References to the "Company," "
Cautionary Note Regarding Forward-Looking Statements
This Quarterly Report on Form 10-Q includes forward-looking statements within
the meaning of Section 27A of the Securities Act of 1933, as amended (the
"Securities Act"), and Section 21E of the Securities Exchange Act of 1934, as
amended (the "Exchange Act"). We have based these forward-looking statements on
our current expectations, assumptions and projections about future events. These
forward-looking statements are subject to known and unknown risks, uncertainties
and assumptions about us. No assurance can be given that future results, levels
of activity, performance or achievements expressed or implied by such
forward-looking statements will be achieved, and actual results, levels of
activity, performance or achievements could be affected by one or more factors,
which could cause them to be materially different from any future results,
levels of activity, performance or achievements expressed or implied by such
forward-looking statements. In some cases, you can identify forward-looking
statements by terminology such as "anticipate," "believe," "continue," "could,"
"estimate," "expect," "intends," "may," "might," "plan," "possible,"
"potential," "predict," "project," "should," "would" or the negative of such
terms or other similar expressions. Factors that might cause or contribute to
such a discrepancy include, but are not limited to, those described in our other
Overview
We are a blank check company incorporated on
The registration statement for our initial public offering (the "Initial Public
Offering") was declared effective on
Simultaneously with the closing of the Initial Public Offering, we consummated
the private placement (the "Private Placement") of 501,000 Class A ordinary
shares (the "Private Placement Shares") at a price of
Upon the closing of the Initial Public Offering and Private Placement,
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If we are unable to complete an initial business combination within 24 months
from the closing of the Initial Public Offering, or
The issuance of additional shares in connection with a business combination to the owners of the target or other investors:
may significantly dilute the equity interest of investors in the Initial Public
? 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 in 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; and
? may adversely affect prevailing market prices for our Class A ordinary shares
and/or warrants.
Similarly, if we issue debt securities or otherwise incur significant debt to bank or other lenders or the owners of a target, 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 security is payable on demand;
our inability to obtain necessary additional financing if the debt security
? contains covenants restricting our ability to obtain such financing while the
debt security 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 condensed financial statements, we had
approximately
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Our entire activity from our inception on
For the three months ended
For the three months ended
Liquidity and Capital Resources
As of
Our liquidity needs to date have been satisfied through a contribution of
We intend to use substantially all of the net proceeds of the Initial Public Offering, including the funds held in the Trust Account (including interest accrued thereon), in connection with our business combination and to pay our expenses relating thereto, including a deferred underwriting commission payable to the underwriters from our Initial Public Offering upon consummation of our initial business combination. To the extent that our capital stock is used in whole or in part as consideration to effect our initial business combination, the remaining proceeds held in the Trust Account, as well as any other net proceeds not expended, will be used as working capital to finance the operations of the target business. Such working capital funds could be used in a variety of ways including continuing or expanding the target business' operations, for strategic acquisitions and for marketing, research and development of existing or new products. Such funds could also be used to repay any operating expenses or finders' fees which we may incur prior to the completion of our initial business combination, if the funds available to us outside of the Trust Account are insufficient to cover such expenses.
Based on the foregoing, management believes that we will have sufficient working
capital and borrowing capacity from our Sponsor or an affiliate of our Sponsor,
or our officers and directors, to meet our needs through the consummation of a
business combination. However, in connection with the Company's assessment of
going concern considerations in accordance with
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If our estimates of the costs of undertaking the aforementioned activities are less than the actual amount necessary to do so, we may have insufficient funds available to operate our business prior to our initial business combination. Moreover, we may need to obtain additional financing either to consummate our initial business combination or because we become obligated to convert a significant number of our Public Shares upon consummation of our initial business combination, in which case we may issue additional securities or incur debt in connection with such business combination. Subject to compliance with applicable securities laws, we would only consummate such financing simultaneously with the consummation of our initial business combination. Following our initial business combination, if cash on hand is insufficient, we may need to obtain additional financing in order to meet our obligations.
Contractual Obligations
As of
Registration and Shareholder Rights
The holders of Founder Shares, Private Placement Shares and the Private Placement Shares that may be issued upon conversion of working capital loans were and will be entitled to registration rights pursuant to a registration and shareholder rights agreement signed upon consummation of our Initial Public Offering. The holders of these securities are entitled to make up to three demands, excluding short form demands, that we register such securities. In addition, the holders have certain "piggy-back" registration rights with respect to registration statements filed subsequent to our completion of the 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 lock-up period, which occurs (i) in the case of the Founder Shares, in accordance with the letter agreement our initial shareholders entered into and (ii) in the case of the Private Placement Shares, 30 days after the completion of our business combination. We will bear the expenses incurred in connection with the filing of any such registration statements.
Underwriting Agreement
We granted the underwriters a 45-day option from the final prospectus relating
to our Initial Public Offering to purchase up to 1,800,000 additional Public
Shares to cover over-allotments, if any, at our Initial Public Offering price
less the underwriting discounts and commissions. The underwriters fully
exercised the over-allotment option on
The underwriters were entitled to an underwriting discount of
Risks and Uncertainties
Management continues to evaluate the impact of the COVID-19 pandemic, current and anticipated military conflict, sanctions, inflation, and other geopolitical events on the industry and has concluded that while it is reasonably possible that such factors could have a negative effect on our financial position, results of our operations and/or search for a target company, the specific impact is not readily determinable as of the date of these condensed financial statements. The condensed financial statements do not include any adjustments that might result from the outcome of this uncertainty.
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Critical Accounting Policies and Estimates
This management's discussion and analysis of our financial condition and results of operations is based on our condensed financial statements, which have been prepared in accordance with GAAP. The preparation of our condensed financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses and the disclosure of contingent assets and liabilities in our condensed financial statements. On an ongoing basis, we evaluate our estimates and judgments, including those related to fair value of financial instruments and accrued expenses. We base our estimates on historical experience, known trends and events and various other factors that we believe to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions. We have identified the following as our critical accounting policies:
Investments Held in Trust Account
Our portfolio of investments is comprised of
Class A ordinary shares subject to possible redemption
We account for our Class A ordinary shares subject to possible redemption in
accordance with the guidance in ASC Topic 480 "Distinguishing Liabilities from
Equity." Class A ordinary shares subject to mandatory redemption (if any) are
classified as liability instruments and are measured at fair value.
Conditionally redeemable Class A ordinary shares (including Class A ordinary
shares that feature redemption rights that are either within the control of the
holder or subject to redemption upon the occurrence of uncertain events not
solely within our control) are classified as temporary equity. At all other
times, Class A ordinary shares are classified as shareholders' equity. Our
Public Shares feature certain redemption rights that are considered to be
outside of our control and subject to the occurrence of uncertain future events.
Accordingly, as of
Under ASC 480-10S99, we have elected to recognize changes in the redemption value immediately as they occur and adjust the carrying value of the security to equal the redemption value at the end of each reporting period. This method would view the end of the reporting period as if it were also the redemption date for the security. Effective with the closing of the Initial Public Offering, we recognized the accretion from initial book value to redemption amount, which resulted in charges against additional paid-in capital (to the extent available) and accumulated deficit.
Net Loss Per Ordinary Share
We comply with the accounting and disclosure requirements of FASB ASC Topic 260, "Earnings Per Share." We have two classes of ordinary shares: Class A ordinary shares and Class B ordinary shares. Income and losses are shared pro rata between the two classes of ordinary shares, which assumes a business combination as the most likely outcome. Net loss per ordinary share is calculated by dividing the net loss by the weighted average ordinary shares outstanding for the respective period.
At
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Recent Accounting Pronouncements
We do not believe that any recently issued, but not yet effective, accounting pronouncements, if currently adopted, would have a material impact on our condensed financial statements.
JOBS Act
On
As an "emerging growth company," we are not 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, (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
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