended Termination Date”) or the liquidation of the Trust Account if a
Business Combination is not consummated by the Termination Date or Extended Termination Date, as applicable.
3.4 Delivery to Underwriters of Prospectuses. The Company will
deliver to the Underwriters, without charge and from time to time during the period when the Prospectus is required to be delivered under
the Act or the Exchange Act, such number of copies of each Preliminary Prospectus and the Prospectus as the Underwriters may reasonably
request and, as soon as the Registration Statement or any amendment or supplement thereto becomes effective, deliver to the Underwriters,
upon their request, two manually executed Registration Statements, including exhibits, and all post-effective amendments thereto and copies
of all exhibits filed therewith or incorporated therein by reference and all manually executed consents of certified experts.
3.5 Effectiveness and Events Requiring Notice to the Representative.
The Company will use its best efforts to cause the Registration Statement to remain effective and will notify the Representative immediately
and confirm the notice in writing: (i) of the effectiveness of the Registration Statement and any amendment thereto; (ii) of
the issuance by the Commission of any stop order suspending the effectiveness of the Registration Statement or any post-effective amendment
thereto or preventing or suspending the use of any Preliminary Prospectus or the Prospectus or of the initiation, or the threatening,
of any proceeding for that purpose; (iii) of the issuance by any foreign or state securities commission of any proceedings for the
suspension of the qualification of the Public Securities for offering or sale in any jurisdiction or of the initiation, or the threatening,
of any proceeding for that purpose; (iv) of the mailing and delivery to the Commission for filing of any amendment or supplement
to the Registration Statement or Prospectus; (v) of the receipt of any comments or request for any additional information from the
Commission; and (vi) of the happening of any event that, in the reasonable judgment of the Company, makes any statement of a material
fact made in the Registration Statement or the Prospectus untrue or that requires the making of any changes in the Registration Statement
or the Prospectus in order to make the statements therein, and in light of the circumstances under which they were made, not misleading.
If the Commission or any foreign or state securities commission shall enter a stop order or suspend such qualification at any time, the
Company will use commercially reasonable efforts to obtain promptly the lifting of such order.
3.6 Affiliated Transactions.
3.6.1 Business Combinations. The Company will not consummate
a Business Combination with any entity that is affiliated with any Insider unless (i) the Company obtains an opinion from an independent
investment banking firm which is a member of FINRA or a valuation or appraisal firm, that such initial Business Combination is fair to
the Company from a financial point of view, and (ii) such transaction is approved by a majority of the Company’s disinterested
and independent directors. No Insider, the Sponsor, any affiliate of the Company’s sponsor or officers shall receive any finder’s
fee, consulting fee, monies in respect of any payment of a loan or other compensation prior to, or for any services it renders in order
to effectuate, the completion of the Company’s initial 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 activities on the Company’s
behalf related to identifying, investigating and completing an initial Business Combination; (ii) may be repaid loans as described
in the Registration Statement, the Preliminary Sale Prospectus and the Prospectus; and (iii) may be paid $10,000 per month for office
space and administrative and support services pursuant to the Services Agreement, none of which will be made from the proceeds held in
the Trust Account prior to completion of the initial Business Combination.
3.6.2 Compensation to Insiders. Except as disclosed in the Prospectus,
the Company shall not pay any of the Insiders or any of their affiliates any fees or compensation from the Company, for services rendered
to the Company prior to, or in connection with, the consummation of a Business Combination.
3.7 [Reserved]
3.8 Reports to the Representative. For a period of five years
from the Effective Date or until such earlier time upon which the Company is required to be liquidated or is no longer required to file
reports under the Exchange Act, the Company will furnish to the Representative and its counsel copies of such financial statements and
other periodic and special reports as the Company from time to time furnishes generally to holders of any class of its securities, and
promptly furnish to the Underwriters: (i) a copy of each periodic report the Company shall be required to file with the Commission,
(ii) a copy of every press release and every news item and article with respect to the Company or its affairs that was released by
the Company, (iii) a copy of each current Report on Form 8-K or Schedules 13D, 13G, 14D-1 or 13E-4 received or prepared by the
Company, (iv) two (2) copies of each registration statement filed by the Company with the Commission under the Act, and (v) such
additional documents and information with respect to the Company and the affairs of any future subsidiaries of the Company as the Representative
may from time to time reasonably request; provided that the Representative shall sign, if requested by the Company, a Regulation FD compliant
confidentiality agreement which is reasonably acceptable to the Representative and its counsel in connection with the Representative’s
receipt of such information. Documents filed with the Commission pursuant to its EDGAR system shall be deemed to have been delivered to
the Representative pursuant to this Section.
3.9 Transfer Agent. For a period of five years following the
Effective Date or until such earlier time upon which the Company is required to be liquidated, the Company shall retain a transfer agent
and warrant agent acceptable to the Representative. CST is acceptable to the Underwriters.
3.10 Payment of Expenses. The Company hereby agrees to pay
on each of the Closing Date and the Option Closing Date, if any, to the extent not paid at the Closing Date, all Company expenses incident
to the performance of the obligations of the Company under this Agreement, including but not limited to (i) the Company’s
legal and accounting fees and disbursements, (ii) the preparation, printing, filing, mailing and delivery (including the payment
of postage with respect to such mailing) of the Registration Statement, the Preliminary Sale Prospectus and the Prospectus, including
any pre or post effective amendments or supplements thereto, and the printing and mailing of this Agreement and related documents, including
the cost of all copies thereof and any amendments thereof or supplements thereto supplied to the Underwriters in quantities as may be
required by the Underwriters, (iii) fees incurred in connection with conducting background checks of the Company’s management
team, up to a maximum of $5,500 per person, (iv) the preparation, printing, engraving, issuance and delivery of the Units, the Ordinary
Shares and the Warrants included in the Units, including any transfer or other taxes payable thereon, (v) filing fees incurred in
registering the Offering with FINRA and the reasonable fees of counsel of the Underwriters (not to exceed $25,000) in connection therewith
(including the costs incurred in connection with (iii) above), (vi) fees, costs and expenses incurred in listing the Securities
on Nasdaq or such other stock exchanges as the Company and the Underwriters together determine, (vii) all fees and disbursements
of the transfer and warrant agent, (viii) all of the Company’s expenses associated with “due diligence” and “road
show” meetings arranged by the Representative and any presentations made available by way of a netroadshow, including without limitation
trips for the Company’s management to meet with prospective investors, all travel, food and lodging expenses associated with such
trips incurred by the Company or such management; (ix) the preparation, binding and delivery of bound transaction “bibles,”
in quantities and form and style reasonably satisfactory to the Representative and Lucite cube mementos in such quantities as the Representative
and the Company may mutually agree; (x) all of the expenses associated with any Business Combination marketing activities or capital
markets advisory activities undertaken by any Underwriter at the request of the Company; and (x) all other costs and expenses customarily
borne by an issuer incident to the performance of its obligations hereunder which are not otherwise specifically provided for in this
Section 3.10. If the Offering is consummated, the Representative may deduct from the net proceeds of the Offering payable to the
Company on the Closing Date the expenses set forth above (which shall be mutually agreed upon between the Company and the Representative
prior to Closing) to be paid by the Company to the Representative and others. If the Offering is not consummated for any reason (other
than a breach by the Representative of any of its obligations hereunder), then the Company shall reimburse the Representative in full
for its reasonable and documented out-of-pocket accountable expenses actually incurred through such date, including, without limitation,
reasonable fees and disbursements of counsel to the Representative.
3.11 Application of Net Proceeds. The Company will apply the
net proceeds from the Offering and Unit Private Placement received by it in a manner consistent with the application described under the
caption “Use of Proceeds” in the Prospectus.
3.12 Delivery of Earnings Statements to Security Holders. The
Company will make generally available to its security holders as soon as practicable, but not later than the first day of the fifteenth
full calendar month following the Effective Date, an earnings statement (which need not be certified by independent public or independent
certified public accountants unless required by the Act or the Regulations, but which shall satisfy the provisions of Rule 158(a) under
Section 11(a) of the Act) covering a period of at least twelve consecutive months beginning after the Effective Date.
3.13 Notice to the Representative or FINRA.
3.13.1. Notice to the Representative. For a period of sixty
(60) days after the date of the Prospectus, in the event any person or entity (regardless of any FINRA affiliation or association) is
engaged, in writing, to assist the Company in its search for a Target Business or to provide any other services in connection therewith,
the Company will provide the following to the Representative prior to the consummation of the Business Combination: (i) complete
details of all services and copies of agreements governing such services; and (ii) justification as to why the person or entity providing
the merger and acquisition services should not be considered Participating Member with respect to the Offering. The Company also agrees
that, if required by law, proper disclosure of such arrangement or potential arrangement will be made in the tender offer documents or
proxy statement which the Company will file with the Commission in connection with the Business Combination.
3.13.2. FINRA. The Company shall advise the Representative (who
shall make an appropriate filing with FINRA) if it is aware that any 10% or greater shareholder of the Company becomes an affiliate or
associated person of a Participating Member.
3.13.3 Broker/Dealer. In the event the Company intends to register
as a broker/dealer, merge with or acquire a registered broker/dealer, or otherwise become a member of FINRA, it shall promptly notify
FINRA.
3.14 Stabilization. Neither the Company, nor to its knowledge,
assuming reasonable inquiry, any of its employees, directors or shareholders (without the consent of the Representative) has taken and
the Company will not take, and has directed its employees, directors or shareholders not to take, directly or indirectly, any action designed
to or that has constituted or that might reasonably be expected to cause or result in, under the Exchange Act, or otherwise, stabilization
or manipulation of the price of any security of the Company to facilitate the sale or resale of the Units.
3.15 Existing Lock-Up Agreement. The Company will enforce all
existing agreements between the Company and any of its security holders that prohibit the sale, transfer, assignment, pledge or hypothecation
of any of the Securities in connection with the Offering. In addition, the Company will direct the Company’s transfer agent to place
stop transfer restrictions upon any such Securities of the Company that are bound by such existing “lock-up” agreements for
the duration of the periods contemplated in such agreements.
3.16 Payment of Deferred Underwriting Commission on Business Combination.
Upon the consummation of the Business Combination, the Company agrees that it will cause the Trustee to pay the Deferred Underwriting
Commission directly from the Trust Account to the Representative, in accordance with Section 1.3.
3.17 Internal Controls. The Company will maintain a system of
internal accounting controls sufficient to provide reasonable assurances that: (i) transactions are executed in accordance with management’s
general or specific authorization, (ii) transactions are recorded as necessary in order to permit preparation of financial statements
in accordance with GAAP and to maintain accountability for assets, (iii) access to assets is permitted only in accordance with management’s
general or specific authorization, and (iv) the recorded accountability for assets is compared with existing assets at reasonable
intervals and appropriate action is taken with respect to any differences.
3.18 Accountants. Until the earlier of five years from the Effective
Date or until such earlier time upon which the Company is required to be liquidated, the Company shall retain Marcum or another independent
registered public accounting firm.
3.19 Form 8-K. The Company has retained its
independent registered public accounting firm to audit the balance sheet of the Company as of the Closing Date (“Audited
Financial Statements”) reflecting the receipt by the Company of the proceeds of the Offering and the Unit Private
Placement. Within four (4) Business Days after the Closing Date, the Company shall file a Current Report on Form 8-K with
the Commission, which Report shall contain the Company’s Audited Financial Statements. Promptly after the Option Closing Date,
if the Over-allotment Option is exercised after the Closing Date, the Company shall file with the Commission a Current Report on
Form 8-K or an amendment to the Form 8-K to provide updated financial information to reflect the exercise of such
option.
3.20 Corporate Proceedings. All corporate proceedings and other
legal matters necessary to carry out the provisions of this Agreement and the transactions contemplated hereby shall have been effected,
except where failure to do so would not individually or in the aggregate, have a Material Adverse Effect.
3.21 Investment Company. The Company shall cause the proceeds
of the Offering to be held in the Trust Account to be invested only as provided for in the Trust Agreement and disclosed in 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 shall be engaged in a business other than that of investing, reinvesting, owning,
holding or trading securities.
3.22 Amendments to Charter Documents. The Company covenants
and agrees that, prior to its initial Business Combination, it will not seek to amend or modify its Charter Documents, except as set forth
therein.
3.23 Press Releases. The Company agrees that it will not issue
press releases or engage in any other publicity, without the Representative’s prior written consent (not to be unreasonably withheld),
for a period of twenty-five (25) days after the Closing Date. Notwithstanding the foregoing, in no event shall the Company be prohibited
from issuing any press releases or engaging in any other publicity required by law, except that including the name of any Underwriter
therein shall require the prior written consent of such Underwriter.
3.24 Insurance. The Company will maintain directors’ and
officers’ insurance (including, without limitation, insurance covering the Company, its directors and officers for liabilities or
losses arising in connection with this Offering, including, without limitation, liabilities or losses arising under the Act, the Exchange
Act, the Regulations and any applicable foreign securities laws).
3.25 Electronic Prospectus. The Company shall cause to be prepared
and delivered to the Underwriters, at the Company’s expense, promptly, but in no event later than two (2) Business Days from
the effective date of this Agreement, an Electronic Prospectus to be used by the Underwriters in connection with the Offering. As used
herein, the term “Electronic Prospectus” means a form of prospectus, and any amendment or supplement thereto, that
meets each of the following conditions: (i) it shall be encoded in an electronic format, satisfactory to the Representative, that
may be transmitted electronically by the Underwriters to offerees and purchasers of the Units for at least the period during which a prospectus
relating to the Units is required to be delivered under the Act; (ii) it shall disclose the same information as the paper prospectus
and prospectus filed pursuant to EDGAR, except to the extent that graphic and image material cannot be disseminated electronically, in
which case such graphic and image material shall be replaced in the electronic prospectus with a fair and accurate narrative description
or tabular representation of such material, as appropriate; and (iii) it shall be in or convertible into a paper format or an electronic
format, satisfactory to the Representative, that will allow recipients thereof to store and have continuously ready access to the prospectus
at any future time, without charge to such recipients (other than any fee charged for subscription to the Internet as a whole and for
on-line time).
3.26 Private Placement Proceeds. On or prior to the Effective
Date, certain of the proceeds from the Sponsor Unit Private Placement shall be deposited into the Trust Account in accordance with the
Purchase Agreements.
3.27 Future Financings. The Company agrees that neither it,
nor any successor or subsidiary of the Company, will consummate any public or private equity or debt financing prior to or in connection
with the consummation of a Business Combination, unless all investors in such financing expressly waive, in writing, any rights in or
claims against the Trust Account.
3.28 Amendments to Agreements. The Company shall not amend,
modify or otherwise change any of the Transaction Documents without the prior written consent of the Representative, which will not be
unreasonably withheld. Furthermore, the Trust Agreement shall provide that the trustee is required to obtain a joint written instruction
signed by both the Company and the Representative with respect to the transfer of the funds held in the Trust Account from the Trust Account,
prior to commencing any liquidation of the assets of the Trust Account in connection with the consummation of any Business Combination,
and such provision of the Trust Agreement shall not be permitted to be amended without the prior written consent of the Representative.
3.29 Nasdaq. Until the consummation of a Business Combination,
the Company will use its best efforts to maintain the listing of the Public Securities on Nasdaq or a national securities exchange acceptable
to the Representative.
3.30 Reservation of Shares. The Company will reserve and keep
available that maximum number of its authorized but unissued securities which are issuable upon exercise of the Warrants and Placement
Warrants outstanding from time to time.
3.31 Notice of Disqualification Events. The Company will notify
the Underwriters in writing, prior to the Closing Date, of (i) any Disqualification Event relating to any Company Covered Person
and (ii) any event that would, with the passage of time, become a Disqualification Event relating to any Company Covered Person.
3.32 Disqualification of S-1. Until the earlier of seven years
from the date hereof or until the Warrants have either expired and are no longer exercisable or have all been exercised, the Company will
not take any action or actions that prevent or disqualify the Company’s use of Form S-1 (or other appropriate form) for the
registration of the Ordinary Shares issuable upon exercise of the Warrants under the Act.
4. Conditions of Underwriters’ Obligations. The obligations
of the Underwriters to purchase and pay for the Units, as provided herein, shall be subject to the continuing accuracy of the representations
and warranties of the Company as of the date hereof and as of each of the Closing Date and the Option Closing Date, if any, to the accuracy
of the statements of officers of the Company made pursuant to the provisions hereof and to the performance, in all material respects,
by the Company of its obligations hereunder and to the following conditions:
4.1 Regulatory Matters.
4.1.1 Effectiveness of Registration Statement. The Registration
Statement shall have become effective not later than 4:00 p.m., New York time, on the date of this Agreement or such later date and time
as shall be consented to in writing by the Representative, and, at each of the Closing Date and the Option Closing Date, no stop order
suspending the effectiveness of the Registration Statement shall have been issued and no proceedings for the purpose shall have been instituted
or shall be pending or contemplated by the Commission and any request on the part of the Commission for additional information shall have
been complied with to the reasonable satisfaction of EG&S.
4.1.2 FINRA Clearance. By the Effective Date, the Underwriters
shall have received a letter of no objections from FINRA as to the terms and arrangement and amount of compensation allowable or payable
to the Underwriters as described in the Registration Statement.
4.1.3 No Commission Stop Order. At the Closing Date and on each
Option Closing Date, the Commission has not issued any order or threatened to issue any order preventing or suspending the use of any
Preliminary Prospectus, the Prospectus or any part thereof, and has not instituted or, to the Company’s knowledge, assuming reasonable
inquiry, threatened to institute any proceedings with respect to such an order. To the Company’s knowledge, (i) no order suspending
the sale of the Units shall have been issued in any jurisdiction on either the Closing Date or the Option Closing Date, and (ii) no
proceeds for the purpose of issuing such a suspension order shall have been instituted or contemplated.
4.1.4 Nasdaq. The Securities shall have been approved for listing
on Nasdaq, subject to official notice of issuance and evidence of satisfactory distribution, satisfactory evidence of which shall have
been provided to the Representative.
4.2 Company Counsel Matters.
4.2.1 Closing Date and Option Closing Date Opinions of
Counsel. On the Closing Date and the Option Closing Date, if any, the Representative shall have received the favorable opinions
and negative assurance statements of Reed Smith LLP and the favorable opinion of Maples and Calder (Cayman) LLP, dated the Closing
Date or the Option Closing Date, as the case may be, addressed to the Representative as representative for the several Underwriters
and in form and substance reasonably satisfactory to the Representative and EG&S. On the Closing Date, the Representative shall
have received the favorable opinion and negative assurance statement of EG&S, dated the Closing Date, addressed to the
Representative as representative for the several Underwriters.
4.2.2 Reliance. In rendering such opinions, such counsel may
rely as to matters of fact, to the extent they deem proper, on certificates or other written statements of officers of the Company and
officers of departments of various jurisdictions having custody of documents respecting the corporate existence or good standing of the
Company, provided that copies of any such statements or certificates shall be delivered to the Representative’s counsel if requested.
The opinions of counsel for the Company shall include a statement to the effect that they may be relied upon by counsel for the Underwriters
in its opinion delivered to the Underwriters.
4.3 Comfort Letter. At the time this Agreement is executed,
and at the Closing Date and Option Closing Date, if any, the Representative shall have received a letter, addressed to the Representative
as representative for the several Underwriters and in form and substance satisfactory in all respects (including the non-material nature
of the changes or decreases, if any, referred to in Section 4.3.3 below) to the Representative and to EG&S from Marcum
dated, respectively, as of the date of this Agreement and as of the Closing Date and Option Closing Date, if any:
4.3.1 Confirming that they are independent accountants with respect
to the Company within the meaning of the Act and the applicable Regulations and that they have not, during the periods covered by the
financial statements included in the Registration Statement, Preliminary Prospectus, Sale Preliminary Prospectus and the Prospectus, provided
to the Company any non-audit services, as such term is used in Section 10A(g) of the Exchange Act;
4.3.2 Stating that in their opinion the financial statements of the
Company included in the Registration Statement, the Sale Preliminary Prospectus and the Prospectus comply as to form in all material respects
with the applicable accounting requirements of the Act and the published Regulations thereunder;
4.3.3 Stating that, on the basis of their review, which included
a reading of the latest available unaudited interim financial statements of the Company (with an indication of the date of the
latest available unaudited interim financial statements), a reading of the latest available minutes of the shareholders and Board of
Directors and the various committees of the Board of Directors, consultations with officers and other employees of the Company
responsible for financial and accounting matters and other specified procedures and inquiries, nothing has come to their attention
that would lead them to believe that (a) the unaudited financial statements of the Company included in the Registration
Statement, the Sale Preliminary Prospectus and the Prospectus do not comply as to form in all material respects with the applicable
accounting requirements of the Act and the Regulations or are not fairly presented in conformity with GAAP applied on a basis
substantially consistent with that of the audited financial statements of the Company included in the Registration Statement, the
Sale Preliminary Prospectus and the Prospectus, or (b) at a date not later than five days prior to the Effective Date, Closing
Date or Option Closing Date, as the case may be, there was any change in the share capital or long-term debt of the Company, or any
decrease in the shareholders’ equity of the Company as compared with amounts shown in the June 30, 2021 balance sheet
included in the Registration Statement, the Sale Preliminary Prospectus and the Prospectus, other than as set forth in or
contemplated by the Registration Statement, the Sale Preliminary Prospectus and the Prospectus or, if there was any decrease,
setting forth the amount of such decrease, and (c) during the period from June 30, 2021 to a specified date not later than
five days prior to the Effective Date, Closing Date or Option Closing Date, as the case may be, there was any decrease in revenues,
net earnings or net earnings per Ordinary Share, in each case as compared with the corresponding period in the preceding year and as
compared with the corresponding period in the preceding quarter, other than as set forth in or contemplated by the Registration
Statement the Sale Preliminary Prospectus and the Prospectus, or, if there was any such decrease, setting forth the amount of such
decrease;
4.3.4 Setting forth, at a date not later than five days prior to the
Effective Date, the amount of liabilities of the Company (including a break-down of commercial papers and notes payable to banks);
4.3.5 Stating that they have compared specific dollar amounts, numbers
of shares, percentages of revenues and earnings, statements and other financial information pertaining to the Company set forth in the
Registration Statement, the Sale Preliminary Prospectus and the Prospectus in each case to the extent that such amounts, numbers, percentages,
statements and information may be derived from the general accounting records, including work sheets, of the Company and excluding any
questions requiring an interpretation by legal counsel, with the results obtained from the application of specified readings, inquiries
and other appropriate procedures (which procedures do not constitute an examination in accordance with generally accepted auditing standards)
set forth in the letter and found them to be in agreement;
4.3.6 Stating that they have not, since the Company’s incorporation,
brought to the attention of the Company’s management any reportable condition related to internal structure, design or operation
as defined in the Statement on Auditing Standards No. 60 “Communication of Internal Control Structure Related Matters Noted
in an Audit,” in the Company’s internal controls; and
4.3.7 Statements as to such other matters incident to the transaction
contemplated hereby as the Representative or EG&S may reasonably request, including: (i) that Marcum is registered with the Public
Company Accounting Oversight Board; (ii) that Marcum has sufficient assets and insurance to pay for any liability incurred by it
relating to providing the letter; and (iii) that Marcum is not insolvent.
4.4 Officers’ Certificates.
4.4.1 Officers’ Certificate. At each of the Closing Date
and the Option Closing Date, if any, the Representative shall have received a certificate of the Company signed by the received a certificate
of the Company signed by the Chairman of the Board or the Chief Executive Officer, the President, the Chief Financial Officer of the Company,
or any similar or equivalent officer of the Company (in their capacities as such), dated the Closing Date or the Option Closing Date,
as the case may be, respectively, to the effect that the Company has performed all covenants and complied with all conditions required
by this Agreement to be performed or complied with by the Company prior to and as of the Closing Date, or the Option Closing Date, as
the case may be, and that the conditions set forth in Section 4 hereof have been satisfied as of such date and that, as of
Closing Date and the Option Closing Date, as the case may be, the representations and warranties of the Company set forth in Section 2
hereof are true and correct. In addition, the Representative will have received such other and further certificates of officers of the
Company (in their capacities as such) as the Representative may reasonably request.
4.4.2 Secretary’s Certificate. At each of the Closing
Date and the Option Closing Date, if any, the Representative shall have received a certificate of the Company signed by the Secretary
or Assistant Secretary of the Company, dated the Closing Date or the Option Date, as the case may be, respectively, certifying (i) that
the Charter Documents are true and complete, have not been modified and are in full force and effect, (ii) that the resolutions of
the Company’s Board of Directors relating to the public offering contemplated by this Agreement are in full force and effect and
have not been modified, (iii) as to the accuracy and completeness of all correspondence between the Company or its counsel and the
Commission, (iv) as to the accuracy and completeness of all correspondence between the Company or its counsel and Nasdaq and (v) as
to the accuracy and completeness, to the Company’s knowledge (assuming reasonable inquiry) of the certificates specified in Section 4.2.1;
(vi) as to the accuracy and completeness of all resolutions of the shareholders of the Company; and (vii) as to the incumbency
of the officers of the Company. The documents referred to in such certificate shall be attached to such certificate.
4.5 No Material Changes. Prior to and on each of the Closing
Date and the Option Closing Date, if any, (i) there shall have been no material adverse change or development involving a prospective
material adverse change in the condition or prospects or the business activities, financial or otherwise, of the Company from the latest
dates as of which such condition is set forth in the Registration Statement and the Prospectus, (ii) no action suit or proceeding,
at law or in equity, shall have been pending or threatened against the Company or any Insider before or by any court or federal, foreign
or state commission, board or other administrative agency wherein an unfavorable decision, ruling or finding may materially adversely
affect the business, operations, or financial condition or income of the Company, except as set forth in the Registration Statement and
the Prospectus, (iii) no stop order shall have been issued under the Act and no proceedings therefor shall have been initiated or,
to the Company’s knowledge, assuming reasonable inquiry, threatened by the Commission, and (iv) the Registration Statement,
the Sale Preliminary Prospectus and the Prospectus and any amendments or supplements thereto shall contain all material statements which
are required to be stated therein in accordance with the Act and the Regulations and shall conform in all material respects to the requirements
of the Act and the Regulations, and neither the Registration Statement, the Sale Preliminary Prospectus nor the Prospectus nor any amendment
or supplement thereto shall contain any untrue statement of a material fact or omit to state any material fact required to be stated therein
or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading.
4.6 Delivery of Transaction Documents. On the Effective Date,
the Company shall have delivered to the Representative executed copies of the Transaction Documents.
4.7 Private Placements. On the Closing Date, the Unit Private
Placement shall have been completed in accordance with Sections 1.4, 2.21 and 3.26 of this Agreement.
5. Indemnification and Contribution.
5.1 Indemnification
5.1.1 Indemnification of the Underwriters. The Company agrees
to indemnify and hold harmless each Underwriter, its affiliates and their respective partners, members, directors, officers, employees
and agents, and each person, if any, who controls each Underwriter or any affiliate within the meaning of Section 15 of the Act or
Section 20 of the Exchange Act as follows:
(a) against any and all loss, liability, claim, damage and expense
whatsoever, as incurred, joint or several, arising out of or based upon any untrue statement or alleged untrue statement of a material
fact contained in the Registration Statement (or any amendment thereto), 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 in any preliminary prospectus, Sale Preliminary Prospectus, any Testing-the-Waters Communication
or the Prospectus (or any amendment or supplement to the foregoing), or the omission or alleged omission therefrom 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;
(b) against any and all loss, liability, claim, damage and expense
whatsoever, as incurred, joint or several, to the extent of the aggregate amount paid in settlement of any litigation, or any investigation
or proceeding by any governmental authority, 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 5.1(d)) any such settlement is effected
with the written consent of the Company, which consent shall not unreasonably be delayed, conditioned or withheld;
(c) against any and all claims, actions, suits, proceedings, damages,
liabilities and expenses incurred by any of them (including the reasonable fees and expenses of counsel), as incurred, that are related
to or arise out of any business combination marketing or capital markets advisory activities by any Underwriter on the Company’s
behalf in connection with a Business Combination, provided that the Company will not, however, be responsible to an Indemnified Person
for any portion of any such claim, action, suit, proceeding, damage, liability or expense that is finally judicially determined by a court
of competent jurisdiction (not subject to further appeal) to have resulted primarily and directly from the bad faith, gross negligence
or willful misconduct of the Indemnified Person seeking such indemnification; and
(d) against any and all expense whatsoever, as incurred (including
the fees and disbursements of counsel), reasonably incurred in investigating, preparing or defending against any litigation, or any investigation
or proceeding by any governmental authority, commenced or threatened, or any claim whatsoever based upon any such untrue statement or
omission, or any such alleged untrue statement or omission (whether or not a party), to the extent that any such expense is not paid under
(a), (b) or (c) above; provided, however, that the foregoing 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 solely in reliance
upon and in conformity with the Underwriters’ Information.
5.1.2 Indemnification of the Company, its Directors and
Officers. Each Underwriter agrees, severally and not jointly, to indemnify and hold harmless the Company, and its directors,
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 Act or Section 20 of the Exchange Act, against any and all loss, liability, claim, damage and
expense described in the indemnity contained in Section 5.1.1, as incurred, but only with respect to untrue statements or
omissions, or alleged untrue statements or omissions, made in the Registration Statement, any preliminary prospectus, the Sale
Preliminary Prospectus, any Testing-the-Waters Communication or the Prospectus (or any amendment or supplement to the foregoing), in
reliance upon and in conformity with the Underwriters’ Information.
5.1.3 Notifications and Other Indemnification Procedures. Any
party that proposes to assert the right to be indemnified under this Section 5.1 will, promptly after receipt of notice of commencement
of any action against such party in respect of which a claim is to be made against an indemnifying party or parties under this Section 5.1,
notify each such indemnifying party of the commencement of such action, enclosing a copy of all papers served, but the omission so to
notify such indemnifying party will not relieve the indemnifying party from (i) any liability that it might have to any indemnified
party otherwise than under this Section 5.1 and (ii) any liability that it may have to any indemnified party under the foregoing
provision of this Section 5.1 unless, and only to the extent that, such omission results in the forfeiture of substantive rights
or defenses by the indemnifying party. If any such action is brought against any indemnified party and it notifies the indemnifying party
of its commencement, the indemnifying party will be entitled to participate in and, to the extent that it elects by delivering written
notice to the indemnified party promptly after receiving notice of the commencement of the action from the indemnified party, jointly
with any other indemnifying party similarly notified, to assume the defense of, the action, with counsel reasonably satisfactory to the
indemnified party, and after notice from the indemnifying party to the indemnified party of its election to assume the defense, the indemnifying
party will not be liable to the indemnified party for any other legal expenses except as provided below and except for the reasonable
costs of investigation subsequently incurred by the indemnified party in connection with the defense. The indemnified party will have
the right to employ its own counsel in any such action, but the fees, expenses and other charges of such counsel will be at the expense
of such indemnified party unless (A) the employment of counsel by the indemnified party has been authorized in writing by the indemnifying
party, (B) the indemnified party has reasonably concluded (based on advice of counsel) that there may be legal defenses available
to it or other indemnified parties that are different from or in addition to those available to the indemnifying party, (C) a conflict
or potential conflict exists (based on advice of counsel to the indemnified party) between the indemnified party and the indemnifying
party (in which case the indemnifying party will not have the right to direct the defense of such action on behalf of the indemnified
party) or (D) the indemnifying party has not in fact employed counsel to assume the defense of such action or counsel reasonably
satisfactory to the indemnified party, in each case, within a reasonable time after receiving notice of the commencement of the action;
in each of which cases the reasonable fees, disbursements and other charges of counsel will be at the expense of the indemnifying party
or parties. It is understood that the indemnifying party or parties shall not, in connection with any proceeding or related proceedings
in the same jurisdiction, be liable for the reasonable fees, disbursements and other charges of more than one separate firm admitted to
practice in such jurisdiction (plus local counsel) at any one time for all such indemnified party or parties. All such fees, disbursements
and other charges will be reimbursed by the indemnifying party promptly as they are incurred. An indemnifying party will not, in any event,
be liable for any settlement of any action or claim effected without its written consent. No indemnifying party shall, without the prior
written consent of each indemnified party, settle or compromise or consent to the entry of any judgment in any pending or threatened claim,
action or proceeding relating to the matters contemplated by this Section 5 (whether or not any indemnified party is a party thereto),
unless such settlement, compromise or consent (x) includes an express and unconditional release of each indemnified party, in form
and substance reasonably satisfactory to such indemnified party, from all liability arising out of such litigation, investigation, proceeding
or claim and (y) 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.
5.1.4 Settlement Without Consent if Failure to Reimburse.
If an indemnified party shall have requested an indemnifying party to reimburse the indemnified party for reasonable fees and
expenses of counsel, such indemnifying party agrees that it shall be liable for any settlement of the nature contemplated by
Section 5.1.1(b) 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.
5.2 Contribution. In order to provide for just and equitable
contribution in circumstances in which the indemnification provided for in the foregoing paragraphs of Section 5.1 is applicable
in accordance with its terms but for any reason is held to be unavailable or insufficient from the Company or the Underwriters, the Company
and the Underwriters will contribute to the total losses, claims, liabilities, expenses and damages (including any investigative, legal
and other expenses reasonably incurred in connection with, and any amount paid in settlement of, any action, suit or proceeding or any
claim asserted) to which any indemnified party may be subject in such proportion as shall be appropriate to reflect the relative benefits
received by the Company on the one hand and the Underwriters on the other hand. The relative benefits received by the Company on the one
hand and the Underwriters on the other hand shall be deemed to be in the same proportion as the total net proceeds from the sale of the
Units (before deducting expenses) received by the Company bear to the total compensation received by the Underwriters (before deducting
expenses) from the sale of the Units on behalf of the Company. If, but only if, the allocation provided by the foregoing sentence is not
permitted by applicable law, the allocation of contribution shall be made in such proportion as is appropriate to reflect not only the
relative benefits referred to in the foregoing sentence but also the relative fault of the Company, on the one hand, and the Underwriters,
on the other hand, with respect to the statements or omissions that resulted in such loss, claim, liability, expense or damage, or action
in respect thereof, as well as any other relevant equitable considerations with respect to such offering. Such relative fault shall be
determined by reference to, among other things, whether the 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 the Underwriters, the intent of the parties and their
relative 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 contributions pursuant to this Section 5.2 were to be determined by pro rata allocation
or by any other method of allocation that does not take into account the equitable considerations referred to herein. The amount paid
or payable by an indemnified party as a result of the loss, claim, liability, expense or damage, or action in respect thereof, referred
to above in this Section 5.2 shall be deemed to include, for the purpose of this Section 5.2, any legal or other expenses reasonably
incurred by such indemnified party in connection with investigating or defending any such action or claim to the extent consistent with
Section 5.1.3. Notwithstanding the foregoing provisions of Section 5.1 and this Section 5.2, the Underwriters shall not
be required to contribute any amount in excess of the commissions actually received by it under this Agreement and no person found guilty
of fraudulent misrepresentation (within the meaning of Section 11(f) of the Act) will be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation. For purposes of this Section 5.2, any person who controls a party to this
Agreement within the meaning of the Act, any affiliates of the respective Underwriters and any officers, directors, partners, employees
or agents of the Underwriters or their respective affiliates, will have the same rights to contribution as that party, and each director
of the Company and each officer of the Company who signed the Registration Statement will have the same rights to contribution as the
Company, subject in each case to the provisions hereof. Any party entitled to contribution, promptly after receipt of notice of commencement
of any action against such party in respect of which a claim for contribution may be made under this Section 5.2, will notify any
such party or parties from whom contribution may be sought, but the omission to so notify will not relieve that party or parties from
whom contribution may be sought from any other obligation it or they may have under this Section 5.2 except to the extent that the
failure to so notify such other party materially prejudiced the substantive rights or defenses of the party from whom contribution is
sought. Except for a settlement entered into pursuant to the last sentence of Section 5.1.3, no party will be liable for contribution
with respect to any action or claim settled without its written consent if such consent is required pursuant to Section 5.1.3.
6. Default by an Underwriter.
6.1 Default Not Exceeding 10% of Firm Units. If any Underwriter
or Underwriters shall default in its or their obligations to purchase the Firm Units and if the number of the Firm Units with respect
to which such default relates does not exceed in the aggregate 10% of the number of Firm Units that all Underwriters have agreed to purchase
hereunder, then such Firm Units to which the default relates shall be purchased by the non-defaulting Underwriters in proportion to their
respective commitments hereunder.
6.2 Default Exceeding 10% of Firm Units. In the event that the
default addressed in Section 6.1 above relates to more than 10% of the Firm Units , the Representative may, in its discretion,
arrange for it or for another party or parties to purchase such Firm Units to which such default relates on the terms contained herein.
If within one (1) Business Day after such default relating to more than 10% of the Firm Units the Representative does not arrange
for the purchase of such Firm Units, then the Company shall be entitled to a further period of one (1) Business Day within which
to procure another party or parties satisfactory to the Representative to purchase said Firm Units on such terms. In the event that neither
the Representative nor the Company arrange for the purchase of the Firm Units to which a default relates as provided in this Section 6,
this Agreement may be terminated by the Representative or the Company without liability on the part of the Company (except as provided
in Sections 3.10, 5, and 9.3 hereof) or the several Underwriters (except as provided in Section 5 hereof);
provided, that nothing herein shall relieve a defaulting Underwriter of its liability, if any, to the other several Underwriters and to
the Company for damages occasioned by its default hereunder.
6.3 Postponement of Closing Date. In the event that the Firm
Units to which the default relates are to be purchased by the non-defaulting Underwriters, or are to be purchased by another party or
parties as aforesaid, the Representative or the Company shall have the right to postpone the Closing Date for a reasonable period, but
not in any event exceeding five (5) Business Days, in order to effect whatever changes may thereby be made necessary in the Registration
Statement, and/or the Prospectus, as the case may be, or in any other documents and arrangements, and the Company agrees to file promptly
any amendment to, or to supplement, the Registration Statement and/or the Prospectus, as the case may be, that in the reasonable opinion
of counsel for the Underwriters may thereby be made necessary. The term “Underwriter” as used in this Agreement shall include
any party substituted under this Section 6 with like effect as if it had originally been a party to this Agreement with respect
to such securities.
7. Additional Covenants.
7.1 Additional Shares or Options. The Company hereby agrees
that until the consummation of a Business Combination, it shall not issue any Ordinary Shares or any options or other securities convertible
into Ordinary Shares, or any preferred shares or other securities of the Company which participate in any manner in the Trust Account
or which vote as a class with the Ordinary Shares on a proposed Business Combination.
7.2 Trust Account Waiver Acknowledgments. The Company hereby
agrees that it will use commercially reasonable best efforts prior to commencing its due diligence investigation of any prospective Target
Business or prior to obtaining the services of any vendor to have such Target Business or vendor acknowledge in writing whether through
a letter of intent, memorandum of understanding or other similar document (and subsequently acknowledge the same in any definitive document
replacing any of the foregoing), that (a) it has read the Prospectus and understands that the Company has established the Trust Account,
initially in an amount of $306,000,000 (without giving effect to any exercise of the Over-allotment Option) for the benefit of the Public
Shareholders and that, except for a portion of the interest earned on the amounts held in the Trust Account, the Company may disburse
monies from the Trust Account only: (i) to the Public Shareholders in the event they elect to redeem the Ordinary Shares contained
in the Public Securities in connection with the consummation of a Business Combination, (ii) to the Public Shareholders s if the
Company fails to consummate a Business Combination within the time period set forth in the Charter Documents, or (iii) to the Company
after or concurrently with the consummation of a Business Combination and (b) for and in consideration of the Company (i) agreeing
to evaluate such Target Business for purposes of consummating a Business Combination with it or (ii) agreeing to engage the services
of the vendor, as the case may be, such Target Business or vendor agrees that it does not have any right, title, interest or claim of
any kind in or to any monies in the Trust Account (“Claim”) and waives any Claim it may have in the future as a result
of, or arising out of, any negotiations, contracts or agreements with the Company and will not seek recourse against the Trust Account
for any reason whatsoever.
7.3 Insider Letters.
7.3.1 The Company shall not take any action or
omit to take any action which would cause a breach of any of the Insider Letters and will not allow any amendments to, or waivers of,
such Insider Letters without the prior written consent of the Representative, which consent shall not be unreasonably withheld.
7.3.2 The Company shall cause each of the Insiders
in the Insider Letter to agree (i) that, in order to minimize potential conflicts of interest that may arise from multiple affiliations,
the Insiders will present to the Company for its consideration, prior to presentation to any other person or company, any suitable opportunity
to acquire an operating business, until the earlier of the consummation by the Company of a Business Combination, the liquidation of the
Company or such time as such Insider ceases to be an officer or director of the Company, subject to any pre-existing fiduciary or contractual
obligations such Insiders might have and (ii) to certain other matters, including but not limited to the voting of Ordinary Shares
held by them and certain matters described as being agreed to by them under the “Proposed Business” section of the Registration
Statement, the Sale Preliminary Prospectus and the Prospectus.
7.4 Rule 419. The Company agrees that it will use commercially
reasonable efforts to prevent the Company from becoming subject to Rule 419 under the Act prior to the consummation of any Business
Combination, including but not limited to using its best efforts to prevent any of the Company’s outstanding securities from being
deemed to be a “penny stock” as defined in Rule 3a-51-1 under the Exchange Act during such period.
7.5 Tender Offer Documents, Proxy Materials and Other
Information. The Company shall provide to the Representative or its counsel (if so instructed by the Representative) with 10
copies of all tender offer documents or proxy information and all related material filed with the Commission in connection with a
Business Combination concurrently with such filing with the Commission. Documents filed with the Commission pursuant to its EDGAR
system shall be deemed to have been provided to the Representative pursuant to this Section. In addition, the Company shall furnish
any other state in which its initial public offering was registered, such information as may be requested by such state.
7.6 Emerging Growth Company. The Company shall promptly notify
the Representative if the Company ceases to be an Emerging Growth Company at any time prior to the completion of the distribution of the
Securities within the meaning of the Act.
7.7 Target Net Assets. The Company agrees that, so long as the
Company is listed on a national securities exchange, the Target Business that it acquires must have a fair market value equal to at least
80% of the balance in the Trust Account at the time of signing the definitive agreement for the Business Combination with such Target
Business (excluding taxes payable and the Deferred Underwriting Commissions). The fair market value of such business must be determined
by the Board of Directors of the Company based upon standards generally accepted by the financial community, such as actual and potential
sales, earnings, cash flow and book value. If the Board of Directors of the Company is not able to independently determine that the Target
Business meets such fair market value requirement, the Company will obtain an opinion from an independent investment banking which is
a member of FINRA or a valuation or appraisal firm, that such initial Business Combination is fair to the Company from a financial point
of view. The Company is not required to obtain an opinion as to the fair market value if the Company’s Board of Directors independently
determines that the Target Business does have sufficient fair market value.
7.8 Charter Documents. The Company shall not take any action
or omit to take any action that would cause the Company to be in breach or violation of any of its Charter Documents.
8. Representations and Agreements to Survive Delivery. Except
as the context otherwise requires, all representations, warranties and agreements contained in this Agreement shall be deemed to be representations,
warranties and agreements as of the Closing Date or the Option Closing Date, if any, and such representations, warranties and agreements
of the Underwriters and the Company, including the indemnity agreements contained in Section 5 hereof, shall remain operative
and in full force and effect regardless of any investigation made by or on behalf of the Underwriters, the Company or any Controlling
Person, and shall survive termination of this Agreement or the issuance and delivery of the Public Securities to the Underwriters until
the earlier of the expiration of any applicable statute of limitations and the seventh (7th) anniversary of the later of the Closing Date
or the Option Closing Date, if any, at which time the representations, warranties and agreements shall terminate and be of no further
force and effect.
9. Effective Date of This Agreement and Termination Thereof.
9.1 Effective Date. This Agreement shall become effective on
the Effective Date at the time the Registration Statement is declared effective by the Commission.
9.2 Termination. The Representative shall have the right
to terminate this Agreement at any time prior to the Closing Date, (i) if any domestic or international event or act or
occurrence has materially disrupted, or in the Representative’s opinion will in the immediate future materially disrupt,
general securities markets in the United States; or (ii) if trading on the New York Stock Exchange (the
“NYSE”), the NYSE American, Nasdaq, the Nasdaq Global Select Market or the Nasdaq Capital Market or quoted on the
OTCBB shall have been suspended, or minimum or maximum prices for trading shall have been fixed, or maximum ranges for prices for
securities shall have been fixed, or maximum ranges for prices for securities shall have been required by FINRA or by order of the
Commission or any other government authority having jurisdiction, or (iii) if the United States shall have become involved in a
new war or an increase in existing major hostilities, or (iv) if a banking moratorium has been declared by a New York State or
Federal authority, or (v) if a moratorium on foreign exchange trading has been declared which materially adversely impacts the
United States securities market, or (vi) if the Company shall have sustained a material loss by fire, flood, accident,
hurricane, earthquake, theft, sabotage or other calamity (including, without limitation, a calamity relating to a public health
matter or natural disaster) or malicious act which, whether or not such loss shall have been insured, will, in the
Representative’s sole opinion, make it inadvisable to proceed with the delivery of the Units, or (vii) if the Company is
in material breach of any of its representations, warranties or covenants hereunder, or (viii) if the Representative shall have
become aware after the date hereof of such a material adverse change in the conditions of the Company, or such adverse material
change in general market conditions, including without limitation as a result of terrorist activities or any other calamity
(including, without limitation, a calamity relating to a public health matter or natural disaster) or crisis either within or
outside the United States after the date hereof, or an increase in any of the foregoing, as in the Representative’s sole
judgment would make it impracticable to proceed with the offering, sale and/or delivery of the Units or to enforce contracts made by
the Underwriters for the sale of the Public Securities.
9.3 Expenses. In the event that this Agreement shall not be
carried out for any reason whatsoever, within the time specified herein or any extensions thereof pursuant to the terms herein, (i) the
obligations of the Company to pay the out of pocket expenses related to the transactions contemplated herein shall be governed by Section 3.10
hereof and (ii) the Company shall reimburse the Representative for any costs and expenses incurred in connection with enforcing any
provisions of this Agreement.
9.4 Indemnification. Notwithstanding any contrary provision
contained in this Agreement, any election hereunder or any termination of this Agreement, and whether or not this Agreement is otherwise
carried out, the provisions of Section 5 shall not be in any way affected by such election or termination or failure to carry
out the terms of this Agreement or any part hereof.
10. Miscellaneous.
10.1 Notices. All communications hereunder, except as herein
otherwise specifically provided, shall be in writing and shall be mailed, delivered by hand or reputable overnight courier and confirmed
or delivered by facsimile transmission (with printed confirmation of receipt) and shall be deemed given when so delivered or faxed or,
if mailed, two days after such mailing.
If to the Representative:
Cantor Fitzgerald & Co.
499 Park Avenue
New York, New York 10022
Attn: General Counsel
Facsimile: (212) 829-4708
Email: #legal-IBD@cantor.com with a copy to spac@cantor.com
Cantor Fitzgerald & Co.
499 Park Avenue
New York, New York 10022
Attn: Head of Investment Banking
Attn: Head of SPACs
Facsimile: (212) 829-4708
Email: Sage.kelly@cantor.com; David.batalion@cantor.com
Copy (which copy shall not constitute notice) to:
Ellenoff Grossman & Schole LLP
1345 Avenue of the Americas
New York, New York 10105
Attn: Stuart Neuhauser, Esq.
Facsimile: (212) 370-7889
Email: sneuhauser@egsllp.com
If to the Company:
Semper Paratus Acquisition Corporation
767 Third Avenue, 38th Floor
New York, NY 10017
Attn: Richard N. Peretz
Facsimile: [*]
Email: [*]
Copy (which copy shall not constitute notice) to:
Reed Smith LLP
599 Lexington Avenue
New York, New York 10022
Attn: Ari Edelman, Esq.
Facsimile: (212) 521-5400
Email: aedelman@reedsmith.com
10.2 Headings. The headings contained herein are for the sole
purpose of convenience of reference, and shall not in any way limit or affect the meaning or interpretation of any of the terms or provisions
of this Agreement.
10.3 Amendment. This Agreement may only be amended by a written
instrument executed by each of the parties hereto.
10.4 Entire Agreement. This Agreement (together with
the other agreements and documents being delivered pursuant to or in connection with this Agreement) constitute the entire agreement
of the parties hereto with respect to the subject matter hereof and thereof, and supersede all prior agreements and understandings of
the parties, oral and written, with respect to the subject matter hereof.
10.5 Binding Effect. This Agreement shall inure solely
to the benefit of and shall be binding upon the Representative, the Underwriters, the selected dealers, the Company and the controlling
persons, directors, agents, partners, members, employees and officers referred to in Section 5 hereof, and their respective successors,
legal representatives and assigns, and no other person shall have or be construed to have any legal or equitable right, remedy or claim
under or in respect of or by virtue of this Agreement or any provisions herein contained. The term “successors and assigns”
shall not include a purchaser, in its capacity as such, of securities from any of the Underwriters.
10.6 Waiver of Immunity. To the extent that the Company
may be entitled in any jurisdiction in which judicial proceedings may at any time be commenced hereunder, to claim for itself or its
revenues or assets any immunity, including sovereign immunity, from suit, jurisdiction, attachment in aid of execution of a judgment
or prior to a judgment, execution of a judgment or any other legal process with respect to its obligations hereunder and to the extent
that in any such jurisdiction there may be attributed to the Company such an immunity (whether or not claimed), the Company hereby irrevocably
agrees not to claim and irrevocably waives such immunity to the maximum extent permitted by law.
10.7 Submission to Jurisdiction. Each of the Company and
the Representative irrevocably submit to the non-exclusive jurisdiction of any New York State or United States Federal court sitting
in The City of New York, Borough of Manhattan, over any suit, action or proceeding arising out of or relating to this Agreement, the
Registration Statement, the Sale Preliminary Prospectus and the Prospectus or the offering of the Securities. Each of the Company
and the Representative irrevocably waives, to the fullest extent permitted by law, any objection that they may now or hereafter have
to the laying of venue of any such suit, action or proceeding brought in such a court and any claim that any such suit, action or
proceeding brought in such a court has been brought in an inconvenient forum. Any such process or summons to be served upon the
Company or the Representative may be served by transmitting a copy thereof by registered or certified mail, return receipt
requested, postage prepaid, addressed to it at the address set forth in Section 10.1 hereof. Such mailing shall be deemed
personal service and shall be legal and binding upon the Company or the Representative in any action, proceeding or claim. Each of
the Company and the Representative waives, to the fullest extent permitted by law, any other requirements of or objections to
personal jurisdiction with respect thereto. Notwithstanding the foregoing, any action based on this Agreement may be instituted by
the Underwriters in any competent court. The Company agrees that the Underwriters shall be entitled to recover all of their
reasonable attorneys’ fees and expenses relating to any action or proceeding and/or incurred in connection with the
preparation therefor if any of them are the prevailing party in such action or proceeding. EACH PARTY 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.
10.8 Governing Law. 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.
10.9 Execution in Counterparts. This Agreement may be executed
in one or more counterparts, and by the different parties hereto in separate counterparts, each of which shall be deemed to be an original,
but all of which taken together shall constitute one and the same agreement, and shall become effective when one or more counterparts
has been signed by each of the parties hereto and delivered to each of the other parties hereto. Delivery of a signed counterpart of this
Agreement by facsimile, electronic mail (including pdf or any electronic signature complying with U.S. federal ESIGN Act of 2000, Uniform
Electronic Transactions Act or other applicable law) or other transmission method and any counterpart so delivered will be deemed to have
been duly and validly delivered and valid and effective for all purposes.
10.10 Waiver. The failure of any of the parties hereto to at
any time enforce any of the provisions of this Agreement shall not be deemed or construed to be a waiver of any such provision, nor to
in any way affect the validity of this Agreement or any provision hereof or the right of any of the parties hereto to thereafter enforce
each and every provision of this Agreement. No waiver of any breach, non-compliance or non-fulfillment of any of the provisions of this
Agreement shall be effective unless set forth in a written instrument executed by the party or parties against whom or which enforcement
of such waiver is sought; and no waiver of any such breach, non-compliance or non-fulfillment shall be construed or deemed to be a waiver
of any other or subsequent breach, non-compliance or non-fulfillment.
10.11 No Fiduciary Relationship. The Company acknowledges and
agrees that (i) the purchase and sale of the Units pursuant to this Agreement is an arm’s-length commercial transaction pursuant
to a contractual relationship between the Company and the Underwriters, (ii) in connection therewith and with the process leading
to such transaction, each Underwriter is acting solely as a principal and not the agent or fiduciary of the Company, (iii) the Underwriters
have not assumed an advisory or fiduciary responsibility in favor of the Company with respect to the offering contemplated hereby or the
process leading thereto (irrespective of whether the Underwriters have advised or are currently advising the Company on other matters)
or any other obligation to the Company except the obligations expressly set forth in this Agreement, (iv) in no event do the parties
intend that the Underwriters act or be responsible as a fiduciary to the Company, its management, shareholders, creditors or any other
person in connection with any activity that the Underwriters may undertake or have undertaken in furtherance of this offering of the Company’s
securities, either before or after the date hereof and (v) the Company has consulted its own legal and financial advisors to the
extent it deemed appropriate. The Underwriters hereby expressly disclaim any fiduciary or similar obligations to the Company, either in
connection with the transactions contemplated by this Agreement or any matters leading up to such transactions, and the Company hereby
confirms its understanding and agreement to that effect. The Company agrees that it will not claim that the Underwriters have rendered
advisory services of any nature or respect, or owe a fiduciary or similar duty to the Company, in connection with such transaction or
the process leading thereto. The Company and the Underwriters agree that they are each responsible for making their own independent judgment
with respect to any such transactions, and that any opinions or views expressed by the Underwriters to the Company regarding such transactions,
including but not limited to any opinions or views with respect to the price or market for the Company’s securities, do not constitute
advice or recommendations to the Company. The Company hereby waives and releases, to the fullest extent permitted by law, any claims that
the Company may have against the Underwriters with respect to any breach or alleged breach of any fiduciary or similar duty to the Company
in connection with the transactions contemplated by this Agreement or any matters leading up to such transactions.
[Remainder of page intentionally left blank]
If the foregoing correctly sets forth the understanding between the
Representative and the Company, please so indicate in the space provided below for that purpose, whereupon this letter shall constitute
a binding agreement between us.
| |
Very truly yours, |
| |
|
| |
Semper Paratus Acquisition Corporation |
| Accepted on the date first above written. |
|
| CANTOR FITZGERALD & CO., as Representative of the several underwriters |
|
| |
|
| By: |
|
|
| Name: |
|
|
| Title: |
|
|
[Signature page to Underwriting Agreement,
dated [*], 2021]
SCHEDULE A
Semper Paratus Acquisition Corporation
30,000,000 Units
| Underwriter | |
Number
of
Firm Units
to be
Purchased | |
| Cantor Fitzgerald & Co. | |
| 30,000,000 | |
| | |
| | |
| TOTAL | |
| 30,000,000 | |
SCHEDULE B
[*]
Exhibit 5.1
 |
Reed Smith LLP
599 Lexington Avenue
New York, NY 10022-7650
+1 212 521 5400
Fax +1 212 521 5450
reedsmith.com |
October 21, 2021
Semper Paratus Acquisition Corporation
767 Third Avenue, 38th Floor
New York, New York 10017
Ladies and Gentlemen:
We have acted as special United States counsel
to Semper Paratus Acquisition Corporation, a Cayman Islands exempted company (the “Company”), in connection with the
Registration Statement on Form S-1 (File No. 333-260113) (such registration statement, as amended through the date hereof, the
“Registration Statement”) filed by the Company with the Securities and Exchange Commission (the “Commission”)
under the Securities Act of 1933, as amended (the “Securities Act”), relating to the offer and sale by the Company
(the “Offering”) of (a) up to 34,500,000 units of the Company (the “Units”) (including up to
4,500,000 Units subject to the underwriters’ option to purchase additional Units),
each such Unit consisting of one share of Class A ordinary shares of the Company, par value $0.0001 per share (the “Ordinary
Shares”), and one-half of one redeemable warrant of the Company (each whole warrant, a “Warrant”), each Warrant
exercisable for the purchase of one Ordinary Share, as set forth in the prospectus included in the Registration Statement (the “Prospectus”)
and (b) all Ordinary Shares and all Warrants, in each case, issued as part of the Units. The term “Units” also includes
any additional Units (and the underlying securities) that may be issued by the Company pursuant to Rule 462(b) under the Securities
Act in connection with the Offering.
This opinion letter is being furnished in accordance
with the requirements of Item 601(b)(5) of Regulation S-K under the Securities Act.
We have reviewed originals or copies of the Registration
Statement, the Prospectus, the form of warrant agreement (the “Warrant Agreement”) proposed to be entered into by the
Company and Continental Stock Transfer & Trust Company, a New York corporation, as warrant agent (the “Warrant Agent”)
that is filed as Exhibit 4.4 to the Registration Statement, and the form of Unit certificate filed as Exhibit 4.1 to the Registration
Statement (together with the Warrant Agreement the “Transaction Documents”), and such other corporate records, agreements
and documents of the Company, certificates or comparable documents of public officials and officers of the Company and have made such
other investigations as we have deemed necessary as a basis for the opinions set forth below.
In rendering the opinion set forth below, we have
assumed:
| a. | the genuineness of all signatures; |
| b. | the legal capacity of natural persons; |
| c. | the authenticity of all documents submitted to us as originals; |
| d. | the conformity to original documents of all documents submitted to us as duplicates or conformed copies; |
| e. | as to matters of fact, the truthfulness of the representations made in certificates or comparable documents of
public officials and officers of the Company; |
| f. | the board of directors of the Company or a duly constituted and acting committee of such board of directors
will have taken all action necessary to set the public offering price of the Units; |
| g. | the Company (i) is duly incorporated and is validly existing and in good standing, (ii) has
requisite legal status and legal capacity under the laws of the jurisdiction of its organization, (iii) has complied and will comply
with all aspects of the laws of the jurisdiction of its organization in connection with the transactions contemplated by, and the performance
of its obligations under, the Warrant Agreement, and (iv) has the corporate power and authority to execute, deliver and perform all
its obligations under the Warrant Agreement; |
| h. | neither the execution and delivery by the Company of the Transaction Documents nor the performance by
the Company of its obligations thereunder, including the issuance and sale of the Units and Warrants (i) conflicts or will conflict
with the Amended and Restated Memorandum and Articles of Association of the Company, (ii) constitutes or will constitute a violation
of, or a default under, any lease, indenture, instrument or other agreement to which the Company or its property is subject, (iii) contravenes
or will contravene any order or decree of any governmental authority to which the Company or its property is subject, (iv) violates
or will violate any law, rule or regulation to which the Company or its property is subject (except that we do not make the assumption
set forth in this clause (iv) with respect to the Opined-on Law (as defined below)), or (v) requires or will require the consent,
approval, licensing or authorization of, or any filing, recording or registration with, any governmental authority under any law, rule,
or regulation of any jurisdiction. |
We have not independently established the validity
of the foregoing assumptions.
Based upon the foregoing, and subject to the qualifications,
assumptions and limitations stated herein, we are of the opinion that:
| 1. | The Units, when issued and sold by the Company in the manner contemplated in the Registration Statement
and Prospectus against payment therefor, and assuming the due authorization, execution and delivery of the Units by Continental Stock
Transfer & Trust Company, as transfer agent, will constitute the legal, valid, and binding obligations of the Company, enforceable
against the Company in accordance with their terms under the laws of the State of New York, subject to applicable bankruptcy, insolvency,
fraudulent conveyance, reorganization, moratorium and similar laws affecting creditors’ rights and remedies generally, and subject,
as to enforceability, to general principles of equity, including principles of commercial reasonableness, good faith, and fair dealing
(regardless of whether enforcement is sought in a proceeding at law or in equity). |
| 2. | The Ordinary Shares included in the Units, when the Units are issued and sold by the Company in the manner
contemplated in the Registration Statement and Prospectus against payment therefor, will be validly issued, fully paid, and nonassessable. |
| 3. | The Warrants included in the Units, when the Units are issued and sold by the Company in the manner contemplated
in the Registration Statement and Prospectus against payment therefor, and assuming the due authorization, execution and delivery of such
Warrants by the Warrant Agent, will constitute the legal, valid, and binding obligations of the Company, enforceable against the Company
in accordance with their terms, under the laws of the State of New York, subject to applicable bankruptcy,
insolvency, fraudulent conveyance, reorganization, moratorium and similar laws affecting creditors’ rights and remedies generally,
and subject, as to enforceability, to general principles of equity, including principles of commercial reasonableness, good faith and
fair dealing (regardless of whether enforcement is sought in a proceeding at law or in equity). |
The opinions stated herein are subject to the
qualifications that we express no opinion as to the applicability of, compliance with, or effect of (i) public policy considerations
which may limit the rights of parties to obtain certain remedies, (ii) any requirement that a claim with respect to any security
denominated in other than U.S. dollars (or a judgment denominated in other than U.S. dollars in respect of such claim) be converted into
U.S. dollars at a rate of exchange prevailing on a date determined in accordance with applicable law, (iii) any provision waiving
the right to object to venue in any court; (v) any agreement to submit to the jurisdiction of any federal court; and (iii) governmental
authority to limit, delay or prohibit the making of payments outside of the United States or in a foreign currency or currency unit.
Our opinion is limited to the laws of the State
of New York (the “Opined-on Law”) and we do not express any opinion herein concerning any other law. We advise you
that issues addressed by this letter may be governed in whole or in part by other laws, but we express no opinion as to whether any relevant
difference exists between the laws upon which our opinions are based and any other laws which may actually govern. This opinion letter
speaks only as of its date.
We hereby consent to the filing of this opinion
letter as Exhibit 5.1 to the Registration Statement and to the use of our name under the caption “Legal Matters” in the
Prospectus. In giving such consent, we do not hereby admit that we are within the category of persons whose consent is required under
Section 7 of the Securities Act, and the rules and regulations of the Commission promulgated thereunder.
Very truly yours,
/s/ Reed Smith LLP
REED SMITH LLP
Exhibit 5.2
Our ref AIH/787233-000001/68220913v1
Semper Paratus Acquisition Corporation
PO Box 309, Ugland House
Grand Cayman
KY1-1104
Cayman Islands
21 October 2021
Semper Paratus Acquisition Corporation
We have acted as counsel as to Cayman Islands
law to Semper Paratus Acquisition Corporationthe "Company") in connection with the Company's registration statement on
Form S-1, including all amendments or supplements thereto, filed with the United States Securities and Exchange Commission (the "Commission")
under the United States Securities Act of 1933, as amended (the "Act") (including its exhibits, the "Registration
Statement") for the purposes of, registering with the Commission under the Act, the offering and sale to the public of:
| (a) | up to 34,500,000 units (including 4,500,000 units, which the several underwriters ("Underwriters"),
for whom Cantor Fitzgerald & Co. is acting as representative ("Representative"), will have a 45-day option to
purchase from the Company to cover over-allotments, if any) ("Units") at an offering price of US$10 per Unit, each Unit
consisting of: |
| (i) | one Class A ordinary share of a par value of US$0.0001 of the Company ("Class A Ordinary
Shares"); and |
| (ii) | one-half of one redeemable warrant, each whole warrant exercisable to purchase one Class A Ordinary
Share at a price of US$11.50 per Class A Ordinary Share ("Warrants"); and |
| (b) | all Class A Ordinary Shares and Warrants issued as part of the Units. |
This opinion letter is given in accordance with
the terms of the Legal Matters section of the Registration Statement.
We have reviewed originals, copies, drafts or
conformed copies of the following documents:
| 1.1 | The certificate of incorporation dated 21 April 2021 and the memorandum and articles of association
of the Company as registered or adopted on 21 April 2021 (the "Memorandum and Articles"). |
| 1.2 | The written resolutions of the board of directors of the Company dated 29 April 2021 and 21 October 2021
(the "Resolutions") and the corporate records of the Company maintained at its registered office in the Cayman Islands. |
| 1.3 | A certificate of good standing with respect to the Company issued by the Registrar of Companies (the "Certificate
of Good Standing"). |
| 1.4 | A certificate from a director of the Company a copy of which is attached to this opinion letter (the "Director's
Certificate"). |
| 1.5 | The Registration Statement. |
| 1.6 | A draft of the form of the unit certificate representing the Units (the "Unit Certificate"). |
| 1.7 | A draft of the form of the warrant agreement and the warrant certificate constituting the Warrants (the
"Warrant Documents"). |
| 1.8 | A draft of the underwriting agreement between the Company and the Representative. |
The documents listed in paragraphs 1.6 to 1.8
inclusive above shall be referred to collectively herein as the "Documents".
The following opinions are given only as to, and
based on, circumstances and matters of fact existing and known to us on the date of this opinion letter. These opinions only relate to
the laws of the Cayman Islands which are in force on the date of this opinion letter. In giving the following opinions, we have relied
(without further verification) upon the completeness and accuracy, as at the date of this opinion letter, of the Director's Certificate
and the Certificate of Good Standing. We have also relied upon the following assumptions, which we have not independently verified:
| 2.1 | The Documents have been or will be authorised and duly executed and unconditionally delivered by or on
behalf of all relevant parties in accordance with all relevant laws (other than, with respect to the Company, the laws of the Cayman Islands). |
| 2.2 | The Documents are, or will be, legal, valid, binding and enforceable against all relevant parties in accordance
with their terms under the laws of the State of New York (the "Relevant Law") and all other relevant laws (other than,
with respect to the Company, the laws of the Cayman Islands). |
| 2.3 | The choice of the Relevant Law as the governing law of the Documents has been made in good faith and would
be regarded as a valid and binding selection which will be upheld by the courts of the State of New York and any other relevant jurisdiction
(other than the Cayman Islands) as a matter of the Relevant Law and all other relevant laws (other than the laws of the Cayman Islands). |
| 2.4 | Copies of documents, conformed copies or drafts of documents provided to us are true and complete copies
of, or in the final forms of, the originals. |
| 2.5 | All signatures, initials and seals are genuine. |
| 2.6 | The capacity, power, authority and legal right of all parties under all relevant laws and regulations
(other than, with respect to the Company, the laws and regulations of the Cayman Islands) to enter into, execute, unconditionally deliver
and perform their respective obligations under the Documents. |
| 2.7 | No invitation has been or will be made by or on behalf of the Company to the public in the Cayman Islands
to subscribe for any of the Units, the Warrants or the Class A Ordinary Shares. |
| 2.8 | There is no contractual or other prohibition or restriction (other than as arising under Cayman Islands
law) binding on the Company prohibiting or restricting it from entering into and performing its obligations under the Documents. |
| 2.9 | No monies paid to or for the account of any party under the Documents or any property received or disposed
of by any party to the Documents in each case in connection with the Documents or the consummation of the transactions contemplated thereby
represent or will represent proceeds of criminal conduct or criminal property or terrorist property (as defined in the Proceeds of Crime
Act (As Revised) and the Terrorism Act (As Revised), respectively). |
| 2.10 | There is nothing under any law (other than the laws of the Cayman Islands) which would or might affect
the opinions set out below. Specifically, we have made no independent investigation of the Relevant Law. |
| 2.11 | The Company will receive money or money's worth in consideration for the issue of the Class A Ordinary
Shares and none of the Class A Ordinary Shares were or will be issued for less than par value. |
Save as aforesaid we have not been instructed
to undertake and have not undertaken any further enquiry or due diligence in relation to the transaction the subject of this opinion letter.
Based upon, and subject to, the foregoing assumptions
and the qualifications set out below, and having regard to such legal considerations as we deem relevant, we are of the opinion that:
| 3.1 | The Company has been duly incorporated as an exempted company with limited liability and is validly existing
and in good standing with the Registrar of Companies under the laws of the Cayman Islands. |
| 3.2 | The Class A Ordinary Shares to be offered and issued by the Company as contemplated by the Registration
Statement (including the issuance of Class A Ordinary Shares upon the exercise of the Warrants in accordance with the Warrant Documents)
have been duly authorised for issue, and when issued by the Company against payment in full of the consideration as set out in the Registration
Statement and in accordance with the terms set out in the Registration Statement (including the issuance of Class A Ordinary Shares
upon the exercise of the Warrants in accordance with the Warrant Documents), such Class A Ordinary Shares will be validly issued,
fully paid and non-assessable. As a matter of Cayman Islands law, a share is only issued when it has been entered in the register of members
(shareholders). |
| 3.3 | The execution, delivery and performance of the Unit Certificate and the Warrant Documents have been authorised
by and on behalf of the Company and, once the Unit Certificate and the Warrant Documents have been executed and delivered by any director
or officer of the Company, the Unit Certificate and the Warrant Documents will be duly executed and delivered on behalf of the Company
and will constitute the legal, valid and binding obligations of the Company enforceable in accordance with their terms. |
The opinions expressed above are subject to the
following qualifications:
| 4.1 | The obligations assumed by the Company under the Documents will not necessarily be enforceable in all
circumstances in accordance with their terms. In particular: |
| (a) | enforcement may be limited by bankruptcy, insolvency, liquidation, reorganisation, readjustment of debts
or moratorium or other laws of general application relating to protecting or affecting the rights of creditors; |
| (b) | enforcement may be limited by general principles of equity. For example, equitable remedies such as specific
performance may not be available, inter alia, where damages are considered to be an adequate remedy; |
| (c) | where obligations are to be performed in a jurisdiction outside the Cayman Islands, they may not be enforceable
in the Cayman Islands to the extent that performance would be illegal under the laws of that jurisdiction; and |
| (d) | some claims may become barred under relevant statutes of limitation or may be or become subject to defences
of set off, counterclaim, estoppel and similar defences. |
| 4.2 | To maintain the Company in good standing with the Registrar of Companies under the laws of the Cayman
Islands, annual filing fees must be paid and returns made to the Registrar of Companies within the time frame prescribed by law. |
| 4.3 | Under Cayman Islands law, the register of members (shareholders) is prima facie evidence of title
to shares and this register would not record a third party interest in such shares. However, there are certain limited circumstances where
an application may be made to a Cayman Islands court for a determination on whether the register of members reflects the correct legal
position. Further, the Cayman Islands court has the power to order that the register of members maintained by a company should be rectified
where it considers that the register of members does not reflect the correct legal position. As far as we are aware, such applications
are rarely made in the Cayman Islands and for the purposes of the opinion given in paragraph 3.2, there are no circumstances or matters
of fact known to us on the date of this opinion letter which would properly form the basis for an application for an order for rectification
of the register of members of the Company, but if such an application were made in respect of the Class A Ordinary Shares, then the
validity of such shares may be subject to re-examination by a Cayman Islands court. |
| 4.4 | In this opinion letter the phrase "non-assessable" means, with respect to the issuance of shares,
that a shareholder shall not, in respect of the relevant shares and in the absence of a contractual arrangement, or an obligation pursuant
to the memorandum and articles of association, to the contrary, have any obligation to make further contributions to the Company's assets
(except in exceptional circumstances, such as involving fraud, the establishment of an agency relationship or an illegal or improper purpose
or other circumstances in which a court may be prepared to pierce or lift the corporate veil). |
We hereby consent to the filing of this opinion
letter as an exhibit to the Registration Statement and to the references to our firm under the "Legal Matters", "Risk Factors",
"Shareholders' Suits" and "Enforcement of Civil Liabilities" in the prospectus included in the Registration Statement.
In providing our consent, we do not thereby admit that we are in the category of persons whose consent is required under section 7 of
the Act or the Rules and Regulations of the Commission thereunder.
We express no view as to the commercial terms
of the Documents or whether such terms represent the intentions of the parties and make no comment with regard to warranties or representations
that may be made by the Company.
The opinions in this opinion letter are strictly
limited to the matters contained in the opinions section above and do not extend to any other matters. We have not been asked to review
and we therefore have not reviewed any of the ancillary documents relating to the Documents and express no opinion or observation upon
the terms of any such document.
This opinion letter is addressed to you and may
be relied upon by you, your counsel and purchasers of Units pursuant to the Registration Statement. This opinion letter is limited to
the matters detailed herein and is not to be read as an opinion with respect to any other matter.
Yours faithfully
Maples and Calder (Cayman) LLP
Exhibit 10.1
INVESTMENT MANAGEMENT TRUST AGREEMENT
This Investment Management Trust Agreement (this
“Agreement”) is made effective as of [•], 2021 by and between Semper Paratus Acquisition Corporation, a
Cayman Islands exempted company (the “Company”), and Continental Stock Transfer & Trust Company, a
New York limited purpose trust company (the “Trustee”).
WHEREAS, the Company’s registration statement
on Form S-1, File No. 333-[•] (the “Registration Statement”), and prospectus (the “Prospectus”)
for the initial public offering of the Company’s units (the “Units”), each of which consists of one of
the Company’s Class A ordinary shares, par value $0.0001 per share (the “Ordinary Shares”), and one-half
of one redeemable warrant, each whole warrant entitling the holder thereof to purchase one Ordinary Share (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 Cantor Fitzgerald & Co. (the “Underwriter”)
named therein; and
WHEREAS, as described in the Prospectus, $306,000,000
of the gross proceeds of the Offering and sale of the Private Placement Units (as defined in the Underwriting Agreement) (or $351,900,000
if the Underwriter’s option to purchase additional units 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 Ordinary Shares 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 shareholders for whose benefit the Trustee shall hold the Property will be referred to as the “Public Shareholders”
and the Public Shareholders and the Company will be referred to together as the “Beneficiaries”); and
WHEREAS, pursuant to the Underwriting Agreement, a portion of the
Property equal to $12,000,000 or $14,700,000 if the Underwriter’s option to purchase additional units is exercised in full, is
attributable to deferred underwriting discounts and commissions that will be payable by the Company to the Underwriter upon and
concurrently with the consummation of the initial 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 J.P. Morgan
Chase Bank, N.A. (or at another U.S. chartered commercial bank with consolidated assets of $100 billion or more), maintained by the Trustee
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 in United States government securities within the meaning of Section 2(a)(16)
of the Investment Company Act of 1940, as amended, 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
(or any successor rule), which invest only in direct U.S. government treasury obligations, as determined by the Company; it being understood
that the Trust Account will earn no interest while the Property is uninvested awaiting the Company’s instructions hereunder and
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) Promptly notify the Company and the Underwriter
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 an 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 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, as applicable, signed on behalf of the Company by its Chief Executive Officer, Chief Financial Officer,
Executive Chairman of the board of directors of the Company (the “Board”) or other authorized officer of
the Company (and, in the case of a Termination Letter in a form substantially similar to the attached hereto as Exhibit A,
jointly signed, acknowledged and agreed to by the Underwriter), and complete the liquidation of the Trust Account and distribute the
Property in the Trust Account, including interest earned on the funds held in the Trust Account and not previously released to the
Company to pay its taxes (less up to $100,000 of interest that may be released to the Company to pay dissolution expenses), only as
directed in the Termination Letter and the other documents referred to therein, or (y) the date which is the later of
(1) 15 months after the closing of the Offering and (2) such later date as may be approved by the Company’s
shareholders in accordance with the Company’s amended and restated memorandum and articles of association, 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 hereto as Exhibit B and the Property in the Trust
Account, including interest earned on the funds held in the Trust Account and not previously released to the Company to pay its
taxes (less up to $100,000 of interest that may be released to the Company to pay dissolution expenses), shall be distributed to the
Public Shareholders 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 so long as there is no reduction
in the principal amount per share initially deposited in the Trust Account; 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 (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 distribute 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 “Shareholder
Redemption Withdrawal Instruction”), the Trustee shall distribute on behalf of the Company to the Public Shareholders of
record as of such date the amount requested by the Company to be used to redeem Ordinary Shares from Public Shareholders properly submitted
in connection with a shareholder vote to approve an amendment (a “Specified Charter Amendment”) to the Company’s
amended and restated memorandum and articles of association (the “Charter”) (A) to modify the substance
or timing of the ability of Public Shareholders to seek redemption in connection with an initial Business Combination or to redeem 100%
of the Company’s Ordinary Shares if the Company does not complete an initial Business Combination within the time period specified
in the Charter or (B) with respect to any other provision relating to the Public Shareholders’ rights. 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; and
(l) Not make any withdrawals or distributions
from the Trust Account other than pursuant to Sections 1(i), 1(j) or 1(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 Chief Executive Officer, Chief Financial Officer, Executive Chairman of the Board
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 out-of-pocket expenses, including
reasonable and documented 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 arising out of, in connection with or resulting from the Trustee’s
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. 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 as agreed 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 an initial Business Combination (as defined below) is consummated. The Company shall pay the Trustee
the initial acceptance fee and the first annual administration fee at the consummation of the Offering. The Trustee shall refund to the
Company the annual administration fee (on a pro rata basis) with respect to any period after the liquidation of the Trust Account or after
the removal or withdrawal of the Trustee in accordance with this Agreement. 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
shareholders regarding a merger, share exchange, asset acquisition, share purchase, reorganization or similar business combination involving
the Company and one or more businesses (the “Business Combination”), provide to the Trustee an affidavit or
certificate of the inspector of elections for the shareholder meeting verifying the vote of such shareholders regarding such Business
Combination;
(e) Provide the Underwriter 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) Unless otherwise agreed between the Company
and the Underwriter, ensure that any Instruction Letter (as defined in Exhibit A) delivered in connection with a Termination
Letter in the form of Exhibit A expressly provides that the Deferred Discount is paid directly to the account or accounts directed
by the Underwriter prior to any transfer of the funds held in the Trust Account to the Company or any other person;
(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; and
(h) Within four (4) business days after the Underwriters exercise the over allotment option (or any unexercised portion thereof) or such
over allotment expires, provide the Trustee with a notice in writing of the total amount of the Deferred Discount, which shall in no event
be less than $12,000,000.
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 third party except for liability
arising out, in connection with or resulting from the Trustee’s 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 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 Company 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 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, 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 initial
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, any 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 acknowledges
and agrees that it has no right of set-off or any right, title, interest or claim of any kind (“Claim”) to,
or to any monies or other assets in, the Trust Account, and hereby irrevocably waives any Claim to, or to any monies or other assets 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 or other assets in
the Trust Account, and the Trustee hereby agrees not to seek recourse, reimbursement, payment or satisfaction of any Claim against the
Trust Account under any circumstance.
5. Termination. 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 by the Company and has agreed to become subject to the terms of 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, whereupon this Agreement shall terminate; provided, however,
that in the event that the Company does not locate a successor trustee within 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 with respect to any liability arising after such time;
(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 business days of the date of this Agreement, in which case any funds received by the Trustee from the Company or Semper Paratus Sponsor
LLC, the Company’s sponsor, as applicable, shall be returned promptly following the receipt by the Trustee of written instructions
from the Company.
6. Miscellaneous.
(a) The Company and the Trustee each acknowledge
that the Trustee will follow the security procedures set forth herein 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 as promptly as practicable 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, in connection with or resulting
from the Trustee’s gross negligence, fraud or willful misconduct, the Trustee shall not be liable for any loss, liability or 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 Section 1(i), 1(j) and
1(k) hereof (which sections may not be modified, amended or deleted without the affirmative vote of 65% of the then-outstanding
Ordinary Shares and Class B ordinary shares, par value $0.0001 per share, of the Company, voting together as a single class; provided
that no such amendment will affect any Public Shareholder who has properly elected to redeem his or her Ordinary Shares in connection
with a shareholder vote to approve a Specified Charter Amendment or to redeem 100% of its Ordinary Shares if the Company does not complete
its initial Business Combination within the time frame specified in the Company’s Charter), 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 facsimile or by electronic mail:
if to the Trustee, to:
Continental Stock Transfer & Trust Company
1 State Street, 30th Floor
New York, NY 10004
Attention: Account Administration
if to the Company, to:
Semper Paratus Acquisition Corporation
767 Third Avenue, 38th Floor
New York, New York 10017
Attn: Philippe Kurzweil
Email: pj@semperparatusspac.com
in each case, with copies to:
Reed Smith LLP
599 Lexington Avenue
New York, NY 10022
Attn: Ari Edelman, Esq.
Email: aedelman@reedsmith.com
and
Cantor Fitzgerald & Co.
499 Park Avenue
New York, New York, 10022
Attn: General Counsel
and
Ellenoff Grossman & Schole LLP
1345 Avenue of the Americas
New York, NY 10105
Attn: Douglas S. Ellenoff, Esq..
Email: ellenoff@egsllp.com
(f) 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.
(g) 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.
(h) 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.
(i) Each of the Company and the Trustee hereby
acknowledges and agrees that the Underwriter is a third-party beneficiary of this Agreement.
(j) The Trustee may not assign its rights
or delegate its obligations hereunder to any other person or entity without the prior consent of the Company.
[Signature Page Follows]
IN WITNESS WHEREOF, the parties hereto have duly executed this
Investment Management Trust Agreement as of the date first written above.
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CONTINENTAL STOCK TRANSFER & TRUST COMPANY, as Trustee |
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By: |
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Name: |
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Title: |
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SEMPER PARATUS ACQUISITION CORPORATION |
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By: |
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Name: |
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Title: |
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[Signature Page to Investment Management Trust Agreement]
SCHEDULE A
| Fee Item | |
Time and method of payment | |
Amount | |
| Initial acceptance fee | |
Payable at the initial closing of the Offering by wire transfer | |
$ | 3,500.00 | |
| Annual administration fee | |
First year fee payable at initial closing of the Offering by wire transfer; thereafter, payable on the anniversary of the initial closing of the Offering by wire transfer or check | |
$ | 10,000.00 | |
| Transaction processing fee for disbursements to Company under Sections 1(i) and 1(j) | |
Billed by Trustee to Company following disbursements made to the Company under Sections 1(i) and 1(j) | |
$ | 250.00 | |
| Paying Agent services as required pursuant to Sections 1(i) and 1(k) | |
Billed to Company upon delivery of service pursuant to Section 1(i) and 1(k) | |
| Prevailing rates | |
[Signature Page to Investment Management Trust Agreement]
EXHIBIT A
[Letterhead of Company]
[●], 2021
Continental Stock Transfer & Trust Company
1 State Street, 30th Floor
New York, NY 10004
Attention: Account Administration
Re: Trust Account – Termination Letter
Dear [____]:
Pursuant to Section 1(i) of the Investment Management
Trust Agreement between Semper Paratus Acquisition Corporation, a Cayman Islands exempted company (the “Company”),
and Continental Stock Transfer & Trust Company, a New York limited purpose trust company (the “Trustee”),
dated as of [● ], 2021 (the “Trust Agreement”), this is to advise you that the Company has entered into
an agreement with [●] (the “Target Business”) to consummate a business combination with the Target Business
(the “Business Combination”) on or about [●]. The Company shall notify you at least 72 hours in
advance of the actual date (or such shorter time period as you may agree) 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 liquidate all of the assets in the Trust Account and to transfer the total proceeds into the trust operating account at [J.P. Morgan
Chase Bank, N.A.] 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 the Underwriter (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 said trust operating account at [J.P. Morgan Chase
Bank, N.A.] awaiting distribution, neither the Company nor the Underwriter will earn any interest or dividends.
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, Chief Financial Officer, Executive Chairman of the board of directors of the Company or other authorized officer
of the Company, which verifies that the Business Combination has been approved by a vote of the Company’s shareholders, if a
vote is held, and (b) joint written instruction signed by the Company and the Underwriter with respect to the transfer of the
funds held in the Trust Account, including payment of the Deferred Discount from the Trust Account and amounts owed to public
shareholders who have properly exercised their redemption rights (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, (x) to the Representative in an amount equal to the Deferred Discount as directed by the Representative and
(y) the remainder 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 Notification 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 such Notification as soon thereafter as possible.
[Signature Page to Investment Management Trust Agreement]
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Very truly yours, |
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Semper Paratus Acquisition Corporation |
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By: |
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Name: |
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Title: |
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Cantor Fitzgerald & Co. |
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By: |
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Name: |
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Title: |
[Signature Page to Investment Management Trust Agreement]
EXHIBIT B
[Letterhead of Company]
[●], 2021
Continental Stock Transfer & Trust Company
1 State Street, 30th Floor
New York, NY 10004
Attention: Account Administration
Attn: [INSERT NAME]
Re: Trust Account – Termination Letter
Dear [____]:
Pursuant to Section 1(i) of the Investment Management
Trust Agreement between Semper Paratus Acquisition Corporation, a Cayman Islands exempted company (the “Company”),
and Continental Stock Transfer & Trust Company, a New York limited purpose trust company (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 (the “Business Combination”) within the time frame specified
in the Company’s amended and restated memorandum and articles of association, 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 [J.P. Morgan
Chase Bank, N.A.] to await distribution to the Public Shareholders. The Company has selected [____]1
as the effective date for the purpose of determining when the Public Shareholders will be entitled to receive their share of the liquidation
proceeds. It is acknowledged that no interest will be earned by the Company on the liquidation proceeds while on deposit in the trust
operating account. 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 Shareholders 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, net of any payments necessary for reasonable
and documented unreimbursed expenses related to liquidating the Trust Account, your obligations under the Trust Agreement shall be terminated,
except to the extent otherwise provided in Section 1(j) of the Trust Agreement.
1 15 months from the closing of the Offering, or at a later
date, if extended.
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Very truly yours, |
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Semper Paratus Acquisition Corporation |
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By: |
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Name: |
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Title: |
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| cc: J.P. Cantor Fitzgerald & Co. |
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[Signature Page to Investment Management
Trust Agreement]
EXHIBIT C
[Letterhead of Company]
[●], 2021
Continental Stock Transfer & Trust Company
1 State Street, 30th Floor
New York, NY 10004
Attention: Account Administration
Re: Trust Account – Tax Payment Withdrawal Instructions
Dear [____]:
Pursuant to Section 1(j) of the Investment Management
Trust Agreement between Semper Paratus Acquisition Corporation, a Cayman Islands exempted company (the “Company”),
and Continental Stock Transfer & Trust Company, a New York limited purpose trust company (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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Semper Paratus Acquisition Corporation |
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By: |
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Name: |
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Title: |
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| cc: Cantor Fitzgerald & Co. |
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[Signature Page to Investment Management Trust Agreement]
EXHIBIT D
[Letterhead of Company]
[●], 2021
Continental Stock Transfer & Trust Company
1 State Street, 30th Floor
New York, NY 10004
Attention: Account Administration
Re: Trust Account – Shareholder Redemption Withdrawal Instruction
Dear [____]:
Pursuant to Section 1(k) of the Investment Management
Trust Agreement between Semper Paratus Acquisition Corporation, a Cayman Islands exempted company (the “Company”),
and Continental Stock Transfer & Trust Company, a New York limited purpose trust company (the “Trustee”),
dated as of [ ], 2021 (the “Trust Agreement”), the Company hereby requests that you deliver to the redeeming
Public Shareholders of the Company $[ ] of the principal and interest income earned on the Property in the aggregate 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 its Public Shareholders who have
properly elected to have their Ordinary Shares redeemed by the Company in connection with a shareholder vote to approve a Specified Charter
Amendment. 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 Shareholders in accordance with your customary procedures.
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Very truly yours, |
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Semper Paratus Acquisition Corporation |
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By: |
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Name: |
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Title: |
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| cc Cantor Fitzgerald & Co. |
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[Signature Page to Investment Management
Trust Agreement]
Exhibit 10.2
REGISTRATION AND SHAREHOLDER RIGHTS AGREEMENT
THIS REGISTRATION AND SHAREHOLDER RIGHTS AGREEMENT (this “Agreement”),
dated as of [•], 2021, is made and entered into by and among Semper Paratus Acquisition Corporation, a Cayman Islands exempted company
(the “Company”), Semper Paratus Sponsor LLC, a Delaware limited liability company (the “Sponsor”),
Cantor Fitzgerald & Co., the representatives of the underwriters (“Cantor”), and the undersigned parties
listed under Holder on the signature page hereto (each such party, together with the Sponsor and any person or entity who hereafter
becomes a party to this Agreement pursuant to Section 6.2 of this Agreement, a “Holder” and collectively
the “Holders”).
RECITALS
WHEREAS,
the Sponsor currently owns 11,983,333 Class B ordinary shares of the Company, par value $0.0001 per share (the “Class B
Ordinary Shares”) (up to 1,530,000 of which are subject to partial or complete forfeiture depending on the extent to which
the underwriters’ over-allotment option is exercised);
WHEREAS,
the Class B Ordinary Shares are convertible into Class A ordinary shares of the Company, par value $0.0001 per share (the “Class A
Ordinary Shares”), at the time of the initial Business Combination on a one-for-one basis, subject to adjustment, on the
terms and conditions provided in the Company’s amended and restated memorandum and articles of association, as may be amended from
time to time;
WHEREAS, the Company, the Sponsor, and
Cantor entered into that certain Placement Unit Purchase Agreements, pursuant to which the Sponsor agreed to purchase 1,210,000 placement
units (or 1,300,000 placement units if the underwriters exercise their over-allotment option in full) and
Cantor agreed to purchase 150,000 placement units, (regardless of whether the Underwriters’ over-allotment option in connection
with the Company’s initial public offering is exercised in full), (the “Private Placement Units”), with
each Private Placement Unit composed of one Class A Ordinary Share and one-half of one warrant, in a private placement transaction occurring
simultaneously with the closing of the Company’s initial public offering;
WHEREAS,
in order to finance the Company’s transaction costs in connection with its search for, and consummation of, an initial Business
Combination, in the future the Sponsor or its affiliates 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 at the option of the lender into an additional 150,000 units, at a price of
$10.00 per unit (the “Working Capital Units”); and
WHEREAS,
the Company and the Holders desire to enter into this Agreement, pursuant to which the Company shall grant the Holders certain registration
rights with respect to certain securities of the Company, as set forth in this Agreement.
NOW,
THEREFORE, in consideration of the mutual representations, covenants and agreements contained herein, and certain other good and
valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto, intending to be legally bound,
hereby agree as follows:
ARTICLE 1
DEFINITIONS
1.1 Definitions. The terms defined in this
Article I shall, for all purposes of this Agreement, have the respective meanings set forth below:
“Adverse Disclosure”
shall mean any public disclosure of material non-public information, which disclosure, in the good faith judgment of the chief executive
officer, chief financial officer or executive chairman of the Company, after consultation with counsel to the Company, (i) would
be required to be made in any Registration Statement or Prospectus in order for the applicable Registration Statement or Prospectus not
to contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements contained therein
(in the case of any prospectus and any preliminary prospectus, in the light of the circumstances under which they were made) not misleading,
(ii) would not be required to be made at such time if the Registration Statement were not being filed and (iii) the Company
has a bona fide business purpose for not making such information public.
“Agreement” shall have
the meaning given in the Preamble.
“Board” shall mean the
Board of Directors of the Company.
“Business Combination”
shall mean any merger, share exchange, asset acquisition, share purchase, reorganization or similar business combination involving the
Company and one or more businesses.
“Cantor” means Cantor Fitzgerald & Co.,
the representative of the underwriters in the Offering.
“Class A Ordinary Shares”
shall have the meaning given in the Recitals hereto.
“Class B Ordinary Shares”
shall have the meaning given in the Recitals hereto.
“Commission” shall mean
the U.S. Securities and Exchange Commission.
“Company” shall have
the meaning given in the Preamble.
“Demand Registration”
shall have the meaning given in subsection 2.1.1.
“Demanding Holder” shall
have the meaning given in subsection 2.1.1.
“Exchange Act” shall
mean the Securities Exchange Act of 1934, as it may be amended from time to time.
“Form S-1” shall
have the meaning given in subsection 2.1.1.
“Form S-3” shall
have the meaning given in subsection 2.3.1.
“Founder Shares” shall
mean the Class B Ordinary Shares and shall be deemed to include the Class A Ordinary Shares issuable upon conversion thereof.
“Founder Shares Lock-up Period”
shall mean, with respect to the Founder Shares, the period ending on 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 closing price of our Class A ordinary
shares equals or exceeds $12.00 per share (as adjusted for share subdivisions, share capitalizations, 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 on which we complete a liquidation, merger, share exchange or other similar transaction that results in all of our
public shareholders having the right to exchange their ordinary shares for cash, securities or other property.
“Insider Letter” shall
mean that certain letter agreement, dated as of the date hereof, among the Company, the Holders and each of the Company’s officers,
directors and director nominees.
“Maximum Number of Securities”
shall have the meaning given in subsection 2.1.4.
“Misstatement” shall
mean an untrue statement of a material fact or an omission to state a material fact required to be stated in a Registration Statement
or Prospectus, or necessary to make the statements in a Registration Statement or Prospectus (in the case of any prospectus and any preliminary
prospectus, in the light of the circumstances under which they were made) not misleading.
“Nominee” is defined
in Section 6.1.
“Permitted Transferees”
shall mean any person or entity to whom a Holder of Registrable Securities is permitted to transfer such Registrable Securities prior
to the expiration of the Founder Shares Lock-up Period or Private Placement Lock-up Period, as the case may be, under the Insider Letter,
the Placement Unit Purchase Agreements, this Agreement and any other applicable agreement between such Holder and the Company, and to any
transferees thereafter.
“Piggyback Registration”
shall have the meaning given in subsection 2.2.1.
“Private Placement Lock-up Period”
shall mean, with respect to Private Placement Units that are held by the initial purchasers of such Private Placement Units or their Permitted
Transferees, and any of the Class A Ordinary Shares issued or issuable upon the exercise or conversion of the Private Placement Units
and that are held by the initial purchasers of the Private Placement Units or their Permitted Transferees, the period ending 30 days after
the completion of an initial Business Combination.
“Private Placement Units ”
shall have the meaning given in the Recitals hereto.
“Prospectus” shall mean
the prospectus included in any Registration Statement, as supplemented by any and all prospectus supplements and as amended by any and
all post-effective amendments and including all material incorporated by reference in such prospectus.
“Registrable
Security” shall mean (a) the Founder Shares (including any Class A Ordinary Shares or other equivalent
equity security issued or issuable upon the conversion of any such Founder Shares or exercisable for Class A Ordinary Shares),
(b) the Private Placement Units (and its components), (c) any Working Capital Units (including any Class A Ordinary Shares
issued or issuable upon the exercise of any such Working Capital Units), (d) any outstanding Class A Ordinary Shares or
any other equity security (including the Class A Ordinary Shares issued or issuable upon the exercise of any other equity
security) of the Company held by a Holder as of the date of this Agreement, and (e) any other equity security of the Company
issued or issuable with respect to any such Class A Ordinary Shares by way of a share subdivision or share capitalization or in
connection with a combination of shares, recapitalization, merger, consolidation or reorganization; provided, however,
that, as to any particular Registrable Security, such securities shall cease to be Registrable Securities when: (i) a
Registration Statement with respect to the sale of such securities shall have become effective under the Securities Act and such
securities shall have been sold, transferred, disposed of or exchanged in accordance with such Registration Statement;
(ii) such securities shall have been otherwise transferred, new certificates for such securities not bearing a legend
restricting further transfer shall have been delivered by the Company and subsequent public distribution of such securities shall
not require registration under the Securities Act; (iii) such securities shall have ceased to be outstanding; (iv) such
securities have been sold without registration pursuant to Section 4(a)(1) of the Securities Act or Rule 144 or
Rule 145 promulgated under the Securities Act (or any successor rule promulgated thereafter by the Commission); or
(v) such securities have been sold to, or through, a broker, dealer or underwriter in a public distribution or other public
securities transaction.
“Registration” shall
mean a registration effected by preparing and filing a registration statement or similar document in compliance with the requirements
of the Securities Act, and the applicable rules and regulations promulgated thereunder, and such registration statement becoming
effective.
“Registration Expenses”
shall mean the out-of-pocket expenses of a Registration, including, without limitation, the following:
(A) all registration and filing
fees (including fees with respect to filings required to be made with the Financial Industry Regulatory Authority, Inc.) and any
securities exchange on which the Class A Ordinary Shares are then listed;
(B) fees and expenses of compliance
with securities or blue sky laws (including reasonable fees and disbursements of counsel for the Underwriters in connection with blue
sky qualifications of Registrable Securities);
(C) printing, messenger, telephone
and delivery expenses;
(D) reasonable fees and disbursements
of counsel for the Company;
(E) reasonable fees and disbursements
of all independent registered public accountants of the Company incurred specifically in connection with such Registration; and
(F) reasonable fees and expenses
of one legal counsel selected by the majority-in-interest of the Demanding Holders initiating a Demand Registration to be registered for
offer and sale in the applicable Registration or the Takedown Requesting Holder initiating an Underwritten Shelf Takedown.
“Registration Statement”
shall mean any registration statement that covers the Registrable Securities pursuant to the provisions of this Agreement, including the
Prospectus included in such registration statement, amendments (including post-effective amendments) and supplements to such registration
statement, and all exhibits to and all material incorporated by reference in such registration statement.
“Requesting Holder”
shall have the meaning given in subsection 2.1.1.
“Securities Act” shall
mean the Securities Act of 1933, as amended from time to time.
“Shelf” shall have the
meaning given in subsection 2.3.1.
“Sponsor” shall have
the meaning given in the Recitals hereto.
“Sponsor Director” means
an individual elected to the Board that has been nominated by the Sponsor pursuant to this Agreement.
“Subsequent Shelf Registration”
shall have the meaning given in subsection 2.3.2.
“Takedown Requesting Holder”
shall have the meaning given in subsection 2.3.3.
“Underwriter” shall
mean a securities dealer who purchases any Registrable Securities as principal in an Underwritten Offering and not as part of such dealer’s
market-making activities.
“Underwritten Registration”
or “Underwritten Offering” shall mean a Registration in which securities of the Company are sold to an Underwriter
in a firm commitment underwriting for distribution to the public.
“Underwritten Shelf Takedown”
shall have the meaning given in subsection 2.3.3.
“Working Capital Units”
shall have the meaning given in the Recitals hereto.
ARTICLE 2
REGISTRATIONS
2.1 Demand Registration.
2.1.1 Request for Registration.
Subject to the provisions of subsection 2.1.4 and Section 2.4 hereof, at any time and from time to time on or
after the date the Company consummates the initial Business Combination, (i) the Holders of at least a majority in interest of the
then-outstanding number of Registrable Securities or (ii) Cantor, the other underwriters in the Offering and/or their designees (the
“Demanding Holders”) may make a written demand for Registration of all or part of their Registrable
Securities, which written demand shall describe the amount and type of securities to be included in such Registration and the
intended method(s) of distribution thereof (such written demand, a “Demand Registration”). The
Company shall, within five business days of the Company’s receipt of the Demand Registration, notify, in writing, all other
Holders of Registrable Securities of such demand, and each Holder of Registrable Securities who thereafter wishes to include all or
a portion of such Holder’s Registrable Securities in a Registration pursuant to a Demand Registration (each such Holder that
includes all or a portion of such Holder’s Registrable Securities in such Registration, a “Requesting
Holder”) shall so notify the Company, in writing, within three business days after the receipt by the Holder of the
notice from the Company. Upon receipt by the Company of any such written notification from a Requesting Holder(s) to the
Company, such Requesting Holder(s) shall be entitled to have their Registrable Securities included in a Registration pursuant
to a Demand Registration and the Company shall effect, as soon thereafter as practicable, but not more than 45 days immediately
after the Company’s receipt of the Demand Registration, the Registration of all Registrable Securities requested by the
Demanding Holders and Requesting Holders pursuant to such Demand Registration. Under no circumstances shall the Company be obligated
to effect more than an aggregate of three Registrations pursuant to a Demand Registration under this subsection 2.1.1 with
respect to any or all Registrable Securities, including one (1) Demand Registration on behalf of Cantor, the other underwriters in
the Offering and/or their designees; provided, however, that a Registration shall not be counted for such purposes
unless a Form S-1 or any similar long-form registration statement that may be available at such time
(“Form S-1”) has become effective and all of the Registrable Securities requested by the Requesting
Holders to be registered on behalf of the Requesting Holders in such Form S-1 Registration have been sold, in accordance with Section 3.1
of this Agreement; provided, further, that an Underwritten Shelf Takedown shall not count as a Demand
Registration.
2.1.2 Effective Registration. Notwithstanding
the provisions of subsection 2.1.1 above or any other part of this Agreement, a Registration pursuant to a Demand Registration
shall not count as a Registration unless and until (i) the Registration Statement filed with the Commission with respect to a Registration
pursuant to a Demand Registration has been declared effective by the Commission and (ii) the Company has complied with all of its
obligations under this Agreement with respect thereto; provided, further, that if, after such Registration Statement has
been declared effective, an offering of Registrable Securities in a Registration pursuant to a Demand Registration is subsequently interfered
with by any stop order or injunction of the Commission, federal or state court or any other governmental agency the Registration Statement
with respect to such Registration shall be deemed not to have been declared effective, unless and until, (i) such stop order or injunction
is removed, rescinded or otherwise terminated and (ii) a majority-in-interest of the Demanding Holders initiating such Demand Registration
thereafter affirmatively elect to continue with such Registration and accordingly notify the Company in writing, but in no event later
than five days, of such election; provided, further, that the Company shall not be obligated or required to file another
Registration Statement until the Registration Statement that has been previously filed with respect to a Registration pursuant to a Demand
Registration becomes effective or is subsequently terminated.
2.1.3 Underwritten Offering. Subject to
the provisions of subsection 2.1.4 and Section 2.4 hereof, if a majority-in-interest of the Demanding Holders so advise
the Company as part of their Demand Registration that the offering of the Registrable Securities pursuant to such Demand Registration
shall be in the form of an Underwritten Offering, then the right of such Demanding Holder or Requesting Holder (if any) to include its
Registrable Securities in such Registration shall be conditioned upon such Holder’s participation in such Underwritten Offering
and the inclusion of such Holder’s Registrable Securities in such Underwritten Offering to the extent provided herein. All such
Holders proposing to distribute their Registrable Securities through an Underwritten Offering under this subsection 2.1.3 shall
enter into an underwriting agreement in customary form with the Underwriter(s) selected for such Underwritten Offering by the majority-in-interest
of the Demanding Holders initiating the Demand Registration.
2.1.4 Reduction of Underwritten Offering.
If the managing Underwriter or Underwriters in an Underwritten Registration pursuant to a Demand Registration, in good faith, advises
the Company, the Demanding Holders and the Requesting Holders (if any) in writing that the dollar amount or number of Registrable Securities
that the Demanding Holders and the Requesting Holders (if any) desire to sell, taken together with all other Class A Ordinary Shares
or other equity securities that the Company desires to sell and the Class A Ordinary Shares, if any, as to which a Registration has
been requested pursuant to separate written contractual piggy-back registration rights held by any other shareholders who desire to sell,
exceeds the maximum dollar amount or maximum number of equity securities that can be sold in the Underwritten Offering without adversely
affecting the proposed offering price, the timing, the distribution method, or the probability of success of such offering (such maximum
dollar amount or maximum number of such securities, as applicable, the “Maximum Number of Securities”), then
the Company shall include in such Underwritten Offering, as follows: (i) first, the Registrable Securities of the Demanding Holders
and the Requesting Holders (if any) (pro rata based on the respective number of Registrable Securities that each Demanding Holder and
Requesting Holder (if any) has requested be included in such Underwritten Registration and the aggregate number of Registrable Securities
that the Demanding Holders and Requesting Holders have requested be included in such Underwritten Registration (such proportion is referred
to herein as “Pro Rata”)) that can be sold without exceeding the Maximum Number of Securities; (ii) second,
to the extent that the Maximum Number of Securities has not been reached under the foregoing clause (i), the Class A Ordinary Shares
or other equity securities that the Company desires to sell, which can be sold without exceeding the Maximum Number of Securities; and
(iii) third, to the extent that the Maximum Number of Securities has not been reached under the foregoing clauses (i) and (ii),
the Class A Ordinary Shares or other equity securities of other persons or entities that the Company is obligated to register in
a Registration pursuant to separate written contractual arrangements with such persons and that can be sold without exceeding the Maximum
Number of Securities.
2.1.5 Demand Registration Withdrawal. A
majority-in-interest of the Demanding Holders initiating a Demand Registration or a majority-in-interest of the Requesting Holders (if
any), pursuant to a Registration under subsection 2.1.1 shall have the right to withdraw from a Registration pursuant to such Demand
Registration for any or no reason whatsoever upon written notification to the Company and the Underwriter or Underwriters (if any) of
their intention to withdraw from such Registration prior to the effectiveness of the Registration Statement filed with the Commission
with respect to the Registration of their Registrable Securities pursuant to such Demand Registration. Notwithstanding anything to the
contrary in this Agreement, the Company shall be responsible for the Registration Expenses incurred in connection with a Registration
pursuant to a Demand Registration prior to its withdrawal under this subsection 2.1.5.
2.2 Piggyback Registration.
2.2.1 Piggyback Rights. If, at any time
on or after the date the Company consummates an initial Business Combination, the Company proposes to file a Registration Statement under
the Securities Act with respect to an offering of equity securities, or securities or other obligations exercisable or exchangeable for,
or convertible into equity securities, for its own account or for the account of shareholders of the Company (or by the Company and by
the shareholders of the Company including, without limitation, pursuant to Section 2.1 hereof), other than a Registration
Statement (i) filed in connection with any employee share option or other benefit plan, (ii) for an exchange offer or offering
of securities solely to the Company’s existing shareholders, (iii) for an offering of debt that is convertible into equity
securities of the Company or (iv) for a dividend reinvestment plan, then the Company shall give written notice of such proposed filing
to all of the Holders of Registrable Securities as soon as practicable but not less than seven days before the anticipated filing date
of such Registration Statement, which notice shall (A) describe the amount and type of securities to be included in such offering,
the intended method(s) of distribution, and the name of the proposed managing Underwriter or Underwriters, if any, in such offering,
and (B) offer to all of the Holders of Registrable Securities the opportunity to register the sale of such number of Registrable
Securities as such Holders may request in writing within three business days after receipt of such written notice (such Registration,
a “Piggyback Registration”). The Company shall, in good faith, cause such Registrable Securities to be included
in such Piggyback Registration and shall use commercially reasonable efforts to cause the managing Underwriter or Underwriters of a proposed
Underwritten Offering to permit the Registrable Securities requested by the Holders pursuant to this subsection 2.2.1 to be included
in a Piggyback Registration on the same terms and conditions as any similar securities of the Company included in such Registration and
to permit the sale or other disposition of such Registrable Securities in accordance with the intended method(s) of distribution
thereof. All such Holders proposing to distribute their Registrable Securities through an Underwritten Offering under this subsection
2.2.1 shall enter into an underwriting agreement in customary form with the Underwriter(s) selected for such Underwritten Offering
by the Company. For purposes of clarity, the notice periods set forth in this subsection 2.2.1 shall not apply to an Underwritten
Shelf Takedown conducted in accordance with subsection 2.3.3.
2.2.2 Reduction of Piggyback Registration.
If the managing Underwriter or Underwriters in an Underwritten Registration that is to be a Piggyback Registration (other than Underwritten
Shelf Takedown), in good faith, advises the Company and the Holders of Registrable Securities participating in the Piggyback Registration
in writing that the dollar amount or number of the Class A Ordinary Shares that the Company desires to sell, taken together with
(i) the Class A Ordinary Shares, if any, as to which Registration has been demanded pursuant to separate written contractual
arrangements with persons or entities other than the Holders of Registrable Securities hereunder, (ii) the Registrable Securities
as to which registration has been requested pursuant to Section 2.2 hereof, and (iii) the Class A Ordinary Shares,
if any, as to which Registration has been requested pursuant to separate written contractual piggy-back registration rights of other shareholders
of the Company, exceeds the Maximum Number of Securities, then:
(a) If the Registration is undertaken for
the Company’s account, the Company shall include in any such Registration (A) first, the Class A Ordinary Shares or other
equity securities that the Company desires to sell, which can be sold without exceeding the Maximum Number of Securities; (B) second,
to the extent that the Maximum Number of Securities has not been reached under the foregoing clause (A), the Registrable Securities of
Holders exercising their rights to register their Registrable Securities pursuant to subsection 2.2.1, pro rata based on the number
of Registrable Securities that each Holder has requested to be included in such Registration and the aggregate number of Registrable Securities
that the Holders have requested to be included in such Registration, which can be sold without exceeding the Maximum Number of Securities;
and (C) third, to the extent that the Maximum Number of Securities has not been reached under the foregoing clauses (A) and
(B), the Class A Ordinary Shares or other equity securities for the account of other persons or entities that the Company is obligated
to register pursuant to separate written contractual arrangements with such persons or entities, which can be sold without exceeding the
Maximum Number of Securities;
(b) If the Registration is pursuant to a
request by persons or entities other than the Holders of Registrable Securities, then the Company shall include in any such Registration
(A) first, the Class A Ordinary Shares or other equity securities, if any, of such requesting persons or entities, other than
the Holders of Registrable Securities, which can be sold without exceeding the Maximum Number of Securities; (B) second, to the extent
that the Maximum Number of Securities has not been reached under the foregoing clause (A), the Registrable Securities of Holders exercising
their rights to register their Registrable Securities pursuant to subsection 2.2.1, pro rata based on the number of Registrable
Securities that each Holder has requested be included in such Registration and the aggregate number of Registrable Securities that the
Holders have requested to be included in such Registration, which can be sold without exceeding the Maximum Number of Securities; (C) third,
to the extent that the Maximum Number of Securities has not been reached under the foregoing clauses (A) and (B), the Class A
Ordinary Shares or other equity securities that the Company desires to sell, which can be sold without exceeding the Maximum Number of
Securities; and (D) fourth, to the extent that the Maximum Number of Securities has not been reached under the foregoing clauses
(A), (B) and (C), the Class A Ordinary Shares or other equity securities for the account of other persons or entities that the
Company is obligated to register pursuant to separate written contractual arrangements with such persons or entities, which can be sold
without exceeding the Maximum Number of Securities.
2.2.3 Piggyback Registration Withdrawal.
Any Holder of Registrable Securities shall have the right to withdraw from a Piggyback Registration for any or no reason whatsoever upon
written notification to the Company and the Underwriter or Underwriters (if any) of his, her or its intention to withdraw from such Piggyback
Registration prior to the effectiveness of the Registration Statement filed with the Commission with respect to such Piggyback Registration.
The Company (whether on its own good faith determination or as the result of a request for withdrawal by persons pursuant to separate
written contractual obligations) may withdraw a Registration Statement filed with the Commission in connection with a Piggyback Registration
at any time prior to the effectiveness of such Registration Statement. Notwithstanding anything to the contrary in this Agreement, the
Company shall be responsible for the Registration Expenses incurred in connection with the Piggyback Registration prior to its withdrawal
under this subsection 2.2.3.
2.2.4 Unlimited Piggyback Registration Rights.
For purposes of clarity, any Registration effected pursuant to Section 2.2 hereof shall not be counted as a Registration pursuant
to a Demand Registration effected under Section 2.1 hereof.
2.3 Shelf Registrations.
2.3.1 The Holders of Registrable Securities may
at any time, and from time to time, request in writing that the Company, pursuant to Rule 415 under the Securities Act (or any successor
rule promulgated thereafter by the Commission), register the resale of any or all of their Registrable Securities on Form S-3
or any similar short-form registration statement that may be available at such time (“Form S-3”), or if
the Company is ineligible to use Form S-3, on Form S-1; a registration statement filed pursuant to this subsection 2.3.1
(a “Shelf”) shall provide for the resale of the Registrable Securities included therein pursuant to any method
or combination of methods legally available to, and requested by, any Holder. Within three days of the Company’s receipt of a written
request from a Holder or Holders of Registrable Securities for a Registration on a Shelf, the Company shall promptly give written notice
of the proposed Registration to all other Holders of Registrable Securities, and each Holder of Registrable Securities who thereafter
wishes to include all or a portion of such Holder’s Registrable Securities in such Registration shall so notify the Company, in
writing, within three business days after the receipt by the Holder of the notice from the Company. As soon as practicable thereafter,
but not more than 10 days after the Company’s initial receipt of such written request for a Registration on a Shelf, the Company
shall register all or such portion of such Holder’s Registrable Securities as are specified in such written request, together with
all or such portion of Registrable Securities of any other Holder or Holders joining in such request as are specified in the written notification
given by such Holder or Holders; provided, however, that the Company shall not be obligated to effect any such Registration pursuant to
this subsection 2.3.1 if the Holders of Registrable Securities, together with the Holders of any other equity securities of the
Company entitled to inclusion in such Registration, propose to sell the Registrable Securities and such other equity securities (if any)
at any aggregate price to the public of less than $10,000,000. The Company shall maintain each Shelf in accordance with the terms hereof,
and shall prepare and file with the Commission such amendments, including post-effective amendments, and supplements as may be necessary
to keep such Shelf continuously effective, available for use and in compliance with the provisions of the Securities Act until such time
as there are no longer any Registrable Securities included on such Shelf. In the event the Company files a Shelf on Form S-1, the
Company shall use its commercially reasonable efforts to convert the Form S-1 to a Form S-3 as soon as practicable after the
Company is eligible to use Form S-3.
2.3.2 If any Shelf ceases to be effective under
the Securities Act for any reason at any time while Registrable Securities included thereon are still outstanding, the Company shall use
its commercially reasonable efforts to as promptly as is reasonably practicable cause such Shelf to again become effective under the Securities
Act (including obtaining the prompt withdrawal of any order suspending the effectiveness of such Shelf), and shall use its commercially
reasonable efforts to as promptly as is reasonably practicable amend such Shelf in a manner reasonably expected to result in the withdrawal
of any order suspending the effectiveness of such Shelf or file an additional registration statement (a “Subsequent Shelf
Registration”) registering the resale of all Registrable Securities including on such Shelf, and pursuant to any method
or combination of methods legally available to, and requested by, any Holder. If a Subsequent Shelf Registration is filed, the Company
shall use its commercially reasonable efforts to (i) cause such Subsequent Shelf Registration to become effective under the Securities
Act as promptly as is reasonably practicable after the filing thereof and (ii) keep such Subsequent Shelf Registration continuously
effective, available for use and in compliance with the provisions of the Securities Act until such time as there are no longer any Registrable
Securities included thereon. Any such Subsequent Shelf Registration shall be on Form S-3 to the extent that the Company is eligible
to use such form. Otherwise, such Subsequent Shelf Registration shall be on another appropriate form. In the event that any Holder holds
Registrable Securities that are not registered for resale on a delayed or continuous basis, the Company, upon request of a Holder shall
promptly use its commercially reasonable efforts to cause the resale of such Registrable Securities to be covered by either, at the Company’s
option, a Shelf (including by means of a post-effective amendment) or a Subsequent Shelf Registration and cause the same to become effective
as soon as practicable after such filing and such Shelf or Subsequent Shelf Registration shall be subject to the terms hereof; provided,
however, the Company shall only be required to cause such Registrable Securities to be so covered once annually after inquiry of
the Holders.
2.3.3 At any time and from time to time after
a Shelf has been declared effective by the Commission, the Sponsor may request to sell all or any portion of its Registrable Securities
in an underwritten offering that is registered pursuant to the Shelf (each, an “Underwritten Shelf Takedown”);
provided that the Company shall only be obligated to effect an Underwritten Shelf Takedown if such offering shall include securities
with a total offering price (including piggyback securities and before deduction of underwriting discounts) reasonably expected to exceed,
in the aggregate, $10,000,000. All requests for Underwritten Shelf Takedowns shall be made by giving written notice to the Company at
least 48 hours prior to the public announcement of such Underwritten Shelf Takedown, which shall specify the approximate number of Registrable
Securities proposed to be sold in the Underwritten Shelf Takedown and the expected price range (net of underwriting discounts and commissions)
of such Underwritten Shelf Takedown. The Company shall include in any Underwritten Shelf Takedown the securities requested to be included
by any holder (each, a “Takedown Requesting Holder”) at least 24 hours prior to the public announcement of such
Underwritten Shelf Takedown pursuant to written contractual piggyback registration rights of such holder (including to those set forth
herein). The Sponsor shall have the right to select the underwriter(s) for such offering (which shall consist of one or more reputable
nationally recognized investment banks), subject to the Company’s prior approval which shall not be unreasonably withheld, conditioned
or delayed. For purposes of clarity, any Registration effected pursuant to this subsection 2.3.3 shall not be counted as a Registration
pursuant to a Demand Registration effected under Section 2.1 hereof.
2.3.4 If the managing Underwriter or Underwriters
in an Underwritten Shelf Takedown, in good faith, advises the Company, the Sponsor and the Takedown Requesting Holders (if any) in writing
that the dollar amount or number of Registrable Securities that the Sponsor and the Takedown Requesting Holders (if any) desire to sell,
taken together with all other Class A Ordinary Shares or other equity securities that the Company desires to sell, exceeds the Maximum
Number of Securities, then the Company shall include in such Underwritten Shelf Takedown, as follows: (i) first, the Registrable
Securities of the Sponsor that can be sold without exceeding the Maximum Number of Securities; (ii) second, to the extent that the
Maximum Number of Securities has not been reached under the foregoing clause (i), the Class A Ordinary Shares or other equity securities
that the Company desires to sell, which can be sold without exceeding the Maximum Number of Securities; and (iii) third, to the extent
that the Maximum Number of Securities has not been reached under the foregoing clauses (i) and (ii), the Class A Ordinary Shares
or other equity securities of the Takedown Requesting Holders, if any, that can be sold without exceeding the Maximum Number of Securities,
determined pro rata based on the respective number of Registrable Securities that each Takedown Requesting Holder has so requested to
be included in such Underwritten Shelf Takedown.
2.3.5 The Sponsor and the Takedown Requesting
Holders (if any) shall have the right to withdraw from an Underwritten Shelf Takedown for any or no reason whatsoever upon written notification
to the Company and the Underwriter or Underwriters (if any) of its intention to withdraw from such Underwritten Shelf Takedown prior to
the public announcement of such Underwritten Shelf Takedown. Notwithstanding anything to the contrary in this Agreement, the Company shall
be responsible for the Registration Expenses incurred in connection with an Underwritten Shelf Takedown prior to a withdrawal under this
subsection 2.3.5.
2.4 Restrictions on Registration Rights.
If (A) during the period starting with the date 60 days prior to the Company’s good faith estimate of the date of the filing
of, and ending on a date 120 days after the effective date of, a Company initiated Registration and provided that the Company has delivered
written notice to the Holders prior to receipt of a Demand Registration pursuant to subsection 2.1.1 and it continues to actively employ,
in good faith, all reasonable efforts to cause the applicable Registration Statement to become effective; (B) the Holders have requested
an Underwritten Registration and the Company and the Holders are unable to obtain the commitment of underwriters to firmly underwrite
the offer; or (C) in the good faith judgment of the Board such Registration would be seriously detrimental to the Company and the
Board concludes as a result that it is essential to defer the filing of such Registration Statement at such time, then in each case the
Company shall furnish to such Holders a certificate signed by the executive chairman of the Board or the chief executive officer or chief
financial officer of the Company stating that in the good faith judgment of the Board it would be seriously detrimental to the Company
for such Registration Statement to be filed in the near future and that it is therefore essential to defer the filing of such Registration
Statement. In such event, the Company shall have the right to defer such filing for a period of not more than 30 days; provided,
however, that the Company shall not defer its obligation in this manner more than once in any 12-month period. Notwithstanding
anything to the contrary contained in this Agreement, the Company shall not be required to effect or permit any Registration or cause
any Registration Statement to become effective, with respect to any Registrable Securities held by any Holder, until after the expiration
of the Founder Shares Lock-Up Period or the Private Placement Lock-Up Period, as the case may be.
ARTICLE 3
COMPANY PROCEDURES
3.1 General Procedures. If at any time
on or after the date the Company consummates an initial Business Combination the Company is required to effect the Registration of Registrable
Securities, the Company shall use commercially reasonable to effect such Registration to permit the sale of such Registrable Securities
in accordance with the intended plan of distribution thereof, and pursuant thereto the Company shall, as expeditiously as possible:
3.1.1 prepare and file with the Commission as
soon as practicable a Registration Statement with respect to such Registrable Securities and use its commercially reasonable efforts to
cause such Registration Statement to become effective and remain effective until all Registrable Securities covered by such Registration
Statement have been sold;
3.1.2 prepare and file with the Commission such
amendments and post-effective amendments to the Registration Statement, and such supplements to the Prospectus, as may be reasonably requested
by the Holders with Registrable Securities registered on such Registration Statement or any Underwriter of Registrable Securities or as
may be required by the rules, regulations or instructions applicable to the registration form used by the Company or by the Securities
Act or rules and regulations thereunder to keep the Registration Statement effective until all Registrable Securities covered by
such Registration Statement are sold in accordance with the intended plan of distribution set forth in such Registration Statement or
supplement to the Prospectus;
3.1.3 prior to filing a Registration Statement
or Prospectus, or any amendment or supplement thereto, furnish without charge to the Underwriters, if any, and the Holders of Registrable
Securities included in such Registration, and such Holders’ legal counsel, copies of such Registration Statement as proposed to
be filed, each amendment and supplement to such Registration Statement (in each case including all exhibits thereto and documents incorporated
by reference therein), the Prospectus included in such Registration Statement (including each preliminary Prospectus), and such other
documents as the Underwriters and the Holders of Registrable Securities included in such Registration or the legal counsel for any such
Holders may request in order to facilitate the disposition of the Registrable Securities owned by such Holders;
3.1.4 prior to any public offering of Registrable
Securities, use commercially reasonable efforts to (i) register or qualify the Registrable Securities covered by the Registration
Statement under such securities or “blue sky” laws of such jurisdictions in the United States as the Holders of Registrable
Securities included in such Registration Statement (in light of their intended plan of distribution) may request and (ii) take such
action necessary to cause such Registrable Securities covered by the Registration Statement to be registered with or approved by such
other governmental authorities as may be necessary by virtue of the business and operations of the Company and do any and all other acts
and things that may be necessary or advisable to enable the Holders of Registrable Securities included in such Registration Statement
to consummate the disposition of such Registrable Securities in such jurisdictions; provided, however, that the Company
shall not be required to qualify generally to do business in any jurisdiction where it would not otherwise be required to qualify or take
any action to which it would be subject to general service of process or taxation in any such jurisdiction where it is not then otherwise
so subject;
3.1.5 cause all such Registrable Securities to
be listed on each securities exchange or automated quotation system on which similar securities issued by the Company are then listed;
3.1.6 provide a transfer agent or warrant agent,
as applicable, and registrar for all such Registrable Securities no later than the effective date of such Registration Statement;
3.1.7 advise each seller of such Registrable Securities,
promptly after it shall receive notice or obtain knowledge thereof, of the issuance of any stop order by the Commission suspending the
effectiveness of such Registration Statement or the initiation or threatening of any proceeding for such purpose and promptly use commercially
reasonable efforts to prevent the issuance of any stop order or to obtain its withdrawal if such stop order should be issued;
3.1.8 at least five days prior to the filing of
any Registration Statement or Prospectus or any amendment or supplement to such Registration Statement or Prospectus (other than by way
of a document incorporated by reference) furnish a copy thereof to each seller of such Registrable Securities or its counsel;
3.1.9 notify the Holders at any time when a Prospectus
relating to such Registration Statement is required to be delivered under the Securities Act, of the happening of any event as a result
of which the Prospectus included in such Registration Statement, as then in effect, includes a Misstatement, and then to correct such
Misstatement as set forth in Section 3.4 hereof;
3.1.10 permit a representative of the Holders,
the Underwriters, if any, and any attorney or accountant retained by such Holders or Underwriter to participate, at each such person’s
own expense, in the preparation of the Registration Statement, and cause the Company’s officers, directors and employees to supply
all information reasonably requested by any such representative, Underwriter, attorney or accountant in connection with the Registration;
provided, however, that such representatives or Underwriters enter into a confidentiality agreement, in form and substance
reasonably satisfactory to the Company, prior to the release or disclosure of any such information;
3.1.11 obtain a “cold comfort” letter
from the Company’s independent registered public accountants in the event of an Underwritten Registration, in customary form and
covering such matters of the type customarily covered by “cold comfort” letters as the managing Underwriter may reasonably
request, and reasonably satisfactory to a majority-in-interest of the participating Holders;
3.1.12 on the date the Registrable Securities
are delivered for sale pursuant to such Registration, obtain an opinion, dated such date, of counsel representing the Company for the
purposes of such Registration, addressed to the Holders, the placement agent or sales agent, if any, and the Underwriters, if any, covering
such legal matters with respect to the Registration in respect of which such opinion is being given as the Holders, placement agent, sales
agent, or Underwriter may reasonably request and as are customarily included in such opinions and negative assurance letters, and reasonably
satisfactory to a majority-in-interest of the participating Holders;
3.1.13 in the event of any Underwritten Offering,
enter into and perform its obligations under an underwriting agreement, in usual and customary form, with the managing Underwriter of
such offering;
3.1.14 make available to its securityholders,
as soon as reasonably practicable, an earnings statement covering the period of at least 12 months beginning with the first day of the
Company’s first full calendar quarter after the effective date of the Registration Statement which satisfies the provisions of Section 11(a) of
the Securities Act and Rule 158 thereunder (or any successor rule promulgated thereafter by the Commission);
3.1.15 if the Registration involves the Registration
of Registrable Securities involving gross proceeds in excess of $25,000,000, use its reasonable efforts to make available senior executives
of the Company to participate in customary “road show” presentations that may be reasonably requested by the Underwriter in
any Underwritten Offering; and
3.1.16 otherwise, in good faith, cooperate reasonably
with, and take such customary actions as may reasonably be requested by the Holders, in connection with such Registration.
3.2 Registration Expenses. The Registration
Expenses of all Registrations shall be borne by the Company. It is acknowledged by the Holders that the Holders shall bear all incremental
selling expenses relating to the sale of Registrable Securities, such as Underwriters’ commissions and discounts, brokerage fees,
Underwriter marketing costs and, other than as set forth in the definition of “Registration Expenses,” all reasonable fees
and expenses of any legal counsel representing the Holders.
3.3 Requirements for Participation in Underwritten
Offerings. No person may participate in any Underwritten Offering for equity securities of the Company pursuant to a Registration
initiated by the Company hereunder unless such person (i) agrees to sell such person’s securities on the basis provided in
any underwriting arrangements approved by the Company and (ii) completes and executes all customary questionnaires, powers of attorney,
indemnities, lock-up agreements, underwriting agreements and other customary documents as may be reasonably required under the terms of
such underwriting arrangements.
3.4 Suspension of Sales; Adverse Disclosure.
Upon receipt of written notice from the Company that a Registration Statement or Prospectus contains a Misstatement, each of the Holders
shall forthwith discontinue disposition of Registrable Securities until it has received copies of a supplemented or amended Prospectus
correcting the Misstatement (it being understood that the Company hereby covenants to prepare and file such supplement or amendment as
soon as practicable after the time of such notice), or until it is advised in writing by the Company that the use of the Prospectus may
be resumed. If the filing, initial effectiveness or continued use of a Registration Statement in respect of any Registration at any time
would require the Company to make an Adverse Disclosure or would require the inclusion in such Registration Statement of financial statements
that are unavailable to the Company for reasons beyond the Company’s control, the Company may, upon giving prompt written notice
of such action to the Holders, delay the filing or initial effectiveness of, or suspend use of, such Registration Statement for the shortest
period of time, but in no event more than 30 days, determined in good faith by the Company to be necessary for such purpose. In the event
the Company exercises its rights under the preceding sentence, the Holders agree to suspend, immediately upon their receipt of the notice
referred to above, their use of the Prospectus relating to any Registration in connection with any sale or offer to sell Registrable Securities.
The Company shall immediately notify the Holders of the expiration of any period during which it exercised its rights under this Section 3.4.
3.5 Reporting Obligations. As long as any
Holder shall own Registrable Securities, the Company, at all times while it shall be a reporting company under the Exchange Act, covenants
to file timely (or obtain extensions in respect thereof and file within the applicable grace period) all reports required to be filed
by the Company after the date hereof pursuant to Sections 13(a) or 15(d) of the Exchange Act and to promptly furnish the Holders
with true and complete copies of all such filings. The Company further covenants that it shall take such further action as any Holder
may reasonably request, all to the extent required from time to time to enable such Holder to sell Class A Ordinary Shares held by
such Holder without registration under the Securities Act within the limitation of the exemptions provided by Rule 144 promulgated
under the Securities Act (or any successor rule promulgated thereafter by the Commission, to the extent that such rule or such
successor rule is available to the Company), including providing customary legal opinions. Upon the request of any Holder, the Company
shall deliver to such Holder a written certification of a duly authorized officer as to whether it has complied with such requirements.
3.6 Limitations on Registration Rights.
Notwithstanding anything herein to the contrary, (i) Cantor, the other underwriters in the Offering and/or their designees may not exercise
their rights under Sections 2.1 and 2.2 hereunder after five (5) and seven (7) years after the effective date of the registration
statement relating to the Company’s initial public offering, respectively, and (ii) Cantor may not exercise its rights under Section
2.1 more than one.
ARTICLE 4
INDEMNIFICATION AND CONTRIBUTION
4.1 Indemnification.
4.1.1 The Company agrees to indemnify, to the
fullest extent permitted by law, each Holder of Registrable Securities, its officers and directors and each person who controls such Holder
(within the meaning of the Securities Act) against all losses, claims, damages, liabilities and expenses (including attorneys’ fees)
caused by any untrue or alleged untrue statement of material fact contained in any Registration Statement, Prospectus or preliminary Prospectus
or any amendment thereof or supplement thereto or any omission or alleged omission of a material fact required to be stated therein or
necessary to make the statements therein not misleading, except insofar as the same are caused by or contained in any information furnished
in writing to the Company by such Holder expressly for use therein. The Company shall indemnify the Underwriters, their officers and directors
and each person who controls such Underwriters (within the meaning of the Securities Act) to the same extent as provided in the foregoing
with respect to the indemnification of the Holder.
4.1.2 In connection with any Registration Statement
in which a Holder of Registrable Securities is participating, such Holder shall furnish to the Company in writing such information and
affidavits as the Company reasonably requests for use in connection with any such Registration Statement or Prospectus and, to the fullest
extent permitted by law, shall indemnify the Company, its directors, officers and agents and each person who controls the Company (within
the meaning of the Securities Act) against any losses, claims, damages, liabilities and expenses (including without limitation reasonable
attorneys’ fees) resulting from any untrue or alleged untrue statement of material fact contained in the Registration Statement,
Prospectus or preliminary Prospectus or any amendment thereof or supplement thereto or any omission or alleged omission of a material
fact required to be stated therein or necessary to make the statements therein not misleading, but only to the extent that such untrue
statement or omission is contained in any information or affidavit so furnished in writing by such Holder expressly for use therein; provided,
however, that the obligation to indemnify shall be several, not joint and several, among such Holders of Registrable Securities,
and the liability of each such Holder of Registrable Securities shall be in proportion to and limited to the net proceeds received by
such Holder from the sale of Registrable Securities pursuant to such Registration Statement. The Holders of Registrable Securities shall,
severally and not jointly, indemnify the Underwriters, their officers, directors and each person who controls such Underwriters (within
the meaning of the Securities Act) to the same extent as provided in the foregoing with respect to indemnification of the Company.
4.1.3 Any person entitled to indemnification herein
shall (i) give prompt written notice to the indemnifying party of any claim with respect to which it seeks indemnification (provided
that the failure to give prompt notice shall not impair any person’s right to indemnification hereunder to the extent such failure
has not materially prejudiced the indemnifying party) and (ii) unless in such indemnified party’s reasonable judgment a conflict
of interest between such indemnified and indemnifying parties may exist with respect to such claim, permit such indemnifying party to
assume the defense of such claim with counsel reasonably satisfactory to the indemnified party. If such defense is assumed, the indemnifying
party shall not be subject to any liability for any settlement made by the indemnified party without its consent (but such consent shall
not be unreasonably withheld). An indemnifying party who is not entitled to, or elects not to, assume the defense of a claim shall not
be obligated to pay the fees and expenses of more than one counsel for all parties indemnified by such indemnifying party with respect
to such claim, unless in the reasonable judgment of any indemnified party a conflict of interest may exist between such indemnified party
and any other of such indemnified parties with respect to such claim. No indemnifying party shall, without the consent of the indemnified
party, consent to the entry of any judgment or enter into any settlement which cannot be settled in all respects by the payment of money
(and such money is so paid by the indemnifying party pursuant to the terms of such settlement) or which settlement does not include as
an unconditional term thereof the giving by the claimant or plaintiff to such indemnified party of a release from all liability in respect
to such claim or litigation.
4.1.4 The indemnification provided for under this
Agreement shall remain in full force and effect regardless of any investigation made by or on behalf of the indemnified party or any officer,
director or controlling person of such indemnified party and shall survive the transfer of securities. The Company and each Holder of
Registrable Securities participating in an offering also agrees to make such provisions as are reasonably requested by any indemnified
party for contribution to such party in the event the Company’s or such Holder’s indemnification is unavailable for any reason.
4.1.5 If the indemnification provided under Section 4.1
hereof from the indemnifying party is unavailable or insufficient to hold harmless an indemnified party in respect of any losses, claims,
damages, liabilities and expenses referred to herein, then the indemnifying party, in lieu of indemnifying the indemnified party, shall
contribute to the amount paid or payable by the indemnified party as a result of such losses, claims, damages, liabilities and expenses
in such proportion as is appropriate to reflect the relative fault of the indemnifying party and the indemnified party, as well as any
other relevant equitable considerations. The relative fault of the indemnifying party and indemnified party shall be determined by reference
to, among other things, whether any action in question, including any untrue or alleged untrue statement of a material fact or omission
or alleged omission to state a material fact, was made by, or relates to information supplied by, such indemnifying party or indemnified
party, and the indemnifying party’s and indemnified party’s relative intent, knowledge, access to information and opportunity
to correct or prevent such action; provided, however, that the liability of any Holder under this subsection 4.1.5
shall be limited to the amount of the net proceeds received by such Holder in such offering giving rise to such liability. The amount
paid or payable by a party as a result of the losses or other liabilities referred to above shall be deemed to include, subject to the
limitations set forth in subsections 4.1.1, 4.1.2 and 4.1.3 above, any legal or other fees, charges or expenses reasonably
incurred by such party in connection with any investigation or proceeding. The parties hereto agree that it would not be just and equitable
if contribution pursuant to this subsection 4.1.5 were determined by pro rata allocation or by any other method of allocation,
which does not take account of the equitable considerations referred to in this subsection 4.1.5. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution pursuant to
this subsection 4.1.5 from any person who was not guilty of such fraudulent misrepresentation.
ARTICLE 5
SHAREHOLDER RIGHTS
5.1 Subject to the terms and conditions of this
Agreement, at any time and from time to time on and after the date that the Company consummates an initial Business Combination and for
so long as the Sponsor holds any Registrable Securities:
5.1.1 The Sponsor shall have the right, but not
the obligation, to designate three individuals to be appointed or nominated, as the case may be, for election to the Board (including
any successor, each, a “Nominee”) by giving written notice to the Company on or before the time such information
is reasonably requested by the Board or the Nominating Committee of the Board, as applicable, for inclusion in a proxy statement for a
meeting of shareholders provided to the Sponsor.
5.1.2 The Company will, as promptly as practicable,
use commercially reasonable to take all necessary and desirable actions (including, without limitation, calling special meetings of the
Board and the shareholders and recommending, supporting and soliciting proxies) so that there are three Sponsor Directors serving on the
Board at all times.
5.1.3 The Company shall, to the fullest extent
permitted by applicable law, use commercially reasonable to take all actions necessary to ensure that: (i) each Nominee is included
in the Board’s slate of nominees to the shareholders of the Company for each appointment of Directors; and (ii) each Nominee
is included in the proxy statement prepared by management of the Company in connection with soliciting proxies for every meeting of the
shareholders of the Company called with respect to the election of members of the Board, and at every adjournment or postponement thereof,
and on every action or approval by written consent of the shareholders of the Company or the Board with respect to the election of members
of the Board.
5.1.4 If a vacancy occurs because of the death,
disability, disqualification, resignation, or removal of a Sponsor Director or for any other reason, the Sponsor shall be entitled to
designate such person’s successor, and the Company will, as promptly as practicable following such designation, use commercially
reasonable to take all necessary and desirable actions, to the fullest extent permitted by law, within its control such that such vacancy
shall be filled with such successor Nominee.
5.1.5 If a Nominee is not elected because of such
Nominee’s death, disability, disqualification, withdrawal as a nominee or for any other reason, the Sponsor shall be entitled to
designate promptly another Nominee and the Company will take all necessary and desirable actions within its control such that the director
position for which such Nominee was nominated shall not be filled pending such designation or the size of the Board shall be increased
by one and such vacancy shall be filled with such successor Nominee as promptly as practicable following such designation.
5.1.6 As promptly as reasonably practicable following
the request of any Sponsor Director, the Company shall enter into an indemnification agreement with such Sponsor Director, in the form
entered into with the other members of the Board. The Company shall pay the reasonable, documented out-of-pocket expenses incurred by
the Sponsor Director in connection with his or her services provided to or on behalf of the Company, including attending meetings or events
attended explicitly on behalf of the Company at the Company’s request.
5.1.7 The Company shall (i) purchase directors’
and officers’ liability insurance in no less than a reasonable and customary amount and (ii) for so long as a Sponsor Director
serves as a Director of the Company, maintain such coverage with respect to such Sponsor Director; provided that upon removal or
resignation of such Sponsor Director for any reason, the Company shall take all actions reasonably necessary to extend such directors’
and officers’ liability insurance coverage for a period of not less than six years from any such event in respect of any act or
omission occurring at or prior to such event.
5.1.8 For so long as a Sponsor Director serves
as a director of the Company, the Company shall not amend, alter or repeal any right to indemnification or exculpation covering or benefiting
any Sponsor Director as and to the extent consistent with applicable law, whether such right is contained in the Company’s amended
and restated memorandum and articles of association or another document (except to the extent such amendment or alteration permits the
Company to provide broader indemnification or exculpation rights on a retroactive basis than permitted prior thereto).
5.1.9 Each Nominee may, but does not need to,
qualify as “independent” pursuant to listing standards of the Nasdaq (or such other national securities exchange upon which
the Company’s securities are then listed).
5.1.10 Any Nominee will be subject to the Company’s
customary due diligence process, including its review of a completed questionnaire and a background check. Based on the foregoing, the
Company may object to any Nominee provided (a) it does so in good faith, and (b) such objection is based upon any of the following:
(i) such Nominee was convicted in a criminal proceeding or is a named subject of a pending criminal proceeding (excluding traffic
violations and other minor offenses), (ii) such Nominee was the subject of any order, judgment, or decree not subsequently reversed,
suspended or vacated of any court of competent jurisdiction, permanently or temporarily enjoining such proposed director from, or otherwise
limiting, the following activities: (A) engaging in any type of business practice, or (B) engaging in any activity in connection
with the purchase or sale of any security or in connection with any violation of federal or state securities laws, (iii) such Nominee
was the subject of any order, judgment or decree, not subsequently reversed, suspended or vacated, of any federal or state authority barring,
suspending or otherwise limiting for more than 60 days the right of such person to engage in any activity described in clause (b)(ii)(B),
or to be associated with persons engaged in such activity, (iv) such Nominee was found by a court of competent jurisdiction in a
civil action or by the Commission to have violated any federal or state securities law, and the judgment in such civil action or finding
by the Commission has not been subsequently reversed, suspended or vacated, or (v) such Nominee was the subject of, or a party to
any federal or state judicial or administrative order, judgment, decree, or finding, not subsequently reversed, suspended or vacated,
relating to a violation of any federal or state securities laws or regulations. In the event the Board reasonably finds the Nominee to
be unsuitable based upon one or more of the foregoing clauses (b)(i) through (b)(v) and reasonably objects to such Nominee,
the Sponsor shall be entitled to propose a different Nominee to the Board within 30 calendar days of the Company’s notice to the
Sponsor of its objection to such Nominee and such replacement Nominee shall be subject to the review process outlined above.
5.1.11 The Company shall take all necessary action
to cause a Nominee chosen by the Sponsor, at the request of such Nominee, to be elected to the board of directors (or similar governing
body) of each material operating subsidiary of the Company. The Nominee, as applicable, shall have the right to attend (in person or remotely)
any meetings of the board of directors (or similar governing body or committee thereof) of each subsidiary of the Company.
ARTICLE 6
MISCELLANEOUS
6.1 Notices. Any notice or communication
under this Agreement must be in writing and given by (i) deposit in the United States mail, addressed to the party to be notified,
postage prepaid and registered or certified with return receipt requested, (ii) delivery in person or by courier service providing
evidence of delivery, or (iii) transmission by hand delivery, electronic mail, telecopy, telegram or facsimile. Each notice or communication
that is mailed, delivered, or transmitted in the manner described above shall be deemed sufficiently given, served, sent, and received,
in the case of mailed notices, on the third business day following the date on which it is mailed and, in the case of notices delivered
by courier service, hand delivery, electronic mail, telecopy, telegram or facsimile, at such time as it is delivered to the addressee
(with the delivery receipt or the affidavit of messenger) or at such time as delivery is refused by the addressee upon presentation. Any
notice or communication under this Agreement must be addressed, if to the Company, to: 767 Third Avenue, 38th Floor, New York, New York
10017, Attention: B. Ben Baldanza with copy to: Reed Smith LLP, 599 Lexington Avenue, New York, New York 10022, Attention: Ari Edelman,
and, if to any Holder, at such Holder’s address or contact information as set forth in the Company’s books and records. Any
party hereto may change its address for notice at any time and from time to time by written notice to the other parties hereto, and such
change of address shall become effective 30 days after delivery of such notice as provided in this Section 6.1.
6.2 Assignment; No Third Party Beneficiaries.
6.2.1 This Agreement and the rights, duties and
obligations of the Company hereunder may not be assigned or delegated by the Company in whole or in part.
6.2.2 Prior to the expiration of the Founder Shares
Lock-up Period or the Private Placement Lock-up Period, as the case may be, no Holder may assign or delegate such Holder’s rights,
duties or obligations under this Agreement, in whole or in part, except in connection with a transfer of Registrable Securities by such
Holder to a Permitted Transferee.
6.2.3 This Agreement and the provisions hereof
shall be binding upon and shall inure to the benefit of each of the parties hereto and its successors and the permitted assigns of the
Holders, which shall include Permitted Transferees.
6.2.4 This Agreement shall not confer any rights
or benefits on any persons that are not parties hereto, other than as expressly set forth in this Agreement, including Section 4.1
and Section 6.2 hereof.
6.2.5 No assignment by any party hereto of such
party’s rights, duties and obligations hereunder shall be binding upon or obligate the Company unless and until the Company shall
have received (i) written notice of such assignment as provided in Section 6.1 hereof and (ii) the written agreement
of the assignee, in a form reasonably satisfactory to the Company, to be bound by the terms and provisions of this Agreement (which may
be accomplished by an addendum or certificate of joinder to this Agreement). Any transfer or assignment made other than as provided in
this Section 6.2 shall be null and void.
6.3 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 that is valid and enforceable.
6.4 Counterparts. This Agreement may be
executed in multiple counterparts (including facsimile or PDF counterparts), each of which shall be deemed an original, and all of which
together shall constitute the same instrument, but only one of which need be produced.
6.5 Entire Agreement. This Agreement (including
all agreements entered into pursuant hereto and all certificates and instruments delivered pursuant hereto and thereto) constitute the
entire agreement of the parties with respect to the subject matter hereof and supersede all prior and contemporaneous agreements, representations,
understandings, negotiations and discussions between the parties, whether oral or written.
6.6 Governing Law; Venue. NOTWITHSTANDING
THE PLACE WHERE THIS AGREEMENT MAY BE EXECUTED BY ANY OF THE PARTIES HERETO, THE PARTIES EXPRESSLY AGREE THAT (I) THIS AGREEMENT
SHALL BE GOVERNED BY AND CONSTRUED UNDER THE LAWS OF THE STATE OF NEW YORK AS APPLIED TO AGREEMENTS AMONG NEW YORK RESIDENTS ENTERED INTO
AND TO BE PERFORMED ENTIRELY WITHIN NEW YORK, WITHOUT REGARD TO THE CONFLICT OF LAW PROVISIONS OF SUCH JURISDICTION AND (II) THE
VENUE FOR ANY ACTION TAKEN WITH RESPECT TO THIS AGREEMENT SHALL BE ANY STATE OR FEDERAL COURT IN NEW YORK COUNTY IN THE STATE OF NEW YORK.
6.7 WAIVER OF TRIAL BY JURY. EACH PARTY
HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES THE RIGHT TO A TRIAL BY JURY IN ANY ACTION, SUIT, COUNTERCLAIM OR OTHER PROCEEDING (WHETHER
BASED ON CONTRACT, TORT OR OTHERWISE) ARISING OUT OF, CONNECTED WITH OR RELATING TO THIS AGREEMENT, THE TRANSACTIONS CONTEMPLATED HEREBY,
OR THE ACTIONS OF THE SPONSOR IN THE NEGOTIATION, ADMINISTRATION, PERFORMANCE OR ENFORCEMENT HEREOF.
6.8 Amendments and Modifications.
Upon the written consent of the Company and the Holders of at least a majority-in-interest of the Registrable Securities at the time
in question, (which majority interest must include Cantor if such amendment or modification affects in any way the rights of Cantor
hereunder) compliance with any of the provisions, covenants and conditions set forth in this Agreement may be waived, or any of such
provisions, covenants or conditions may be amended or modified; provided, however, that notwithstanding the foregoing, any amendment
hereto or waiver hereof that adversely affects one Holder, solely in its capacity as a Holder of Registrable Securities, in a manner
that is materially different from the other Holders (in such capacity) shall require the consent of the Holder so affected. No
course of dealing between any Holder or the Company and any other party hereto or any failure or delay on the part of a Holder or
the Company in exercising any rights or remedies under this Agreement shall operate as a waiver of any rights or remedies of any
Holder or the Company. No single or partial exercise of any rights or remedies under this Agreement by a party shall operate as a
waiver or preclude the exercise of any other rights or remedies hereunder or thereunder by such party.
6.9 Titles and Headings. Titles and headings
of sections of this Agreement are for convenience only and shall not affect the construction of any provision of this Agreement.
6.10 Waivers and Extensions. Any party
to this Agreement may waive any right, breach or default which such party has the right to waive; provided that such waiver will
not be effective against the waiving party unless it is in writing, is signed by such party, and specifically refers to this Agreement.
Waivers may be made in advance or after the right waived has arisen or the breach or default waived has occurred. Any waiver may be conditional.
No waiver of any breach of any agreement or provision herein contained shall be deemed a waiver of any preceding or succeeding breach
thereof nor of any other agreement or provision herein contained. No waiver or extension of time for performance of any obligations or
acts shall be deemed a waiver or extension of the time for performance of any other obligations or acts.
6.11 Remedies Cumulative. In the event
that the Company fails to observe or perform any covenant or agreement to be observed or performed under this Agreement, the Holders may
proceed to protect and enforce its rights by suit in equity or action at law, whether for specific performance of any term contained in
this Agreement or for an injunction against the breach of any such term or in aid of the exercise of any power granted in this Agreement
or to enforce any other legal or equitable right, or to take any one or more of such actions, without being required to post a bond. None
of the rights, powers or remedies conferred under this Agreement shall be mutually exclusive, and each such right, power or remedy shall
be cumulative and in addition to any other right, power or remedy, whether conferred by this Agreement or now or hereafter available at
law, in equity, by statute or otherwise.
6.12 Other Registration Rights. The Company
represents and warrants that no person, other than a Holder of Registrable Securities, has any right to require the Company to register
any securities of the Company for sale or to include such securities of the Company in any Registration filed by the Company for the sale
of securities for its own account or for the account of any other person. Further, the Company represents and warrants that this Agreement
supersedes any other registration rights agreement or agreement with similar terms and conditions and in the event of a conflict between
any such agreement or agreements and this Agreement, the terms of this Agreement shall prevail.
6.13 Term. This Agreement shall terminate (A) in its entirety
upon the earlier of (i) the tenth anniversary of the date of this Agreement and (ii) the date as of which no Registrable Securities
remain outstanding and (B) in part with respect to any Holder upon such Holder ceasing to hold Registrable Securities. The provisions
of Section 3.5 and Article IV shall survive any such termination.
[SIGNATURE PAGES FOLLOW]
IN WITNESS WHEREOF, the undersigned have caused
this Agreement to be executed as of the date first written above.
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COMPANY: |
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SEMPER PARATUS ACQUISITION CORPORATION |
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By: |
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Name: |
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Title: |
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HOLDERS: |
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SEMPER PARATUS SPONSOR LLC |
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By: |
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Name: |
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Title: |
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Philippe J. Kurzweil |
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CANTOR, FITZGERALD & CO. |
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By: |
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[Signature Page to Registration and Shareholder
Rights Agreement]
Exhibit 10.3
PRIVATE PLACEMENT UNITS PURCHASE AGREEMENT
THIS PRIVATE PLACEMENT UNITS
PURCHASE AGREEMENT, dated as of [________], 2021 (as it may from time to time be amended, this “Agreement”), is entered
into by and between Semper Paratus Acquisition Corporation, a Cayman Islands exempted company (the “Company”), and
Semper Paratus Sponsor LLC (the “Purchaser”).
WHEREAS, the Company is a blank
check company formed for the purpose of acquiring one or more businesses or entities (a “Business Combination”);
WHEREAS, the Company intends
to consummate an initial public offering of the Company’s units to be lead-managed by Cantor Fitzgerald & Co. (the “Public
Offering”), with each unit (each, a “Unit”) consisting of one Class A ordinary share of the Company,
par value $0.0001 per ordinary share (each, a “Share”), and one-half of one redeemable warrant, with each whole warrant,
(each, a “Warrant”) entitling the holder to purchase one Share at an exercise price of $11.50 per Share; and
WHEREAS, the Purchaser has agreed
to purchase, at a price of $10.00 per Unit, an aggregate of 1,210,000 Units (the “Private Placement Units”), with each
Private Placement Unit consisting of one Share and one-half of one Warrant.
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
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Authorization, Purchase and Sale; Terms of the Private Placement Units. |
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(a) |
Authorization of the Private Placement Units. The Company has duly authorized the issuance and sale of the Private Placement Units (and the underlying securities) to the Purchaser. |
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(b) |
Purchase and Sale of the Private Placement Units. Simultaneously with the consummation of the Public Offering or on such earlier time and date as may be mutually agreed by the Purchaser and the Company (the “Closing Date”), the Company shall issue and sell to the Purchaser, and the Purchaser shall purchase from the Company, an aggregate of 1,210,000 Private Placement Units at a price of $10.00 per Unit for an aggregate purchase price of $12,100,000 (the “Purchase Price”). Purchaser shall pay the Purchase Price by wire transfer of immediately available funds to the trust account maintained by Continental Stock Transfer & Trust Company acting as trustee, on the Closing Date of the Public Offering. On the Closing Date, upon the payment by the Purchaser of the Purchase Price, the Company, at its option, shall deliver a certificate evidencing the Private Placement Units purchased on such date duly registered in the Purchaser’s name to the Purchaser or effect such delivery in book-entry form. |
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(c) |
Terms of the Private Placement Unit. Each Private Placement Unit shall be identical to the Units to be sold by the Company in the Public Offering, except that: |
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(i) |
The
undersigned agrees not to seek conversion or seek to sell in any tender offer, in connection with any proposed Business Combination
any Class A ordinary shares included in the Private Placement Units; |
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(ii) |
The Warrants underlying the Private Placement Units (a) will not
be redeemable by the Company, (b) may be exercised for cash or on a cashless basis, as described in the registration statement relating
to the Public Offering (the “Registration Statement”), and (c) may not be exercised after five years from the
effective date of the Registration Statement so long as the Private Warrants included in the Private Units are held by the undersigned
or its designees or affiliates; |
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(iii) |
The Private Placement Units (and underlying securities) will not be transferable by the undersigned until 30 days after the consummation of a Business Combination (subject to certain exceptions as described in the Registration Statement and set forth in the warrant agreement governing the Warrants); |
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(iv) |
On the effective date of the Registration Statement, 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 Private Placement Units and the underlying securities; |
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(v) |
The undersigned will not participate in any liquidation distribution with respect to the Private Placement Units or the underlying securities if the Company fails to consummate a Business Combination; |
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(vi) |
the Private Placement Units (and the underlying securities) will include any additional terms or restrictions as is customary in other similarly structured blank check company offerings or as may be reasonably required by the underwriters in order to consummate the Public Offering, which terms or restrictions will be described in the Registration Statement; and |
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(vii) |
The Warrants underlying the Private Placement Units shall be terminated upon the dissolution of the Company or in the event that the Company does not consummate an initial Business Combination within the time period set forth in the Company’s memorandum and articles of association, as the same may be amended from time to time. |
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(d) |
The undersigned further acknowledges and agrees that the Private Placement Units and their component parts and the related registration rights will be deemed compensation by the Financial Industry Regulatory Authority (“FINRA”) and will therefore, pursuant to Rule 5110(g) of the FINRA Manual, be subject to lock-up for a period of 180 days immediately following the date of effectiveness or commencement of sales in the IPO, subject to FINRA Rule 5110(g)(2). Additionally, the Private Placement Units and their component parts and the related registration rights may not be sold, transferred, assigned, pledged or hypothecated or be the subject of any hedging, short sale, derivative, put or call transaction that would result in the economic disposition of such securities by any person during the foregoing 180 day period following the effective date of the Registration Statement except to any underwriter or selected dealer participating in the IPO and the bona fide officers or partners of the undersigned. |
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Representations and Warranties of the Company. As a material inducement to the Purchaser to enter into this Agreement and purchase the Private Placement Units, the Company hereby represents and warrants to the Purchaser (which representations and warranties shall survive each Closing Date) that: |
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(a) |
Incorporation and Corporate Power. The Company is an exempted company duly incorporated, validly existing and in good standing under the laws of the Cayman Islands 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. |
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(b) |
Authorization; No Breach. |
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(i) |
The execution, delivery and performance of this Agreement and the Private Placement Units (and the underlying securities) have been duly authorized by the Company as of the Closing Date. This Agreement constitutes the valid and binding obligation of the Company, 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). Upon issuance in accordance with, and payment pursuant to, the terms of this Agreement, the Private Placement Units (and underlying securities) will constitute valid and binding obligations of the Company, enforceable in accordance with their terms as of the Closing Dates. |
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(ii) |
The execution and delivery by the Company of this Agreement and the Private Placement Units (and the underlying securities), the issuance and sale of the Private Placement Units (and the underlying securities) and compliance with, the respective terms hereof by the Company, do not and will not as of the Closing Date: (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 share capital 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 memorandum and articles of association 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. |
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(iii) |
Title to Securities. Upon issuance in accordance with and payment pursuant to the terms hereof and the amended and restated memorandum and articles of association of the Company and registration in the register of members of the Company, the Private Placement Units (and the underlying securities) will be duly and validly issued as fully paid and non-assessable. On the date of issuance of the Private Placement Units, the underlying securities shall have been reserved for issuance. Upon issuance in accordance with, and payment pursuant to, the terms hereof, the Purchaser will have good title to the Private Placement Units (and the underlying securities), free and clear of all liens, claims and encumbrances of any kind, other than (A) transfer restrictions hereunder and under the other agreements contemplated hereby, (B) transfer restrictions under federal and state securities laws, and (C) liens, claims or encumbrances imposed due to the actions of the Purchaser. |
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(c) |
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. |
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(d) |
Regulation D Qualification. Neither the Company nor, to its actual knowledge, any of its officers, directors or beneficial shareholders of 20% or more of its outstanding securities, has experienced a disqualifying event as enumerated pursuant to Rule 506(d) of Regulation D promulgated under the Securities Act of 1933, as amended (the “Securities Act”). |
| 3. |
Representations and Warranties of the Purchaser. As a material inducement to the Company to enter into this Agreement and issue and sell the Private Placement Units to the Purchaser, the Purchaser hereby represents and warrants to the Company (which representations and warranties shall survive each Closing Date) that: |
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(a) |
Organization and Requisite Authority. The Purchaser is a limited liability company duly formed, 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 Purchaser. The Purchaser possesses all requisite limited liability company power and authority necessary to carry out the transactions contemplated by this Agreement. |
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(b) |
Authorization; No Breach. |
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(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). |
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(ii) |
The execution and delivery by the Purchaser of this Agreement and the fulfillment of and compliance with the terms hereof by the Purchaser do not and shall not as of each Closing Date 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. |
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(c) |
Investment Representations. |
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(i) |
The Purchaser is acquiring the Private Placement Units (and the underlying 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. |
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(ii) |
The Purchaser is an “accredited investor” as such term is defined in Rule 501(a)(3) of Regulation D promulgated under the Securities Act and the Purchaser has not experienced a disqualifying event as enumerated pursuant to Rule 506(d) of Regulation D promulgated under the Securities Act. |
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(iii) |
The Purchaser understands that the Private Placement Units (and the underlying securities) are being offered and will be sold to the Purchaser 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 Private Placement Units (and the underlying securities). |
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(iv) |
The Purchaser decided to enter into this Agreement not as a result of any general solicitation or general advertising within the meaning of Rule 502(c) of Regulation D promulgated under the Securities Act. |
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(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 Private Placement Units (and the underlying 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 Private Placement Units (and the underlying 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 Private Placement Units (and the underlying securities). |
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(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 Private Placement Units (or the underlying securities) or the fairness or suitability of the investment in the Private Placement Units (or the underlying securities) by the Purchaser nor have such authorities passed upon or endorsed the merits of the offering of the Private Placement Units (or the underlying securities). |
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(vii) |
The Purchaser understands that: (A) the offer and sale of the Private Placement Units (and the underlying securities) has not been and is 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) the offer and sale of the Private Placement Units (and the underlying securities) is 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 offer and sale of the Private Placement Units (and the underlying securities) under the Securities Act or any state securities laws or to comply with the terms and conditions of any exemption thereunder. The Private Placement Units (and the underlying securities) will bear a legend and appropriate “stop transfer” instructions (or an appropriate notation if securities are issued in book entry form) relating to the foregoing. The Purchaser further 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 Private Placement Units (and the underlying securities) until the 1-year anniversary following consummation of an Business Combination despite technical compliance with the requirements of Rule 144. |
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(viii) |
The Purchaser has such knowledge and experience in financial and business matters, knows 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 Private Placement Units (and the underlying securities) and is able to bear the economic risk of an investment in the Private Placement Units (and the underlying 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 Private Placement Units (and the underlying securities). The Purchaser can afford a complete loss of its investment in the Private Placement Units (and the underlying securities). |
| 4. |
Conditions of the Purchaser’s Obligations. The obligations of the Purchaser to purchase and pay for the Private Placement Units are subject to the fulfillment, on or before each Closing Date, of each of the following conditions: |
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(a) |
Representations and Warranties. The representations and warranties of the Company contained in Section 2 shall be true and correct at and as of such Closing Date as though then made. |
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(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 such Closing Date. |
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(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. |
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(d) |
Registration Rights Agreement. The Company shall have entered into a registration rights agreement on terms satisfactory to the Purchaser. |
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(e) |
Corporate Consents. The Company shall have obtained the consent of its Board of Directors authorizing the execution, delivery and performance of this Agreement and the issuance and sale of the Private Placement Units. |
| 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 each Closing Date, of each of the following conditions: |
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(a) |
Representations and Warranties. The representations and warranties of the Purchaser contained in Section 3 shall be true and correct at and as of such Closing Date as though then made. |
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(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 such Closing Date. |
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(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. |
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(d) |
Registration Rights Agreement. The Company shall have entered into a registration rights agreement on terms satisfactory to the Company. |
| 6. |
Termination. This Agreement may be terminated at any time after December 31, 2021, upon the election by either the Company or the Purchaser solely as to itself upon written notice to the other parties if the closing of the Public Offering does not occur prior to such date. |
| 7. |
Survival of Representations and Warranties. All of the representations and warranties contained herein shall survive each Closing Date. |
| 8. |
Definitions. Terms used but not otherwise defined in this Agreement shall have the meaning assigned to such terms in the Registration Statement. |
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(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 without the prior written consent of the other party hereto, other than assignments by the Purchaser to affiliates thereof. |
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(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. |
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(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. |
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(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. |
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(e) |
Governing Law. This Agreement shall be deemed to be a contract made under the laws of the State of New York and for all purposes shall be construed in accordance with the internal laws of the State of New York, without regard to the conflicts of laws principles thereof. |
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(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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COMPANY: |
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SEMPER PARATUS ACQUISITION CORPORATION |
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By: |
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Name: |
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Title: |
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PURCHASER: |
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SEMPER PARATUS SPONSOR LLC |
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By: |
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Name: |
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Title: |
Exhibit 10.4
UNIT SUBSCRIPTION AGREEMENT
This UNIT SUBSCRIPTION AGREEMENT
(this “Agreement”) is made as of the [ ]th day of October 2021, by and between Semper Paratus
Acquisition Corporation, a Cayman Islands exempted company (the “Company”), and Cantor Fitzgerald & Co. (the
“Subscriber”).
WHEREAS, the Company desires
to sell to the Subscriber on a private placement basis (the “Offering”) an aggregate of 150,000 units (the “Units”)
of the Company, each Unit comprised of one Class A ordinary share of the Company, par value $0.0001 per share (“Ordinary
Shares”) and one-half of one warrant, each whole warrant exercisable to purchase one Ordinary Share (“Warrant”),
for a purchase price of $10.00 per Unit. The Ordinary Shares underlying the Warrants are hereinafter referred to as the “Warrant
Shares”. The Ordinary Shares underlying the Units (excluding the Warrant Shares) are hereinafter referred to as the “Placement
Shares.” The Warrants underlying the Units are hereinafter referred to as the “Placement Warrants.” The Units,
Placement Shares, Placement Warrants and Warrant Shares, collectively, are hereinafter referred to as the “Securities.”
Each whole Placement Warrant is exercisable to purchase one Ordinary Share at an exercise price of $11.50 during the period commencing
on the later of (i) twelve (12) months from the date of the closing of the Company’s initial public offering of units (the
“IPO”) and (ii) 30 days following the consummation of the Company’s initial business combination (the “Business
Combination”), as such term is defined in the registration statement in connection with the IPO, as amended at the time it becomes
effective (the “Registration Statement”), and expiring on the fifth anniversary of the consummation of the Business
Combination (provided that, so long as the Placement Warrants are held by the Subscriber or its designees, the Subscriber or its designees
will not be permitted to exercise such Placement Warrants after the five year anniversary of the effective date of the Registration Statement);
and
WHEREAS, the Subscriber wishes
to purchase an aggregate of 150,000 Units, and the Company wishes to accept such subscription from the Subscriber.
NOW, THEREFORE, in consideration
of the premises and the mutual covenants hereinafter set forth and other good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, the Company and Subscriber hereby agree as follows:
1. Agreement to Subscribe
1.1. Purchase and Issuance
of the Units. Upon the terms and subject to the conditions of this Agreement, the Subscriber hereby agrees to purchase from the Company,
and the Company hereby agrees to sell to the Subscriber, on the Closing Date (as defined below) the Units in consideration of the payment
of the Purchase Price (as defined below). On the Closing Date, the Company shall, at its option, deliver to the Subscriber the certificates
representing the Units purchased or effect such delivery in book-entry form.
1.2. Purchase Price. As
payment in full for the Initial Units being purchased under this Agreement, the Subscriber shall pay $1,500,000 (the
“Purchase Price”) by wire transfer of immediately available funds or by such other method as may be reasonably
acceptable to the Company, to the Company or to the trust account (the “Trust Account”) at a financial
institution to be chosen by the Company, maintained by Continental Stock Transfer & Trust Company, acting as trustee
(“Continental”), on or prior to the Closing Date.
1.3. Closing. The closing
of the purchase and sale of the Initial Units shall take place simultaneously with the closing of the IPO (the “Closing Date”).
The closing of the purchase and sale of the Units shall take place at the offices of Reed Smith LLP, 599 Lexington Avenue, New York, New
York, 10022, or such other place as may be agreed upon by the parties hereto.
1.4 Conditions to Closing.
The obligation of the Subscriber to purchase and pay for the Units as provided herein shall be subject to the satisfaction of the conditions
set forth in Section 5 of the Underwriting Agreement, dated as of the date hereof, by and between the Company and the Subscriber,
as representative of the underwriters named therein (the “Underwriting Agreement”).
1.5 Termination. This Agreement
and each of the obligations of the undersigned shall be null and void and without effect if a Closing does not occur prior to December 31,
2021.
2. Representations
and Warranties of Subscriber
Subscriber represents and
warrants to the Company that:
2.1. No Government Recommendation
or Approval. Subscriber understands that no federal or state agency has passed upon or made any recommendation or endorsement of the Company
or the Offering of the Securities.
2.2. Accredited Investor.
Subscriber represents that it is an “accredited investor” as such term is defined in Rule 501(a) of Regulation D
under the Securities Act of 1933, as amended (the “Securities Act”), and acknowledges that the sale contemplated hereby
is being made in reliance, among other things, on a private placement exemption to “accredited investors” under the Securities
Act and similar exemptions under state law.
2.3. Intent. Subscriber is
purchasing the Securities solely for investment purposes, for Subscriber’s own account (and/or for the account or benefit of its
members or affiliates, as permitted, pursuant to the terms hereof), and not with a view to the distribution thereof.
2.4. Restrictions on Transfer.
Subscriber acknowledges and understands the Units are being offered in a transaction not involving a public offering in the United States
within the meaning of the Securities Act. The Securities have not been registered under the Securities Act and, if in the future Subscriber
decides to offer, resell, pledge or otherwise transfer the Securities, such Securities may be offered, resold, pledged or otherwise transferred
only (A) pursuant to an effective registration statement filed under the Securities Act, (B) pursuant to an exemption from registration
under Rule 144 promulgated under the Securities Act, if available, or (C) pursuant to any other available exemption from the
registration requirements of the Securities Act, and in each case in accordance with any applicable securities laws of any state or any
other jurisdiction. Notwithstanding the foregoing, Subscriber acknowledges and understands the Securities are subject to transfer restrictions
as described in Section 7 hereof. Subscriber agrees that if any transfer of its Securities or any interest therein is proposed to
be made, as a condition precedent to any such transfer, Subscriber may be required to deliver to the Company an opinion of counsel satisfactory
to the Company with respect to such transfer. Absent registration or another available exemption from registration, Subscriber agrees
it will not resell the Securities (unless otherwise permitted pursuant to the terms hereof). Subscriber further acknowledges that because
the Company is a shell company, Rule 144 may not be available to Subscriber for the resale of the Securities until the one year anniversary
following consummation of the initial Business Combination of the Company, despite technical compliance with the requirements of Rule 144
and the release or waiver of any contractual transfer restrictions.
2.5. Sophisticated Investor.
(i) Subscriber is sophisticated
in financial matters and is able to evaluate the risks and benefits of the investment in the Securities.
(ii) Subscriber is aware
that an investment in the Securities is highly speculative and subject to substantial risks because, among other things, (a) the
Securities are subject to transfer restrictions and have not been registered under the Securities Act and therefore cannot be sold unless
subsequently registered under the Securities Act or an exemption from such registration is available and (b) Subscriber has waived
its redemption rights with respect to the Securities as set forth in Section 5 hereof, and the Securities held by the Subscriber
are not entitled to, and have no right, interest or claim to any monies held in the Trust Account, and accordingly Subscriber may suffer
a loss of a portion or all of its investment in the Securities. Subscriber is able to bear the economic risk of its investment in the
Securities for an indefinite period of time.
2.6. Organization and Authority.
Subscriber is duly organized, validly existing and in good standing under the laws of its state of incorporation or formation and it possesses
all requisite power and authority necessary to carry out the transactions contemplated by this Agreement.
2.7. Authority. This Agreement
has been validly authorized, executed and delivered by Subscriber and is a valid and binding agreement enforceable in accordance with
its terms, subject to the general principles of equity and to bankruptcy or other laws affecting the enforcement of creditors’ rights
generally.
2.8. No Conflicts. The execution,
delivery and performance of this Agreement and the consummation by Subscriber of the transactions contemplated hereby do not violate,
conflict with or constitute a default under (i) Subscriber’s charter documents, (ii) any agreement or instrument to which
Subscriber is a party or (iii) any law, statute, rule or regulation to which Subscriber is subject, or any agreement, order,
judgment or decree to which Subscriber is subject.
2.9. No Legal Advice
from Company. Subscriber acknowledges it has had the opportunity to review this Agreement and the transactions contemplated by this
Agreement and the other agreements entered into between the parties hereto with Subscriber’s own legal counsel and investment
and tax advisors. Except for any statements or representations of the Company made in this Agreement and the other agreements
entered into between the parties hereto, Subscriber is relying solely on its counsel and advisors and not on any statements or
representations of the Company or any of its representatives or agents for legal, tax or investment advice with respect to this
investment, the transactions contemplated by this Agreement or the securities laws of any jurisdiction.
2.10. Reliance on Representations
and Warranties. The Subscriber understands the Units are being offered and sold to the Subscriber in reliance on exemptions from the registration
requirements under the Securities Act, and analogous provisions in the laws and regulations of various states, and that the Company is
relying upon the truth and accuracy of the representations, warranties, agreements, acknowledgments and understandings of the Subscriber
set forth in this Agreement in order to determine the applicability of such provisions.
2.11. No General Solicitation.
Subscriber is not subscribing for the Units as a result of or subsequent to any general solicitation or general advertising, including
but not limited to any advertisement, article, notice or other communication published in any newspaper, magazine, or similar media or
broadcast over television or radio, or presented at any seminar or meeting or in a registration statement with respect to the IPO filed
with the Securities and Exchange Commission (“SEC”).
2.12. Legend. Subscriber acknowledges
and agrees the certificates evidencing each of the Securities shall bear a restrictive legend (the “Legend”), in form
and substance substantially as set forth in Section 4 hereof.
3. Representations,
Warranties and Covenants of the Company
The Company represents and
warrants to, and agrees with, Subscriber that:
3.1. Valid Issuance of Ordinary
Shares. The total number of shares of all classes which the Company has authority to issue is 200,000,000 Ordinary Shares, 20,000,000
Class B ordinary shares, $0.0001 par value per share (the “Class B Ordinary Shares”), and 1,000,000 preference
shares, $0.0001 par value per share (“Preference Shares”). As of the date hereof, the Company has issued and outstanding
11,983,333 Class B Ordinary Shares (of which up to 1,530,000 Class B Ordinary Shares are subject to forfeiture as described
in the Registration Statement), no Ordinary Shares and no Preference Shares. All of the issued ordinary shares of the Company have been
duly authorized, validly issued, and are fully paid and non-assessable.
3.2 Title to Securities.
Upon issuance in accordance with, and payment pursuant to, the terms hereof and that certain warrant agreement to be entered into
between the Company and Continental, as warrant agent (the “Warrant Agreement”), as the case may be, each of the
Units, Placement Shares, Placement Warrants and Warrant Shares (after issuance) will be duly and validly issued, fully paid and
non-assessable. On the date of issuance of the Units, the Warrant Shares shall have been reserved for issuance. Upon issuance in
accordance with, and payment pursuant to, the terms hereof and the Warrant Agreement, as the case may be, Subscriber will have or
receive good title to the Units, Placement Shares and Placement Warrants, free and clear of all liens, claims and encumbrances of
any kind, other than (i) transfer restrictions hereunder and (ii) transfer restrictions under federal and state securities
laws.
3.3. Organization and Qualification.
The Company is a corporation duly incorporated, validly existing and in good standing under the laws of the Cayman Islands and has the
requisite corporate power to own its properties and assets and to carry on its business as now being conducted.
3.4. Authorization; Enforcement.
(i) The Company has the requisite corporate power and authority to enter into and perform its obligations under this Agreement and
to issue the Securities in accordance with the terms hereof, (ii) the execution, delivery and performance of this Agreement by the
Company and the consummation by it of the transactions contemplated hereby have been duly authorized by all necessary corporate action,
and no further consent or authorization of the Company or its Board of Directors or shareholders is required, and (iii) this Agreement
constitutes valid and binding obligations of the Company enforceable against the Company in accordance with its terms, except as such
enforceability may be limited by applicable bankruptcy, insolvency, fraudulent conveyance, moratorium, reorganization, or similar laws
relating to, or affecting generally the enforcement of, creditors’ rights and remedies or by equitable principles of general application
and except as enforcement of rights to indemnity and contribution may be limited by federal and state securities laws or principles of
public policy.
3.5. No Conflicts. The execution,
delivery and performance of this Agreement and the consummation by the Company of the transactions contemplated hereby do not (i) result
in a violation of the Company’s certificate of incorporation or by-laws, (ii) conflict with, or constitute a default under
any agreement or instrument to which the Company is a party or (iii) any law statute, rule or regulation to which the Company
is subject or any agreement, order, judgment or decree to which the Company is subject. Other than any SEC or state securities filings
which may be required to be made by the Company subsequent to the Closing, and any registration statement which may be filed pursuant
thereto, the Company is not required under federal, state or local law, rule or regulation to obtain any consent, authorization or
order of, or make any filing or registration with, any court or governmental agency or self-regulatory entity in order for it to perform
any of its obligations under this Agreement or issue the Units, Placement Shares, Placement Warrants or Warrant Shares in accordance with
the terms hereof.
3.6. Additional Representations
and Warranties. The representations and warranties of the Company set forth in the Underwriting Agreement are hereby incorporated herein.
4. Legends
4.1. Legend. The Company will
issue the Units, Placement Shares and Placement Warrants, and when issued, the Warrant Shares, purchased by the Subscriber in the name
of the Subscriber. The Securities will bear the following Legend and appropriate “stop transfer” instructions:
“THE SECURITIES
REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR ANY STATE
SECURITIES LAWS AND NEITHER THE SECURITIES NOR ANY INTEREST THEREIN MAY BE OFFERED, SOLD, TRANSFERRED, PLEDGED OR OTHERWISE DISPOSED
OF EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR SUCH LAWS OR AN EXEMPTION FROM REGISTRATION UNDER
THE SECURITIES ACT AND SUCH LAWS WHICH, IN THE OPINION OF COUNSEL FOR THIS CORPORATION, IS AVAILABLE.”
“THE SECURITIES
REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO LOCKUP PURSUANT TO A UNIT SUBSCRIPTION AGREEMENT BETWEEN SEMPER PARATUS ACQUISITION CORPORATION
AND CANTOR FITZGERALD & CO. AND MAY ONLY BE OFFERED, SOLD, TRANSFERRED, PLEDGED OR OTHERWISE DISPOSED DURING THE TERM OF
THE LOCKUP PURSUANT TO THE TERMS SET FORTH IN THE UNIT SUBSCRIPTION AGREEMENT.”
4.2. Subscriber’s Compliance.
Nothing in this Section 4 shall affect in any way the Subscriber’s obligations and agreements to comply with all applicable
securities laws upon resale of the Securities.
4.3. Company’s Refusal
to Register Transfer of the Securities. The Company shall refuse to register any transfer of the Securities, if in the sole judgment of
the Company such purported transfer would not be made (i) pursuant to an effective registration statement filed under the Securities
Act, or pursuant to an available exemption from the registration requirements of the Securities Act and (ii) in compliance herewith.
4.4 Registration Rights.
The Subscriber will be entitled to certain registration rights which will be governed by a registration and shareholder rights
agreement (“Registration Rights Agreement”) to be entered into between, among others, the Subscriber and the
Company, on or prior to the effective date of the Registration Statement. Pursuant to the Registration Rights Agreement, the
Subscriber may not exercise its demand and “piggyback” registration rights after five (5) and seven (7) years,
respectively, after the effective date of the Registration Statement and may not exercise its demand rights on more than one
occasion.
5. Waiver of Liquidation
Distributions.
In connection with the Securities
purchased pursuant to this Agreement, Subscriber hereby waives any and all right, title, interest or claim of any kind in or to any distributions
of the amounts in the Trust Account with respect to the Securities, whether (i) in connection with the exercise of redemption rights
if the Company consummates the Business Combination, (ii) in connection with any tender offer conducted by the Company prior to a
Business Combination, (iii) upon the Company’s redemption of Ordinary Shares sold in the Company’s IPO upon the Company’s
failure to timely complete the Business Combination or (iv) in connection with a shareholder 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 redeem 100% of the Company’s public shares if the Company does not timely complete the Business Combination or (B) with
respect to any other provision relating to shareholders’ rights or pre-Business Combination activity. In the event Subscriber purchases
Units or Ordinary Shares in the IPO or in the aftermarket, any additional Ordinary Shares so purchased shall be eligible to receive the
redemption value of such Ordinary Shares upon the same terms offered to all other purchasers of Units in the IPO or Units or Ordinary
Shares in the aftermarket in the event the Company fails to consummate the Business Combination. Nothing herein shall preclude Subscriber
from making any claim or seeking recourse against the Company’s funds held outside of the Trust Account or seeking to enforce the
terms of the Underwriting Agreement.
6. Terms of Placement
Warrants. Each Placement Warrant shall have the terms set forth in the Warrant Agreement.
7. Lock-Up Period.
7.1. The Subscriber agrees
that it shall not Transfer any Securities until 30 days following the consummation of the Business Combination; provided, however, that
Transfers of Securities are permitted (a) to the Company’s officers or directors, any affiliate or family member of any of
the Company’s officers or directors or any affiliate of Subscriber or to any member(s) of Subscriber or any of their affiliates;
(b) in the case of an individual, by gift to a member of such individual’s immediate family or to a trust, the beneficiary
of which is a member of such individual’s immediate family, an affiliate of such individual or to a charitable organization; (c) in
the case of an individual, by virtue of laws of descent and distribution upon death of such 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 any forward purchase
agreement or similar arrangement or in connection with the consummation of the Business Combination at prices no greater than the price
at which the shares or warrants were originally purchased; (f) in the event of the Company’s liquidation prior to the completion
of the Business Combination; (g) by virtue of the laws of the state of incorporation or formation of Subscriber or Subscriber’s
limited liability company agreement upon dissolution of Subscriber or (h) in the event of the Company’s liquidation, merger,
share exchange, asset acquisition, share purchase, reorganization or other similar transaction which results in all of the Company’s
shareholders having the right to exchange their Ordinary Shares for cash, securities or other property subsequent to the Business Combination;
provided, however, that in the case of clauses (a) through (e) or (g), these permitted transferees must enter into a written
agreement with the Company agreeing to be bound by the Transfer restrictions herein.
7.2. For purposes of Section 7.1,
the term “Transfer” shall mean the (a) sale 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
of the Securities Exchange Act of 1934, as amended, and the rules and regulations of the SEC promulgated thereunder with respect
to, any of the Securities, (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 of the Securities, 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).
7.3 In addition to the restrictions
on transfer described in Section 7.1, Subscriber acknowledges and agrees that the Units and their component parts and the related
registration rights will be deemed compensation by the Financial Industry Regulatory Authority (“FINRA”) and will therefore,
pursuant to Rule 5110(e) of the FINRA Manual, be subject to lock-up for a period of 180 days immediately following the date
of effectiveness or commencement of sales in the IPO, subject to FINRA Rule 5110(e)(2). Additionally, the Units and their component
parts and the related registration rights may not be sold, transferred, assigned, pledged or hypothecated during the foregoing 180 day
period following the effective date of the Registration Statement except to any underwriter or selected dealer participating in the IPO
and the bona fide officers or partners of any Subscriber and any such participating underwriter or selected dealer. Additionally, the
Units and their component parts and the related registration rights will not be the subject of any hedging, short sale, derivative, put
or call transaction that would result in the economic disposition of such securities by any person for a period of 180 days immediately
following the date of effectiveness or commencement of sales in the IPO.
8. Terms of the Units
and Placement Warrants
The Units and their component
parts are substantially identical to the units to be offered in the IPO except that: (i) the Units and component parts are subject
to the transfer restrictions described in Section 7 hereof, (ii) the Placement Warrants will be non-redeemable so long as they
are held by the initial holder thereof (or any of its permitted transferees), and may be exercisable on a “cashless” basis
if held by Subscriber or its permitted transferees, as further described in the Warrant Agreement, and (iii) the Units and component
parts are being purchased pursuant to an exemption from the registration requirements of the Securities Act and will become freely tradable
only after the expiration of the lockup described above in clause (i) and they are registered pursuant to the Registration Rights
Agreement or an exemption from registration is available, and the restrictions described above in clause (i) has expired.
9. Governing Law;
Jurisdiction; Waiver of Jury Trial
This Agreement shall be governed
by and construed in accordance with the laws of the State of New York for agreements made and to be wholly performed within such state.
The parties hereto hereby waive any right to a jury trial in connection with any litigation pursuant to this Agreement and the transactions
contemplated hereby.
10. Assignment; Entire
Agreement; Amendment
10.1. Assignment. Neither
this Agreement nor any rights hereunder may be assigned by any party to any other person other than by Subscriber to a person agreeing
to be bound by the terms hereof, including the transfer restrictions contained in Section 7 hereof.
10.2. Entire Agreement. This
Agreement sets forth the entire agreement and understanding between the parties as to the subject matter thereof and merges and supersedes
all prior discussions, agreements and understandings of any and every nature among them.
10.3. Amendment. Except as
expressly provided in this Agreement, neither this Agreement nor any term hereof may be amended, waived, discharged or terminated other
than by a written instrument signed by all of the parties hereto.
10.4. Binding upon Successors.
This Agreement shall be binding upon and inure to the benefit of the parties hereto and to their respective heirs, legal representatives,
successors and permitted assigns.
11. Notices
11.1 Notices. Unless otherwise
provided herein, any notice or other communication to a party hereunder shall be sufficiently given if in writing and personally delivered
or sent by facsimile or other electronic transmission with copy sent in another manner herein provided or sent by courier (which for all
purposes of this Agreement shall include Federal Express or other recognized overnight courier) or mailed to said party by certified mail,
return receipt requested, at its address provided for herein or such other address as either may designate for itself in such notice to
the other. Communications shall be deemed to have been received when delivered personally, on the scheduled arrival date when sent by
next day or 2nd-day courier service, or if sent by facsimile upon receipt of confirmation of transmittal or, if sent by mail, then three
days after deposit in the mail. If given by electronic transmission, such notice shall be deemed to be delivered (a) if by electronic
mail, when directed to an electronic mail address at which the shareholder has consented to receive notice; (b) if by a posting on
an electronic network together with separate notice to the shareholder of such specific posting, upon the later of (1) such posting
and (2) the giving of such separate notice; and (c) if by any other form of electronic transmission, when directed to the shareholder.
12. Counterparts
This Agreement may be executed
in one or more counterparts, all of which when taken together shall be considered one and the same agreement and shall become effective
when counterparts have been signed by each party and delivered to the other party, it being understood that both parties need not sign
the same counterpart. In the event that any signature is delivered by facsimile transmission or by e-mail delivery of a “pdf”
format data file, such signature shall create a valid and binding obligation of the party executing (or on whose behalf such signature
is executed) with the same force and effect as if such facsimile or “.pdf” signature page were an original thereof.
13. Survival; Severability
13.1. Survival. The representations,
warranties, covenants and agreements of the parties hereto shall survive the Closing Date.
13.2. Severability. In the
event that any provision of this Agreement becomes or is declared by a court of competent jurisdiction to be illegal, unenforceable or
void, this Agreement shall continue in full force and effect without said provision; provided that no such severability shall be effective
if it materially changes the economic benefit of this Agreement to any party.
14. Headings.
The titles and subtitles used
in this Agreement are used for convenience only and are not to be considered in construing or interpreting this Agreement.
[remainder of page intentionally left blank]
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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COMPANY: |
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SEMPER PARATUS |
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ACQUISITION CORPORATION |
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SUBSCRIBER: |
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CANTOR FITZGERALD &
CO. |
Exhibit 23.1
Independent
Registered Public Accounting Firm’s Consent
We consent to the inclusion in this Amendment
No. 1 to Registration Statement of Semper Paratus Acquisition Corporation (the “Company”) on Form S-1 of our report dated
June 9, 2021, except for Note 6, as to which the date is October 7, 2021 and for Note 8, as to which the date is October 22, 2021, which
includes an explanatory paragraph as to the Company’s ability to continue to as a going concern, with respect to our audit of the
financial statements of the Company as of April 30, 2021 and for the period from April 21, 2021 (inception) through April 30, 2021, which
report appears in the Prospectus, which is part of this Registration Statement. We also consent to the reference to our Firm under the
heading “Experts” in such Prospectus.
/s/ Marcum llp
Marcum llp
Los Angeles, CA
October 22, 2021
Exhibit 99.4
SEMPER PARATUS ACQUISITION CORPORATION
COMPENSATION COMMITTEE CHARTER
The Compensation Committee
(the “Committee”) of the Board of Directors of Semper Paratus Acquisition Corporation , a Cayman Islands exempted company
(the “Company”), shall have responsibility for the compensation of the Company’s executive officers, including
the Company’s Chief Executive Officer (the “CEO”), and for incentive compensation, equity-based and pension plans
as further provided in this Charter.
The Committee shall consist
of two or more directors, each of whom shall satisfy the applicable independence and other compensation committee membership requirements
of the Company’s corporate governance guidelines, The Nasdaq Global Market and any other applicable regulatory requirements subject
to any exceptions or cure periods that are applicable pursuant to the foregoing requirements and the phase-in periods permitted under
the rules of The Nasdaq Global Market under which the Committee is required to have only one independent member at the time of listing,
a majority of independent members within 90 days of listing and all independent members within one year of listing.
At least one member of the
Committee shall have experience in matters relating to executive compensation either as a professional or as a business executive. At
least two members shall qualify as (a) “outside directors” within the meaning of Section 162(m) of the U.S.
Internal Revenue Code of 1986, as amended, and the rules and regulations promulgated thereunder, including Treasury Regulations Section 1.162-27
(“Outside Directors”), and (b) “non-employee directors” within the meaning of Section 16 of the
U.S. Securities Exchange Act of 1934, as amended (the “Exchange Act”), and the rules and regulations promulgated
thereunder (“Non-Employee Directors”).
Members of the Committee shall
be appointed by the Board and may be removed by the Board at any time; provided, however, that if removing a member or members of the
Committee would cause the Committee to have fewer than two members, then the Board must at the same time appoint an additional member
to the Committee so that the Committee will have at least two members who qualifies as an (a) Outside Directors and (b) Non-Employee
Directors. The Committee’s chairperson shall be designated by the Board or, if not so designated, the members of the Committee shall
elect a chairperson by a vote of the majority of the full Committee.
The Committee may form and
delegate authority to subcommittees from time to time as it sees fit, provided that the subcommittees are composed entirely of directors
who satisfy the applicable independence requirements of the Company’s corporate governance guidelines and The Nasdaq Capital Market.
The Committee shall meet as
often as necessary to carry out its responsibilities. Meetings shall be called by the chairperson of the Committee or, if there is no
chairperson, by a majority of the members of the Committee. Meetings may be held telephonically or by other electronic means to the extent
permitted by the Company’s organizational documents and applicable law. Committee actions may be taken by unanimous written resolutions
of all the members.
| IV. |
Authority and Responsibilities |
To fulfill its responsibilities, the
Committee shall:
| 1. |
Review and make recommendations to the Board with respect to the Company’s compensation strategy to ensure it is appropriate to attract, retain and motivate senior management and other key employees. |
| 2. |
Review and make recommendations to the Board with respect to the executive compensation philosophy, policies and programs that in the Committee’s judgment support the Company’s overall business strategy and review and discuss, at least annually, the material risks associated with executive compensation structure, policies and programs to determine whether such structure, policies and programs encourage excessive risk-taking and to evaluate compensation policies and practices that could mitigate any such risk. |
| 3. |
On an annual basis, review and approve corporate goals and objectives relevant to the compensation of the Company’s CEO, evaluate the CEO’s performance in light of those goals and objectives and determine and approve CEO compensation based on this evaluation. In evaluating, determining and approving the long-term incentive component of CEO compensation, the Committee may consider, among such other factors as it may deem relevant, the Company’s performance, shareholder returns, the value of similar incentive awards to executive officers at comparable companies, the value of similar awards given to other executive officers of the Company, the results of the most recent shareholder advisory vote on executive compensation required by Section 14A of the Exchange Act (the “Say-on-Pay Vote”) and the awards given to the executive officer in past years. The CEO shall not be present during voting or deliberations relating to his or her compensation. |
| 4. |
On an annual basis, review and make recommendations to the Board with respect to corporate goals and objectives relevant to the compensation of the Company’s other executive officers, evaluate the executive officers’ performance in light of those goals and objectives and determine and make recommendations to the Board with respect to executive officer compensation based on this evaluation. In evaluating and making recommendations with respect to the long-term incentive component of executive officer compensation, the Committee may consider, among such other factors as it may deem relevant, the Company’s performance, shareholder returns, the value of similar incentive awards to executive officers at comparable companies, the value of similar awards given to other executive officers of the Company, the results of the most recent shareholder advisory vote on executive compensation required by Section 14A of the Exchange Act (the “Say-on-Pay Vote”) and the awards given to the executive officer in past years. No executive officer may be present during voting or deliberations relating to his or her compensation. |
| 5. |
Review on an annual basis and make recommendations to the Board with respect to the Company’s incentive compensation, equity-based and pension plans, if any. With respect to each such plan, the Committee shall have responsibility for: |
| |
(a) |
implementing and administering the plan; |
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(b) |
setting performance targets under all annual bonus and long-term incentive compensation plans as appropriate and committing to writing any and all performance targets for executive officers who may be “covered employees” under applicable laws and regulations; |
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(c) |
if called for by the plan, certifying that any and all performance targets used for any performance-based equity compensation plans have been met before payment of any executive bonus or compensation or exercise of any executive award granted under any such plans; |
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(d) |
approving all amendments to, and terminations of, all compensation plans and any awards under such plans; |
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(e) |
granting any awards under any performance-based annual bonus, long- term incentive compensation and equity compensation plans to executive officers or current employees with the potential to become the CEO or an executive officer, including share options and other equity rights (e.g., restricted shares and share purchase rights); |
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(f) |
approving which executive officers are entitled to awards under the Company’s share option plans; and |
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(g) |
approving repurchases of securities from terminated employees. |
In reviewing the Company’s incentive compensation,
equity-based and pension plans, the Committee may consider the plan’s administrative costs, current plan features relative to any
proposed new features, the results of the most recent Say-on-Pay Vote and the performance of the plan’s internal and external administrators
if any duties have been delegated.
| 6. |
Review and recommend to the Board for approval any employment agreement or compensatory transaction with an executive officer of the Company involving compensation in excess of $120,000 per year. |
| 7. |
Establish and periodically review policies concerning perquisite benefits and approve all special perquisites, special cash payments and other special compensation and benefits arrangements for officers and employees of the Company and approve all special perquisites, special cash payments and other special compensation and benefit arrangements for officers and employees of the Company. |
| 8. |
Determine and recommend to the Board for approval the Company’s policy with respect to change-of-control or “parachute” payments. In reviewing the Company’s policy with respect to change of control or “parachute” payments, the Committee may consider, among such other factors as it may deem relevant, the results of the most recent Say-on-Pay Vote on “parachute” payments, if any. |
| 9. |
Review and make recommendations to the Board with respect to executive officer and director indemnification and insurance matters. |
| 10. |
Review and recommend to the Board for approval the compensation of directors for their service to the Board. Review, evaluate and recommend changes, if appropriate, to the remuneration of directors. |
| 11. |
Approve compensation awards, including individual awards, as may be required to comply with applicable tax and state corporate laws. |
| 12. |
Review the Company’s compensation disclosures in its annual proxy statement and its Annual Report on Form 10-K filed with the U.S. Securities and Exchange Commission (the “SEC”) and assist management in complying with proxy statement and annual report requirements. Review and discuss the Company’s Compensation Discussion and Analysis (“CD&A”) with management and based on such review and discussion, determine whether to recommend to the Board that such compensation disclosures and CD&A be disclosed in the Company’s Annual Report on Form 10-K or annual proxy statement filed with the SEC, as applicable. |
| 13. |
Review and recommend to the Board for approval the frequency with which the Company will conduct Say-on-Pay Votes, taking into account the results of the most recent shareholder advisory vote on frequency of Say-on-Pay Votes required by Section 14A of the Exchange Act, and review and recommend to the Board for approval the proposals regarding the Say-on-Pay Vote and the frequency of the Say-on-Pay Vote to be included in the Company’s proxy statement filed with the SEC. |
| 14. |
Prepare any report required by applicable rules and regulations or listing standards, including reports on executive compensation required by the SEC to be included in the Company’s annual proxy statement, or, if the Company does not file a proxy statement, in the Company’s Annual Report filed on Form 10-K with the SEC. |
| 15. |
Review and assess the adequacy of this Charter annually and recommend to the Board any changes deemed appropriate by the Committee. |
| 16. |
Review its own performance annually. |
| 17. |
Report regularly to the Board. |
| 18. |
Perform any other activities consistent with this Charter, the Company’s by-laws and governing law, as the Committee or the Board deems necessary or appropriate. |
The Committee shall have the authority to retain
or terminate, at its sole discretion, compensation consultants, independent legal counsel or other advisors (collectively, “Advisors”)
to assist the Committee in its responsibilities and shall be directly responsible for the appointment, compensation and oversight of the
work of such Advisors. Before retaining an Advisor (other than in-house legal counsel and any Advisor whose role is limited to consulting
on broad-based, non-discriminatory plans or providing information that is not customized in particular for the Company (as described in
Item 407(e)(3)(iii) of Regulation S-K), the Committee shall consider the independence of such Advisor, including any independence
factors that it is required to consider by law or The Nasdaq Global Market rules.
The chairperson of the Committee,
at the request of any member of the Committee, may request that any officer, employee or advisor of the Company attend a meeting of the
Committee or otherwise respond to Committee requests.
The Committee shall have the
sole authority to determine the terms of engagement and the extent of funding necessary (and to be provided by the Company) for payment
of compensation to any Advisors or other professionals retained to advise the Committee and ordinary administrative expenses of the Committee
that are necessary or appropriate in carrying out its duties.
