Filed 2026-03-03 · Period ending 2025-12-31 · 88,456 words · SEC EDGAR
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# Evolution Global Acquisition Corp (EVOX) — 10-K
**Filed:** 2026-03-03
**Period ending:** 2025-12-31
**Accession:** 0001213900-26-023006
**Source:** [SEC EDGAR](https://www.sec.gov/Archives/edgar/data/2077954/000121390026023006/)
**Origin leaf:** 02bed361c4b7d1cde3e48be5dda5d83ecdb47858b89e0b715f9b061b4bf33beb
**Words:** 88,456
---
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM10-K
(Mark One)
ANNUAL REPORT PURSUANT TO SECTION13 OR 15(d)OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December31, 2025
TRANSITION REPORT PURSUANT TO SECTION13 OR 15(d)OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from to .
Commission File Number: 001-42946
EVOLUTION GLOBAL ACQUISITION CORP
(Exact name of registrant as specified in its charter)
| Cayman Islands | | N/A | |
| (State or other jurisdiction of incorporation or organization) | | (I.R.S. Employer Identification Number) | |
| 2727 LBJ Freeway Suite 1010 Farmers Branch, TX | | 75234 | |
| (Address of principal executive offices) | | (Zip Code) | |
Registrants telephone number, including area code: 214-775-0614
Securities registered pursuant to Section 12(b) of the Act:
| Title of Each Class: | | Trading Symbol: | | Name of Each Exchange on Which Registered: | |
| Units, each consisting of one ClassA Ordinary Share, $0.0001 par value, and one-half of one redeemable warrant | | EVOXU | | The Nasdaq Stock Market LLC | |
| | | | | | |
| ClassA Ordinary Shares | | EVOX | | The Nasdaq Stock Market LLC | |
| | | | | | |
| Redeemable warrants, each whole warrant exercisable for one ClassA Ordinary Share at an exercise price of $11.50 | | EVOXW | | The Nasdaq Stock Market LLC | |
Securities registered pursuant to Section12(g)of the Act: None
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes No
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Act. Yes No
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes No
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (Section 232.405 of this chapter) during the preceding 12 months (or such shorter period that the registrant was required to submit such files). Yes No
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of large accelerated filer, accelerated filer, smaller reporting company, and emerging growth company in Rule 12b-2 of the Exchange Act:
| Large accelerated filer | | Accelerated filer | | |
| Non-accelerated filer | | Smaller reporting company | | |
| | | Emerging growth company | | |
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section13(a)of the Exchange Act.
Indicate by check mark whether the registrant has filed a report on and attestation to its managements assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report.
If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements.
Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrants executive officers during the relevant recovery period pursuant to 240.10D-1(b).
Indicate by check mark whether the registrant is a shell company (as defined in Rule12b-2 of the Exchange Act). YesNo
At June 30, 2025, the aggregate market value of the registrants voting and non-voting ordinary shares held by non-affiliates was $0.
As of March 3, 2026 there were 24,000,000 of the registrants ClassA ordinary shares, par value $0.0001 per share, and 8,000,000 of the registrants ClassB ordinary shares, par value $0.0001 per share, issued and outstanding.
Documents Incorporated by Reference: None.
TABLE
OF CONTENTS
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Page | |
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PART
I |
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1 | |
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Item
1. BUSINESS |
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1 | |
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Item
1A. RISK FACTORS |
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19 | |
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Item
1B. UNRESOLVED STAFF COMMENTS |
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64 | |
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Item
1C. CYBERSECURITY |
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64 | |
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Item
2. PROPERTIES |
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64 | |
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Item
3. LEGAL PROCEEDINGS |
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64 | |
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Item
4. MINE SAFETY DISCLOSURES |
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64 | |
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PART
II |
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65 | |
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Item
5. MARKET FOR REGISTRANTS COMMON EQUITY, RELATED SHAREHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES |
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65 | |
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Item
6. [RESERVED] |
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66 | |
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Item
7. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS. |
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66 | |
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Item
7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK |
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69 | |
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Item
8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA |
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69 | |
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Item
9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE |
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69 | |
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Item
9A. CONTROLS AND PROCEDURES |
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69 | |
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Item
9B. OTHER INFORMATION |
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69 | |
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Item
9C. DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS |
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69 | |
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PART
III |
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70 | |
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Item
10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE |
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70 | |
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Item
11. EXECUTIVE COMPENSATION |
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78 | |
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Item
12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED SHAREHOLDER MATTERS |
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79 | |
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Item
13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE |
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81 | |
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Item
14. PRINCIPAL ACCOUNTANT FEES AND SERVICES |
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84 | |
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PART
IV |
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85 | |
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Item
15. EXHIBIT AND FINANCIAL STATEMENT SCHEDULES |
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85 | |
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Item
16. FORM 10K SUMMARY |
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85 | |
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SIGNATURES |
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86 | |
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INDEX
TO FINANCIAL STATEMENTS |
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F-1 | |
i
CERTAIN
TERMS
**
*Unless
otherwise stated in this Annual Report on Form10-K(this Report), references to:*
|
| amended
and restated memorandum and article of association are to the second amended and restated
memorandum and articles of association that the company has adopted; | |
|
| board
of directors are to the board of directors of the company; | |
|
| ClassA
Ordinary Shares are to our ClassA Ordinary Shares of par value $0.0001 per share
in the share capital of the company; | |
|
| ClassB
Ordinary Shares are to our ClassB Ordinary Shares of par value $0.0001 per share
in the share capital of the company; | |
|
| Cohen
are to Cohen and Company Capital Markets, a division of Cohen & Company Securities, LLC,
the representative of the underwriters in the initial public offering; | |
|
| Companies
Act are to the Companies Act (As Revised) of the Cayman Islands, as the same may be
amended from time to time; | |
|
| directors
are to our current directors; | |
|
| founder
shares are to our ClassB Ordinary Shares initially purchased by our sponsor
in a private placement prior to our initial public offering, and our ClassA Ordinary
Shares issuable upon the conversion thereof as provided herein; | |
|
| initial
public offering or IPO are to our initial public offering consummated
on November 12, 2025; | |
|
| management
or our management team are to our officers and directors; | |
|
| Ordinary
Shares are to our ClassA Ordinary Shares and our ClassB Ordinary Shares,
collectively; | |
|
| placement
warrants are to the warrants purchased by our sponsor and the underwriters in the
private placement; | |
|
| private
placement are to the private placement to our sponsor and the underwriters of an aggregate
of 6,800,000 private placement warrants at a price of $1.00 per placement warrant, for an
aggregate purchase price of $6,800,000, which occurred simultaneously with the completion
of our initial public offering; | |
|
| public
shares are to our ClassA Ordinary Shares sold as part of theunits in our
initial public offering (whether they are purchased in our initial public offering or thereafter
in the open market); | |
|
| public
shareholders are to the holders of our public shares, including our sponsor and management
team to the extent our sponsor and/or members of our management team purchase public shares,
provided that our sponsors and member of our management teams status as a public
shareholder shall only exist with respect to such public shares; | |
|
| public
warrants or warrants are to our redeemable warrants sold as part of
theunits in our initial public offering (whether they are purchased in our initial
public offering or thereafter in the open market, including warrants that may be acquired
by our sponsor or its affiliates in the open market); | |
|
| representative
are to Cohenand Company Capital Markets, a division of Cohen & Company Securities,
LLC, the representative of the underwriters in the initial public offering; | |
|
| sponsor
are to Evolution Sponsor Holdings LLC, a Cayman Islands limited liability company; | |
|
| underwriters
are to Cohen and Clear Street LLC, the underwriters of the initial public offering; and | |
|
| we,
us, company or our company are to Evolution Global
Acquisition Corp, a Cayman Islands exempted company. | |
ii
CAUTIONARY
STATEMENT REGARDING FORWARD-LOOKING STATEMENTS
Certain
statements in this Report 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 teams 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, intend, may, might,
plan, possible, potential, predict, project, should,
would and similar expressions may identify forward-looking statements, but the absence of these words does not mean that
a statement is not forward-looking. Forward-looking statements in this Report may include, for example, statements about:
|
| our
ability to complete our initial business combination; | |
|
| 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 a business combination; | |
|
| our
pool of prospective target businesses; | |
|
| the
ability of our officers and directors to generate a number of potential investment opportunities; | |
|
| potential
changes in control if we acquire one or more target businesses for stock; | |
|
| 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 established in connection with our initial
public offering (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. | |
The
forward-looking statements contained in this Annual Report 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.
iii
PARTI
Item1.
BUSINESS
General
We
are a special purpose acquisition company incorporated on June26, 2025, as a Cayman Islands exempted company and formed for the
purpose of effecting a merger, amalgamation, share exchange, asset acquisition, share purchase, reorganization or similar business combination
with one or more businesses, which we refer to throughout the annual report as our initial business combination. We have not selected
any business combination target, and we have not, nor has anyone on our behalf, initiated any substantive discussions, directly or indirectly,
with any business combination target.
While
we may pursue an acquisition in any industry, we intend to focus our search on companies that own, operate, or are developing assets
in the critical minerals sector that are fundamental to the economic and national security interests of the UnitedStates. We intend
to identify companies with critical resource infrastructure, in order to accelerate Americas safe and secure energy future, accelerate
electrification and grid expansion, support the what we expect to be an upcoming digital infrastructure revolution, reduce foreign reliance
on mineral supply chains, and drive industrial resurgence. We expect to target companies involved in the exploration, processing, production,
and domestic refining and recycling of minerals essential to national defense, clean energy independence, and technological leadership,
preferably with enabling technologies. We have not selected any specific business combination target, and we have not, nor has anyone
on our behalf, engaged in any substantive discussions, directly or indirectly, with any business combination target. We believe our management
team has the skills and experience to identify, evaluate and consummate a business combination and is positioned to assist businesses
we acquire. However, our management teams network and investing and operating experience do not guarantee a successful initial
business combination. The members of our management team are not required to devote any significant amount of time to our business and
are concurrently involved with other businesses. There is no guarantee that our current officers and directors will continue in their
respective roles, or in any other role, after our initial business combination, and their expertise may only be of benefit to us until
our initial business combination is completed. Past performance by our management team is not a guarantee of success with respect to
any business combination we may consummate.
Our
Management Team
We
believe our teams distinctive and complementary backgrounds can have a transformative impact on a target business. Our team will
deploy a proactive, thematic sourcing strategy and will focus its efforts on companies where we believe the combination of our operating
experience, transaction execution capabilities, professional relationships and capital markets expertise can serve as catalysts to enhance
the growth potential and value of a target business and provide opportunities for an attractive return to our shareholders.
Over
the course of their careers, the members of our management team have developed a broad network of contacts and corporate relationships
that we believe will serve as a useful source of acquisition opportunities. In addition to industry and investment community relationships,
we plan to leverage relationships with management teams of public and private companies, investment bankers, restructuring advisers,
attorneys and accountants, which we believe should provide us with a number of business combination opportunities. Members of our management
team will communicate with their networks of relationships to articulate the parameters for our search for a target business and a potential
business combination and begin the process of pursuing and reviewing potentially interesting leads with the eventual goal to complete
a successful business combination.
Our
team is led by Stephen Silver, our Chairman of the Board and Chief Executive Officer, who is a finance professional with over two decades
of experience in capital markets and corporate finance, particularly in the natural resources sector. Our board includes Ashley Zumwalt-Forbes,
a petroleum engineer and former U.S.Deputy Director for Batteries& Critical Materials at the Department of Energy; Erez
Ichilov, a seasoned mining and metals executive with extensive operational experience at Traxys Projects LP and Cunico Resources; and
Matthew Langsford, a seasoned investment professional from Terra Capital Holdings Pty Ltd, with deep expertise in the natural resources
sector. This unique blend of private sector execution, public policy insight, and operational experience is purpose-built to identify,
perform due diligence on, and support a company in the critical minerals space.
Stephen
Silver, our Chief Executive Officer and Chairman of the Board, Ashley Zumwalt-Forbes, our Chief Operating Officer and Director, Arthur
Chen, our Chief Financial Officer, and Erez Ichilov each hold the same respective position with M Evo Global Acquisition Corp II (MEVO)
as our company. On February 2, 2026 , MEVO consummated its IPO of 30,000,000 units at $10.00 per unit, generating gross proceeds of $300
million; each unit is comprised of one Class A ordinary share and one-half of one redeemable warrant. The Units, Class A ordinary shares
and warrants trade on Nasdaq under the symbols MEVOU, MEVO and MEVOW.
1
Business
Combination Criteria and Strategy
While
we may acquire a business in any industry and in any geography, we plan to focus our pursuit for business combination opportunities with
companies operating in the metals and mining or infrastructure segments. We intend to evaluate companies engaged both directly and indirectly
in our target industries; including those companies involved in providing the necessary infrastructure to support the long-term growth
of our target sectors.
We
believe the world is entering a period of strategic resource realignment. The convergence of the energy transition, geopolitical shifts,
and new industrial policies has created an urgent need for secure, reliable, and domestic supply chains for critical minerals. The UnitedStates
is currently over 50% import-reliant for 49 of the 50 designated critical minerals, with a significant dependency on foreign nations
for processing and refining. This creates both a national security vulnerability and a compelling investment opportunity.
Our
strategy is to leverage this landscape by targeting businesses in U.S.-aligned jurisdictions (including the UnitedStates, Canada,
and Australia, and potentially other members of the US led MSP-Minerals Security Partnership) that are poised for significant growth. Our
primary investment focus includes:
**
|
| Critical
Mineral Assets:Companies with assets or enabling technologies
in key materials such as lithium, graphite, nickel, cobalt, copper, uranium, rare earth elements
(REEs), vanadium, germanium, antimony, 3T technology metals (Tin, Tungsten, Tantalum), and
more. |
|
**
|
| Stage
of Development:We intend to prioritize near-production, brown
field restarts, expansion-stage assets, all with proven geology or well documented past production
mineralized tailings and dumps that are capital-constrained or underdeveloped. |
|
|
| Domestic
Infrastructure:Opportunities in U.S.-based mineral processing
and refining infrastructure to help close the domestic supply chain gap. |
|
|
| Target
Enterprise Value:We intend to initially seek targets with an
enterprise value between $200million and $1.5billion. |
|
We
believe that powerful U.S.policy tailwinds, including the Inflation Reduction Act (IRA), the Defense Production Act, and strategic
funding from the Department of Defense (DoD) and Department of Energy (DOE), provide substantial support for our strategy and will catalyze
growth for our eventual partner company.
Acquisition
Criteria
We
will seek to identify a business that has demonstrated technical or commercial readiness but requires capital, scale, and public market
access to accelerate its growth. We expect our evaluation will be guided by the following criteria:
|
| Strategic
Alignment:Assets that are critical to U.S.supply chains
and supported by national policy. |
|
|
| Strong
Fundamentals:Businesses with proven geology, a clear path to
production, or existing operations with expansion potential. |
|
|
| Value
Creation Potential:Opportunities where our capital, strategic
advice, and relationships with government entities and offtake partners can unlock significant
value. |
|
|
| Experienced
Management:Partnering with strong, motivated management teams
who will benefit from our support in a public company context. |
|
|
| Compelling
Valuation:Businesses that we can acquire at an attractive valuation
relative to their intrinsic value and growth prospects. |
|
In
evaluating a prospective target business, we will conduct extensive due diligence, leveraging our teams technical and financial
expertise to assess all aspects of its operations, geology, permitting status, and market potential.
Our
acquisition and value creation strategy will be to identify, acquire and, after our initial business combination, build a value accretive
company. Our acquisition strategy will leverage our network of potential proprietary and public transaction sources where we believe
a combination of our relationships, knowledge, and experience in the metals and mining industry could effect a positive transformation.
Our goal is to build a focused business with multiple competitive advantages that have the potential to improve the target business
overall value proposition.
2
Our
selection process is expected to leverage our sponsors global network of relationships across the critical minerals, natural resources,
capital markets, and public policy arenas, along with our teams extensive track record of operational and transactional success.
This network has been built over decades through the leadership roles and investment activities of our management team across mining,
energy, structured finance, and strategic government initiatives. We intend to employ a proactive, thesis-driven sourcing approach, focusing
on opportunities where our combined operating expertise, regulatory insight, and capital markets fluency can serve as accelerants to
unlock value, scale operations, and enhance long-term performance. We expect that our sponsor and management team will actively engage
their networks to communicate our investment thesis, surface potential targets, and initiate the evaluation and diligence process for
prospective business combinations. Our teams objectives are to generate attractive returns for shareholders and enhance the value
of our eventual business combination partner by leveraging our technical, operational, and financial expertise to support its growth,
improve execution, and facilitate a successful transition to the public markets. We expect to prioritize opportunities with characteristics
aligned to the unique demands and tailwinds of the critical minerals sector.
**
*Key
industry characteristics include:*
|
| mission-critical
role in energy transition, electrification, and national security; |
|
|
| large,
durable addressable markets with multi-decade secular growth; |
|
|
| favorable
government policy support and structural supply-demand imbalances; and |
|
|
| opportunities
for consolidation, vertical integration, and technological disruption. |
|
**
*Key
business characteristics of attractive targets include:*
|
| high-quality
executive and technical teams with domain expertise; |
|
|
| de-risked
assets with demonstrated geology, operational readiness, or past production; |
|
|
| low-cost
production profile and strong cash generation potential; |
|
|
| operations
or projects located in U.S.-aligned, mining-friendly jurisdictions; |
|
|
| alignment
with regulatory frameworks and eligibility for government incentives; |
|
|
| potential
for growth and valuation re-rating through scale and capital access; |
|
|
| defensible
market position with high entry barriers; |
|
|
| attractive
unit economics and long-term offtake or customer relationships; |
|
|
| resilience
across commodity and capital cycles; |
|
|
| ability
to benefit from our capital markets experience, policy fluency, and long-term strategic guidance. |
|
These
criteria are intended as a framework, not a limitation. Any evaluation of a prospective business combination will be based on these guidelines
as well as other qualitative and quantitative factors our management and sponsor deem material. Should we pursue a transaction that does
not meet these stated criteria, we will disclose this in our shareholder communications, including proxy or tender offer materials as
applicable.
In
evaluating a potential target, we expect to conduct a comprehensive due diligence process that includes meetings with management, site
visits, technical assessments, customer and supplier references, legal and regulatory review, and detailed financial analysis. Our diligence
will be informed by our collective experience in resource development, structured finance, public policy, and M&A execution.
**
*Our
management team and sponsor bring decades of experience in:*
|
| developing
deep, trust-based relationships with operators, investors, and policymakers; |
|
|
| originating,
structuring, and financing complex transactions across jurisdictions; |
|
|
| conducting
rigorous diligence on technical, regulatory, and market fundamentals; |
|
3
|
| navigating
commodity cycles, macro shifts, and public market transitions; and |
|
|
| providing
strategic oversight at the board level to unlock long-term shareholder value in a public
company setting. |
|
We
are not prohibited from pursuing an initial business combination with a business combination target that is affiliated with our sponsor,
officers, directors (or their respective affiliates or related entities) or making the acquisition through a joint venture or other form
of shared ownership with our sponsor, officers, directors (or their respective affiliates or related entities). In the event that we
seek to complete our initial business combination with a company that is affiliated with our sponsor, officers or directors (or their
respective affiliates or related entities), we, or a committee of independent directors, will obtain an opinion from an independent investment
banking firm which is a member of FINRA or a valuation or appraisal firm stating that the consideration to be paid by us in such an initial
business combination is fair to our company from a financial point of view. We are not required to obtain such an opinion in any other
context.
Initial
Business Combination
We
are not presently engaged in, and we will not engage in, any operations for an indefinite period of time following the IPO. We intend
to effectuate our initial business combination using cash from the proceeds of the IPO and the private placement of the private placement
warrants, the proceeds of the sale of our shares in connection with our initial business combination (including pursuant to forward purchase
agreements or backstop agreements we may enter into following the consummation of the IPO or otherwise), shares issued to the owners
of the target, debt issued to bank or other lenders or the owners of the target, other securities issuances, or a combination of the
foregoing. See the section titled *The OfferingAdditional Financing* below for more information.
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.
We
will provide our public shareholders with the opportunity to redeem, regardless of whether they abstain, vote for, or against, our initial
business combination, all or a portion of their public shares in connection with the completion of our initial business combination either
(i)in connection with a general meeting called to approve the business combination or (ii)without a shareholder vote by means
of a tender offer. If we seek shareholder approval, we will complete our initial business combination only if we receive an ordinary
resolution under Cayman Islands law and our amended and restated memorandum and articles of association, which requires the affirmative
vote of at least a majority of the votes cast by such shareholders as, being entitled to do so, vote in person or, where proxies are
allowed, by proxy at the applicable general meeting of the company. 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.
We
have until the date that is 24months from the closing of the IPO or until such earlier liquidation date as our board of directors
may approve, to consummate our initial business combination. If we anticipate that we may be unable to consummate our initial business
combination within such 24-month period, we may seek shareholder approval to amend our amended and restated memorandum and articles of
association to extend the date by which we must consummate our initial business combination. If we seek shareholder approval for an extension,
holders of public shares will be offered an opportunity to redeem their shares, regardless of whether they abstain, vote for, or against,
the proposed extension, at a per share price, payable in cash, equal to the aggregate amount then on deposit in the trust account, including
interest earned thereon (which interest shall be net of amounts not previously released to us for permitted withdrawals), divided by
the number of then issued and outstanding public shares, subject to applicable law. There is no limit on the number or length of extensions
that we may seek; however, we do not expect to extend the time period to consummate our initial business combination beyond 36months
from the closing of the IPO. If we determine not to or are unable to extend the time period to consummate our initial business combination
or fail to obtain shareholder approval to extend, our sponsor, management team and other initial shareholders will lose their entire
investment in our founder shares and our private placement warrants, except to the extent they entitle the holders thereof to receive
liquidating distributions from assets outside the trust account. For more information, also see *Risk FactorsRisks
Relating to our SecuritiesSince our sponsor, officers and directors, any other holder of our founder shares, and the
underwriters may lose their entire investment in us if our initial business combination is not completed (other than with respect to
public shares they may acquire during or after the IPO), a conflict of interest may arise in determining whether a particular business
combination target is appropriate for our initial business combination.*
4
If
we are unable to complete our initial business combination within the completion window, we will redeem 100% of the public shares at
a per share price, payable in cash, equal to the aggregate amount then on deposit in the trust account, including interest earned thereon
(which interest shall be net of amounts not previously released to us for permitted withdrawals and up to $100,000 of interest to pay
liquidation expenses), divided by the number of then issued and outstanding public shares, subject to applicable law and certain conditions
as further described herein. We expect the pro rata redemption price to be approximately $10.00 per public share (regardless of whether
or not the underwriters exercise their over-allotment option), without taking into account any interest or other income earned on such
funds. However, we cannot assure you that we will in fact be able to distribute such amounts as a result of claims of creditors, which
may take priority over the claims of our public shareholders.
Nasdaq
rules require that we must complete one or more business combinations having an aggregate fair market value of at least 80% of the value
of the assets held in the trust account (excluding the deferred underwriting commissions and taxes paid or payable on the interest earned
on the trust account). Our board of directors will make the determination as to the fair market value of our initial business combination.
In the event that we seek to complete our initial business combination with a company that is affiliated with our sponsor, officers or
directors (or their respective affiliates or related entities), we, or a committee of independent directors, will obtain an opinion from
an independent investment banking firm which is a member of FINRA or a valuation or appraisal firm stating that the consideration to
be paid by us in such an initial business combination is fair to our company from a financial point of view. We are not required to obtain
such an opinion in any other context. 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 transaction 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 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, 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 is otherwise not required to register as an investment company under the Investment Company Actof1940, as amended, or
the Investment Company Act. Even if the post transaction 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 transaction 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 issued and outstanding shares subsequent to our initial business combination. If less than 100%
of the equity interests or assets of a target business or businesses are owned or acquired by the post transaction company, the portion
of such business or businesses that is owned or acquired is what will be taken into account for purposes of the 80% of net assets test
described above. 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.
Members
of our management team and our independent directors will directly or indirectly own founder shares and/or private placement warrants
following the IPO 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. The low price that our sponsor, executive officers and directors
(directly or indirectly) paid for the founder shares creates an incentive whereby our officers and directors could potentially make a
substantial profit even if we select an acquisition target that subsequently declines in value and is unprofitable for public shareholders.
If we are unable to complete our initial business combination within the completion window, the founder shares and private placement
warrants may expire worthless, except to the extent they receive liquidating distributions from assets outside the trust account, which
could create an incentive for our sponsor, executive officers and directors to complete a transaction even if we select an acquisition
target that subsequently declines in value and is unprofitable for public shareholders. 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.
Each
of our officers and directors presently has, and any of them in the future may have additional, fiduciary, contractual or other obligations
or duties to one or more other entities pursuant to which such officer or director is or will be required to present a business combination
opportunity to such entities. Our 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 and 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 to any director or officer on the one hand, and us, on the other. 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, he or she will honor his or her fiduciary or contractual obligations to present
such business combination opportunity to such other entity, subject to their fiduciary duties under Cayman Islands law. Our amended and
restated memorandum and articles of association provide that, to the fullest extent permitted by law: (i)no individual serving
as a director or an officer, among other persons, shall have any duty, except and 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 (a)may
be a corporate opportunity for any director or officer, on the one hand, and us, on the other or (b)the presentation of which would
breach an existing legal obligation of a director or officer to any other entity.
5
In
addition, our sponsor and our officers and directors may sponsor or form other special purpose acquisition companies similar to ours
or may pursue other business or investment ventures during the period in which we are seeking an initial business combination. As a result,
our sponsor, officers and directors could have conflicts of interest in determining whether to present business combination opportunities
to us or to any other special purpose acquisition company with which they may become involved. Any such companies, businesses or investments
may present additional conflicts of interest in pursuing an initial business combination target.
We
filed a Registration Statement on Form8-A with the SEC to voluntarily register our securities under Section12 of the Securities
ExchangeActof1934, as amended (the ExchangeAct). As a result, we are subject to the rules and regulations
promulgated under the ExchangeAct. We have no current intention of filing a Form15 to suspend our reporting or other obligations
under the ExchangeAct prior or subsequent to the consummation of our initial 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
or shares in the target business for our ClassA ordinary shares (or shares of a new holding company) or for a combination of our
ClassA ordinary shares and cash, allowing us to tailor the consideration to the specific needs of the sellers. 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 and market and other uncertainties in the initial public offering process, including
underwriting discounts and commissions, marketing and road show efforts that may not be present to the same extent in connection with
a business combination with us.
Furthermore,
once a proposed initial business combination is completed, the target business will have effectively become public, whereas an initial
public offering is always subject to the underwriters ability to complete the offering, as well as general market conditions,
which could delay or prevent the offering from occurring or could have negative valuation consequences. Following an initial business
combination, we believe the target business would then have greater access to capital, 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 augmenting a companys profile among potential new customers and vendors and aid in attracting talented
employees.
While
we believe that our structure and our management teams 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 the JOBS Act. We will remain an emerging growth company until the earlier
of (1)the lastday of the fiscal year (a)following the fifth anniversary of the completion of the IPO, (b)in which
we have total annual gross revenue of at least $1.235billion, or (c)in which we are deemed to be a large accelerated filer,
which means the market value of our ClassA ordinary shares that are held by non-affiliates exceeds $700million as of the
prior June30, and (2)the date on which we have issued more than $1.0billion in non-convertible debt securities during
the prior three-year period.
Additionally,
we are a smaller reporting company as defined in Item10(f)(1)of RegulationS-K.Smaller reporting
companies may take advantage of certain reduced disclosure obligations, including, among other things, providing only twoyears
of audited financial statements. We will remain a smaller reporting company until the lastday of the fiscal year in which (1)the
market value of our ordinary shares held by non-affiliates is equal to or exceeds $250million as of the prior June30, or
(2)our annual revenues equaled or exceeded $100million during such completed fiscal year and the market value of our ordinary
shares held by non-affiliates is equal to or exceeds $700million as of the prior June30.
6
In
addition, after completion of the IPO and prior to the consummation of a business combination, only holders of our ClassB ordinary
shares will have the right to vote on the appointment or removal of directors. As a result, Nasdaq will consider us to be a controlled
company within the meaning of Nasdaq corporate governance standards. Under Nasdaq corporate governance standards, a company of
which more than 50% of the voting power for the appointment of directors is held by an individual, group or another company is a controlled
company and may elect not to comply with certain corporate governance requirements. We currently do not intend to rely on the
controlled company exemption, but may do so in the future. Accordingly, if we choose to do so, 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 $230,400,000 assuming no redemptions and after payment of $9,600,000,
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 the IPO. We intend
to effectuate our initial business combination using cash from the proceeds of the IPO and the private placement of the private placement
warrants, the proceeds of the sale of our shares in connection with our initial business combination (including pursuant to forward purchase
agreements or backstop agreements we may enter into following the consummation of the IPO or otherwise), shares issued to the owners
of the target, debt issued to bank or other lenders or the owners of the target, other securities issuances, or a combination of the
foregoing. See the section titled *The OfferingAdditional Financing* below for more information.
We may seek to complete our initial business combination with a company or business that may be financially unstable or in its early
stages of development or growth, which would subject us to the numerous risks inherent in such companies and businesses.
If
our initial business combination is paid for using equity or debt securities, or not all of the funds released from the trust account
are used for payment of the consideration in connection with our initial business combination or used for redemptions of our ClassA
ordinary shares, we may use the balance of the cash released to us from the trust account following the closing for general corporate
purposes, including for maintenance or expansion of operations of the post-transaction company, the payment of principal or interest
due on indebtedness incurred in completing our initial business combination, to fund the purchase of other companies, or for working
capital.
We
have not selected any business combination target and we have not, nor has anyone on our behalf, initiated any substantive discussions,
directly or indirectly, with any business combination target.
We
may pursue an initial business combination in any business or industry but expect to target opportunities and companies in the critical
minerals sector that are fundamental to the economic and national security interests of the UnitedStates. Accordingly, there is
no current basis for investors in the IPO 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.
7
We
may seek to raise additional funds through a private offering of debt or equity securities in connection with the completion of our initial
business combination and we may effectuate our initial business combination using the proceeds of such offering rather than using the
amounts held in the trust account. In addition, we intend to target businesses with enterprise values that are greater than we could
acquire with the net proceeds of the IPO and the sale of the private placement warrants, and, as a result, if the cash portion of the
purchase price exceeds the amount available from the trust account, net of amounts needed to satisfy any redemptions by public shareholders,
we may 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 is no limitation on our ability to raise funds through the issuance of equity
or equity-linked securities or through loans, advances or other indebtedness in connection with our initial business combination, including
pursuant to forward purchase agreements or backstop agreements we may enter into following consummation of the IPO. 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. None of our sponsor, officers, directors or shareholders is required to provide any financing to us in connection
with or after our initial business combination. For more information also see *The OfferingLimited payments
to insiders* and *The OfferingAdditional financing* as well as *Risk FactorsRisks
Relating to our Search for, and Consummation of, or Inability to Consummate, a Business CombinationWe may issue additional
ClassA 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 ClassA ordinary shares upon the conversion of the ClassB
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
contained therein. Any such issuances would dilute the interest of our shareholders and likely present other risks, Risk
FactorsRisks Relating to our Search for, and Consummation of, or Inability to Consummate, a Business CombinationWe
may issue shares to investors in connection with our initial business combination at a price which is less than $10.00 or the prevailing
market price of our shares at that time, which could dilute the interests of our existing shareholders and add costs*or *Risk
FactorsRisks Relating to our Search for, and Consummation of, or Inability to Consummate, a Business CombinationWe
may issue notes or other debt, 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*.
Sources
of Target Businesses
We
anticipate that target business candidates will be brought to our attention from various unaffiliated sources, including investment bankers,
personal relationships, operating executives and private investment funds. 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 many of these sources will have read the 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 track record and 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 finders
fee, consulting fee or other compensation to be determined in an arms length negotiation based on the terms of the transaction.
Prior
to or in connection with the completion of our initial business combination, there may be payment by the company to our officers, independent
directors, or their respective affiliates, of a finders fee, advisory fee, consulting fee or success fee for any services they
render in order to effectuate the completion of our initial business, which, if made prior to the completion of our initial business
combination, will be paid from funds released to us pursuant to permitted withdrawals or held outside the trust account.
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 a finders fee 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.
We
are not prohibited from pursuing an initial business combination with a company that is affiliated with our sponsor, officers, directors
(or their respective affiliates or related entities). In the event that we seek to complete our initial business combination with a company
that is affiliated (as defined in our amended and restated memorandum and articles of association) with our sponsor, officers, directors
(or their respective affiliates or related entities), we, or a committee of independent directors, will obtain an opinion from an independent
investment banking firm which is a member of FINRA or a valuation or appraisal firm stating that the consideration to be paid by us in
such an initial business combination is fair to our company from a financial point of view. We are not required to obtain such an opinion
in any other context.
8
Evaluation
of a Target Business and Structuring of Our Initial Business Combination
In
evaluating a prospective target business, we expect to conduct a due diligence review which may encompass, among other things, meetings
with incumbent management and employees, document reviews, interviews of customers and suppliers, inspection of facilities, as applicable,
as well as a review of financial, operational, legal and other information which will be made available to us. 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.
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. |
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Limited
Ability to Evaluate the Targets 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 businesss management may not prove to be correct. In addition,
the future management may not have the necessary skills, qualifications or abilities to manage a public company. Furthermore, the future
role of members of our management team, if any, in the target business cannot presently be stated with any certainty. The determination
as to whether any of the members of our management team will remain with the combined company will be made at the time of our initial
business combination. While it is possible that one or more of our directors will remain associated in some capacity with us following
our initial business combination, it is unlikely that any of them will devote their full efforts to our affairs subsequent to our initial
business combination. Moreover, we cannot assure you that members of our management team will have significant experience or knowledge
relating to the operations of the particular target business.
We
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
a 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
Nasdaqs listing rules, shareholder approval would 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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9
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| Any
of our directors, officers or substantial shareholders (as defined by Nasdaq rules) has a
5% or greater interest (or such persons collectively have a 10% 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 outstanding ordinary
shares or voting power of 5% or more; or |
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| The
issuance or potential issuance of ordinary shares will result in our undergoing a change
of control. |
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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 applicable law or stock exchange listing requirements will be made by us, solely in our discretion, and will be based
on business and legal reasons, which include a variety of factors, including, but not limited to: (i)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;
(ii)the expected cost of holding a shareholder vote; (iii)the risk that the shareholders would fail to approve the proposed
business combination; (iv)other time and budget constraints of the company; and (v)additional legal complexities of a proposed
business combination that would be time-consuming and burdensome to present to shareholders.
Permitted
Purchases of 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, initial shareholders, directors, officers, and their 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 or duty to do so. Such a purchase may include a contractual acknowledgment
that such shareholder, although still the record holder of our shares is no longer the beneficial owner thereof and therefore agrees
not to exercise its redemption rights. In the event that our sponsor, initial shareholders, directors, officers, and their 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. It is intended that, if Rule10b-18
would apply to purchases by our sponsor, initial shareholders, directors, officers, and their affiliates, then such purchases will comply
with Rule10b-18 under the ExchangeAct, to the extent it applies, which provides a safe harbor for purchases made under certain
conditions, including with respect to timing, pricing and volume of purchases.
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, initial shareholders, directors, officers, and their 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, rights or warrants in such transactions.
The
purpose of any such transactions could be to (1)increase the likelihood of obtaining shareholder approval of the business combination,
(2)reduce the number of public warrants outstanding and/or increase the likelihood of approval on any matters submitted to the
public 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 securities 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, initial shareholders, directors, officers, and their affiliates anticipate that they may identify the shareholders with whom
our sponsor, initial shareholders, directors, officers, and their 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 ClassA ordinary
shares) following our mailing of proxy materials in connection with our initial business combination. To the extent that our sponsor,
initial shareholders, directors, officers,
10
and
their 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, initial shareholders, directors,
officers, and their 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
RegulationM under the ExchangeAct and the other federal securities laws.
Our
sponsor, initial shareholders, directors, officers, and their affiliates will be restricted from making purchases of shares if the purchases
would violate Section9(a)(2)or Rule10b-5 of the ExchangeAct. Any such purchases will be reported pursuant to
Section13 and Section16 of the ExchangeAct to the extent such purchasers are subject to such reporting requirements.
Additionally, in the event our sponsor, initial shareholders, directors, officers, and their affiliates were to purchase public shares
or warrants from public shareholders after the announcement of our initial business combination, such purchases would be structured in
compliance with the requirements of Rule14e-5 under the ExchangeAct including, in pertinent part, through adherence to the
following:
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| our
registration statement/proxy statement filed for our business combination transaction would
disclose the possibility that our sponsor, initial shareholders, directors, officers, and
their affiliates may purchase public shares or warrants from public shareholders outside
the redemption process, along with the purpose of such purchases; |
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| if
our sponsor, initial shareholders, directors, officers, and their affiliates were to purchase
public shares or warrants from public shareholders, they would do so at a price no higher
than the price offered through our redemption process; |
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| our
registration statement/proxy statement filed for our business combination transaction would
include a representation that any of our securities purchased by our sponsor, initial shareholders,
directors, officers, and their affiliates would not be voted in favor of approving the business
combination transaction; |
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| our
sponsor, initial shareholders, directors, officers, and their affiliates would not possess
any redemption rights with respect to our securities or, if they do acquire and possess redemption
rights, they would waive such rights; and |
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| we
would disclose in a Current Report on Form8-K, before our security holder meeting to
approve the business combination transaction, the following material items: |
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| the
amount of our securities purchased outside of the redemption offer by our sponsor, initial
shareholders, directors, officers, and their affiliates, along with the purchase price; |
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| the
purpose of the purchases by our sponsor, initial shareholders, directors, officers, and their
affiliates; |
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| the
impact, if any, of the purchases by our sponsor, initial shareholders, directors, officers,
and their affiliates on the likelihood that the business combination transaction will be
approved; |
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| the
identities of our security holders who sold to our sponsor, initial shareholders, directors,
officers, and their affiliates (if not purchased on the open market) or the nature of our
security holders (e.g., 5% security holders) who sold to our sponsor, initial shareholders,
directors, officers, and their affiliates; and |
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number of our securities for which we have received redemption requests pursuant to our redemption
offer. |
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Please
see *Risk FactorsIf we seek shareholder approval of our initial business combination, our sponsor, initial
shareholders, directors, officers, and their affiliates may elect to purchase shares or public warrants from public shareholders, which
may influence a vote on a proposed business combination and reduce the public float of our ClassA ordinary shares
or public warrants*.
11
Redemption
Rights for Public Shareholders upon Completion of Our Initial Business Combination
We
will provide our public shareholders with the opportunity to redeem, regardless of whether they abstain, vote for, or against, our initial
business combination, all or a portion of their public shares in connection with 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 twobusinessdays
prior to the consummation of the initial business combination, including interest earned on the funds held in the trust account (net
of taxes paid or payable) and not previously released to us for permitted withdrawals, divided by the number of then issued and outstanding
public shares, subject to the limitations and on the conditions described herein. The amount in the trust account is initially anticipated
to be $10.00 per public share. The per share amount we will distribute to investors who properly redeem their shares will not be reduced
by the deferred underwriting commissions we will pay to the underwriters. Our sponsor, officers and directors have entered into a letter
agreement with us, pursuant to which they have agreed to waive their redemption rights with respect to their founder shares and any public
shares they may hold in connection with the completion of our initial business combination.
Our
proposed initial business combination may impose a minimum cash requirement for (i)cash consideration to be paid to the target
or its owners, (ii)cash for working capital or other general corporate purposes or (iii)the retention of cash to satisfy
other conditions. In the event the aggregate cash consideration we would be required to pay for all public shares that are validly submitted
for redemption plus any amount required to satisfy cash conditions pursuant to the terms of the proposed initial business combination
exceed the aggregate amount of cash available to us, we will not complete the initial business combination or redeem any shares, and
all public shares submitted for redemption will be returned to the holders thereof. We may, however, raise funds through the issuance
of equity-linked securities or through loans, advances or other indebtedness in connection with our initial business combination, including
pursuant to forward purchase agreements or backstop arrangements we may enter into following consummation of the IPO, in order to, among
other reasons, satisfy such net tangible assets or minimum cash requirements.
Manner
of Conducting Redemptions
We
will provide our public shareholders with the opportunity to redeem, regardless of whether they abstain, vote for, or against, our initial
business combination, all or a portion of their public shares in connection with the completion of our initial business combination either
(i)in connection with a general meeting called to approve the business combination or (ii)without a shareholder vote 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
or whether we were deemed to be a foreign private issuer (which would require a tender offer rather than seeking shareholder approval
under SEC rules), as described above under the heading *Shareholders May Not Have the Ability to Approve Our Initial Business
Combination*. Asset acquisitions and share purchases would not typically require shareholder approval while direct mergers
with our company (other than with a 90% subsidiary of ours) and any transactions where we issue more than 20% of our issued and outstanding
ordinary shares or seek to amend our amended and restated memorandum and articles of association would require shareholder approval.
So long as we obtain and maintain a listing for our securities on Nasdaq, we will be required to comply with Nasdaqs shareholder
approval rules.
The
requirement that we provide our public shareholders with the opportunity to redeem their public shares by one of the two methods listed
above are contained in provisions of our amended and restated memorandum and articles of association and will apply whether or not we
maintain our registration under the ExchangeAct or our listing on Nasdaq. Such provisions may be amended if approved by a special
resolution, which requires the affirmative vote of at least two-thirds of the votes cast by such shareholders as, being entitled to do
so, vote in person or, where proxies are allowed, by proxy at the applicable general meeting of the company, so long as we offer redemption
in connection with such amendment.
If
we provide our public shareholders with the opportunity to redeem their public shares in connection with a general meeting, we will,
pursuant to our amended and restated memorandum and articles of association:
|
| conduct
the redemptions in conjunction with a proxy solicitation pursuant to Regulation14A
of the ExchangeAct, 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.
12
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 and our amended and restated memorandum and articles of association, which requires the affirmative vote of
at least a majority of the votes cast by such shareholders as, being entitled to do so, vote in person or, where proxies are allowed,
by proxy at the applicable general meeting of the company. A quorum for such meeting will be present if the holders of at least one third
of issued and outstanding shares entitled to vote at the meeting are represented in person or by proxy. Our sponsor, officers and directors
will count toward this quorum and, pursuant to the letter agreement, our sponsor, officers and directors have agreed to vote their founder
shares and any public shares purchased during or after the IPO (including in open market and privately-negotiated transactions) in favor
of our initial business combination (including any proposals recommended by the Companys board of directors in connection with
such business combination) (except with respect to any public shares which may not be voted in favor of approving the business combination
transaction in accordance with the requirements of Rule14e-5 under the ExchangeAct and any SEC interpretations or guidance
relating thereto). For purposes of seeking approval of an ordinary resolution, non-votes will have no effect on the approval of our initial
business combination once a quorum is obtained. Assuming that only the holders of one-third of our issued and outstanding ordinary shares,
representing a quorum under our amended and restated memorandum and articles of association, vote their ordinary shares at a general
meeting of the company, we will not need any public shares in addition to our founder shares to be voted in favor of an initial business
combination in order to approve an initial business combination. However, if our initial business combination is structured as a statutory
merger or consolidation with another company under Cayman Islands law, the approval of our initial business combination will require
the approval of a special resolution, which requires the affirmative vote of at least two-thirds of the votes cast by such shareholders
as, being entitled to do so, vote in person or, where proxies are allowed, by proxy at the applicable general meeting of the company.
Assuming that only the holders of one-third of our issued and outstanding ordinary shares, representing a quorum under our amended and
restated memorandum and articles of association, vote their ordinary shares at a special meeting of the company, we will not need any
public shares in addition to our founder shares to be voted in favor of an initial business combination in order to approve an initial
business combination. In addition, prior to the closing of our initial business combination, only holders of our ClassB ordinary
shares (i)will have the right to appoint and remove directors prior to or in connection with the completion of our initial business
combination and (ii)will be entitled to vote on continuing our company in a jurisdiction outside the Cayman Islands (including
any special resolution required to amend our constitutional documents or to adopt new constitutional documents, in each case, as a result
of our approving a transfer by way of continuation in a jurisdiction outside the Cayman Islands). These quorum and voting thresholds,
and the voting agreement of our sponsor, officers and directors, may make it more likely that we will consummate our initial business
combination. Each public shareholder may elect to redeem their public shares irrespective of whether they vote for or against the proposed
transaction, or whether they do not vote or abstain from voting on the proposed transaction, or whether they were a public shareholder
on the record date for the general meeting held to approve the proposed transaction.
If
a shareholder vote is not required and we do not decide to hold a shareholder vote for business or other legal reasons, we will:
|
| conduct
the redemptions pursuant to Rule13e-4 and Regulation14E of the ExchangeAct,
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 Regulation14A of the ExchangeAct,
which regulates the solicitation of proxies. |
|
20businessdays,
in accordance with Rule14e-1(a)under the ExchangeAct, 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 the initial business combination.
Upon
the public announcement of our initial business combination, if we elect to conduct redemption pursuant to the tender offer rules, we
or our sponsor will terminate any plan established in accordance with Rule10b5-1 to purchase our ClassA ordinary shares in
the open market, in order to comply with Rule14e-5 under the ExchangeAct.
13
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, at the holders option, either deliver their share certificates to our transfer agent
or deliver their shares to our transfer agent electronically using the Depository Trust Companys DWAC (Deposit/Withdrawal At Custodian)
system, prior to the date set forth in the proxy materials or tender offer documents, as applicable. In the case of proxy materials,
this date may be up to twobusinessdays prior to the scheduled vote on the proposal to approve the initial business combination.
In addition, if we conduct redemptions in connection with a shareholder vote, we intend to require a public shareholder seeking redemption
of its public shares to also submit a written request for redemption to our transfer agent twobusinessdays prior to the scheduled
vote in which the name of the beneficial owner of such shares is included. The proxy materials or tender offer documents, 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. We believe that this will allow our transfer agent to efficiently
process any redemptions without the need for further communication or action from the redeeming public shareholders, which could delay
redemptions and result in additional administrative cost. If the proposed initial business combination is not approved and we continue
to search for a target company, we will promptly return any certificates or shares delivered by public shareholders who elected to redeem
their shares.
Our
proposed initial business combination may impose a minimum cash requirement for (i)cash consideration to be paid to the target
or its owners, (ii)cash for working capital or other general corporate purposes or (iii)the retention of cash to satisfy
other conditions. In the event the aggregate cash consideration we would be required to pay for all public shares that are validly submitted
for redemption plus any amount required to satisfy cash conditions pursuant to the terms of the proposed initial business combination
exceed the aggregate amount of cash available to us, we will not complete the initial business combination or redeem any shares, and
all public shares submitted for redemption will be returned to the holders thereof. We may, however, raise funds through the issuance
of equity or equity-linked securities or through loans, advances or other indebtedness in connection with our initial business combination,
including pursuant to forward purchase agreements or backstop arrangements we may enter into following consummation of the IPO, in order
to, among other reasons, satisfy such net tangible assets or minimum cash requirements.
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 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 Section13 of the ExchangeAct), will be restricted from seeking redemption rights
with respect to 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 or our management 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 the IPO could threaten to exercise its redemption rights if such holders shares are not purchased by us, our sponsor or
our management 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 the IPO 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.
Delivering
Share Certificates in Connection with the Exercise of Redemption Rights
As
described above, 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, at the holders option, either deliver their share certificates to our transfer
agent or deliver their shares to our transfer agent electronically using the Depository Trust Companys DWAC (Deposit/Withdrawal
At Custodian) system, prior to the date set forth in the proxy materials or tender offer documents, as applicable. In the case of proxy
materials, this date may be up to twobusinessdays prior to the scheduled vote on the proposal to approve the initial business
combination. In addition, if we conduct redemptions in connection with a shareholder vote, we intend to require a public shareholder
seeking redemption of its public shares to also submit a written request for redemption to our transfer agent twobusinessdays
prior to the scheduled vote in which the name of the beneficial owner of such shares is included. The proxy materials or tender offer
documents, 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. Accordingly, a public shareholder would
have up to twobusinessdays prior to the scheduled vote on the initial business combination if we distribute proxy materials,
or from the time we send out our tender offer materials until the close of the tender offer period, as applicable, to submit or tender
its shares if it wishes to seek to exercise its redemption rights. In the event that a shareholder fails to comply with these or any
other procedures disclosed in the proxy or tender offer materials, as applicable, its shares may not be redeemed. Given the relatively
short exercise period, it is advisable for shareholders to use electronic delivery of their public shares.
14
There
is a nominal cost associated with the above-referenced process and the act of certificating the shares or delivering them through the
DWAC system. The transfer agent will typically charge the broker submitting or tendering shares a fee of approximately $100 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 submit or 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.
Any
request to redeem such shares, once made, may be withdrawn at any time up to the date set forth in the proxy materials or tender offer
documents, as applicable. 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 the end of the completion window.
Redemption
of Public Shares and Liquidation if No Initial Business Combination
Our
amended and restated memorandum and articles of association provide that we will have only the duration of the completion window to complete
our initial business combination. If we have not completed our initial business combination within such time period, we will as promptly
as reasonably possible but not more than tenbusinessdays thereafter (and subject to lawfully available funds therefor), redeem
the public shares, at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the trust account, including
interest earned on the funds held in the trust account (which interest shall be net of amounts not previously released to us for permitted
withdrawals and up to $100,000 of interest to pay liquidation expenses), divided by the number of then issued and 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 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 complete our initial business combination within the completion window.
Our
sponsor, officers and directors have entered into a letter agreement with us, pursuant to which they have waived their rights to liquidating
distributions from the trust account with respect to any founder shares held by them if we fail to complete our initial business combination
within the completion window, although they will entitled to liquidating distributions from assets outside the trust account. However,
if our sponsor or management team acquire public shares in or after the IPO, they will be entitled to liquidating distributions from
the trust account with respect to such public shares if we fail to complete our initial business combination within the allotted completion
window.
Our
sponsor, officers, directors and director nominees 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)to modify the substance or timing of our obligation
to allow redemption in connection with our initial business combination or to redeem 100% of our public shares if we do not complete
our initial business combination within the completion window or (B)with respect to any other material provisions relating to shareholders
rights or pre-initial business combination activity, in each case 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 (net of taxes paid or payable) and not
previously released to us for permitted withdrawals, divided by the number of then issued and outstanding public shares.
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 approximately $1,450,000 of proceeds held outside the trust account and funds we may withdraw
from interest earned on the trust account pursuant to permitted withdrawals, although we cannot assure you that there will be sufficient
funds for such purpose. However, if those funds are not sufficient to cover the costs and expenses associated with implementing our plan
of dissolution, to the extent that there is any interest accrued in the trust account not required to pay taxes, we may request the trustee
to release to us an additional amount of up to $100,000 of such accrued interest to pay those costs and expenses.
15
If
we were to expend all of the net proceeds of the IPO and the sale of the private placement warrants, other than the proceeds deposited
in the trust account, and without taking into account interest, if any, earned on the trust account less taxes paid or payable, the per-share
redemption amount received by shareholders upon our dissolution would be approximately $10.00. The proceeds deposited in the trust account
could, however, become subject to the claims of our creditors which would have higher priority than the claims of our public shareholders.
We cannot assure you that the actual per-share redemption amount received by shareholders will not be substantially less than $10.00.
While we intend to pay such amounts, if any, we cannot assure you that we will have funds sufficient to pay or provide for all creditors
claims.
Although
we will seek to have all vendors, service providers, 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 they will execute such agreements or even if they execute such agreements that
they would be prevented from bringing claims against the trust account including but not limited to fraudulent inducement, breach of
fiduciary responsibility or other similar claims, as well as claims challenging the enforceability of the waiver, in each case in order
to gain an advantage with respect to a claim against our assets, including the funds held in the trust account. If any third party refuses
to execute an agreement waiving such claims to the monies held in the trust account, our management will consider whether competitive
alternatives are reasonably available to us and will only enter into an agreement with such third party if management believes that such
third partys engagement would be in the best interests of the company under the circumstances. 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. WithumSmith+Brown, PC, our independent
registered public accounting firm, and the underwriters of the IPO will not execute agreements with us waiving such claims to the monies
held in the trust account. In addition, there is no guarantee that such entities will agree to waive any claims they may have in the
future as a result of, or arising out of, any negotiations, contracts or agreements with us and will not seek recourse against the trust
account for any reason. 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 third party for services rendered or products sold to us (except for the Companys independent
registered public accounting firm), or a prospective target business with which we have entered into a written letter of intent, confidentiality
or other similar agreement or business combination agreement, reduce the amount of funds in the trust account to below the lesser of
(i)$10.00 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 $10.00 per share due to reductions in the value of the trust assets, in each case less taxes paid
or payable and up to $100,000 of interest to pay liquidation expenses, provided that such liability will not apply to any claims by a
third party or prospective target business who executed a waiver of any and all rights to the monies held in the trust account (whether
or not such waiver is enforceable) nor will it apply to any claims under our indemnity of the underwriters of the IPO against certain
liabilities, including liabilities under the Securities Act. 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 sponsors 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 $10.00 per public share.
In
such event, we may not be able to complete our initial business combination, and you would receive such lesser amount per share in connection
with any redemption of your public shares. None of our officers or directors will indemnify us for claims by third parties including,
without limitation, claims by vendors and prospective target businesses.
In
the event that the proceeds in the trust account are reduced below the lesser of (i)$10.00 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 $10.00 per share
due to reductions in the value of the trust assets, in each case less taxes paid or payable and up to $100,000 of interest to pay liquidation
expenses, 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 if, for example, the cost of such legal action is deemed by the independent
directors to be too high relative to the amount recoverable or if the independent directors determine that a favorable outcome is not
likely. 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 $10.00 per share.
16
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. Our sponsor will also not
be liable as to any claims under our indemnity of the underwriters of the IPO against certain liabilities, including liabilities under
the Securities Act. We will have access to up to approximately $1,450,000 from the proceeds of the IPO 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. In the event that our offering expenses
exceed our estimate of $550,000, we may fund such excess with funds from the funds not to be held in the trust account. In such case,
the amount of funds we intend to be held outside the trust account would decrease by a corresponding amount. Conversely, in the event
that the offering expenses are less than our estimate of $550,000, 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 $10.00 per 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/insolvency laws as either a preferential transfer or a fraudulent conveyance, preference or disposition.
As a result, a liquidator or bankruptcy, insolvency or other 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 us or 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 the completion window, (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 allow redemption in connection with our initial business combination or to redeem 100% of our public shares if we do not complete
our initial business combination within the completion window or (B)with respect to any other material provisions relating to shareholders
rights or pre-initial business combination activity or (iii)if they redeem their respective shares for cash in connection with
the completion of our initial business combination. In no other circumstances will a shareholder have any right or interest of any kind
to or in the trust account. In the event that we seek shareholder approval in connection with our initial business combination, a shareholders
voting in connection with the business combination alone will not result in a shareholders 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.
In
identifying, evaluating and selecting a target business for our initial business combination, we may encounter competition from other
entities having a business objective similar to ours, including other special purpose acquisition companies, private equity groups and
leveraged buyout funds, public companies and operating businesses seeking strategic acquisitions. 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 similar or greater financial, technical, human and other resources than us. 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 issued and 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 utilize office space at 2727 LBJ Freeway Suite 1010, Farmers Branch, TX75234 as our executive offices which is being
provided to us through our sponsor at no cost. Upon completion of our initial business combination or our liquidation, we will cease
paying these monthly fees. We consider our current office space adequate for our current operations.
17
Employees
We
have three executive officers. These individuals are not obligated to devote any specific number of hours to our matters and intend to
devote only as much time as they deem necessary to our affairs. The amount of time they will devote in any time period will vary based
on whether a target business has been selected for the business combination and the stage of the business combination process the company
is in. Accordingly, once management locates a suitable target business to acquire, they will spend more time investigating such target
business and negotiating and processing the business combination (and consequently spend more time to our affairs) than they would prior
to locating a suitable target business. We presently expect our executive officers to devote such amount of time as they reasonably believe
is necessary to our business (which could range from only a few hours a week while we are trying to locate a potential target business
to a majority of their time as we move into serious negotiations with a target business for a business combination). We do not intend
to have any full time employees prior to the consummation of a business combination.
Periodic
Reporting and Financial Information
We
have registered our units, ClassA ordinary shares and warrants under the ExchangeAct 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 ExchangeAct,
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 materials
or tender offer documents sent to shareholders to assist them in assessing the target business. In all likelihood, these financial statements
will need 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 conduct an initial business combination with because some targets may be unable
to provide such financial statements in time for us to disclose such financial statements in accordance with federal proxy rules and
complete our initial business combination within the prescribed time frame. We cannot assure you that any particular target business
identified by us as a potential business combination 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 business combination candidates, we do not believe that this limitation will be material.
We
will be required to evaluate our internal control procedures for the fiscal year ending December31, 2026 as required by the Sarbanes-Oxley
Act. Only in the event we are deemed to be a large accelerated filer or an accelerated filer, and no longer qualify as an emerging growth
company, will we be required to have our internal control procedures audited. 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 business combination.
We
have filed a Registration Statement on Form8-A with the SEC to voluntarily register our securities under Section12 of the
ExchangeAct. As a result, we are subject to the rules and regulations promulgated under the ExchangeAct. We have no current
intention of filing a Form15 to suspend our reporting or other obligations under the ExchangeAct 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 Section6 of the Tax Concessions
Act (As Revised) of the Cayman Islands, for a period of 30years 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 dividends 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 Section2(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 Section404 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.
18
In
addition, Section107 of the JOBS Act also provides that an emerging growth company can take advantage of the extended
transition period provided in Section7(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 lastday of the fiscal year (a)following the fifth
anniversary of the completion of the IPO, (b)in which we have total annual gross revenue of at least $1.235billion, or (c)in
which we are deemed to be a large accelerated filer, which means the market value of our ClassA ordinary shares that are held by
non-affiliates exceeds $700million as of the prior June30, and (2)the date on which we have issued more than $1.0billion
in non-convertible debt during the prior three-year period.
Additionally,
we are a smaller reporting company as defined in Item10(f)(1)of RegulationS-K.Smaller reporting
companies may take advantage of certain reduced disclosure obligations, including, among other things, providing only twoyears
of audited financial statements. We will remain a smaller reporting company until the lastday of the fiscal year in which (1)the
market value of our ClassA ordinary shares held by non-affiliates equals or exceeds $250million as of the end of that years
second fiscal quarter, or (2)our annual revenues equaled or exceeded $100million during such completed fiscal year and the
market value of our ClassA ordinary shares held by non-affiliates exceeds $700million as of the end of that years
second fiscal quarter.
Legal
Proceedings
There
is no material litigation, arbitration or governmental proceeding currently pending against us or any members of our management team
in their capacity as such, and we and the members of our management team have not been subject to any such proceeding in the 24 months
preceding the date of the prospectus.
However,
during the course of their careers, members of our management team and board of directors and advisors have had significant experience
as founders, board members, officers, executives or employees of other companies. Certain of those persons have been, are currently or
may in the future become involved in litigation, investigations or other proceedings, including relating to the business affairs of such
companies, transactions entered into by such companies, or otherwise, including as follows.
In
May 2016, Stephen Silver, our chief executive officer, entered into a settlement with the Financial Industry Regulatory Authority (FINRA)
for allegedly participating in private securities transactions without providing prior written notice to his firm, Casimir Capital L.P.
Mr. Silver consented to a suspension from association with any FINRA member for six months and disgorgement of $40,000. In December 2016,
Mr. Silver entered into a second settlement with FINRA in connection with allegations that he opened and maintained outside securities
accounts without providing prior written notice to his firm, Jett Capital Advisors, LLC. Mr. Silver consented to a suspension from association
with any FINRA member for five months and a $25,000 fine. Both suspensions have expired, and Mr. Silver has not been the subject of any
FINRA disciplinary actions since 2017.
Item1A.
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 the annual report, 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, and Consummation of or Inability to Consummate, a Business Combination
**
*Our
public shareholders may not be afforded an opportunity to vote on our proposed initial business combination, and even if we hold a vote,
holders of our founder shares will participate in such vote, which means we may complete our initial business combination even though
a majority of our public shareholders do not support such a combination.*
We
may choose not to hold a shareholder vote to approve our initial business combination unless the business combination would require shareholder
approval under applicable law or stock exchange listing requirements. In such case, 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. Even if we seek shareholder approval, the holders of our founder
shares will participate in the vote on such approval. Accordingly, we may complete our initial business combination even if holders of
a majority of our ordinary shares do not approve of the business combination we complete. Please see the section entitled *Proposed
BusinessEffecting Our Initial Business CombinationShareholders May Not Have the Ability to Approve
Our Initial Business Combination* for additional information.
19
**
*If
we seek shareholder approval of our initial business combination, our initial shareholders and management team have agreed to vote in
favor of such initial business combination, regardless of how our public shareholders vote, and we may not need any public shares in
addition to our founder shares to be voted in favor of an initial business combination in order to approve an initial business combination.*
Our
initial shareholders own 25% of our issued and outstanding ordinary shares immediately following the completion of the IPO (assuming
our initial shareholders do not purchase any units in the IPO).
Our
initial shareholders and management team also may from time to time purchase ClassA ordinary shares prior to our initial business
combination. Our amended and restated memorandum and articles of association provides that, if we seek shareholder approval of an initial
business combination, such initial business combination will be approved if we obtain the approval of an ordinary resolution under Cayman
Islands law and our amended and restated memorandum and articles of association, which requires the affirmative vote of at least a majority
of the votes cast by such shareholders as, being entitled to do so, vote in person or, where proxies are allowed, by proxy at the applicable
general meeting of the company. As a result, in addition to our initial shareholders founder shares, we would need 7,000,001,
or 33.3%, of the 21,000,000 public shares sold in the IPO to be voted in favor of an initial business combination in order to have our
initial business combination approved, assuming all issued and outstanding shares are voted, the over-allotment option is not exercised
and the parties to the letter agreement do not acquire any ClassA ordinary shares. Assuming that only the holders of one-third
of our issued and outstanding ordinary shares, representing a quorum under our amended and restated memorandum and articles of association,
vote their ordinary shares at a general meeting of the company, we will not need any public shares in addition to our founder shares
to be voted in favor of an initial business combination in order to approve an initial business combination. However, if our initial
business combination is structured as a statutory merger or consolidation with another company under Cayman Islands law, the approval
of our initial business combination will require the approval of a special resolution, which requires the affirmative vote of at least
two-thirds of the votes cast by such shareholders as, being entitled to do so, vote in person or, where proxies are allowed, by proxy
at the applicable general meeting of the company. Assuming that only the holders of one-third of our issued and outstanding ordinary
shares, representing a quorum under our amended and restated memorandum and articles of association, vote their ordinary shares at a
special meeting of the company, we will not need any public shares in addition to our founder shares to be voted in favor of an initial
business combination in order to approve an initial business combination. Accordingly, if we seek shareholder approval of our initial
business combination, the agreement by our initial shareholders and management team to vote in favor of our initial business combination
will increase the likelihood that an ordinary resolution will be passed, being the requisite shareholder approval for such initial business
combination.
**
*Your
only opportunity to effect your 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 our initial
business combination. 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 vote. Accordingly, your only
opportunity to effect your investment decision regarding our initial business combination may be limited to exercising your redemption
rights within the period of time (which will be at least 20businessdays) set forth in our tender offer documents mailed to
our public shareholders in which we describe our 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 commission and after such redemptions,
the per-share value of shares held by non-redeeming shareholders will reflect our obligation to pay the deferred underwriting commissions.
**
20
**
*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 minimum cash requirement for (i)cash consideration to
be paid to the target or its owners, (ii)cash for working capital or other general corporate purposes or (iii)the retention
of cash to satisfy other conditions. 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. Consequently, if accepting all properly
submitted redemption requests would not allow us to satisfy a closing condition as described above, we would not proceed with such redemption
and the related business combination and may instead search for an alternate business combination. Prospective targets will be aware
of these risks and, thus, may be reluctant to enter into a business combination transaction with us.
**
*The
ability of our public shareholders to exercise redemption rights with respect to a large number of our shares and the amount of deferred
underwriting compensation may not allow us to complete the most desirable business combination or optimize our capital structure, and
may substantially dilute your investment in us.*
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 our initial business combination agreement requires us to use a portion of the cash in the trust account to pay the
purchase price, or requires us to have a minimum amount of cash at closing, we will need to reserve a portion of the cash in the trust
account to meet such requirements, or arrange for third party financing. In addition, if a larger number of shares are submitted for
redemption than we initially expected, we may need to restructure the transaction to reserve a greater portion of the cash in the trust
account or arrange for third party financing. Raising additional third party financing may involve dilutive equity issuances or the incurrence
of indebtedness at higher than desirable levels. Furthermore, this dilution would increase to the extent that the anti-dilution provision
of the ClassB ordinary shares results in the issuance of ClassA ordinary shares on a greater than one-to-one basis upon conversion
of the ClassB ordinary shares immediately prior to, concurrently with or immediately following the consummation of our initial
business combination. The above considerations may limit our ability to complete the most desirable business combination available to
us or optimize our capital structure. As a result, our obligations to redeem public shares for which redemption is requested and to pay
the deferred underwriting commissions may not allow us to complete the most desirable business combination or optimize our capital structure.
In
addition, raising additional third-party financing may involve dilutive equity issuances or the incurrence of indebtedness at higher
than desirable levels. Furthermore, this dilution would increase to the extent that the anti-dilution provisions of the ClassB
ordinary shares result in the issuance of ClassA ordinary shares on a greater than one-to-one basis upon conversion of the ClassB
ordinary shares at the time of our business combination. The above considerations may limit our ability to complete the most desirable
business combination available to us or optimize our capital structure and may result in substantial dilution from your purchase of our
ClassA ordinary shares. The effect of this dilution will be greater for shareholders who do not redeem. We may not be able to generate
sufficient value from the completion of our initial business combination in order to overcome the dilutive impact of these and other
factors, and, accordingly, you may incur a net loss on your investment. Please see *Risks Relating to Our SecuritiesThe
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, and our sponsor is likely to make a substantial profit on its investment
in us in the event we consummate an initial business combination, even if the business combination causes the trading price of our ordinary
shares to materially decline*.
**
21
**
*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.*
We
have not selected any specific business combination target but intend to target businesses with enterprise values that are greater than
we could acquire with the net proceeds of the IPO and the sale of the private placement warrants. As a result, if the cash portion of
the purchase price exceeds the amount available from the trust account, net of amounts needed to satisfy any redemption by public shareholders,
we may be required to seek additional financing to complete such proposed initial business combination. We cannot assure you that such
financing will be available on acceptable terms, if at all. To the extent that additional financing proves to be unavailable when needed
to complete our initial business combination, we would be compelled to either restructure the transaction or abandon that particular
business combination and seek an alternative target business candidate. Further, we may be required to obtain additional financing in
connection with the closing of our initial business combination for general corporate purposes, including for maintenance or expansion
of operations of the post-transaction businesses, the payment of principal or interest due on indebtedness incurred in completing our
initial business combination, or to fund the purchase of other companies. If we are unable to complete our initial business combination,
our public shareholders may only receive their pro rata portion of the funds in the trust account that are available for distribution
to public shareholders, and our public rights will be 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.
**
*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 your exercise of
redemption rights until we liquidate or you are able to sell your shares in the open market.
**
*The
requirement that we complete our initial business combination within the completion window 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 liquidation 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 complete
our initial business combination within the completion window. 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
timeframe 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. The length of time it may take us to complete our diligence
and negotiate a business combination may reduce the amount of time available for us to ultimately complete an initial business combination
should such diligence or negotiations not lead to a consummated initial business combination.
**
*We
may engage one or more of our underwriters or one of their respective affiliates to provide additional services to us after the IPO,
which may include acting as M&A advisor in connection with an initial business combination or as placement agent in connection with
a related financing transaction. Our underwriters are entitled to receive deferred underwriting commissions that will be released from
the trust account only upon a completion of an initial business combination. These financial incentives may cause them to have potential
conflicts of interest in rendering any such additional services to us after the IPO, including, for example, in connection with the sourcing
and consummation of an initial business combination.*
We
may engage one or more of our underwriters or one of their respective affiliates to provide additional services to us after the IPO,
including, for example, identifying potential targets, providing M&A advisory services, acting as a placement agent in a private
offering or arranging debt financing transactions. We may pay such underwriter or its affiliate fair and reasonable fees or other compensation
that would be determined at that time in an arms length negotiation; provided that no agreement will be entered into with any
of the underwriters or their respective affiliates and no fees or other compensation for such services will be paid to any of the underwriters
or their respective affiliates prior to the date that is 60days from the date of the prospectus, unless such payment would not
be deemed underwriters compensation in connection with the IPO.
22
The
underwriters are also entitled to receive deferred underwriting commissions that are conditioned on the completion of an initial business
combination. The underwriters or their respective affiliates financial interests 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. The underwriters are under
no obligation to provide any further services to us in order to receive all or any part of the deferred underwriting commissions.
**
*We
may not be able to complete our initial business combination within the completion window, in which case we would redeem our public shares.*
We
may not be able to find a suitable target business and complete our initial business combination within the completion window after the
closing of the IPO. In recentyears, a number of SPACs have liquidated due to an inability to complete an initial business combination
within their allotted time periods. Furthermore, our ability to complete our initial business combination may be negatively impacted
by general market conditions, volatility in the capital and debt markets and the other risks described herein, including the impact of
events such as the conflict between Russia and Ukraine and the war between Israel and Hamas. If we have not completed our initial business
combination within such time period, we will as promptly as reasonably possible but not more than tenbusinessdays thereafter
(and subject to lawfully available funds therefor), redeem the public shares, at a per-share price, payable in cash, equal to the aggregate
amount then on deposit in the trust account, including interest earned on the funds held in the trust account (which interest shall be
net of amounts not previously released to us for permitted withdrawals and up to $100,000 of interest to pay liquidation expenses), divided
by the number of then issued and 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 our obligations under Cayman Islands
law to provide for claims of creditors and the requirements of other applicable law. In such case, our public shareholders may only receive
$10.00 per share, or possibly less, and our warrants will expire without value to the holder. In certain circumstances, our public shareholders
may receive less than $10.00 per share on the redemption of their shares. 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 $10.00 per share* and other risk factors described in this *Risk Factors* section.
**
*We
may decide not to extend the term we have to consummate our initial business combination, in which case we would redeem our public shares,
and the warrants may be worthless.*
We
have until the date that is 24months from the closing of the IPO or until such earlier liquidation date as our board of directors
may approve, to consummate our initial business combination. If we anticipate that we may be unable to consummate our initial business
combination within such period, we may seek shareholder approval to amend our amended and restated memorandum and articles of association
to extend the date by which we must consummate our initial business combination. However, we may decide not to seek to extend the date
by which we must consummate our initial business combination. If we do not seek to extend the date by which we must consummate our initial
business combination, and we are unable to consummate our initial business combination within the applicable time period, we will as
promptly as reasonably possible but not more than tenbusinessdays thereafter (and subject to lawfully available funds therefor),
redeem the public shares, at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the trust account,
including interest earned on the funds held in the trust account (which interest shall be net of amounts not previously released to us
for permitted withdrawals and up to $100,000 of interest to pay liquidation expenses), divided by the number of then issued and 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 our obligations under Cayman Islands law to provide for claims of creditors
and the requirements of other applicable law. In such event, the warrants may be worthless.
**
*If
we seek shareholder approval of our initial business combination, our sponsor, initial shareholders, directors, officers, and their affiliates
may elect to purchase shares or public warrants from public shareholders, which may influence a vote on a proposed business combination
and reduce the public float of our ClassA 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, initial shareholders, directors, officers, and their 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 or duty to do so. Such a purchase may include a contractual acknowledgment
that such shareholder, although still the record holder of our shares is no longer the beneficial owner thereof and therefore agrees
not to exercise its redemption rights. In the event that our sponsor, initial shareholders, directors, officers, and their 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. It is intended that, if Rule10b-18
would apply to purchases by our sponsor, initial shareholders, directors, officers, and their affiliates, then such purchases will comply
with Rule10b-18 under the ExchangeAct, to the extent it applies, which provides a safe harbor for purchases made under certain
conditions, including with respect to timing, pricing and volume of purchases.
23
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, initial shareholders, directors, officers, and their 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, rights or warrants in such transactions.
The
purpose of any such transactions could be to (1)increase the likelihood of obtaining shareholder approval of the business combination,
(2)reduce the number of public warrants outstanding and/or increase the likelihood of approval on any matters submitted to the
public 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 securities 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 Section13 and Section16 of the ExchangeAct
to the extent such purchasers are subject to such reporting requirements. Additionally, in the event our sponsor, initial shareholders,
directors, officers, and their affiliates were to purchase public shares or warrants from public shareholders after the announcement
of our initial business combination, such purchases would be structured in compliance with the requirements of Rule14e-5 under
the ExchangeAct including, in pertinent part, through adherence to the following:
|
| our
registration statement/proxy statement filed for our business combination transaction would
disclose the possibility that our sponsor, initial shareholders, directors, officers, and
their affiliates may purchase public shares or warrants from public shareholders outside
the redemption process, along with the purpose of such purchases; |
|
|
| if
our sponsor, initial shareholders, directors, officers, and their affiliates were to purchase
public shares or warrants from public shareholders, they would do so at a price no higher
than the price offered through our redemption process; |
|
|
| our
registration statement/proxy statement filed for our business combination transaction would
include a representation that any of our securities purchased by our sponsor, initial shareholders,
directors, officers, and their affiliates would not be voted in favor of approving the business
combination transaction; |
|
|
| our
sponsor, initial shareholders, directors, officers, and their affiliates would not possess
any redemption rights with respect to our securities or, if they do acquire and possess redemption
rights, they would waive such rights; and |
|
|
| we
would disclose in a Form8-K, before our security holder meeting to approve the business
combination transaction, the following material items: |
|
|
| the
amount of our securities purchased outside of the redemption offer by our sponsor, initial
shareholders, directors, officers, and their affiliates, along with the purchase price; |
|
|
| the
purpose of the purchases by our sponsor, initial shareholders, directors, officers, and their
affiliates; |
|
|
| the
impact, if any, of the purchases by our sponsor, initial shareholders, directors, officers,
and their affiliates on the likelihood that the business combination transaction will be
approved; |
|
24
|
| the
identities of our security holders who sold to our sponsor, initial shareholders, directors,
officers, and their affiliates (if not purchased on the open market) or the nature of our
security holders (e.g., 5% security holders) who sold to our sponsor, initial shareholders,
directors, officers, and their affiliates; and |
|
|
| the
number of our securities for which we have received redemption requests pursuant to our redemption
offer. |
|
Please
see *Proposed BusinessEffecting Our Initial Business CombinationPermitted Purchases of
Our Securities* for a description of how such persons will determine from which shareholders to seek to acquire securities.
**
*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 submitting or 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 materials or tender offer documents,
as applicable, such shareholder may not become aware of the opportunity to redeem its shares. In addition, proxy materials or tender
offer documents, as applicable, that we will furnish to holders of our public shares in connection with our initial business combination
will describe the various procedures that must be complied with in order to validly tender or submit public shares for redemption. For
example, 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, at the holders option, either deliver their share certificates to our transfer
agent, or to deliver their shares to our transfer agent electronically prior to the date set forth in the proxy materials or tender offer
documents, as applicable. In the case of proxy materials, this date may be up to twobusinessdays prior to the scheduled vote
on the proposal to approve the initial business combination. In addition, if we conduct redemptions in connection with a shareholder
vote, we intend to require a public shareholder seeking redemption of its public shares to also submit a written request for redemption
to our transfer agent twobusinessdays prior to the scheduled vote in which the name of the beneficial owner of such shares
is included. In the event that a shareholder fails to comply with these or any other procedures disclosed in the proxy or tender offer
materials, as applicable, its shares may not be redeemed. See the section entitled *Proposed BusinessDelivering
Share Certificates in Connection with the Exercise of Redemption Rights.*
**
*You
will not be entitled to protections normally afforded to investors of other blank check companies subject to Rule419 of the Securities
Act.*
Since
the net proceeds of the IPO and the sale of the private placement warrants are intended to be used to complete one or more initial business
combinations with a target business or businesses that has not been selected, we may be deemed to be a blank check company
under the UnitedStates securities laws. However, because we will be listed on a national securities exchange meeting certain quantitative
requirements set out in Rule3a51-1(a)(2)of the ExchangeAct, we are exempt from rules promulgated by the SEC to protect
investors in blank check companies, such as Rule419. 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 respective initial business combinations than do companies subject to Rule419.
Moreover,
if the IPO were subject to Rule419, 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 Rule419, please see *Proposed BusinessComparison
of The IPO to Those of Blank Check Companies Subject to Rule419*.
However,
if we are not able to list our ordinary shares on Nasdaq or any other national stock exchange, and if we fail to have net tangible assets
in excess of $5,000,000, we may be required to comply with the penny stock rules and this could negatively affect the market
for our securities and our ability to complete an initial business combination.
25
**
*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 ClassA ordinary shares, you may
lose the ability to redeem all such shares in excess of 15% of our ClassA 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 provides 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 Section13 of the ExchangeAct), will be restricted from redeeming its shares with
respect to more than an aggregate of 15% of the then issued and outstanding public shares, 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. And as a result, you will continue to hold that number of shares exceeding 15% and,
in order to dispose of such shares, would be required to sell your shares in open market transactions, potentially at a loss.
**
*Because
of our limited resources and the significant competition for business combination opportunities, it may be more difficult for us to complete
our initial business combination. If we are unable to complete our initial business combination, our public shareholders may receive
only their pro rata portion of the funds in the trust account that are available for distribution to public shareholders, and our warrants
will expire worthless.*
We
expect to encounter competition from other entities having a business objective similar to ours, including private investors (which may
be individuals or investment partnerships), other blank check companies and other entities, domestic and international, competing for
the types of businesses we intend to acquire. Many of these individuals and entities are well-established and have extensive experience
in identifying and effecting, directly or indirectly, acquisitions of companies operating in or providing services to various industries.
Many of these competitors possess similar or greater technical, human and other resources to ours or more local industry knowledge than
we do and our financial resources will be relatively limited when contrasted with those of many of these competitors. While we believe
there are numerous target businesses we could potentially acquire with the net proceeds of the IPO and the sale of the private placement
warrants, our ability to compete with respect to the acquisition of certain target businesses that are sizable will be limited by our
available financial resources. This inherent competitive limitation gives others an advantage in pursuing the acquisition of certain
target businesses. Furthermore, 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. If we are unable to complete our initial business combination, our public
shareholders may receive only their pro rata portion of the funds in the trust account that are available for distribution to public
shareholders, and our warrants will expire worthless.
**
*If
the net proceeds of the IPO and the sale of the private placement warrants not being held in the trust account are insufficient to allow
us to operate for at least the duration of the completion window, it could limit the amount available to fund our search for a target
business or businesses and complete our initial business combination, and we will depend on loans from our sponsor or management team
to fund our search and to complete our initial business combination.*
Of
the net proceeds of the IPO, only $1,450,000 is available to us initially outside the trust account to fund our working capital requirements.
We believe that, upon closing of the IPO, the funds available to us outside of the trust account will be sufficient to allow us to operate
for at least the duration of the completion window; however, we cannot assure you that our estimate is accurate. Of the funds available
to us, we could use a portion of the funds available to us to pay fees to consultants to assist us with our search for a target business.
We could also use a portion of the funds as a down payment or to fund a no-shop provision (a provision in letters of intent
or merger agreements designed to keep target businesses from shopping around for transactions with other companies or investors
on terms more favorable to such target businesses) with respect to a particular proposed business combination, although we do not have
any current intention to do so. If we entered into a letter of intent or merger agreement where we paid for the right to receive exclusivity
from a target business and were subsequently required to forfeit such funds (whether as a result of our breach or otherwise), we might
not have sufficient funds to continue searching for, or conduct due diligence with respect to, a target business.
In
the event that our offering expenses exceed our estimate of $550,000, 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. The
amount held in the trust account will not be impacted as a result of such increase or decrease. Conversely, in the event that the offering
expenses are less than our estimate of $550,000, the amount of funds we intend to be held outside the trust account would increase by
a corresponding amount. If we are required to seek additional capital, we would need to borrow funds from our sponsor, management team
or other third parties to operate or may be forced to liquidate.
26
Neither
our sponsor, members of our management team nor any of their affiliates is under any obligation to advance funds to us in such circumstances.
Any such advances would 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 such loans may be convertible into private placement warrants of the post-business
combination entity at a price of $1.00 per warrant at the option of the lender. Such warrants would be identical to the private placement
warrants. Prior to the completion of our initial business combination, we do not expect to seek loans from parties other than our sponsor
or an affiliate of our sponsor as we do not believe third parties will be willing to loan such funds and provide a waiver against any
and all rights to seek access to funds in our trust account. If we are unable to complete our initial business combination because we
do not have sufficient funds available to us, we will be forced to liquidate the trust account. Consequently, our public shareholders
may only receive an estimated $10.00 per share, or possibly less, on our redemption of our public shares, and our warrants will expire
worthless.
**
*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 $10.00 per share.*
Our
placing of funds in the trust account may not protect those funds from third party claims against us. Although we will seek to have all
vendors, service providers, 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,
such parties may not execute such agreements, or even if they execute such agreements they may not be prevented from bringing claims
against the trust account, including, but not limited to, fraudulent inducement, breach of fiduciary responsibility or other similar
claims, as well as claims challenging the enforceability of the waiver, in each case in order to gain advantage with respect to a claim
against our assets, including the funds held in the trust account. If any third party refuses to execute an agreement waiving such claims
to the monies held in the trust account, our management will consider whether competitive alternatives are reasonably available to us
and will only enter into an agreement with such third party if management believes that such third partys engagement would be
in the best interests of the company under the circumstances. WithumSmith+Brown, PC, our independent registered public accounting firm,
and the underwriters of the IPO will not execute agreements with us waiving such claims to the monies held in the trust account.
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,
there is no guarantee that such entities will agree to waive any claims they may have in the future as a result of, or arising out of,
any negotiations, contracts or agreements with us and will not seek recourse against the trust account for any reason. Upon redemption
of our public shares, if we are unable to complete our initial business combination within the prescribed timeframe, 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 10years following redemption. Accordingly, the per-share redemption
amount received by public shareholders could be less than the $10.00 per public share initially held in the trust account, due to claims
of such creditors. Pursuant to the letter agreement the form of which is filed as an exhibit to the registration statement, our sponsor
has agreed that it will be liable to us if and to the extent any claims by a third party for services rendered or products sold to us
(except for the Companys independent registered public accounting firm), or a prospective target business with which we have entered
into a written letter of intent, confidentiality or other similar agreement or business combination agreement, reduce the amount of funds
in the trust account to below the lesser of (i)$10.00 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 $10.00 per public share due to reductions in the
value of the trust assets, in each case less taxes paid or payable and up to $100,000 for liquidation expenses, provided that such liability
will not apply to any claims by a third party or prospective target business who executed a waiver of any and all rights to the monies
held in the trust account (whether or not such waiver is enforceable) nor will it apply to any claims under our indemnity of the underwriters
of the IPO against certain liabilities, including liabilities under the Securities Act. 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 sponsors 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 $10.00 per public share. In such
event, we may not be able to complete our initial business combination, and you would receive such lesser amount per share in connection
with any redemption of your public shares. None of our officers or directors will indemnify us for claims by third parties including,
without limitation, claims by vendors and prospective target businesses.
**
27
**
*Our
directors may decide not to enforce the indemnification obligations of our sponsor, resulting in a reduction in the amount of funds in
the trust account available for distribution to our public shareholders.*
In
the event that the proceeds in the trust account are reduced below the lesser of (i)$10.00 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 $10.00 per public
share due to reductions in the value of the trust assets, in each case less taxes paid or payable and up to $100,000 of interest to pay
liquidation expenses, and our sponsor asserts that it is unable to satisfy his, her or its obligations or that he 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, for example, the cost
of such legal action is deemed by the independent directors to be too high relative to the amount recoverable or if the independent directors
determine that a favorable outcome is not likely. 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 $10.00 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, including for any liability incurred in their
capacities as such, except through their own actual fraud, willful default or willful neglect. 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 shareholders 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.
**
*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 liquidator or a bankruptcy, insolvency or other court
may seek to recover such proceeds, and the members of our board of directors may be viewed as having breached their fiduciary duties
to us or 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/insolvency laws as either a preferential transfer or a fraudulent
conveyance, preference or disposition. As a result, a liquidator or a bankruptcy, insolvency or other court could seek to recover
some or all amounts received by our shareholders. In addition, our board of directors may be viewed as having breached its fiduciary
duty to us or our creditors and/or having 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.
28
**
*Changes
in laws or regulations, or a failure to comply with any laws and regulations, may adversely affect our business, including our ability
to negotiate and complete our initial business combination, and results of operations.*
We
are subject to laws and regulations enacted by national, regional and local governments. In particular, we will be required to comply
with certain SEC and other legal requirements and numerous complex tax laws. Compliance with, and monitoring of, applicable laws and
regulations may be difficult, time consuming and costly. Those laws and regulations and their interpretation and application may also
change from time to time and those changes could have a material adverse effect on our business, investments and results of operations.
In addition, a failure to comply with applicable laws or regulations, as interpreted and applied, could have a material adverse effect
on our business, including our ability to negotiate and complete our initial business combination, and results of operations.
On
January24, 2024, the SEC adopted a series of new rules relating to SPACs (the SPAC Rules) requiring, among other
items, (i)additional disclosures relating to SPAC business combination transactions; (ii)additional disclosures relating
to dilution and to conflicts of interest involving sponsors and their affiliates in both SPAC initial public offerings and de-SPAC transactions;
(iii)the use of projections by SPACs in SEC filings in connection with proposed business combination transactions; and (iv)both
the SPAC and the target companys status as co-registrants on de-SPAC registration statements.
In
addition, the SECs adopting release provided guidance describing circumstances in which a SPAC could become subject to regulation
under the Investment Company Act, including its duration, asset composition, business purpose, and the activities of the SPAC and its
management team in furtherance of such goals.
Compliance
with the SPAC Rules and related guidance may increase the costs of and the time needed to negotiate and complete an initial business
combination and may constrain the circumstances under which we could complete an initial business combination.
**
*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.*
As
described in the risk factor above entitled Changes in laws or regulations, or a failure to comply with any laws and regulations,
may adversely affect our business, including our ability to negotiate and complete our initial business combination, and results of operations,
the SECs adopting release with respect to the SPAC Rules provided guidance describing the extent to which SPACs could become subject
to regulation under the Investment Company Act and the regulations thereunder. Whether a SPAC is an investment company will be a question
of facts and circumstances. If our facts and circumstances change over time, we will update our disclosure to reflect how those changes
impact the risk that we may be considered to be operating as an unregistered investment company. We can give no assurance that a claim
will not be made that we have been operating as an unregistered investment company.
If
we are deemed to be an investment company under the Investment Company Act, we may have to change our operations, wind down our operations,
or register as an investment company under the Investment Company Act. Our activities may be restricted, including:
|
| restrictions
on the nature of our investments; and |
|
|
| 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: |
|
|
| registration
as an investment company; |
|
|
| adoption
of a specific form of corporate structure; and |
|
|
| reporting,
record keeping, voting, proxy and disclosure requirements and other rules and regulations. |
|
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 in 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 intend
to spend a considerable amount of time actively managing the assets in the trust account for the primary purpose of achieving investment
returns. 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.
29
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 held as cash, including in demand deposit accounts at a bank, or invested in U.S. government
securities within the meaning of Section2(a)(16)of the Investment Company Act having a maturity of 185days or
less or in money market funds meeting certain conditions under Rule2a-7promulgated under the Investment Company Act which
invest only in direct U.S.government treasury obligations; the holding of these assets in this form is intended to be temporary
and for the sole purpose of facilitating the intended business combination and may at any time be held as cash or cash items, including
in demand deposit accounts at a bank. 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. The IPO 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: (i)the completion of our initial business combination;
(ii)the redemption of any public shares properly submitted in connection with an amendment of our amended and restated memorandum
and articles of association (A)to modify the substance or timing of our obligation to provide for the redemption of our public
shares in connection with an initial business combination or to redeem 100% of our public shares if we have not consummated our initial
business combination within the completion window or (B)with respect to any other material provisions relating to shareholders
rights or pre-initialbusiness combination activity; or (iii)absent an initial business combination within the completion
window, 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.
Further,
under the subjective test of a investment company pursuant to Section3(a)(1)(A)of the Investment Company Act,
even if the funds deposited in the trust account were invested in the assets discussed above (U.S.government securities or money
market funds registered under the Investment Company Act), such assets, other than cash, are securities for purposes of
the Investment Company Act and, therefore, nevertheless, there is a risk that we could be deemed an unregistered investment company and
subject to the Investment Company Act at any time.
In
the adopting release for the SPAC Rules, the SEC provided guidance that a SPACs potential status as an investment company
depends on a variety of factors, such as a SPACs duration, asset composition, business purpose and activities and is a
question of facts and circumstances requiring individualized analysis. If we were deemed to be an unregistered investment company
and subject to compliance with and regulation under the Investment Company Act, we would be subject to additional regulatory burdens
and expenses for which we have not allotted funds. Unless we are able to modify our activities so that we would not be deemed an investment
company, we would either register as an investment company or wind-downand abandon our efforts to complete a business combination
and instead liquidate the trust account. As a result, our public shareholders may only receive their pro rata portion of the funds in
the trust account that are available for distribution to public shareholders and would be unable to realize the potential benefits of
an initial business combination, including the possible appreciation of the combined companys securities.
**
*To
mitigate the risk that we might be deemed to be an investment company for purposes of the Investment Company Act, we may, at any time,
instruct the trustee to liquidate the securities held in the trust account and instead to hold the funds in the trust account in cash
until the earlier of the consummation of our initial business combination or our liquidation. As a result, following the liquidation
of securities in the trust account, the interest earned, on the funds held in the trust account may be materially reduced, which would
reduce the dollar amount our public shareholders would receive upon any redemption or liquidation of the Company.*
We
intend to initially hold the funds in the trust account as cash, including in demand deposit accounts at a bank, or in U.S.government
treasury obligations with a maturity of 185days or less or in money market funds investing solely in U.S.government treasury
obligations and meeting certain conditions under Rule2a-7 under the Investment Company Act. U.S.government treasury obligations
are considered securities for purposes of the Investment Company Act, while cash is not. As noted above, one of the factors
the SEC identified as relevant to the determination of whether a SPAC which holds securities could potentially be deemed an investment
company under the Investment Company Act is the SPACs duration. To mitigate the risk of us being deemed to be an unregistered
investment company (including under the subjective test of Section3(a)(1)(A)of the Investment Company Act) and thus subject
to regulation under the Investment Company Act, we may, at any time, instruct Continental, the trustee with respect to the trust account,
to liquidate the U.S.government treasury obligations or money market funds held in the trust account and thereafter to hold all
funds in the trust account in cash until the earlier of consummation of our initial business combination or liquidation of the company.
Following such liquidation, the rate of interest we receive on the funds held in the trust account may be materially decreased. However,
interest previously earned on the funds held in the trust account still may be released to us for permitted withdrawals and certain other
expenses as permitted. As a result, any decision to liquidate the securities held in the trust account and thereafter to hold all funds
in the trust account in cash would reduce the dollar amount our public shareholders would receive upon any redemption or liquidation
of the company.
30
The
longer that the funds in the trust account are held in short-term U.S. government treasury obligations or in money market funds invested
exclusively in such securities, the greater the risk that we may be deemed to be an unregistered investment company, in which case we
may be required to liquidate, as described above. If our facts and circumstances change over time, we will update our disclosure to reflect
how those changes impact the risk that we may be considered to be operating as an unregistered investment company. As disclosed above,
we may determine, in our discretion, to liquidate the securities held in the trust account at any time and instead hold all funds in
the trust account in an interest bearing demand deposit account or as cash or cash items at a bank, which could further reduce the dollar
amount our public shareholders would receive upon any redemption or liquidation of the Company as compared to what they would have received
had the investments not been so liquidated. Were we to liquidate the Company, our warrants would expire worthless, and our securityholders
would lose the investment opportunity associated with an investment in the target company with which we could have consummated an initial
business combination. In addition, upon moving the funds from the trust account to a deposit account, we will maintain the cash items
in bank accounts which, at times, may exceed federally insured limits as guaranteed by the FDIC. While we intend to place our deposits
in high-quality banks, only a small portion of the funds in our trust account will be guaranteed by the FDIC.
**
*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 status of debt and equity markets.*
Our
ability to consummate a transaction may be dependent on the ability to raise equity and debt financing which may be impacted by certain
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.
**
*Our
search for an initial business combination, and any target business with which we may ultimately consummate an initial business combination,
may be materially adversely affected by current global geopolitical conditions resulting from the ongoing Russia-Ukraine conflict and
the recent escalation of conflict in the Middle East and Southwest Asia.*
UnitedStates
and global markets are experiencing volatility and disruption following the geopolitical instability resulting from the ongoing Russia-Ukraine
conflict and the recent escalation of conflict in the Middle East and Southwest Asia. In response to the ongoing Russia-Ukraine conflict,
the North Atlantic Treaty Organization (NATO) deployed additional military forces to eastern Europe, and the UnitedStates,
the United Kingdom, the European Union and other countries have announced various sanctions and restrictive actions against Russia, Belarus
and related individuals and entities, including the removal of certain financial institutions from the Society for Worldwide Interbank
Financial Telecommunication (SWIFT) payment system. Certain countries, including the UnitedStates, have also provided and may continue
to provide military aid or other assistance to Ukraine and to Israel, or have undertaken or will undertake military strikes in Southwest
Asia, increasing geopolitical tensions among a number of nations. The invasion of Ukraine by Russia and the escalation of conflict in
the Middle East and Southwest Asia and the resulting measures that have been taken, and could be taken in the future, by NATO, the UnitedStates,
the United Kingdom, the European Union, Israel and its neighboring states and other countries have created global security concerns that
could have a lasting impact on regional and global economies. Although the length and impact of the ongoing conflicts are highly unpredictable,
they could lead to market disruptions, including significant volatility in commodity prices, credit and capital markets, as well as supply
chain interruptions and increased cyber-attacks against U.S.companies. Additionally, any resulting sanctions could adversely affect
the global economy and financial markets and lead to instability and lack of liquidity in capital markets.
Any
of the above mentioned factors, or any other negative impact on the global economy, capital markets or other geopolitical conditions
resulting from the Russian invasion of Ukraine, the escalation of conflict in the Middle East and Southwest Asia and subsequent sanctions
or related actions, may lead to increased volume and price volatility for publicly traded securities or could adversely affect our search
for an initial business combination by adversely affecting the operations or financial condition of potential target companies, any of
which could make it more difficult for us to identify a business combination target and consummate an initial business combination on
acceptable commercial terms, or at all.
The
extent and duration of the ongoing conflicts, resulting sanctions and any related market disruptions are impossible to predict, but could
be substantial, particularly if current or new sanctions continue for an extended period of time or if geopolitical tensions result in
expanded military operations on a global scale. Any such disruptions may also have the effect of heightening many of the other risks
described in this section. If these disruptions or other matters of global concern continue for an extensive period of time, our ability
to consummate an initial business combination may be materially adversely affected.
31
**
*If
we are unable to consummate our initial business combination within the completion window, our public shareholders may be forced to wait
beyond such period before redemption from our trust account.*
If
we are unable to consummate our initial business combination within the completion window, the proceeds then on deposit in the trust
account, including interest earned on the funds held in the trust account (which interest shall be net of amounts not previously released
to us for permitted withdrawals and up to $100,000 of interest to pay liquidation 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 the end of the completion window 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 we consummate our initial business combination prior thereto
and only then in cases where investors have sought to redeem their public shares. Only upon our redemption or any liquidation will public
shareholders be entitled to distributions if we are unable to complete our initial business combination. 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 tenbusinessdays thereafter, subject to applicable Cayman Islands law.
**
*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, our directors may be viewed as having breached their fiduciary duties to us or our creditors and/or may have 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 offence and may be liable to a certain
monetary penalties and imprisonment in the Cayman Islands.
**
*We
may not hold an annual general meeting until after the consummation of our initial business combination, which could delay the opportunity
for our public shareholders to discuss company affairs with management, and the holders of our ClassA ordinary shares will not
have the right to vote on the appointment or removal of directors or continuing the company in a jurisdiction outside the Cayman Islands
until after the consummation of our initial business combination.*
In
accordance with Nasdaq corporate governance requirements, we are not required to hold an annual general meeting until no later than one
year after our first fiscal year end following our listing on 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 discuss company affairs with management.
In addition, as holders of our ClassA ordinary shares, our public shareholders will not have the right to vote on the appointment
or removal of directors or continuing the company in a jurisdiction outside the Cayman Islands until after the consummation of our initial
business combination.
**
*The
warrants may become exercisable and redeemable for a security other than the ClassA ordinary shares, and you will not have any
information regarding such other security at this time.*
In
certain situations, including if we are not the surviving entity in our initial business combination, the warrants may become exercisable
for a security other than the ClassA ordinary shares. As a result, if the surviving company redeems your warrants for securities
pursuant to the warrant agreement, you may receive a security in a company of which you do not have information at this time. Pursuant
to the warrant agreement, the surviving company will be required to use commercially reasonable efforts to register the issuance of the
security underlying the warrants within 20businessdays of the closing of an initial business combination.
32
**
*Because
we are neither limited to evaluating a target business in a particular industry sector nor have we selected any target businesses with
which to pursue our initial business combination, you will be unable to ascertain the merits or risks of any particular target businesss
operations.*
Our
efforts to identify a prospective initial business combination target will not be limited to a particular industry, sector or geographic
region. While we may pursue an initial business combination opportunity in any industry or sector, we intend to capitalize on the ability
of our management team to identify and acquire a business or businesses that can benefit from our management teams established
global relationships and operating experience. Our management team has extensive experience in identifying and executing strategic investments
globally and has done so successfully in a number of sectors. Our amended and restated memorandum and articles of association prohibits
us from effectuating a business combination solely with another blank check company or similar company with nominal operations.
Because
we have not yet selected 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 businesss 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. In recentyears, a number of target businesses have underperformed financially post-business combination. There are
no assurances that the target business with which we consummate our initial business combination will perform as anticipated. 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 shareholders
who choose to remain shareholders following the business combination could suffer a reduction in the value of their securities. Such
shareholders are unlikely to have a remedy for such reduction in value unless they are able to successfully claim that the reduction
was due to the breach by our officers or directors of a duty of care or other fiduciary duty owed to them, or if they are able to successfully
bring a private claim under securities laws that the proxy solicitation or tender offer materials, as applicable, relating to the business
combination contained an actionable material misstatement or material omission.
**
*We
may seek business combination opportunities in industries or sectors that may be outside of our managements areas of expertise.*
We
will consider a business combination outside of our managements areas of expertise if a business combination candidate is presented
to us and we determine that such candidate offers an attractive business combination opportunity for our company. Although our management
will endeavor to evaluate the risks inherent in any particular business combination candidate, 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 the IPO than a direct investment, if an opportunity were available, in a business combination
candidate. In the event we elect to pursue a business combination outside of the areas of our managements expertise, our managements
expertise may not be directly applicable to its evaluation or operation, and the information contained in the annual report regarding
the areas of our managements 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 ascertain or assess adequately all of the relevant risk factors. Accordingly, any shareholders
who choose to remain shareholders following our initial business combination could suffer a reduction in the value of their shares. Such
shareholders are unlikely to have a remedy for such reduction in value.
**
*Although
we have identified general criteria and guidelines that we believe are important in evaluating prospective target businesses, we may
enter into our initial business combination with a target that does not meet such criteria and guidelines, and as a result, the target
business with which we enter into our initial business combination may not have attributes entirely consistent with our general criteria
and guidelines.*
Although
we have identified general criteria and guidelines for evaluating prospective target businesses, it is possible that a target business
with which we enter into our initial business combination will not have all of these positive attributes. If we complete our initial
business combination with a target that does not meet some or all of these guidelines, such combination may not be as successful as a
combination with a business that does meet all of our general criteria and guidelines. In addition, if we announce a prospective business
combination with a target that does not meet our general criteria and guidelines, a greater number of 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 and
guidelines. If we have not completed our initial business combination within the completion window, our public shareholders may only
receive their pro rata portion of the funds in the trust account that are available for distribution to public shareholders, and our
warrants will expire worthless.
33
**
*We
are not required to obtain an opinion from an independent accounting or investment banking firm or from an independent entity that commonly
renders valuation opinions, and consequently, you may have no assurance from an independent source that the price we are paying for the
business is fair to our shareholders from a financial point of view.*
Unless
we complete our initial business combination with a company that is affiliated with our sponsor, officers or directors (or their respective
affiliates or related entities), we are not required to obtain an opinion from an independent investment banking firm which is a member
of FINRA or a valuation or appraisal firm stating that the consideration to be paid by us in such an initial business combination 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 materials or tender offer documents, as applicable, related to our initial business combination;
provided that such conversion of founder shares will never occur on a less than one-for-one basis.
**
*We
may issue additional ClassA 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 ClassA 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 therein. Any such issuances would dilute the interest of our shareholders and likely present other risks.*
Our
amended and restated memorandum and articles of association authorizes the issuance of up to 500,000,000 ClassA ordinary shares,
par value $0.0001 per share, 50,000,000 ClassB ordinary shares, par value $0.0001 per share, and 5,000,000 preference shares, par
value $0.0001 per share. As of the date of the IPO, there are 476,000,000 and 42,000,000 authorized but unissued ClassA ordinary
shares and ClassB 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 ClassB ordinary shares. The ClassB
ordinary shares are automatically convertible into ClassA ordinary shares (which such ClassA ordinary shares issued 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) immediately prior to, concurrently with or immediately following the consummation of our initial business
combination or at any time prior thereto at the option of the holder, initially at a one-for-one ratio but subject to adjustment as set
forth herein and in our amended and restated memorandum and articles of association, including in certain circumstances in which we issue
ClassA ordinary shares or equity-linked securities related to our initial business combination. As of the date of the IPO, there
are no preference shares issued and outstanding.
We
may issue a substantial number of additional ClassA 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 ClassA ordinary shares
upon conversion of the ClassB 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 therein. Such issuance of additional ordinary or preference shares could involve
costs to us and our shareholders that would not otherwise be incurred in a traditional initial public offering, including but not limited
to:
|
| significant
dilution of the equity interest of investors in the IPO, which dilution would increase if
the anti-dilution provisions in the ClassB ordinary shares resulted in the issuance
of ClassA ordinary shares on a greater than one-to-one basis upon conversion of the
ClassB ordinary shares; |
|
|
| subordination
of the rights of holders of ClassA ordinary shares if preference shares are issued
with rights senior to those afforded our ClassA ordinary shares; |
|
|
| additional
costs involved in registering the resale of the securities being sold in any PIPE transactions
and potential additional downward pressure on our share price due to the ability of investors
in such PIPE transactions being able to sell their securities after registration; |
|
34
|
| potential
change in control if a substantial number of ClassA 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; |
|
|
| potential
delaying or preventing of a change of control of us by diluting the share ownership or voting
rights of a person seeking to obtain control of us; and |
|
|
| adverse
impact on prevailing market prices for our units, ClassA ordinary shares and/or warrants. |
|
In
addition, issuances of additional ordinary or preference share may not result in adjustment to the exercise price of our warrants. Such
issuances may be structured in a way intended to provide a return on investment to the investors in return for funds facilitating the
completion of the business combination or providing additional liquidity to the post-business combination company.
**
*Unlike
some other similarly structured special purpose acquisition companies, our initial shareholders will receive additional ClassA
ordinary shares if we issue certain shares to consummate an initial business combination in order to provide anti-dilution protection
to our initial shareholders.*
The
founder shares will automatically convert into ClassA ordinary shares (which such ClassA ordinary shares issued 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) immediately prior to, concurrently with or immediately following the consummation of our initial business combination
or at any time prior thereto at the option of the holder on a one-for-one basis, subject to adjustment for share sub-divisions, share
capitalizations, reorganizations, recapitalizations and the like, and subject to further adjustment as provided herein. In the case that
additional ClassA ordinary shares, or any other equity-linked securities, are issued or deemed issued in excess of the amounts
sold in the IPO and related to or in connection with the closing of the initial business combination, the ratio at which ClassB
ordinary shares convert into ClassA ordinary shares will be adjusted (unless the holders of a majority of the issued and outstanding
ClassB ordinary shares agree to waive such adjustment with respect to any such issuance or deemed issuance) so that the number
of ClassA ordinary shares issuable upon conversion of all ClassB ordinary shares will equal, in the aggregate, 25% of the
sum of (i)the total number of all ordinary shares issued and outstanding upon the completion of the IPO (including any ClassA
ordinary shares issued pursuant to the underwriters over-allotment option and excluding the ClassA ordinary shares underlying
the private placement warrants issued to the sponsor and the underwriters), plus (ii)all ClassA ordinary shares and equity-linked
securities issued or deemed issued in connection with our initial business combination (excluding any shares or equity-linked securities
issued, or to be issued, to any seller in the initial business combination and any private placement-equivalent warrants issued to our
sponsor or any of its affiliates or to our officers and directors upon conversion of working capital loans) minus (iii)any redemptions
of ClassA ordinary shares by public shareholders prior to or in connection with an initial business combination. The purpose of
such adjustment to provide anti-dilution protection to our initial shareholders.
**
*We
may issue our shares to investors in connection with our initial business combination at a price which is 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 of $10.00 per share or lower, at a price that approximates the per-share amounts in our trust account at such
time. The purpose of such issuances will be to enable us to provide sufficient liquidity and capital 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. Any such issuances of equity securities could dilute the interests of our existing shareholders.
**
*Since
only holders of our ClassB ordinary shares will have the right to vote on the appointment of directors, upon the listing of our
shares on Nasdaq, Nasdaq will consider us to be a controlled company within the meaning of Nasdaq rules and, as a result,
we may qualify for exemptions from certain corporate governance requirements.*
After
completion of the IPO and prior to the consummation of a business combination, only holders of our ClassB ordinary shares will
have the right to vote on the appointment of directors. As a result, Nasdaq will consider us to be a controlled company
within the meaning of Nasdaq corporate governance standards. Under Nasdaq corporate governance standards, a company of which more than
50% of the voting power for the appointment of directors is held by an individual, group or another company is a controlled company
and may elect not to comply with certain corporate governance requirements, including the requirements that:
|
| we
have a board that includes a majority of independent directors, as defined
under the rules of Nasdaq; and |
|
35
|
| we
have a compensation committee of our board that is comprised entirely of independent directors
with a written charter addressing the committees purpose and responsibilities. |
|
We
currently do not intend to rely on the controlled company exemption, but may do so in the future. Accordingly, if we choose
to do so, you will not have the same protections afforded to shareholders of companies that are subject to all of the Nasdaq corporate
governance requirements.
**
*Resources
could be wasted in researching business combinations that are not completed, which could materially adversely affect subsequent attempts
to locate and acquire or merge with another business. If we are unable to complete our initial business combination, our public shareholders
may only receive their pro rata portion of the funds in the trust account that are available for distribution to public shareholders,
and our warrants will expire worthless.*
We
anticipate that the investigation of each specific target business and the negotiation, drafting and execution of relevant agreements,
disclosure documents and other instruments will require substantial management time and attention and substantial costs for accountants,
attorneys, consultants and others. If we decide not to complete a specific initial business combination, the costs incurred up to that
point for the proposed transaction likely would not be recoverable. Furthermore, if we reach an agreement relating to a specific target
business, we may fail to complete our initial business combination for any number of reasons including those beyond our control. Any
such event will result in a loss to us of the related costs incurred which could materially adversely affect subsequent attempts to locate
and acquire or merge with another business. If we are unable to complete our initial business combination within the completion window,
our public shareholders may only receive their pro rata portion of the funds in the trust account that are available for distribution
to public shareholders, and our warrants will expire worthless.
**
*We
may engage in a business combination with one or more target businesses that have relationships with entities that may be affiliated
with our sponsor, officers, directors or existing holders which may raise potential conflicts of interest.*
In
light of the involvement of our sponsor, its managing member, and our officers and directors with other entities, we may decide to acquire
one or more businesses affiliated with or competitive with our sponsor, officers, directors and their respective affiliates or existing
holders. Our directors also serve as officers and/or board members for other entities, including, without limitation, those described
under *ManagementConflicts of Interest*. Our sponsor, officers and directors 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.
Such entities may compete with us for business combination opportunities. Our sponsor, officers and directors are not currently aware
of any specific opportunities for us to complete our initial business combination with any entities with which they are affiliated, and
there have been no substantive discussions concerning a business combination with any such entity or entities. Although we will not be
specifically focusing on, or targeting, any transaction with any affiliated entities, we would pursue such a transaction if we determined
that such affiliated entity met our criteria for a business combination as set forth in *Proposed BusinessEffecting
our Initial Business CombinationEvaluation of a Target Business and Structuring of our Initial Business Combination*
and such transaction was approved by a majority of our independent and disinterested directors. Despite our obligation to obtain an opinion
from an independent investment banking firm or an independent entity that commonly renders valuation opinions for the type of company
we are seeking to acquire or from an independent accounting firm regarding the fairness to our company from a financial point of view
of a business combination with one or more domestic or international businesses affiliated with our sponsor, officers or directors (or
their respective affiliates or related entities), potential conflicts of interest still may exist and, as a result, the terms of the
business combination may not be as advantageous to our public shareholders as they would be absent any conflicts of interest.
**
*Since
our sponsor, officers and directors, any other holder of our founder shares, and the underwriters may lose their entire investment in
us if our initial business combination is not completed (other than with respect to public shares they may acquire during or after the
IPO), a conflict of interest may arise in determining whether a particular business combination target is appropriate for our initial
business combination.*
On
June30, 2025, our sponsor paid $25,000, or approximately $0.004 per share, to cover certain of our offering costs in exchange for
6,666,667 founder shares. Our management team will have an indirect economic interest in the founder shares through their investment
in the sponsor through their non-managing sponsor membership interests (the Company initially issued 100 class B ordinary shares to the
sponsor for a consideration of $1.00 on 27 June 2025, and subsequently issued 5,749,000 class B ordinary shares to the sponsor for a
consideration of $24,999 on 30 June 2025). On November 10, 2025, the Company issued 1,333,333 class B ordinary shares to our sponsor
in a share capitalization, resulting in the total Class B ordinary shares increasing to 8,000,000 class B ordinary shares.
36
Prior
to the initial investment in the company of $25,000 by the sponsor, the company had no assets, tangible or intangible. The purchase price
of the founder shares was determined by dividing the amount of cash contributed to the company by the number of founder shares issued.
The number of founder shares issued and outstanding was determined based on the expectation that the total size of the IPO would be a
maximum of 24,000,000units if the underwriters over-allotment option is exercised in full, and therefore that such founder
shares would represent 25% of the issued and outstanding shares after the IPO. The founder shares will be worthless if we do not complete
an initial business combination, except to the extent they receive liquidating distributions from assets outside of the trust account.
In addition, our sponsor and the underwriters have purchased an aggregate 6,800,000 private placement warrants, each exercisable to purchase
one ClassA ordinary share at $11.50 per share, at a price of $1.00 per warrant, or $6,800,000 in the aggregate in a private placement
that closed simultaneously with the closing of the IPO. Of those 6,800,000 private placement, our sponsor purchased 4,400,000 private
placement warrants and the underwriters purchased 2,400,000 private placement warrants consistent with their pro rata allocation of the
base offering. If we do not complete an initial business combination within the completion window, the private placement warrants will
be 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 end of the completion window nears, which is the deadline for our
completion of an initial business combination, unless such completion window is extended as described herein.
**
*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 the prospectus to issue any notes or other debt securities, or to otherwise incur outstanding
debt following the IPO, we may choose to incur substantial debt to complete our initial business combination. The incurrence of debt
could have a variety of negative effects, including:
|
| 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; |
|
|
| using
a substantial portion of our cash flow to pay principal and interest on our debt, which will
reduce the funds available for 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. |
|
37
**
*We
may only be able to complete one business combination with the proceeds of the IPO and the sale of the private placement warrants, which
will cause us to be solely dependent on a single business which may have a limited number of products or services. This lack of diversification
may negatively impact our operations and profitability. The net proceeds from the IPO and the private placement of warrants provided
us with $192,000,000 that we may use to complete our initial business combination (after taking into account the $8,000,000 in the aggregate
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 developments. 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:
|
| solely
dependent upon the performance of a single business, property or asset, or |
|
|
| dependent
upon the development or market acceptance of a single or limited number of products, processes
or services. |
|
This
lack of diversification may subject us to numerous economic, competitive and regulatory risks, any or all of which may have a substantial
adverse impact upon the particular industry in which we may operate subsequent to our initial business combination.
**
*We
may attempt to simultaneously complete business combinations with multiple prospective targets, which may hinder our ability to complete
our initial business combination and give rise to increased costs and risks that could negatively impact our operations and profitability.*
If
we determine to simultaneously acquire several businesses that are owned by different sellers, we will need for each of such sellers
to agree that our purchase of its business is contingent on the simultaneous closings of the other business combinations, which may make
it more difficult for us, and delay our ability, to complete our initial business combination. With multiple business combinations, we
could also face additional risks, including additional burdens and costs with respect to possible multiple negotiations and due diligence
investigations (if there are multiple sellers) and the additional risks associated with the subsequent assimilation of the operations
and services or products of the acquired companies in a single operating business. If we are unable to adequately address these risks,
it could negatively impact our profitability and results of operations.
**
*We
may attempt to complete our initial business combination with a private company about which little information is available, which may
result in a business combination with a company that is not as profitable as we suspected, if at all.*
In
pursuing our business combination 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
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 will not provide a specified maximum redemption threshold. Our proposed initial
business combination may impose a minimum cash requirement for (i)cash consideration to be paid to the target or its owners, (ii)cash
for working capital or other general corporate purposes or (iii)the retention of cash to satisfy other conditions. 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. In the event the aggregate cash consideration we would be required to pay for all
public shares that are validly submitted for redemption plus any amount required to satisfy cash conditions pursuant to the terms of
the proposed business combination exceed the aggregate amount of cash available to us, we will not complete the business combination
or redeem any shares, all public shares submitted for redemption will be returned to the holders thereof, and we instead may search for
an alternate business combination.
38
**
*In
order to effectuate an initial business combination, special purpose acquisition 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 our shareholders or warrant holders, as applicable, may not support.*
In
order to effectuate a business combination, special purpose acquisition companies have, in the recent past, amended various provisions
of their charters and governing instruments, including their warrant agreements. For example, special purpose acquisition companies have
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 the approval of a special resolution under Cayman Islands law, which requires the affirmative vote of at least
two-thirds (or, in with respect to the appointment or removal of directors or continuing the company outside of the Cayman Islands, 90%)
of the votes cast by such shareholders as, being entitled to do so, vote in person or, where proxies are allowed, by proxy at the applicable
general meeting of the company, and 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 private placement warrants or any provision of the warrant agreement with
respect to the private placement warrants (including, for the avoidance of doubt, the forfeiture or cancellation of any private placement
warrants or working capital warrants), 50% of the then outstanding private placement warrants (including, the vote or written consent
of the underwriters). In addition, our amended and restated memorandum and articles of association requires us to provide our public
shareholders with the opportunity to redeem their public shares, regardless of whether they abstain, vote for, or against, our initial
business combination, for cash if we propose an amendment to our amended and restated memorandum and articles of association (A)to
modify the substance or timing of our obligation to allow redemption in connection with our initial business combination or to redeem
100% of our public shares if we do not complete an initial business combination within the completion window or (B)with respect
to any other material provisions relating to shareholders rights or pre-initial business combination activity. Many SPACs have
faced delisting of their securities following redemptions of shares by public shareholders in connection with proposed amendments to
their corporate charters since, after redeeming a large number of publicly held shares, they no longer meet the continued listing requirements
of the stock exchange. To the extent any of such amendments would be deemed to fundamentally change the nature 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 charter 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 our pre-business combination activity (and
corresponding provisions of the agreement governing the release of funds from our trust account) may be amended with the approval of
holders of not less than two-thirds of our ordinary shares which are represented in person or by proxy and are voted at a general meeting
of the company, which is a lower amendment threshold than that of some other special purpose acquisition 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 shareholders may not support.*
Our
amended and restated memorandum and articles of association provide that any of its provisions related to pre-business combination activity
(including the requirement to deposit proceeds of the IPO and the private placement of warrants into the trust account and not release
such amounts except in specified circumstances, and to provide redemption rights to public shareholders as described herein, and other
than amendments relating to the provisions regulating the appointment and removal of directors and continuing the company in a jurisdiction
outside the Cayman Islands, which require the approval of a special resolution passed by the affirmative vote of at least 90% (or, where
such amendment is proposed in respect of the consummation of our initial business combination, two-thirds) of the votes cast by such
shareholders as, being entitled to do so, vote in person or, where proxies are allowed, by proxy at the applicable general meeting of
the company) may be amended if approved by special resolution under Cayman Islands law. Except as specified above with respect to matters
requiring a 90% majority, a special resolution requires the affirmative vote of at least two-thirds of the votes cast by such shareholders
as, being entitled to do so, vote in person or, where proxies are allowed, by proxy at the applicable general meeting of the company.
Corresponding provisions of the trust agreement governing the release of funds from our trust account may be amended if approved by the
affirmative vote of at least two-thirds of our ordinary shares which are represented in person or by proxy and are voted at a general
meeting of the company. Our sponsor, who will beneficially own 25% of our ordinary shares upon the closing of the IPO (assuming it does
not purchase any units in the IPO), will 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. 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 special purpose acquisition companies, and this may increase our ability to complete a business combination with which you
do not agree.
39
Our
sponsor, officers, directors and director nominees 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)to modify the substance or timing of our obligation
to allow redemption in connection with our initial business combination or to redeem 100% of our public shares if we do not complete
our initial business combination within the completion window or (B)with respect to any other material provisions relating to shareholders
rights or pre-initial business combination activity, in each case 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 (net of taxes paid or payable) and not
previously released to us for permitted withdrawals, divided by the number of then issued and 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, officers, directors or director nominees 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.*
We
have not selected any specific business combination target but intend to target businesses with enterprise values that are greater than
we could acquire with the net proceeds of the IPO and the sale of the private placement warrants. As a result, if the cash portion of
the purchase price exceeds the amount available from the trust account, net of amounts needed to satisfy any redemption by public shareholders,
we may be required to seek additional financing to complete such proposed initial business combination. We cannot assure you that such
financing will be available on acceptable terms, if at all. To the extent that additional financing proves to be unavailable when needed
to complete our initial business combination, we would be compelled to either restructure the transaction or abandon that particular
business combination and seek an alternative target business candidate. Further, we may be required to obtain additional financing in
connection with the closing of our initial business combination for general corporate purposes, including for maintenance or expansion
of operations of the post-transaction businesses, the payment of principal or interest due on indebtedness incurred in completing our
initial business combination, or to fund the purchase of other companies. If we are unable to complete our initial business combination,
our public shareholders may only receive their pro rata portion of the funds in the trust account that are available for distribution
to public shareholders, 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.
**
*Our
sponsor will control the appointment of our board of directors until consummation of our initial business combination and will hold a
substantial interest in us. As a result, it will appoint all of our directors prior to the consummation of our initial business combination
and may exert a substantial influence on actions requiring a shareholder vote, potentially in a manner that you do not support.*
Upon
closing of the IPO, our sponsor owns 25% of our issued and outstanding ordinary shares (assuming it does not purchase any units in the
IPO). 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. This potential concentration of
influence could be disadvantageous to other shareholders with interests different from those of our sponsor. In addition, the founder
shares, all of which are held by our sponsor, will entitle the holders to appoint all of our directors prior to the consummation of our
initial business combination. Holders of our public shares will have no right to vote on the appointment or removal of directors during
such time. Further, prior to the closing of our initial business combination, only holders of our ClassB ordinary shares will be
entitled to vote on continuing our company in a jurisdiction outside the Cayman Islands (including any special resolution required to
amend our constitutional documents or to adopt new constitutional documents, in each case, as a result of our approving a transfer by
way of continuation in a jurisdiction outside the Cayman Islands). In addition, our board of directors is and will be divided into three
classes, each of which will generally serve for a term for threeyears with only one class of directors being appointed in each
year. These provisions of our amended and restated memorandum and articles of association may only be amended if approved by a special
resolution passed by the affirmative vote of at least 90% (or, where such amendment is proposed in respect of the consummation of our
initial business combination, two-thirds) of the votes cast by such shareholders as, being entitled to do so, vote in person or, where
proxies are allowed, by proxy at the applicable general meeting of the company. In addition, our board of directors, whose members were
or will be appointed by our sponsor, is and will be divided into three classes, each of which will generally serve for a term for threeyears
with only one class of directors being appointed in each year. As a result, you will not have any influence over the appointment or removal
of directors prior to our initial business combination or any influence over our continuation in a jurisdiction outside the Cayman Islands
prior to our initial business combination. If our sponsor purchases any units in the IPO or if our sponsor purchases any additional ClassA
ordinary shares in the aftermarket or in privately negotiated transactions, this would increase its control. Neither our sponsor nor,
to our knowledge, any of our officers or directors, have any current intention to purchase additional securities, other than as disclosed
in the annual report. Factors that would be considered in making such additional purchases would include consideration of the current
trading price of our ClassA ordinary shares. We may not hold an annual or extraordinary 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. In addition, since only holders of our ClassB ordinary shares will have the
right to vote on directors prior to our initial business combination, our initial shareholders will continue to exert control at least
until the completion of our initial business combination. Accordingly, our sponsor will continue to exert control at least until the
completion of our initial business combination.
40
**
*We
may not be able to complete an initial business combination because such initial business combination may be subject to regulatory review
and approval requirements, including foreign investment regulations and review by government entities such as the Committee on Foreign
Investment in the UnitedStates (CFIUS), or may be ultimately prohibited.*
Our
Chief Executive Officer, Stephen Silver, who is also the controlling person of the managing member of our sponsor, is a non-U.S. person
and resides outside the United States. We do not anticipate that he will be affiliated with a target company upon completion of a business
combination. For this reason, we believe that he should not be considered a foreign person under the regulations administered
by CFIUS and should not be considered as such in the future. However, any business combination with a U.S. business may be subject to
CFIUS review, the scope of which was expanded by the Foreign Investment Risk Review Modernization Act of 2018 (FIRRMA),
to include certain non-passive non-controlling investments in sensitive U.S. businesses and certain acquisitions of real estate even
with no underlying U.S. business. FIRRMA, and subsequent implementing regulations that are now in force, also subjects certain categories
of investments to mandatory filings. For example, CFIUS has authority to review direct or indirect foreign investments in U.S.companies.
Among other things, CFIUS is empowered to require certain foreign investors to make mandatory filings, to charge filing fees related
to such filings, and to self-initiate national security reviews of foreign direct and indirect investments in U.S.companies if
the parties to that investment choose not to file voluntarily. In the case that CFIUS determines an investment to be a threat to national
security, CFIUS has the power to unwind or place restrictions on the investment. Whether CFIUS has jurisdiction to review an acquisition
or investment transaction depends onamong other factorsthe nature and structure of the transaction,
including the level of beneficial ownership interest and the nature of any information or governance rights involved. For example, investments
that result in control of a U.S.business by a foreign person always are subject to CFIUS jurisdiction. CFIUSs
expanded jurisdiction under the Foreign Investment Risk Review Modernization Actof2018 and implementing regulations that
became effective on February13, 2020 further includes investments that do not result in control of a U.S.business by a foreign
person but afford certain foreign investors certain information or governance rights in a U.S.business that has a nexus to critical
technologies, critical infrastructure and/or sensitive personal data.
If
a particular proposed initial business combination with a U.S.business falls within CFIUSs jurisdiction, we may determine
that we are required to make a mandatory filing or that we will submit to CFIUS review on a voluntary basis, or to proceed with the transaction
without submitting to CFIUS and risk CFIUS intervention, before or after closing the transaction. CFIUS may decide to block or delay
our proposed initial business combination, impose conditions with respect to such initial business combination or request the President
of the UnitedStates to order us to divest all or a portion of the U.S.target business of our initial business combination
that we acquired without first obtaining CFIUS approval, which may limit the attractiveness of, delay or prevent us from pursuing certain
target companies that we believe would otherwise be beneficial to us and our shareholders. As a result, the pool of potential targets
with which we could complete an initial business combination may be limited and we may be adversely affected in terms of competing with
other special purpose acquisition companies which do not have any foreign ownership issues. In addition, certain federally licensed businesses
may be subject to rules or regulations that limit foreign ownership.
The
process of government review, whether by CFIUS or otherwise, could be lengthy. Because we have only a limited time to complete our initial
business combination, our failure to obtain any required approvals within the requisite time period may require us to liquidate. If we
are unable to consummate our initial business combination within the applicable time period required under our amended and restated memorandum
and articles of association, including as a result of extended regulatory review of a potential initial business combination, we will
as promptly as reasonably possible but not more than tenbusinessdays thereafter (and subject to lawfully available funds
therefor), redeem the public shares, at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the trust
account, including interest earned on the funds held in the trust account (which interest shall be net of amounts not previously released
to us for permitted withdrawals and up to $100,000 of interest to pay liquidation expenses), divided by the number of then issued and
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 our obligations under Cayman Islands law to provide for claims
of creditors and the requirements of other applicable law. In such event, our shareholders will miss the opportunity to benefit from
an investment in a target company and the appreciation in value of such investment. Additionally, our warrants may be worthless.
41
**
*Due
to the number of special purpose acquisition companies evaluating targets, attractive targets may become more scarce and there may be
more competition for attractive targets or such attractive targets may not be interested in consummating a business combination with
a SPAC due to a negative public perception of mergers involving SPACs. This could increase the cost of our initial business combination
and could even result in our inability to find a target or to consummate an initial business combination.*
During
2021 and 2022, the number of special purpose acquisition companies that have been formed increased substantially. Many potential targets
for special purpose acquisition companies have already entered into an initial business combination, and there are still many special
purpose acquisition companies preparing for an initial public offering, as well as many such companies currently in registration. As
a result, at times, fewer attractive targets may be available to consummate an initial business combination.
In
addition, because there are more special purpose acquisition companies seeking to enter into an initial business combination with available
targets, the competition for available targets with attractive fundamentals or business models may increase, which could cause target
companies to demand improved financial terms. Attractive deals could also become more scarce for other reasons, such as economic or industry
sector downturns (including a negative public perception of mergers involving SPACs), geopolitical tensions, or increases in the cost
of additional capital needed to close business combinations or operate targets post-business combination. This could increase the cost
of, delay or otherwise complicate or frustrate our ability to find and consummate an initial business combination and may result in our
inability to consummate an initial business combination on terms favorable to our investors altogether.
**
*Adverse
developments affecting the financial services industry, including events or concerns involving liquidity, defaults or non-performance
by financial institutions, could adversely affect our business, financial condition or results of operations, or our prospects.*
The
funds in our operating account and our trust account will initially be held in banks or other financial institutions and will be invested
only in U.S.government treasury obligations with a maturity of 185days or less or in money market funds meeting certain conditions
under Rule2a-7 under the Investment Company Act which invest only in direct U.S.government treasury obligations; the holding
of these assets in this form is intended to be temporary and for the sole purpose of facilitating the intended business combination.
To mitigate the risk that we might be deemed to be an investment company for purposes of the Investment Company Act, which risk increases
the longer that we hold investments in the trust account, we may, at any time (based on our management teams ongoing assessment
of all factors related to our potential status under the Investment Company Act), instruct the trustee to liquidate the investments held
in the trust account and instead to hold the funds in the trust account in cash or in an interest-bearing demand deposit account at a
bank. Our cash held in these accounts may exceed any applicable Federal Deposit Insurance Corporation (FDIC) insurance
limits. Should events, including limited liquidity, defaults, non-performance or other adverse developments occur with respect to the
banks or other financial institutions that hold our funds, or that affect financial institutions or the financial services industry generally,
or concerns or rumors about any events of these kinds or other similar risks, the value of the assets in our trust account could be impaired,
which could have a material impact on our operating results, liquidity, financial condition and prospects. For example, on March10,
2023, the FDIC announced that Silicon Valley Bank had been closed by the California Department of Financial Protection and Innovation.
We cannot guarantee that the banks or other financial institutions that will hold our funds will not experience similar issues.
**
*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 an initial business combination meeting certain financial
significance tests include historical and pro forma financial statement disclosure. 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 UnitedStates
of America (GAAP) or international financial reporting standards as issued by the International Accounting Standards Board
(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 (UnitedStates) (PCAOB). These financial statement
requirements may limit the pool of potential target businesses we may acquire because some targets may be unable to provide such financial
statements in time for us to disclose such financial statements in accordance with federal proxy rules and complete our initial business
combination within the prescribed time frame.
42
**
*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 initial business combination*
Section404
of the Sarbanes-Oxley Act requires that we evaluate and report on our system of internal controls beginning with our Annual Report on
Form10-K for the year ending December31, 2026. Only in the event we are deemed to be a large accelerated filer or an accelerated
filer, and no longer qualify as an emerging growth company, will we be required to comply with the independent registered public accounting
firm attestation requirement on our internal control over financial reporting. Further, for as long as we remain an emerging growth company,
we will not be required to comply with the independent registered public accounting firm attestation requirement on our internal control
over financial reporting. The fact that we are a blank check company makes compliance with the requirements of the Sarbanes-Oxley Act
particularly burdensome on us as compared to other public companies because a target business with which we seek to complete our initial
business combination may not be in compliance with the provisions of the Sarbanes-Oxley Act regarding adequacy of its internal controls.
The development of the internal control of any such entity to achieve compliance with the Sarbanes-Oxley Act may increase the time and
costs necessary to complete any such business combination.
Risks
Relating to the Post-Business Combination Company
**
*Subsequent
to our completion of our initial business combination, we may be required to take write-downs or write-offs, restructuring and impairment
or other charges that could have a significant negative effect on our financial condition, results of operations and the price of our
securities, which could cause you to lose some or all of your investment.*
Even
if we conduct due diligence on a target business with which we combine, we cannot assure you that this diligence will identify all material
issues that may be present within 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 debt financing to partially finance the initial business combination or thereafter. Accordingly, any shareholders who
choose to remain shareholders following the business combination could suffer a reduction in the value of their securities. Such shareholders
are unlikely to have a remedy for such reduction in value unless they are able to successfully claim that the reduction was due to the
breach by our officers or directors of a duty of care or other fiduciary duty owed to them, or if they are able to successfully bring
a private claim under securities laws that the proxy solicitation or tender offer materials, as applicable, relating to the business
combination contained an actionable material misstatement or material omission.
**
*The
officers and directors of an acquisition candidate may resign upon completion of our initial business combination. The loss of a business
combination targets key personnel could negatively impact the operations and profitability of our post-combination business.*
The
role of an acquisition candidates 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 candidates management team will remain associated
with the acquisition candidate following our initial business combination, it is possible that members of the management of an acquisition
candidate will not wish to remain in place. The departure of an acquisition candidates key personnel could negatively impact the
operations and profitability of our post-combination business.
**
*Our
management may not be able to maintain control of a target business after our initial business combination. We cannot provide assurance
that, upon loss of control of a target business, new management will possess the skills, qualifications or abilities necessary to profitably
operate such business.*
We
may structure our initial business combination so that the post-transaction company in which our public 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 is otherwise 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 business combination. For example, we could pursue a transaction in which we issue a substantial number of new ClassA
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 ClassA ordinary
shares, our shareholders immediately prior to such transaction could own less than a majority of our issued and outstanding ClassA
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 companys 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.
43
**
*We
may have a limited ability to assess the management of a prospective target business and, as a result, may effect 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 businesss management may be limited due to a lack of time, resources or information. Our assessment of the capabilities
of the target businesss management, therefore, may prove to be incorrect and such management may lack the skills, qualifications
or abilities we suspected. Should the target businesss management not possess the skills, qualifications or abilities necessary
to manage a public company, the operations and profitability of the post-combination business may be negatively impacted. Accordingly,
any shareholders who choose to remain shareholders following the business combination could suffer a reduction in the value of their
shares. Such shareholders are unlikely to have a remedy for such reduction in value unless they are able to successfully claim that the
reduction was due to the breach by our officers or directors of a duty of care or other fiduciary duty owed to them, or if they are able
to successfully bring a private claim under securities laws that the proxy solicitation or tender offer materials, as applicable, relating
to the business combination contained an actionable material misstatement or material omission.
**
*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 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 combination may not be as successful as a combination with a smaller, less complex organization.
**
*Transactions
in connection with or in anticipation of our initial business combination and our structure thereafter may not be tax-efficient to our
shareholders and warrant holders. As a result of our business combination, our tax obligations may be more complex, burdensome and/or
uncertain.*
Although
we will attempt to structure the transactions in connection with our initial business combination in a tax-efficient manner, 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. For example, in anticipation of or in connection with our initial business combination and subject to any requisite
shareholder approval, we may: enter into one or more transactions that require or structure our business combination in a manner that
requires shareholders and/or warrant holders to recognize gain or income for tax purposes or otherwise increase their tax burden; effect
a business combination with a target company in another jurisdiction; or reincorporate in a different jurisdiction (including, but not
limited to, the jurisdiction in which the target company or business is located). We do not intend to make any cash distributions to
shareholders or warrant holders to pay taxes in connection with our business combination or thereafter. Accordingly, a shareholder or
a warrant holder may need to satisfy any liability resulting from our initial business combination with cash from its own funds or by
selling all or a portion of the shares or warrants received.
44
In
addition, we may effect a business combination with a target company that has business operations outside of the UnitedStates,
and possibly, business operations in multiple jurisdictions. If we effect such a business combination, we could be subject to significant
income, withholding and other tax obligations in a number of jurisdictions with respect to income, operations and subsidiaries related
to those jurisdictions. Due to the complexity of tax obligations and filings in other jurisdictions, we may have a heightened risk related
to audits or examinations by U.S.federal, state, local and non-U.S.taxing authorities. This additional complexity and risk
could have an adverse effect on our after-tax profitability and financial condition. In addition, shareholders and warrant holders may
be subject to additional income, withholding or other taxes with respect to their ownership of us after any such transaction.
Risks
Relating to Acquiring and Operating a Business in Foreign Countries
**
*If
we effect our initial business combination with a company located outside of the UnitedStates, we would be subject to a variety
of additional risks that may adversely affect us.*
If
we pursue a target company with operations or opportunities outside of the UnitedStates 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 company with operations or opportunities outside of the UnitedStates 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:
|
| costs
and difficulties inherent in executing cross-border transactions, managing cross-border business
operations and complying with different commercial and legal requirements of overseas market; |
|
|
| rules
and regulations regarding currency redemption; |
|
|
| complex
corporate withholding taxes on individuals; |
|
|
| laws
governing the manner in which future business combinations may be effected; |
|
|
| exchange
listing and/or delisting requirements; |
|
|
| tariffs
and trade barriers; |
|
|
| regulations
related to customs and import/export matters; |
|
|
| local
or regional economic policies and market conditions; |
|
|
| unexpected
changes in regulatory requirements; |
|
|
| challenges
in managing and staffing international operations; |
|
|
| longer
payment cycles; |
|
|
| tax
issues, such as tax law changes and variations in tax laws as compared to the UnitedStates; |
|
|
| currency
fluctuations and exchange controls; |
|
|
| rates
of inflation; |
|
|
| challenges
in collecting accounts receivable; |
|
|
| cultural
and language differences; |
|
|
| employment
regulations; |
|
45
|
| underdeveloped
or unpredictable legal or regulatory systems; |
|
|
| corruption; |
|
|
| protection
of intellectual property; |
|
|
| social
unrest, crime, strikes, riots and civil disturbances; |
|
|
| regime
changes and political upheaval; |
|
|
| terrorist
attacks, natural disasters, widespread health emergencies and wars; and |
|
|
| deterioration
of political relations with the UnitedStates. |
|
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 initial business combination, our operations might suffer, either of which may adversely impact
our business, financial condition and results of operations.
**
*We
may reincorporate in or transfer by way of continuation to another jurisdiction in connection with our business combination, and such
reincorporation may result in taxes imposed on shareholders or warrant holders.*
We
may, in connection with our initial business combination or otherwise and, to the extent applicable, subject to requisite shareholder
approval by special resolution under the Companies Act (with respect to which only holders of ClassB ordinary shares will be entitled
to vote prior to our initial business combination), reincorporate in or transfer by way of continuation to the jurisdiction in which
the target company or business is located or in another jurisdiction. 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 (or may otherwise result in adverse tax consequences). 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 our ClassA ordinary shares or warrants after the reincorporation.
In
particular, although we may attempt to structure any change in our jurisdiction of incorporation (if any) in a tax-efficient manner (including,
if possible, in a manner that is tax-deferred for U.S.federal income tax purposes), tax structuring considerations are complex,
the relevant facts and law may be uncertain and may change, we may prioritize commercial and other considerations over tax considerations,
and we may prioritize company-level tax considerations over the tax considerations of our shareholders and warrant holders. As a result,
the change in our jurisdiction of incorporation may have adverse tax consequences to us or to our shareholders and warrant holders, including
the recognition of substantial gain for U.S.federal income tax purposes, and because you may not have prior notice of our change
in jurisdiction, you may not be able to avoid such consequences. For example, under certain circumstances, including if we are treated
as a PFIC, a U.S.Holder may be subject to U.S.federal income tax on gain or a deemed dividend upon the exchange of our ordinary
shares or warrants for our successors shares or warrants, and such taxes may be substantial.
In
addition to the immediate consequences of a change in our jurisdiction of incorporation, holding our successors shares or warrants
following a change in our jurisdiction of incorporation could have different, potentially adverse, consequences as compared to those
of holding our shares or warrants prior to any such change. For example, if we were to change our jurisdiction of incorporation from
the Cayman Islands to Delaware, this could have a number of adverse consequences to Non-U.S.Holders who own our successors
shares or warrants by exposing them to U.S.taxation and reporting obligations, such as the taxation of dividends from our successor
or the taxation of dispositions of our successors shares or warrants. Because such persons may not have prior notice of our change
in jurisdiction, they may not be able to change the manner in which they hold our shares or warrants or dispose of our shares or warrants
prior to any such change in our jurisdiction of incorporation, and therefore such persons may not be able to avoid any adverse consequences
of holding our successors shares or warrants after such change.
Further,
it is possible that we would change our jurisdiction of incorporation in anticipation of consummating a specific business combination
but not complete that business combination for any number of reasons. If we are unable to consummate a business combination with a specific
business combination target following such a change in our jurisdiction of incorporation, our new jurisdiction of incorporation could
have disadvantages to us or our shareholders and/or warrant holders, particularly if we subsequently pursue a business combination with
a target that is incorporated in a different jurisdiction. In such circumstances, we may not be as competitive with other special purpose
acquisition companies incorporated in the Cayman Islands when pursuing certain target companies, the consummation of our initial business
combination could be more complex, or it may be more difficult to structure such an initial business combination in a tax-efficient manner.
For example, we may change our jurisdiction of incorporation to the UnitedStates in anticipation of a business combination with
a U.S.target company but ultimately effect our initial business combination with a non-U.S.target company. In such a case,
we may be unable to structure our initial business combination in a tax-deferred manner, and our shareholders and/or warrant holders
may be required to pay substantial U.S.federal income or other taxes in connection with the consummation of the initial business
combination. In addition, the initial business combination may result in tax inefficiencies for the post-business combination company,
including that, if the post-business combination company is organized outside of the UnitedStates, it may nevertheless be treated
as a U.S.corporation for U.S.federal income tax purposes, which treatment may result in substantial tax inefficiencies for
both the post-business combination company and for our shareholders and/or warrant holders.
46
We
cannot assure you when or whether we will change our jurisdiction of incorporation or, if we do change our jurisdiction of incorporation,
the jurisdiction in which we will ultimately be incorporated. Accordingly, there is significant uncertainty as to the legal, tax and
other considerations that may be applicable to us or to our shareholders and warrant holders, and we cannot provide you with specific
or comprehensive examples of such potential consequences. The rules governing a change in our jurisdiction of incorporation and the transactions
that may occur in connection with our initial business combination are complex, and the consequences arising from such rules or transactions
will depend on a holders particular circumstances and on the circumstances surrounding our change in jurisdiction and initial
business combination. All investors considering a purchase of units in the IPO are urged to consult with and rely solely upon their own
legal and tax advisors regarding the potential consequences to them of any change in our jurisdiction of incorporation.
**
*We
may reincorporate in or transfer by way of continuation to 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 UnitedStates. 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
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.*
We
are subject to rules and regulations by various governing bodies, including, for example, the Securities and Exchange Commission, which
are charged with the protection of investors and the oversight of companies whose securities are publicly traded, and to new and evolving
regulatory measures under applicable law. 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 revenue-generating
activities to compliance activities.
Moreover,
because these laws, regulations and standards are subject to varying interpretations, their application in practice may evolve over time
as new guidance becomes available. This evolution may result in continuing uncertainty regarding compliance matters and additional costs
necessitated by ongoing revisions to our disclosure and governance practices. If we fail to address and comply with these regulations
and any subsequent changes, we may be subject to penalty and our business may be harmed.
**
*If
our management following our initial business combination is unfamiliar with UnitedStates 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, 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 will remain in place. Management of the target business may not be familiar
with UnitedStates securities laws. If new management is unfamiliar with UnitedStates 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.
**
*Exchange
rate fluctuations and currency policies may cause a target business 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.
47
**
*After
our initial business combination, substantially all of our assets may be located in a foreign country and substantially all of our revenue
will be derived from our operations in such country. Accordingly, our results of operations and prospects will be subject, to a significant
extent, to the economic, political and legal policies, developments and conditions in the country in which we operate.*
The
economic, political and social conditions, as well as government policies, of the country in which our operations are located could affect
our business. Economic growth could be uneven, both geographically and among various sectors of the economy and such growth may not be
sustained in the future. If in the future such countrys 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.
Risks
Relating to our Sponsor and Management Team
**
*A
change of ownership or control of our sponsor could adversely affect our ability to consummate our initial business combination.*
There
are no restrictions on our sponsors managing members ability to transfer equity interests in our sponsor held by the managing
member or otherwise consent to a transfer of such equity interests by another member of our sponsor. Transfers of equity interests in
the sponsor or its direct or indirect parent entities may result in a change of ownership or control of our sponsor. Such change of ownership
or control of our sponsor could adversely affect our ability to consummate our initial business combination, as there can be no assurances
that a new sponsor will possess the requisite skills, investor relationships and expertise to select an appropriate target business,
obtain the necessary financing and consummate the initial business combination.
**
*We
are dependent upon our officers and directors and their loss, or a reduction in the amount of time they can dedicate to our initial business
combination, could adversely affect our ability to operate.*
Our
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.
In addition, our officers and directors are not required to commit any specified amount of time to our affairs and, accordingly, will
have conflicts of interest in allocating their time among various business activities, including identifying potential business combinations
and monitoring the related due diligence. We do not have an employment agreement with, or key-man insurance on the life of, any of our
directors or officers. The unexpected loss of the services of one or more of our directors or officers could have a detrimental effect
on us.
**
*Our
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-combination business.*
Our
ability to successfully effect our initial business combination is dependent upon the efforts of our key personnel. The role of our key
personnel in the target business, however, cannot presently be ascertained. Although some of our key personnel may remain with the target
business in senior management or advisory positions following our initial business combination, it is likely that some or all of the
management of the target business will remain in place. While we intend to closely scrutinize any individuals we engage after our initial
business combination, we cannot assure you that our assessment of these individuals will prove to be correct. These individuals may be
unfamiliar with the requirements of operating a company regulated by the SEC, which could cause us to have to expend time and resources
helping them become familiar with such requirements.
48
**
*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 them to receive compensation following our initial business combination and as a result, may cause them to have conflicts
of interest in determining whether a particular business combination is the most advantageous.*
Our
key personnel may be able to remain with 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 personnels 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, subject to their fiduciary duties under Cayman
Islands law.
**
*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 is engaged in other
business endeavors for which he may be entitled to substantial compensation, and our officers are not obligated to contribute any specific
number ofhours 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. Any such companies, businesses or investments may present additional conflicts
of interest in pursuing an initial business combination target. For a complete discussion of our officers and directors
other business affairs, please see *ManagementOfficers, Directors and Director Nominees*.
**
*Our
officers and directors presently have, and any of them in the future may have additional, fiduciary or contractual obligations to other
entities, including other blank check companies, and, accordingly, may have conflicts of interest in allocating their time and in determining
to which entity a particular business opportunity should be presented.*
Following
the completion of the IPO and until we consummate our initial business combination, we intend to engage in the business of identifying
and combining with one or more businesses. Our sponsor, its managing member, and our officers and directors are, or may in the future
become, affiliated with entities (such as operating companies or investment vehicles) that are engaged in a similar business. We do not
have employment contracts with our officers and directors that will limit their ability to work at other businesses. In addition, our
sponsor, officers and directors may participate in the formation of, or become an officer or director of, any other blank check company
prior to completion of our initial business combination. As a result, our sponsor, officers and directors could have conflicts of interest
in determining whether to present business combination opportunities to us or to any other blank check company with which they may become
involved. Our sponsor, officers and directors have complete discretion, subject to applicable fiduciary duties, as to which blank check
company they choose to pursue a business combination and the order in which they pursue business combinations for any of their existing
or future blank check companies. As a result, our sponsor, officers and directors may pursue business combinations for blank check companies
that it has sponsored in any order, which could result in its more recent blank check companies completing business combinations prior
to its blank check companies that were launched earlier. Each of our officers and directors presently has, and any of them in the future
may have additional, fiduciary, contractual or other obligations or duties to one or more other entities pursuant to which such officer
or director is or will be required to present a business combination opportunity to such entities. 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, he or she will honor his or her fiduciary or contractual obligations to present such business combination
opportunity to such other entity, subject to their fiduciary duties under Cayman Islands law. Our amended and restated memorandum and
articles of association provide that, to the fullest extent permitted by law: (i)no individual serving as a director or an officer,
among other persons, shall have any duty, except and 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 (a)may be a corporate opportunity
for any director or officer, on the one hand, and us, on the other or (b)the presentation of which would breach an existing legal
obligation of a director or officer to any other entity.
49
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 *ManagementOfficers, Directors and Director Nominees, ManagementConflicts
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
have not adopted a policy that expressly prohibits our directors, officers, security holders or affiliates from having a direct or indirect
pecuniary or financial interest in any investment to be acquired or disposed of by us or in any transaction to which we are a party or
have an interest. In fact, we may enter into a business combination with a target business that is affiliated with our sponsor, our directors
or officers, although we do not intend to do so. Nor do we have a policy that expressly prohibits any such persons from engaging for
their own account in business activities of the types conducted by us. Accordingly, such persons or entities may have a conflict between
their interests and ours. Any such companies, businesses or investments may present additional conflicts of interest in pursuing an initial
business combination target.
The
personal and financial interests of our directors and officers may influence their motivation in timely identifying and selecting a target
business and completing a business combination. Consequently, our directors and officers discretion in identifying and
selecting a suitable target business may result in a conflict of interest when determining whether the terms, conditions and timing of
a particular business combination are appropriate and in our best interest. If this were the case, it may be a breach of their fiduciary
duties to us as a matter of Cayman Islands law and claims against such individuals may arise for a breach of such duties. See the section
titled *Description of SecuritiesCertain Differences in Corporate LawShareholder Suits*
for further information on the ability to bring such claims. However, we might not ultimately be successful in any claim we may make
against them for such reason.
**
*Members
of our management team and board of directors have significant experience as founders, board members, officers, executives or employees
of other companies. Certain of those persons have been, are currently, or may become, involved in litigation, investigations or other
proceedings, including related to those companies or otherwise. This may have an adverse effect on us, which may impede 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, executives or employees of other companies including SPACs. Certain of those persons have been, are currently and
may in the future become involved in litigation, investigations or other proceedings, including but not limited to issues relating to
breach of fiduciary duty and/or the business affairs of such companies, including SPACs; transactions entered into by such companies,
including SPACs; or otherwise. Any such litigation, investigations or other proceedings may divert the attention and resources of our
management team and board of directors away from identifying and selecting a target business or businesses for our initial business combination
and may result in findings, orders, or other determinations adverse to members of our management team and board of directors or otherwise
negatively affect our reputation, which may impede our ability to complete an initial business combination.
**
*Members
of our management team and affiliated companies may have been, and may in the future be, involved in civil disputes or governmental investigations
unrelated to our business.*
Members
of our management team have been (and intend to be) involved in a wide variety of businesses. Such involvement has, and may lead to,
media coverage and public awareness. As a result, members of our management team and affiliated companies may have been, and may in the
future be, involved in civil disputes or governmental investigations unrelated to our business. Any such claims or investigations may
be detrimental to our reputation and could negatively affect our ability to identify and complete an initial business combination and
may have an adverse effect on the price of our securities.
**
*Our
letter agreement with our sponsor, officers and directors may be amended without shareholder approval.*
Our
letter agreement with our sponsor, officers and directors contain provisions relating to transfer restrictions of our founder shares
and private placement warrants, indemnification of the trust account, waiver of redemption rights and participation in liquidating distributions
from the trust account. The letter agreement may be amended without shareholder approval (although releasing the parties from the restriction
not to transfer the founder shares for 180days following the date of the prospectus will require the prior written consent of the
underwriters). While we do not expect our board to approve any amendment to the letter agreement prior to our initial business combination,
it may be possible that our board, in exercising its business judgment and subject to its fiduciary duties, chooses to approve one or
more amendments to the letter agreement. Any such amendments to the letter agreement would not require approval from our shareholders
and may have an adverse effect on the value of an investment in our securities.
50
Risks
Relating to our Securities
**
*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 ClassA ordinary shares that such shareholder properly
elected to redeem, subject to the limitations and on the conditions described herein, (ii)the redemption of any public shares properly
submitted 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 allow redemption in connection with our initial business combination or to redeem
100% of our public shares if we do not complete our initial business combination within the completion window or (B)with respect
to any other material provisions relating to shareholders rights or pre-initial business combination activity, and (iii)the
redemption of our public shares if we are unable to complete an initial business combination within the completion window, subject to
applicable law and as further described herein. 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.
**
*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.*
Our
units, ClassA ordinary shares and warrants trade separately listed on Nasdaq. Although after giving effect to the IPO we expect
to meet, on a pro forma basis, the minimum initial listing standards set forth in Nasdaq listing standards, we cannot assure you that
our securities will continue to be, listed on Nasdaq in the future or prior to our initial business combination. In order to continue
listing our securities on Nasdaq prior to our initial business combination, we must maintain certain financial, distribution and share
price levels. Generally, we must maintain a minimum market value of listed securities (generally $50,000,000) and a minimum number of
holders of our securities (generally 400 public holders). Additionally, in connection with our initial business combination, we will
be required to demonstrate compliance with Nasdaqs initial listing requirements, which are more rigorous than Nasdaqs continued
listing requirements, in order to continue to maintain the listing of our securities on Nasdaq. For instance, unless we decide to list
on a different Nasdaq tier such as the Nasdaq Capital Market which has different initial listing requirements, our share price would
generally be required to be at least $4.00 per share and we would be required to have a minimum of 400 round lot holders of our securities.
We cannot assure you that we will be able to meet those initial listing requirements at that time.
If
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:
|
| a
limited availability of market quotations for our securities; |
|
|
| reduced
liquidity for our securities; |
|
|
| a
determination that our ClassA ordinary shares are a penny stock which
will require brokers trading in our ClassA 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; |
|
|
| a
limited amount of news and analyst coverage; and |
|
|
| a
decreased ability to issue additional securities or obtain additional financing in the future. |
|
The
National Securities Markets Improvement Actof1996, 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 ClassA ordinary shares and warrants will be listed on Nasdaq, our units, ClassA ordinary shares and warrants will qualify
as covered securities under the statute. Although the states are preempted from regulating the sale of our 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 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.
**
51
**
*Our
initial shareholders paid an aggregate of $25,000, or approximately $0.003 per founder share and, accordingly, you will experience immediate
and substantial dilution from the purchase of our ClassA ordinary shares.*
The
difference between the public offering price per share (allocating all of the unit purchase price to the ClassA ordinary shares
and none to the warrant included in the unit) and the pro forma net tangible book value per share of our ClassA ordinary shares
after the IPO constitutes the dilution to you and the other investors in the IPO. Our initial shareholders acquired the founder shares
at a nominal price of $25,000, or approximately $0.003 per share, significantly contributing to this dilution. Upon closing of the IPO,
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 98.2% (or $9.82 per share), the difference between the pro forma net tangible book value per
share after the IPO of $0.18 (assuming a maximum redemption scenario) 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 ClassA ordinary
shares on a greater than one-to-one basis upon conversion of the founder shares at the time of our initial business combination.
Generally,
the dilution that our public shareholders will experience increases the more public shares are redeemed. The issuance of additional ordinary
or preference shares may also significantly dilute the equity interest of investors in the IPO, which dilution would even further increase
if the anti-dilution provisions in the ClassB ordinary shares resulted in the issuance of ClassA ordinary shares on a greater
than one-to-one basis upon conversion of the ClassB ordinary shares. In addition, because of the anti-dilution protection in the
ClassB ordinary shares, any equity or equity-linked securities issued in connection with our initial business combination would
be disproportionately dilutive to our ClassA ordinary shares.
Our
public shareholders will experience dilution even if no public shares are redeemed in connection with an initial business combination
or another redemption event, for instance in connection with an amendment to our amended and restated memorandum and articles of association
(A)to modify the substance or timing of our obligation to allow redemption in connection with our initial business combination
or to redeem 100% of our public shares if we have not consummated an initial business combination within the completion window or (B)with
respect to any other material provisions relating to shareholders rights or pre-initial business combination activity.
However,
while our public shareholders will experience dilution even if none of our public shares are redeemed, the dilution they will experience
will decrease the more of our public shares remain issued and outstanding following a redemption event. For instance, 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, directors, officers, or their affiliates may purchase units, public shares, rights or equity-linked
securities 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. In the event of any such purchases of our shares prior to the completion
of our initial business combination or if we enter into non-redemption agreements with certain of our shareholders, the number of ClassA
ordinary shares subject to redemption will be reduced by the amount of any such purchases or shares subject to non-redemption agreements,
increasing the pro forma net tangible book value per share. See *Proposed BusinessEffecting Our Initial Business
CombinationPermitted Purchases of Our Securities*.
**
*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, and our sponsor is likely to make a substantial profit on its investment
in us in the event we consummate an initial business combination, even if the business combination causes the trading price of our ordinary
shares to materially decline.*
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 $10.00
per public share, implying an initial value of $10.00 per public share. However, prior to the IPO, our sponsor paid a nominal aggregate
purchase price of $25,000 for the founder shares, or approximately $0.003 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.
52
The
following table shows the public shareholders and our sponsors investment per share and how these compare to the implied
value of one ClassA ordinary share upon the completion of our initial business combination. The following table assumes that (i)our
valuation is $231,606,744 (which is the amount we would have in the trust account for our initial business combination following payment
of the maximum deferred underwriting commissions), (ii)no interest is earned on the funds held in the trust account, (iii)no
public shares are redeemed in connection with our initial business combination and (iv)all founder shares are held by our initial
shareholders upon completion of our initial business combination, and does not take into account other potential impacts on our valuation
at the time of the initial business combination, such as (i)the value of our public and private placement warrants, (ii)the
trading price of our ClassA ordinary shares, (iii)the initial business combination transaction costs (other than the payment
of up to $9,600,000 of deferred underwriting commissions), (iv)any equity issued or cash paid to the targets sellers, (v)any
equity issued to other third party investors, or (vi)the targets business itself.
|
Public
shares: | |
| 24,000,000 | | |
|
Founder
shares: | |
| 8,000,000 | | |
|
Total
shares: | |
| 32,000,000 | | |
|
Total
funds in trust available for initial business combination: | |
$ | 231,606,744 | | |
|
Public
shareholders investment per ClassA ordinary share(1): | |
$ | 10.00 | | |
|
Sponsors
investment per ClassB ordinary share(2): | |
$ | 0.55 | | |
|
Initial
implied value per public share: | |
$ | 10.00 | | |
|
Implied
value per share upon consummation of initial business combination(3): | |
$ | 7.24 | | |
|
(1) | While
the public shareholders investment is in both the public shares and the public warrants,
for purposes of this table the full investment amount is ascribed to the public shares only. |
|
|
(2) | The
total investment in the equity of the company by the sponsor is $4,425,000, consisting of
(i)$25,000 paid by the sponsor for the founder shares and (ii)$4,400,000 paid
by the sponsor for 4,400,000 private placement warrants. For purposes of this table, the
full investment amount is ascribed to the founder shares only. |
|
|
(3) | All
founder shares would automatically convert into ClassA ordinary shares upon completion
of our initial business combination, or at any time prior thereto at the option of the holders
thereof, on a one-for-one basis, subject to adjustment, as described therein. |
|
Based
on these assumptions, each ClassA ordinary share would have an implied value of $7.24 per share upon completion of our initial
business combination, representing an approximately 27.6% decrease from the initial implied value of $10.00 per public share. While the
implied value of $7.24 per ClassA ordinary share upon completion of our initial business combination would represent a dilution
to our public shareholders, this would represent a significant increase in value for our sponsor relative to the price it paid for each
founder share. At $7.24 per ClassA ordinary share, the 8,000,000 ClassA ordinary shares that the sponsor would own upon completion
of our initial business combination (after automatic conversion of the 8,000,000 founder shares) would have an aggregate implied value
of $57,920,000. As a result, even if the trading price of our ClassA ordinary shares significantly declines, the value of the founder
shares held by our sponsor will be significantly greater than the amount our sponsor paid to purchase such shares. In addition, our sponsor
could potentially recoup its entire investment in our company even if the trading price of our ClassA ordinary shares after the
initial business combination is as low as $0.55 per share. As a result, our sponsor is likely to earn a substantial profit on its investment
in us upon disposition of its ClassA ordinary shares even if the trading price of our ClassA ordinary shares declines after
we complete our initial business combination.
Our
sponsor may therefore be economically incentivized to complete an initial business combination with a riskier, weaker-performing or less-established
target business than would be the case if our sponsor had paid the same per share price for the founder shares as our public shareholders
paid for their public shares.
This
dilution would increase to the extent that the anti-dilution provisions of the founder shares result in the issuance of ClassA
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 ClassA ordinary shares.
**
53
**
*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 $10.00 per public share.*
Upon
the closing of the IPO, our sponsor will have invested in us an aggregate of $4,425,000, comprised of the $25,000 purchase price for
the founder shares and the $4,400,000 purchase price for the private placement warrants. Assuming a trading price of $10.00 per public
share upon consummation of our initial business combination, the 8,000,000 founder shares would have an aggregate implied value of $7.24.
Even if the trading price of our ordinary shares were as low as $0.55 per share, and the private placement warrants are worthless, the
value of the founder shares would be equal to our sponsors aggregate initial investment in us. As a result, our sponsor is likely
to be able to make a substantial profit on its investment in us at a time when our public shares have lost significant value. Accordingly,
members of our management team, who own interests in our sponsor, may be more willing to pursue a business combination with a riskier
or less-established target business than would be the case if our sponsor had paid the same per share price for the founder shares as
our public shareholders paid for their public shares.
**
*The
determination of the offering price of our units and the size of the IPO is more arbitrary than 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 the IPO 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 the IPO, management held customary organizational meetings
with the representative of 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 the IPO, prices and terms of the units, including the ClassA 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 operating companies; |
|
|
| general
conditions of the securities markets at the time of the IPO; and |
|
|
| other
factors as were deemed relevant. |
|
Although
these factors were considered, the determination of our offering size, price and terms of the Unitsis more arbitrary than 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 the IPO, 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 geopolitical events like the conflicts in Ukraine, the
Middle East and Southwest Asia and economic impacts such as inflation. 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.
54
**
*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 UnitedStates upon our directors or officers, or enforce judgments obtained in the UnitedStates 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 Revised)
of the Cayman Islands and the common law of the Cayman Islands. We will also be subject to the federal securities laws of the UnitedStates.
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 UnitedStates. In particular, the Cayman Islands has
a different body of securities laws as compared to the UnitedStates, 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 UnitedStates.
We
have been advised by Maples and Calder (HongKong) 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 UnitedStates predicated upon the civil liability
provisions of the federal securities laws of the UnitedStates 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 UnitedStates
or any state, so far as the liabilities imposed by those provisions are penal in nature. In those circumstances, although there is no
statutory enforcement in the Cayman Islands of judgments obtained in the UnitedStates, 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 UnitedStates
company.
**
*After
our initial business combination, it is possible that a majority of our directors and officers will live outside the UnitedStates
and all of our assets will be located outside the UnitedStates; 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 UnitedStates
and all of our assets will be located outside of the UnitedStates. As a result, it may be difficult, or in some cases not possible,
for investors in the UnitedStates to enforce their legal rights, to effect service of process upon all of our directors or officers
or to enforce judgments of UnitedStates courts predicated upon civil liabilities and criminal penalties on our directors and officers
under UnitedStates laws.
**
*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 ClassA 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 include the ability of the board of directors to designate
the terms of and issue new series of preference shares, which may make the removal of management more difficult and may discourage transactions
that otherwise could involve payment of a premium over prevailing market prices for our securities.
55
**
*Our
amended and restated memorandum and articles of association provide that the courts of the Cayman Islands will be the exclusive forums
for certain disputes between us and our shareholders, which could limit our shareholders ability to obtain a favorable judicial
forum for complaints against us or our directors, officers or employees.*
Our
amended and restated memorandum and articles of association provide that unless we consent in writing to the selection of an alternative
forum, the courts of the Cayman Islands shall have exclusive jurisdiction over any claim or dispute arising out of or in connection with
our amended and restated memorandum and articles of association or otherwise related in any way to each shareholders shareholding
in us, including but not limited to (i)any derivative action or proceeding brought on our behalf, (ii)any action asserting
a claim of breach of any fiduciary or other duty owed by any of our current or former directors, officers or other employees to us or
our shareholders, (iii)any action asserting a claim arising pursuant to any provision of the Companies Act or our amended and restated
memorandum and articles of association, or (iv)any action asserting a claim against us governed by the internal affairs doctrine
(as such concept is recognized under the laws of the UnitedStates of America) and that each shareholder irrevocably submits to
the exclusive jurisdiction of the courts of the Cayman Islands over all such claims or disputes. The forum selection provision in our
amended and restated memorandum and articles of association will not apply to actions or suits brought to enforce any liability or duty
created by the Securities Act, ExchangeAct or any claim for which the federal district courts of the UnitedStates of America
are, as a matter of the laws of the UnitedStates of America, the sole and exclusive forum for determination of such a claim.
Our
amended and restated memorandum and articles of association also provide that, without prejudice to any other rights or remedies that
we may have, each of our shareholders acknowledges that damages alone would not be an adequate remedy for any breach of the selection
of the courts of the Cayman Islands as exclusive forum and that accordingly we shall be entitled, without proof of special damages, to
the remedies of injunction, specific performance or other equitable relief for any threatened or actual breach of the selection of the
courts of the Cayman Islands as exclusive forum.
This
choice of forum provision may increase a shareholders cost and limit the shareholders ability to bring a claim in a judicial
forum that it finds favorable for disputes with us or our directors, officers or other employees, which may discourage lawsuits against
us and our directors, officers and other employees. Any person or entity purchasing or otherwise acquiring any of our shares or other
securities, whether by transfer, sale, operation of law or otherwise, shall be deemed to have notice of and have irrevocably agreed and
consented to these provisions. There is uncertainty as to whether a court would enforce such provisions, and the enforceability of similar
choice of forum provisions in other companies charter documents has been challenged in legal proceedings. It is possible that
a court could find this type of provisions to be inapplicable or unenforceable, and if a court were to find this provision in our amended
and restated memorandum and articles of association to be inapplicable or unenforceable in an action, we may incur additional costs associated
with resolving the dispute in other jurisdictions, which could have an adverse effect on our business and financial performance.
**
*Economic
substance legislation of the Cayman Islands may adversely impact us or our operations.*
The
Cayman Islands, together with several other non-European Union jurisdictions, have introduced legislation aimed at addressing concerns
raised by the Organisation for Economic Co-operation and Developments (OECD) Base Erosion and Profit Shifting (BEPS) initiative
as to offshore structures engaged in certain activities which attract profits without real economic activity. The International Tax Co-operation
(Economic Substance) Act, (As Revised) (the Economic Substance Act) contains economic substance requirements for in-scope
Cayman Islands entities which are engaged in certain relevant activities. As we are a Cayman Islands company, our compliance
obligations will include filing an annual notification, which need to state whether we are carrying out any relevant activities and if
so, whether we have satisfied economic substance tests to the extent required under the Economic Substance Act. If the Cayman Islands
Tax Information Authority determines that the Company or any of its Cayman Islands subsidiaries has failed to meet the requirements imposed
by the Economic Substance Act the Company may face significant financial penalties, restriction on the regulation of its business activities
and/or may be struck off as a registered entity in the Cayman Islands.
As
it is still a relatively new regime, it is anticipated that the Economic Substance Act and associated guidance will evolve and may be
subject to further clarification and amendments. We may need to allocate additional resources to keep updated with these developments,
and may have to make changes to our operations in order to comply with all requirements under the Economic Substance Act. Failure to
satisfy these requirements may subject us to penalties under the Economic Substance Act.
In
addition, in order to comply with legislation, regulations and guidance aimed at the prevention of money laundering, terrorist financing
and proliferation financing, and sanctions legislation the Company may be required to adopt and maintain anti-money laundering procedures,
and may require subscribers and their beneficial owners, controllers or authorized persons (where applicable) (Related Persons)
to provide evidence to verify their identity. Where permitted, and subject to certain conditions, the Company may also rely on, or delegate
to, a suitable person the maintenance of our anti-money laundering procedures (including the acquisition of due diligence information).
56
The
Company reserves the right to request such information as is necessary to verify the identity of a subscriber or their Related Persons.
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.
The
Company also reserves the right to refuse to make any redemption payment to a shareholder if directors or officers suspect or are advised
that the payment of redemption proceeds to such shareholder might result in a breach of applicable anti-money laundering, sanctions or
other laws or regulations by any person in any relevant jurisdiction, or if such refusal is considered necessary or appropriate to ensure
compliance with any such laws or regulations in any applicable jurisdiction.
If
any person 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, or 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 (FRA), pursuant to the Proceeds of Crime Act (As Revised) 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 FRA, pursuant to the
Terrorism Act (As Revised) of the Cayman Islands, if the disclosure relates to involvement with terrorism or terrorist financing and
property.
**
*An
investment in the IPO, and certain subsequent transactions with respect to our securities, may result in uncertain or adverse U.S.federal
income tax consequences.*
An
investment in the IPO, and certain subsequent transactions with respect to our securities, may result in uncertain or adverse U.S.federal
income tax consequences. For instance, because there are no authorities that directly address the U.S.federal income tax implications
of instruments similar to the units we are issuing in the IPO, the allocation an investor makes with respect to the purchase price of
a unit between the ClassA ordinary share and the one-half of a warrant to purchase one ClassA ordinary share included in
each unit could be challenged by the U.S.Internal Revenue Service (*IRS*) or courts. In addition, the U.S.federal
income tax consequences of a cashless exercise of warrants included in the units we are issuing in the IPO is unclear under current law.
Finally, it is unclear whether the redemption rights with respect to our ClassA ordinary shares suspend the running of a U.S.Holders
(as defined in section titled *Certain Income Tax Considerations**Material UnitedStates Federal
Income Tax Considerations**U.S.Holders*) holding period for purposes of determining whether any
gain or loss realized by such holder on the sale or exchange of ClassA ordinary shares is long-term capital gain or loss and for
determining whether any dividend we pay would be considered qualified dividend income for U.S.federal income tax
purposes. See the section titled *Certain Income Tax Considerations**Material UnitedStates Federal
Income Tax Considerations* for a summary of certain material 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 acquiring,
owning or disposing of our securities.
**
*The
U.S.federal income tax consequences to a shareholder of a redemption of ClassA ordinary shares will depend on such investors
particular facts and circumstances.*
The
U.S.federal income tax treatment of a redemption of ClassA ordinary shares to a shareholder will depend on whether the redemption
qualifies as a sale of such ClassA ordinary shares under Section302(a)of the Internal Revenue Code of 1986, as amended
(the Code), which will depend largely on the total number of our shares treated as held by the shareholder electing to
redeem ClassA ordinary shares (including any shares constructively owned by the holder as a result of owning private placement
warrants or public warrants or otherwise) relative to all of our shares outstanding both before and after the redemption. If such redemption
is not treated as a sale of ClassA ordinary shares for U.S.federal income tax purposes, the redemption will instead be treated
as a corporate distribution of cash from us. For more information about the U.S.federal income tax treatment of the redemption
of ClassA ordinary shares, see the sections entitled *Certain Income Tax ConsiderationsMaterial UnitedStates
Federal Income Tax ConsiderationsU.S.HoldersRedemption of ClassA ordinary shares*
or *Certain Income Tax ConsiderationsMaterial UnitedStates Federal Income Tax ConsiderationsNon-U.S.Holders*,
as applicable.
57
**
*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, the number of ClassA ordinary shares purchasable upon exercise of a warrant could be decreased.*
Our
warrants are issued in registered form under a warrant agreement between Continental, 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 to correct any defective provision or mistake, including to conform the provisions of the warrant agreement to the description of
the terms of the warrants and the warrant agreement, (ii)adjusting 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, provided that
the approval by the holders of at least 50% of the then issued and outstanding public warrants is required to make any such change. Accordingly,
we may amend the terms of the public warrants in a manner adverse to a holder of public warrants if holders of at least 50% of the then
outstanding public warrants approve of such amendment. Although our ability to amend the terms of the public warrants with the consent
of at least 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 or shares, shorten the exercise period, decrease
the number of ClassA ordinary shares purchasable upon exercise of a warrant.
**
*Our
warrant agreement designates the courts of the State of NewYork or the UnitedStates District Court for the Southern District
of NewYork 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 provides 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 NewYork
or the UnitedStates District Court for the Southern District of NewYork, 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. With respect to any complaint asserting a cause of
action arising under the Securities Act or the rules and regulations promulgated thereunder, we note, however, 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. Section22 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.
Notwithstanding
the foregoing, these provisions of the warrant agreement will not apply to suits brought to enforce any liability or duty created by
the ExchangeAct or any other claim for which the federal district courts of the UnitedStates 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 NewYork or the UnitedStates
District Court for the Southern District of NewYork (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 NewYork in connection with any action brought in any such court to enforce the forum provisions (an enforcement action),
and (y)having service of process made upon such warrant holder in any such enforcement action by service upon such warrant holders
counsel in the foreign action as agent for such warrant holder. This choice-of-forum provision may limit a warrant holders 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.
**
*A
provision of our warrant agreement may make it more difficult for us to consummate an initial business combination.*
If
(i)we issue additional 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 ClassA 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, and (iii)the Market Value of our ClassA ordinary shares is below $9.20 per share, then
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, and the $18.00 per share redemption trigger prices described below under *Description of SecuritiesWarrantsPublic
WarrantsRedemption of warrants when the price per ClassA 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. This may make
it more difficult for us to consummate an initial business combination with a target business.
58
**
*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 outstanding warrants at any time prior to their expiration, at a price of $0.01 per warrant, provided that
the closing price of our ClassA 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 *Description of SecuritiesWarrantsPublic
WarrantsRedemption ProceduresAnti-Dilution* Adjustments) for any 20tradingdays
within a 30 trading-day period commencing at least 30days after completion of our initial business combination and ending on the
thirdtradingday prior to the date on which we give proper notice of such redemption to the warrants holders and provided
certain other conditions are met. We will not redeem the warrants as described above unless a registration statement under the Securities
Act covering the issuance of the ClassA ordinary shares issuable upon exercise of the warrants is then effective and a current
prospectus relating to those ClassA ordinary shares is available throughout the measurement period. 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.
We will use our best 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 the IPO. 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, is likely to be substantially less than the market value of your
warrants.
**
*Our
warrants may have an adverse effect on the market price of our ClassA ordinary shares and make it more difficult to effectuate
our initial business combination.*
We
issued warrants to purchase 12,000,000 of our ClassA ordinary shares as part of the units offered in the IPO and, simultaneously
with the closing of the IPO, we have issued in a private placement an aggregate of 6,800,000 private placement warrants at $1.00 per
warrant. In addition, if the sponsor makes any working capital loans, it may convert those loans into up to an additional 1,500,000 private
placement warrants, at the price of $1.00 per warrant. To the extent we issue ordinary shares to effectuate a business transaction, the
potential for the issuance of a substantial number of additional ClassA 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 ClassA ordinary shares and reduce the value of the ClassA 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.
**
*Holders
of ClassA ordinary shares will not be entitled to vote on continuing the company in a jurisdiction outside of the Cayman Islands.*
As
holders of our ClassA ordinary shares, our public shareholders will not have the right to vote on the appointment of directors
and continuing our company in a jurisdiction outside the Cayman Islands (including any special resolution required to amend our constitutional
documents or to adopt new constitutional documents, in each case, as a result of our approving a transfer by way of continuation in a
jurisdiction outside the Cayman Islands). 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 will not have any say in the management of our
company prior to the consummation of an initial business combination.
**
*You
will not be permitted to exercise your warrants unless we register and qualify the underlying ClassA ordinary shares or certain
exemptions are available.*
If
the issuance of the ClassA ordinary shares upon exercise of the warrants is not registered, qualified or exempt from registration
or qualification under the Securities Act and applicable state securities laws, holders of warrants will not be entitled to exercise
such warrants and such warrants 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 ClassA ordinary shares included in the units.
59
We
registered the ClassA ordinary shares issuable upon exercise of the warrants in the registration statement because the warrants
will become exercisable 30days after the completion of our initial business combination, which may be within one year of the IPO.
However, because the warrants will be exercisable until their expiration date of up to fiveyears after the completion of our initial
business combination, in order to comply with the requirements of Section10(a)(3)of the Securities Act following the consummation
of our initial business combination, under the terms of the warrant agreement, we have agreed that, as soon as practicable, but in no
event later than 20businessdays, after the closing of our initial business combination, we will use our commercially reasonable
efforts to file with the SEC a post-effective amendment to the registration statement a part or a new registration statement covering
the registration under the Securities Actofthe ClassA ordinary shares issuable upon exercise of the warrants and thereafter
will use our commercially reasonable efforts to cause the same to become effective within 60businessdays following our initial
business combination and to maintain a current prospectus relating to the ClassA 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, the financial statements contained or incorporated by reference therein are not current or correct or the
SEC issues a stop order.
If
the ClassA ordinary shares issuable upon exercise of the warrants are not registered under the Securities Act, under the terms
of the warrant agreement, holders of warrants who seek to exercise their warrants will not be permitted to do so for cash and, instead,
will be required to do so on a cashless basis in accordance with Section3(a)(9)of the Securities Act or another exemption.
In
no event will warrants 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 or qualification is available.
If
our ClassA ordinary shares are at the time of any exercise of a warrant not listed on a national securities exchange such that
they satisfy the definition of covered securities under Section18(b)(1)of the Securities Act, we may, at our
option, not permit holders of warrants who seek to exercise their warrants to do so for cash and, instead, require them to do so on a
cashless basis in accordance with Section3(a)(9)of the Securities Act; in the event we so elect, we will not be required
to file or maintain in effect a registration statement or register or qualify the shares underlying the warrants under applicable state
securities laws, and in the event we do not so elect, 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 (other than upon a cashless exercise as described above)
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 the Securities Act or applicable state securities laws.
**
*You
may only be able to exercise your public warrants on a cashless basis under certain circumstances, and if you do so, you
will receive fewer ClassA ordinary shares from such exercise than if you were to exercise such warrants for cash.*
The
warrant agreement provides that in the following circumstances holders of warrants who seek to exercise their warrants will not be permitted
to do for cash and will, instead, be required to do so on a cashless basis in accordance with Section3(a)(9)of the Securities
Act: (i)if the ClassA ordinary shares issuable upon exercise of the warrants are not registered under the Securities Act
in accordance with the terms of the warrant agreement; (ii)if we have so elected and the ClassA ordinary shares are at the
time of any exercise of a warrant not listed on a national securities exchange such that they satisfy the definition of covered
securities under Section18(b)(1)of the Securities Act; and (iii)if we have so elected and we call the public
warrants for redemption.
If
you exercise your public warrants on a cashless basis, you would pay the warrant exercise price by surrendering the warrants for that
number of ClassA ordinary shares equal to the quotient obtained by dividing (x)the product of the number of ClassA
ordinary shares underlying the warrants, multiplied by the excess of the fair market value of our ClassA ordinary
shares (as defined in the next sentence) over the exercise price of the warrants by (y)the fair market value. The fair market
value is the average reported closing price of the ClassA ordinary shares for the 10tradingdays ending on the
thirdtradingday prior to the date on which the notice of exercise is received by the warrant agent or on which the notice
of redemption is sent to the holders of warrants, as applicable. As a result, you would receive fewer ClassA ordinary shares from
such exercise than if you were to exercise such warrants for cash.
60
**
*The
grant of registration rights to our sponsor, the underwriters and other holders of our private placement warrants 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 ClassA
ordinary shares.*
Pursuant
to an agreement to be entered into concurrently with the issuance and sale of the securities in the IPO, our sponsor, the underwriters,
and their permitted transferees can demand that we register the ClassA ordinary shares into which founder shares are convertible,
holders of our private placement warrants and their permitted transferees can demand that we register the private placement warrants
and the ClassA ordinary shares issuable upon exercise of the private placement warrants or holders of securities that may be issued
upon conversion of working capital loans and their permitted transferees may demand that we register such units, shares, warrants or
the ClassA ordinary shares issuable upon exercise of such warrants and any other securities of the company acquired by them prior
to the consummation of our initial business combination. We will bear the cost of registering these securities. The registration and
availability of such a significant number of securities for trading in the public market may have an adverse effect on the market price
of our ClassA 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 ClassA ordinary
shares that is expected when the ordinary shares owned by our initial shareholders, holders of our private placement warrants or holders
of our working capital loans or their respective permitted transferees are registered.
General
Risk Factors
**
*We
are a blank check 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 blank check company incorporated under the laws of the Cayman Islands with no operating results, and we will not commence operations
until obtaining funding through the IPO. 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. 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.
**
*Past
performance by our management team, and their respective affiliates, including investments and transactions in which they have participated
and businesses with which they have been associated, may not be indicative of future performance of an investment in the company.*
Information
regarding our management team, and their respective affiliates, including investments and transactions in which they have participated
and businesses with which they have been associated, is presented for informational purposes only. Any past experience and performance
by our management team, and their respective affiliates and the businesses with which they have been associated, is not a guarantee that
we will be able to successfully identify a suitable candidate for our initial business combination, that we will be able to provide positive
returns to our shareholders, or of any results with respect to any initial business combination we may consummate. You should not rely
on the historical experiences of our management team, and their respective affiliates, including investments and transactions in which
they have participated and businesses with which they have been associated, as indicative of the future performance of an investment
in us or as indicative of every prior investment by each of the members of our management team, or their respective affiliates. The market
price of our securities may be influenced by numerous factors, many of which are beyond our control, and our shareholders may experience
losses on their investment in 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.
61
**
*We
may be a passive foreign investment company, or PFIC, which could result in adverse UnitedStates 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 the prospectus captioned *Certain Income Tax ConsiderationsMaterial UnitedStates Federal
Income Tax ConsiderationsU.S Holders*) of our ClassA 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 taxableyears may depend on whether we qualify for the PFIC start-upexception (see the
section of the prospectus captioned *Certain Income TaxConsiderationsMaterial UnitedStates Federal
Income Tax ConsiderationsU.S.HoldersPassive Foreign Investment Company Rules*).
Depending
on the particular circumstances the application of the start-upexception may be subject to uncertainty, and there cannot be any
assurance that we will qualify for the start-upexception. Our actual PFIC status for any taxable year, however, will not be determinable
until after the end of such taxable year (and, in the case of the start-upexception, potentially not until after the two taxableyears
following our current taxable year). Accordingly, there can be no assurances with respect to our status as a PFIC for our current taxable
year or any subsequent taxable year. In addition, our U.S. counsel expresses no opinion with respect to our PFIC status for any taxable
year. Moreover, if we determine that 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 qualified electing fund election, but there can be no assurance that we will timely provide such required
information, and under current law such election would be unavailable with respect to our warrants. We urge U.S.investors to consult
their own tax advisors regarding the possible application of the PFIC rules in general, and in particular to our warrants. For a more
detailed explanation of the tax consequences of PFIC classification to U.S.Holders, see the section of the prospectus captioned
*Certain Income Tax ConsiderationsMaterial UnitedStates Federal Income Tax ConsiderationsU.S.HoldersPassive
Foreign Investment Company Rules*.
**
*The
Excise Tax could be imposed on redemptions of our ordinary shares if we were to become a covered corporation in the future.*
The
Inflation Reduction Actof2022, among other things, generally imposes the Excise Tax on certain repurchases of stock by covered
corporations (which include publicly traded domestic (i.e., U.S.) corporations and certain domestic subsidiaries of publicly traded
foreign (i.e., non-U.S.) corporations) occurring on or after January1, 2023. The Excise Tax is imposed on the repurchasing corporation
itself, not its stockholders from which the stock is repurchased. The amount of the Excise Tax is generally 1% of the fair market value
of the shares repurchased at the time of the repurchase. However, for purposes of calculating the Excise Tax, repurchasing corporations
are permitted to net the fair market value of certain new stock issuances against the fair market value of stock repurchases during the
same taxable year (the netting rule). In addition, certain exceptions apply to the Excise Tax. The U.S.Department
of the Treasury (the Treasury) has authority to provide regulations and other guidance to carry out, and prevent the abuse
or avoidance of, the Excise Tax. On April9, 2024, the Treasury issued proposed regulations on which taxpayers may rely until final
Treasury regulations addressing the Excise Tax are published, which generally adopt (but in some respects expand or modify) the rules
and guidance set forth in IRS Notice2023-2, published on January17, 2023, providing initial guidance regarding the application
of the Excise Tax. OnJune28, 2024, the Treasury finalized certain of the proposed regulations (those relating to procedures
for reporting and paying theExcise Tax). Although IRS Notice2023-2 and proposed Treasury regulations clarify certain aspects
of the Excise Tax, the interpretation and operation of certain other aspects of the Excise Tax remain unclear. There can be no assurance
that final Treasury regulations will not adversely affect the accuracy of the below description of the Excise Tax considerations that
may be applicable to us if we were to become a covered corporation in the future.
We
are currently not a covered corporation for purposes of the Excise Tax. Accordingly, we generally would not be subject
to the Excise Tax on a redemption of our stock, whether in connection with the consummation of our initial business combination or otherwise.
However, in connection with an initial business combination involving a company organized under the laws of the United States (or any
subdivision thereof), it is possible that we domesticate and continue as a Delaware corporation prior to certain redemptions. Because
we expect that, following such a domestication, our securities would continue to trade on a national securities exchange, in such a case
we could be subject to the stock buyback tax with respect to any subsequent redemptions (including redemptions in connection with the
initial business combination) that are treated as repurchases for this purpose, and we could be considered a covered corporation.
If we were to become a covered corporation in the future, whether in connection with the consummation of our initial business
combination with a U.S.company (including if we were to redomicile as a U.S.corporation in connection therewith) or otherwise,
whether and to what extent we would be subject to the Excise Tax on a redemption of our stock would depend on a number of factors, including
(i)whether the redemption is treated as a repurchase of stock for purposes of the Excise Tax, (ii)the fair market value of
the redemption treated as a repurchase of stock, (iii)the structure of our initial business combination, (iv)the nature and
amount of any PIPE or other equity issuances (whether in connection with our initial business combination or otherwise)
issued within the same taxable year of a redemption treated as a repurchase of stock and (v)the content of forthcoming regulations
and other guidance from the Treasury. As noted above, the Excise Tax would be payable by the repurchasing corporation, and not by the
redeeming holder. However, we will not use the proceeds placed in the trust account, or the interest earned on the proceeds placed in
the trust account, to pay for possible Excise Tax or any other fees or taxes that may be levied on us on any redemptions or stock buybacks
by us pursuant to any current, pending or further rules or laws, including without limitation any Excise Tax, prior to release of such
funds from the trust account following our initial business combination. To the extent the Excise Tax is applicable, the amount of cash
available to transfer to the target business in connection with our initial business combination may be reduced, which could result in
our inability to meet conditions in the agreement relating to our initial business combination related to a minimum cash requirement,
if any, or otherwise result in the shareholders of the combined company (including any of our shareholders who do not exercise their
redemption rights in connection with the initial business combination) to economically bear the impact of the Excise Tax. Consequently,
the Excise Tax may make a transaction with us less appealing to potential business combination targets. Finally, subject to certain exceptions,
the Excise Tax should not apply in the event of our complete liquidation.
**
62
**
*We
are an emerging growth company and a smaller reporting company within the meaning of the Securities Act, and if we take advantage of
certain exemptions from disclosure requirements available to emerging growth companies or smaller reporting companies, this could make
our securities less attractive to investors and may make it more difficult to compare our performance with other public companies.*
We
are an emerging growth company within the meaning of the Securities Act, as modified by the JOBS Act, and we may take advantage
of certain exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth
companies, including, but not limited to, not being required to comply with the auditor internal controls attestation requirements of
Section404 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 fiveyears, although circumstances could cause us to lose
that status earlier, including if the market value of our ClassA ordinary shares held by non-affiliates exceeds $700million
as of the prior June30, in which case we would no longer be an emerging growth company as of December31 in the same year.
We cannot predict whether investors will find our securities less attractive because we will rely on these exemptions. If some investors
find our securities less attractive as a result of our reliance on these exemptions, the trading prices of our securities may be lower
than they otherwise would be, there may be a less active trading market for our securities and the trading prices of our securities may
be more volatile.
Further,
Section102(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 ExchangeAct) 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 Item10(f)(1)of RegulationS-K.Smaller reporting
companies may take advantage of certain reduced disclosure obligations, including, among other things, providing only twoyears
of audited financial statements. We will remain a smaller reporting company until the lastday of the fiscal year in which (1)the
market value of our ordinary shares held by non-affiliates is equal to or exceeds $250million as of the prior June30, or
(2)our annual revenues equaled or exceeded $100million during such completed fiscal year and the market value of our ordinary
shares held by non-affiliates is equal to or exceeds $700million as of the prior June30. 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.
**
*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.*
The
market for directors and officers liability insurance for special purpose acquisition companies has changed in ways adverse to us and
our management team. 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. These trends may continue
into the future.
63
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 combinations 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.
**
*Recent
increases in inflation in the UnitedStates and elsewhere could make it more difficult for us to complete our initial business combination.*
Recent
increases in inflation in the UnitedStates and elsewhere may lead to increased price volatility for publicly traded securities,
including ours, or other national, regional or international economic disruptions, any of which could make it more difficult for us to
complete our initial business combination.
Item1B.
UNRESOLVED STAFF COMMENTS
None.
Item1C. CYBERSECURITY
We are a special purpose acquisition company with no business operations. Since our initial public offering, our sole business activity has been identifying and evaluation suitable targets for an initial business combination. Therefore, we do not consider that we face significant cybersecurity risk and have not adopted any cybersecurity risk management program or formal processes for assessing, identifying, and managing material risks from cybersecurity threats. Our board of directors is ultimately responsible for overseeing the risk management activities in general and, as deemed necessary by our management team, will be informed of any cybersecurity threats or risks that may arise. In fiscal year 2025, we did not identify any risks from cybersecurity threats that have materially affected or are reasonably likely to materially affect us, including our business strategy and results of operations.
Item2.
PROPERTIES
We
maintain our principal executive office at 2727 LBJ Freeway Suite 1010, Farmers Branch, TX75234. Our telephone number is (214)775-0614.
We consider our current office space adequate for our current operations.
Item3.
LEGAL PROCEEDINGS
To
the knowledge of management, there is no material litigation, arbitration or governmental proceeding currently pending against us, any
of our officers or directors in their capacity as such or against any of our property.
Item4.
MINE SAFETY DISCLOSURES
None.
64
PARTII
Item5.
MARKET FOR REGISTRANTS COMMON EQUITY, RELATED SHAREHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES.
Market
Information
Our
units, ClassA Ordinary Shares and warrants are each traded on Nasdaq under the symbols EVOXU, EVOX
and EVOXW, respectively. Our units commenced public trading on November 11, 2025. Our ClassA Ordinary Shares and
warrants began separate trading on December 3, 2025.
Holders
On
February 25, 2026, there was one holder of record for our units, one holder of record for our ClassA Ordinary Shares, one holder
of record of our ClassB Ordinary Shares and four holders of record of our warrants. The number of record holders was determined
from the records of our transfer agent and does not include beneficial owners of Ordinary Shares whose shares are held in the names of
various security brokers, dealers, and registered clearing agencies.
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. Further, if we incur
any indebtedness, our ability to declare dividends may be limited by restrictive covenants we may agree to in connection therewith.
Securities
Authorized for Issuance Under Equity Compensation Plans
None.
Recent
Sales of Unregistered Securities; Use of Proceeds from Registered Offerings
**
*Unregistered
Sales of Equity Securities*
**
On
June26, 2025, our sponsor paid $25,000, to cover certain of our offering costs in exchange for 5,750,000 founder shares. On August
20, 2025, an additional 916,667 founder shares were issued to the sponsor, for a total of 6,666,667 founder shares, which equates to
approximately $0.004 per share. On November 10, 2025, the Company issued 1,333,333 class B ordinary shares to our sponsor in a share
capitalization, resulting in the total Class B ordinary shares increasing to 8,000,000 class B ordinary shares, of which 1,000,000 are
subject to forfeit if the over-allotment option is not exercised. Upon consummation of the IPO, our officers and directors will have
an indirect ownership interest in the founder shares through their member interest in the sponsor. The indirect economic interest in
the sponsor would result in the following allocations upon consummation of the business combination: 3,650,000 founder shares to Stephen
Silver, our Chief Executive Officer and Chairman of the Board, 608,333 to Ashley Zumwalt-Forbes, our Chief Operating Officer and director,
150,000 founder shares to Arthur Chen, our Chief Financial Officer, and 500,000 founder shares to Matthew Langsford and 125,000 founder
shares to Erez Ichilov, our independent directors (for an aggregate of 5,033,333 founder shares), all at the same per-share price that
our sponsor purchased such shares, or approximately $0.003 per share.
The
number of founder shares issued and outstanding was determined based on the expectation that the total size of the IPO would be a maximum
of 24,000,000units if the underwriters over-allotment option is exercised in full, and therefore that such founder shares
would represent 25% of the issued and outstanding shares after the IPO. If we increase or decrease the size of the offering, we will
effect a share capitalization or a share repurchase or redemption or other appropriate mechanism, as applicable, with respect to our
ClassB ordinary shares immediately prior to the consummation of the IPO 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 the IPO.
Our
sponsor and the underwriters purchased an aggregate of 6,800,000 private placement warrants, each exercisable to purchase one ClassA
ordinary share at $11.50 per share, at a price of $1.00 per warrant, or $6,800,000 in the aggregate, in a private placement that closed
simultaneously with the closing of the IPO. Of those 6,800,000 private placement warrants, our sponsor purchased 4,400,000 private placement
warrants and the underwriters purchased 2,400,000 private placement warrants consistent with their pro rata allocation of the base offering.
These
issuances were made pursuant to the exemption from registration contained in Section4(a)(2)of the Securities Act.
No
underwriting discounts or commissions were paid with respect to such sales.
**
65
**
*Use
of Proceeds*
In
connection with the initial public offering, we incurred offering costs of $15,036,813 (including deferred underwriting commissions of
$9,600,000). Other incurred offering costs consisted principally of preparation fees related to the initial public offering. After deducting
the underwriting discounts and commissions (excluding the deferred portion, which amount will be payable upon consummation of the initial
business combination, if consummated) and the initial public offering expenses, $240,000,000 of the net proceeds from our initial public
offering and the sale of the placement shares were placed in the trust account.
There
has been no material change in the planned use of the proceeds from the initial public offering and the sale of the placement shares
as is described in the companys final prospectus related to the initial public offering.
Purchase
of Equity Securities by the Issuer and Affiliated Purchasers
None.
Item6.
[RESERVED]
Item7.
MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
**
*References
in this Report to we, us or the Company refer to Evolution Global Acquisition Corp . References
to our management or our management team refer to our officers and directors, and references to the Sponsor
refer to Evolution Sponsor Holdings LLC . The following discussion and analysis of the Companys financial condition and results
of operations should be read in conjunction with the financial statements and the notes thereto contained elsewhere in this Report. Certain
information contained in the discussion and analysis set forth below includes forward- looking statements that involve risks and uncertainties.*
Special
NoteRegarding Forward-Looking Statements
This
Report includes forward-looking statements within the meaning of Section27A of the Securities Act of 1933, as amended
(the Securities Act) and Section21E of the Exchange Act of 1934, as amended (the Exchange Act) that
are not historical facts, and involve risks and uncertainties that could cause actual results to differ materially from those expected
and projected. All statements, other than statements of historical fact included in this Report including, without limitation, statements
under Managements Discussion and Analysis of Financial Condition and Results of Operations regarding the Companys
financial position, business strategy and the plans and objectives of management for future operations, are forward-looking statements.
When used in this Report, words such as expect, believe, anticipate, intend,
estimate, seek and variations and similar words and expressions, as they relate to us or the Companys
management, identify forward-looking statements. Such forward-looking statements are based on the beliefs of management, as well as assumptions
made by, and information currently available to the Companys management. A number of factors could cause actual events, performance
or results to differ materially from the events, performance and results discussed in the forward-looking statements. The Companys
securities filings can be accessed on the EDGAR section of the SECs website at www.sec.gov. Except as expressly required by applicable
securities law, the Company disclaims any intention or obligation to update or revise any forward-looking statements whether as a result
of new information, future events or otherwise.
The
following discussion and analysis of the Companys financial condition and results of operations should be read in conjunction
with our audited financial statements and the notes related thereto which are included in Item 8. Financial Statements and Supplementary
Data of this Annual Report on Form 10-K. Certain information contained in the discussion and analysis set forth below includes
forward-looking statements. Our actual results may differ materially from those anticipated in these forward-looking statements as a
result of many factors, including those set forth under Special Note Regarding Forward-Looking Statements, Item
1A. Risk Factors and elsewhere in this Annual Report on Form 10-K.
Overview
We
are a blank check company incorporated in the Cayman Islands on June 26, 2025, formed for the purpose of effecting a merger, share exchange,
asset acquisition, share purchase, recapitalization, reorganization or other similar business combination with one or more businesses.
We intend to effectuate our business combination using cash derived from the proceeds of the initial public offering and the sale of
the private placement units, our shares, debt or a combination of cash, shares and debt.
66
We
expect to continue to incur significant costs in the pursuit of our acquisition plans. We cannot assure you that our plans to complete
a business combination will be successful.
We
have neither engaged in any operations nor generated any revenues to date. Our only activities from June 26, 2025 (inception) through
December 31, 2025 were organizational activities and those necessary to prepare for the initial public offering, described below, and,
after our initial public offering, identifying a target company for a business combination. We do not expect to generate any operating
revenues until after the completion of our business combination. Subsequent to the initial public offering, we generate non-operating
income in the form of interest income on marketable securities held in the trust account. We incur expenses as a result of being a public
company (for legal, financial reporting, accounting and auditing compliance), as well as for due diligence expenses.
For
the period from June 26, 2025 (inception) through December 31, 2025, we had a net loss of $4,113,235, which consisted of compensation
expense of $5,032,916 and operating costs of $287,063 partially offset by, interest earned on investments held in Trust Account of $1,206,744.
Liquidity
and Capital Resources
As
of December 31, 2025, we had $1,120,561 of cash and working capital surplus of $1,039,173.
On
November 12, 2025, the Company consummated the Initial Public Offering of 24,000,000 Units, which includes the full exercise by the underwriters
of their over-allotment option in the amount of 3,000,000 Units, at $10.00 per Unit, generating gross proceeds of $240,000,000. Simultaneously
with the closing of the Initial Public Offering, the Company consummated the sale of 6,800,000 Private Placement Warrants at a price
of $1.00 per Private Placement Warrant, in a private placement to the Sponsor and the underwriters, generating gross proceeds of $6,800,000.
Of those 6,800,000 Private Placement Warrants, the Sponsor purchased 4,400,000 Private Placement Warrants and the underwriters purchased
2,400,000 Private Placement Warrants.
Following
the closing of the initial public offering and the private placement, a total of $240,000,000 was placed in 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, until the earlier of (i) the completion of a Business Combination and (ii) the distribution of the funds held in
the Trust Account. To mitigate the risk that the Company might be deemed to be an investment company for purposes of the Investment Company
Act, which risk increases the longer that it holds investments in the Trust Account, the Company may, at any time (based on the management
teams ongoing assessment of all factors related to the potential status under the Investment Company Act), instruct the trustee
to liquidate the investments held in the Trust Account and instead to hold the funds in the Trust Account in cash or in an interest bearing
demand deposit account at a bank. We incurred transaction costs of $15,036,813, consisting of $4,320,000 of cash underwriting fee (net
of $480,000 underwriters reimbursement), $9,600,000 of deferred underwriting fee, and $1,116,813 of other offering costs.
The
remaining proceeds from the initial public offering and the private placement are held outside the trust account, in the cash operating
account amounting to $1,120,561 as of December 31, 2025. Such funds are being used primarily to enable us to identify a target and to
negotiate and consummate our initial Business Combination.
We
intend to use substantially all of the funds held in the trust account, including any amounts representing interest earned on the trust
account (which interest shall be net of any permitted withdrawals and excluding deferred underwriting commissions), to complete our business
combination. To the extent that our share capital or debt is used, in whole or in part, as consideration to complete our business combination,
the remaining proceeds held in the trust account will be used as working capital to finance the operations of the target business or
businesses, make other acquisitions and pursue our growth strategies.
We
intend to use the funds held outside the trust account primarily to identify and evaluate target businesses, perform business due diligence
on prospective target businesses, travel to and from the offices, plants or similar locations of prospective target businesses or their
representatives or owners, review corporate documents and material agreements of prospective target businesses, and structure, negotiate
and complete a business combination.
In
order to fund working capital deficiencies or finance transaction costs in connection with a business combination, the Sponsor or an
affiliate of the Sponsor or certain of the Companys officers and directors may, but are not obligated to, loan us funds as may
be required. If we complete a business combination, we would repay such loaned amounts. In the event that a 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 working capital loans may be convertible into private placement
warrants of the post-business combination entity at a price of $1.00 per warrant. The private placement warrants issued upon conversion
of any such loans would be identical to the private placement warrants sold in a private placement concurrently with the initial public
offering.
67
We
do not believe we will need to raise additional funds in order to meet the expenditures required for operating our business. However,
if our estimate of the costs of identifying a target business, undertaking in-depth due diligence and negotiating a business combination
are less than the actual amount necessary to do so, we may have insufficient funds available to operate our business prior to our business
combination. Moreover, we may need to obtain additional financing either to complete our business combination or because we become obligated
to redeem a significant number of our public shares upon consummation of our business combination, in which case we may issue additional
securities or incur debt in connection with such business combination.
Off-Balance
Sheet Arrangements
We
have no obligations, assets or liabilities, which would be considered off-balance sheet arrangements as of December 31, 2025.
Contractual
Obligations
*Underwriting
Agreement*
The
underwriters were entitled to a deferred fee of $0.40 per Unit, or $9,600,000 in the aggregate. The deferred fee will become payable
to the Underwriters from the amounts held in the Trust Account solely in the event that the Company completes a Business Combination,
subject to the terms of the underwriting agreement.
*Net
Loss Per Ordinary Share*
We
comply with the accounting and disclosure requirements of FASB ASC Topic 260, Earnings Per Share. Net loss per Ordinary
Share is computed by dividing net loss applicable to shareholders by the weighted average number of Ordinary Shares outstanding for the
applicable periods. We apply the two-class method in calculating earnings per Ordinary Share and allocate net loss pro rata to Class
A Ordinary Shares subject to possible redemption, nonredeemable Class A Ordinary Shares and Class B Ordinary Shares. Accretion associated
with the redeemable Class A Ordinary Shares is excluded from earnings per share as the redemption value is not in excess of the fair
value.
Critical
Accounting Estimates
The
preparation of the unaudited condensed financial statements and related disclosures in conformity with GAAP requires management to make
estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities
at the date of the unaudited condensed financial statements, and income and expenses during the periods reported. Making estimates requires
management to exercise significant judgement. It is at least reasonably possible that the estimate of the effect of a condition, situation
or set of circumstances that existed at the date of the unaudited condensed financial statements, which management considered in formulating
its estimate, could change in the near term due to one or more future confirming events. Accordingly, the actual results could materially
differ from those estimates. As of December 31, 2025, we did not have any critical accounting estimates to be disclosed.
*Ordinary
Shares Subject to Possible Redemption*
We
account for our ordinary shares subject to possible redemption in accordance with the guidance in ASC Topic 480 Distinguishing
Liabilities from Equity. Ordinary shares subject to mandatory redemption is classified as a liability instrument and is measured
at fair value. Conditionally redeemable ordinary shares (including common stock that features redemption rights that are either within
the control of the holder or subject to redemption upon the occurrence of uncertain events not solely within the Companys control)
is classified in temporary equity. At all other times, ordinary shares are classified as stockholders equity. The Companys
public shares feature certain redemption rights that are considered to be outside of the Companys control and subject to occurrence
of uncertain future events. Accordingly, at December 31, 2025, the public shares are presented at redemption value as temporary equity,
outside of the shareholders equity (deficit) section of the Companys balance sheet. We recognize changes in redemption
value immediately as they occur and adjusts the carrying value of the ordinary shares subject to possible redemption 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.
**
*Recent
Accounting Standards*
Management
does not believe that there are any other recently issued, but not yet effective, accounting standards, which, if currently adopted,
would have a material effect on the financial statements and notes thereto included in this Report under Item 1. Financial Statements.
68
Item7A.
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
We
are a smaller reporting company as defined by Rule12b-2 of the Exchange Act and are not required to provide the information otherwise
required under this item.
Item8.
FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
This
information appears following Item15 of this Report and is included herein by reference.
Item9.
CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
None.
Item9A.
CONTROLS AND PROCEDURES
Disclosure
controls are procedures that are designed with the objective of ensuring that information required to be disclosed in our reports filed
under the Exchange Act is recorded, processed, summarized, and reported within the time period specified in the SECs rules and
forms. Disclosure controls are also designed with the objective of ensuring that such information is accumulated and communicated to
our management, including the chief executive officer and chief financial officer, as appropriate to allow timely decisions regarding
required disclosure.
As
required by Rules 13a-15 and 15d-15 under the Exchange Act, our Chief Executive Officer and Chief Financial Officer carried out an evaluation
of the effectiveness of the design and operation of our disclosure controls and procedures as of December 31, 2025. Based upon their
evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures (as defined
in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) were effective, Accordingly, management believes that the financial statements
includedin this Annual Report present fairly in all material respects our financial position, results of operations and cash flows
for the period presented.
Managements
Report on Internal Controls Over Financial Reporting
This
Annual Report on Form 10-K does not include a report of managements assessment regarding internal control over financial reporting
or an attestation report of our independent registered public accounting firm due to a transition period established by rules of the
SEC for newly public companies.
Changes
in Internal Control over Financial Reporting
There
were no changes in our internal control over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) of the Exchange
Act) during the most recent fiscal quarter that have materially affected, or are reasonably likely to materially affect, our internal
control over financial reporting.
Item9B.
OTHER INFORMATION
During theyear ended December31, 2025, none of our directors or executive officers adopted or terminated any contract, instruction or written plan for the purchase or sale of our securities to satisfy the affirmative defense conditions of Rule10b5-1(c)or any non-Rule10b5-1 trading arrangement, as such term is defined in Item408(a)of Regulation S-K.
Item9C.
DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS
Not
applicable.
69
PARTIII
Item10.
DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE.
Officers
and Directors
Our
officers, directors and director nominees are as follows:
|
Name: |
|
Age: |
|
Position: | |
|
Stephen Marc Silver |
|
41 |
|
Chief Executive Officer
and Chairman | |
|
Arthur Kuan-Lin Chen |
|
49 |
|
Chief Financial Officer | |
|
Ashley Elizabeth Zumwalt-Forbes |
|
35 |
|
Chief Operating Officer
and Director | |
|
Matthew Ryan Langsford |
|
40 |
|
Director | |
|
Erez Ichilov |
|
59 |
|
Director | |
|
Gavin Apter |
|
42 |
|
Director | |
**
*Stephen
Silver* serves as our Chief Executive Officer and Chairman of the Board (appointed in June, 2025). Mr.Silver is a finance
professional with over two decades of experience in corporate advisory, sales and trading, and capital markets across Australia and international
markets. Mr. Silver is also the Chief Executive Officer and Chairman of M Evo Global Acquisition Corp II, a SPAC that closed its IPO
on February 2, 2026. Mr.Silver currently is the Managing Director of Evolution Capital Pty Ltd (Evolution Capital),
an Australian corporate advisory firm specializing in corporate finance and institutional sales and trading, which he founded in 2016.
At Evolution Capital he has led numerous public and private transactions across a wide range of sectors, including technology, media,
energy, natural resources, and industrial sectors. Mr. Silver has also served as a director at LTO Capital Pty Ltd, since 2012. Prior
to founding Evolution Capital, Stephen was a founding director at Jett*Capital Advisors, LLC.*and senior investment banker
at Casimir Capital, L.P. in NewYork from 2013 to 2016 and 2011 to 2013, respectively. Both firms specialized in corporate finance
in the natural resources sector. Mr.Silver holds a Bachelor of Commerce degree from the University of Western Australia and has
completed executive education programs in corporate finance and investment management. We believe that Mr.Silver is well-qualified
to serve as our chief executive officer due his deep transaction experience and having access to a global network of institutional relationships
across the capital markets and private equity industries.
**
*Arthur
Chen* serves as our Chief Financial Officer (appointed in June, 2025). Mr. Chen is also the Chief Financial Officer of M Evo Global
Acquisition Corp II, a SPAC that closed its IPO on February 2, 2026. Mr.Chen brings 25years of financial leadership experience
in multinational mining companies and advisory services practices. Since 2022, he has been providing financial advisory services to mining
and financial companies as an independent financial consultant. In July2021, Mr.Chen was appointed as the Chief Accounting
Officer at Deepgreen Metals Inc. In September2021, The Metals Company Inc., formerly known as Sustainable Opportunities Acquisition
Corporation, a special purpose acquisition company, completed its business combination with Deepgreen Metals Inc. Mr.Chen continued
as the Chief Accounting Officer for The Metals Company Inc. until November2021. Previously, Mr.Chen held Corporate Controller
roles at several multinational mining companies with gold producing assets and/or development stage projects, including Teranga Gold
Corporation from 2016 through June, 2021. Prior to that, he was the Corporate Controller for Alloycorp Mining Inc. from 2014 to 2016,
New Gold Inc. from 2008 to 2013, and Central Sun Mining Inc. from 2006 to 2008, where his duties spanned external reporting, cost accounting,
budgeting, treasury, tax, risk and internal controls, and financial systems. Mr.Chen completed articling requirements for his Canadian
Chartered Professional Accountant designation at Ernst& Young LLP.He also holds a Bachelor of Commerce degree in Accounting
from York University and Bachelor of Arts degree in Economics from the University of Toronto. We believe that Mr.Chen is well-qualified
to serve as our chief financial officer due to his extensive financial accounting experience, particularly in the mining and natural
resources industry.
**
*Ashley
Elizabeth Zumwalt-Forbes* serves as our Chief Operating Officer and director (appointed in June, 2025). Ms. Zumwalt-Forbes is
also the Chief Operating Officer and a Director of M Evo Global Acquisition Corp II, a SPAC that closed its IPO on February 2, 2026.
Ms. Zumwalt-Forbes is a petroleum engineer with thirteenyears experience in acquiring, financing, and developing both greenfield
and brownfield natural resources projects around the world. Ms. Zumwalt-Forbes currently serves as Principal at Smoketree Resources LLC,
which she founded in January2025, and as Non-Resident Fellow at Rice Universitys Baker Institute Center for Energy Studies.
Prior to founding Smoketree Resources, Ms. Zumwalt-Forbes served as the UnitedStates Deputy Director for Batteries and Critical
Materials within the Department of Energy from January2024 through January2025. Ms. Zumwalt-Forbes served as Senior Advisor
to Metals Acquisition Corp., a SPAC, from August 2022 through December2023. Concurrently, Ms. Zumwalt-Forbes served as a founder
and director from May 2018 through June2023 in the following companies: Co-Founder and President of Black Mountain Metals LLC,
a private battery metals mining company established in 2018, Co-Founder and President of Black Mountain Exploration LLC, a private natural
gas company established in 2019, and Co-Founder and Chief Executive Officer of Black Mountain CarbonLock LLC, a private carbon negative
company established in 2021. Ms. Zumwalt-Forbes also served as Executive Director of REECycle, Inc., a private rare earth recycling company,
from January2022 to July2023, and was an angel investor at New Enterprise Associates via NEA Angel FundI, LP from July2022
to November2023. Ms. Zumwalt-Forbes served on the Strategic Advisory Board for Hennessy Capital Investment Corp.V, the groups
fifth SPAC (NASDAQ:HCICU) from January2021 to January2023. Ms. Zumwalt-Forbes was Co-Founder and President and board
member of Lynncrest Holdings LLC from 2012 through December2024 and currently serves on the Strategic Advisory Board for TCUs
Energy Institute and Oklahoma Universitys School of Petroleum Engineering. Prior to joining Black Mountain in 2017, Ms. Zumwalt-Forbes
attended Harvard Business School from 2015 to 2017. Prior to that, Ms. Zumwalt-Forbes worked in several Lead Project Engineering roles
from July2012 to July2015 at ExxonMobil Corporation and its subsidiary XTO Energy Inc, managing drilling, completions, and
planning aspects of international shale exploration. Ms. Zumwalt-Forbes graduated summa cum laude from the University of Oklahoma with
a B.S. in Petroleum Engineering, holds a Masters in Legal Studies focused on Energy Law from the University of Oklahoma, and holds an
MBA from Harvard Business School. We believe that Ms. Zumwalt-Forbes is well-qualified to serve as our chief operating officer and director
due to her deep experience in financing and developing both greenfield and brownfield natural resources projects around the world.
**
70
**
*Matthew
Langsford* is an independent director of the Company. Mr.Langsford is a seasoned investment professional with over a decade
of experience in portfolio management, investment strategy, and capital markets. He currently serves as a Portfolio Manager at Terra
Capital Holdings Pty Ltd, an Australian investment firm focused on the natural resources sector. Since joining Terra Capital in 2013,
Mr.Langsford has played a key role in investment decision-making, capital raising, and the ongoing management of listed and unlisted
equity portfolios. At Terra Capital, he is actively involved in identifying high-conviction opportunities, conducting in-depth financial
and sector analysis, and engaging with company management teams to drive long-term value. He has also contributed to numerous capital
raising initiatives, helping growth-stage companies access institutional funding through public and private markets. Prior to his current
role, Mr.Langsford spent threeyears at Ernst& Young in Transaction Advisory Services, where he advised on merger
and acquisition transactions and corporate valuations. He holds a Bachelor of Commerce (Accounting and Finance) from Curtin University,
New Zealand, and a Graduate Diploma in Chartered Accounting from Chartered Accountants Australia and New Zealand. We believe that Mr.Langsford
will be well qualified to be a director of the Company because he brings together deep analytical expertise, transaction experience,
and a strong network across Australias capital markets ecosystem.
**
*Erez
Ichilov* is an independent director of the Company. Mr.Ichilov is NewYork City-based and focused mainly on critical
minerals. Mr. Ichilov is also a Director of M Evo Global Acquisition Corp II, a SPAC that closed its IPO on February 2, 2026. Since January
of 2024, he has acted as a consultant through his newly formed company, Cedrus Arbor LLC, where he serves as the sole Manager. He acts
as a consultant, advisor, investor and director to various mining, metals and physical commodities companies, both listed and private
companies, and has a strong legal and financial background. From 2013 2023 Mr.Ichilov served as Managing Director
of Traxys Projects LP, the investments and business development arm of the Traxys Group (a prominent global physical commodities trading
house), where he drove direct and pooled investments as well as commercial agreements and co-managed the Pallinghurst-Traxys Battery
Materials joint venture. Through his career, Mr.Ichilov engaged in complicated negotiations and engagements, structured complex
multi-party transactions involving financing, insurance, logistics and offtake issues, in addition to setting up various tiers of investments
and de-risking mechanisms. The role required extensive travel around the world, engaging with counterparties, regulators, government
and local authorities, in addition to meetings with financial institutions, and speaking often in public, representing the group in international
forums and conferences. Prior to that, Erez spent fouryears (2008-2012) as the Deputy Chief Executive Officer Corporate
Development (and initially Acting Chief Financial Officer) of the Ferro-Nickel Group Cunico Resources N.V, then a prominent global and
integratedmines to metalproducer of refined Ferronickel, producing over 30,000 tonnes per annum
of Nickel content with 3,000 employees and two smelters in the Balkans. Cunico had mines in three continents and was selling its products
to major stainless-steel companies globally. Mr.Ichilov oversaw strategic planning, business and corporate development, joint ventures
and merger and acquisition transactions. Mr.Ichilov also managed certain non-factory units and oversaw their activities (including
corporate and trade offices in Dubai and Amsterdam), global procurement of nickel ore feed and energetics, international shipping and
logistics, legal activities, insurance, intellectual property and branding. Mr.Ichilov holds a law degree (LLB) and a Master of
Business Administration (MBA) from Tel Aviv University. We believe that Mr.Ichilov will be well qualified to be a director of the
Company because of his extensive experience in structuring complex financing and business transactions on a global basis, in the capacity
of both a professional and company executive role.
*Gavin
Apter* is an independent director of the Company. Mr. Apter is an international finance professional with extensive
experience in capital markets, institutional investor engagement, and strategic advisory across the natural resources, commodities,
and broader equities sectors. Mr. Apter is the founder of Loyalsnap, Inc., a technology company serving more than 5,000 fitness and
wellness businesses globally. Under his leadership since 2015, Loyalsnap has grown into a leading CRM and automation platform,
developing sophisticated engagement and retention solutions for high-volume, membership-driven businesses. Mr. Apter has spent more
than a decade advising, financing, and evaluating companies across multiple geographies, followed by founding and scaling a
successful technology firm. Mr. Apter began his career in Sydney in the Investment Banking Division of Goldman Sachs from 2005 to
2007, where he supported capital raising, M&A advisory, and strategic transactions for clients across metals, mining, energy,
and diversified industries. He transitioned to Goldman Sachs Institutional Hedge Fund Equity Sales team in Sydney from 2007
to 2009, advising leading hedge funds on equities, commodities-linked exposures, and sector-driven investment themes. From 2009 to
2010, Mr. Apter continued in institutional equity sales with Goldman Sachs in Hong Kong, working closely with pan-Asian hedge funds
and long-short investment managers. In 2010, he relocated to New York, serving in the same capacity through 2013, where he advised
US-based hedge funds on global markets, corporate developments, and capital deployment strategies across natural resources and
adjacent sectors. Mr. Apters background spans international capital markets, institutional investor strategy, and the
operational leadership of a high-growth technology company. This combination provides deep insight into corporate governance,
financing pathways, and value creation capabilities well aligned with the needs of listed exploration and natural resources
companies. Mr. Apter holds a Bachelor of Accounting, with Distinction, from the University of Technology, Sydney. We believe he is
well qualified to join the Company as an independent director due to his extensive experience in capital markets, institutional
investor engagement, and strategic advisory across the natural resources, commodities, and broader equities sectors.
71
Family
Relationships
There
are no family relationships among any of our executive officers, directors or director nominees.
Number
and Terms of Office of Officers and Directors
Our
board of directors consists of five members. Prior to the closing of our initial business combination, only holders of our ClassB
ordinary shares will be entitled to vote on the appointment and removal of directors or continuing our company in a jurisdiction outside
the Cayman Islands (including any special resolution required to amend our constitutional documents or to adopt new constitutional documents,
in each case, as a result of our approving a transfer by way of continuation in a jurisdiction outside the Cayman Islands). Holders of
our public shares will not be entitled to vote on such matters during such time. These provisions of our amended and restated memorandum
and articles of association relating to these rights of holders of ClassB ordinary shares may be amended by a special resolution
passed by the affirmative vote of at least 90% (or, where such amendment is proposed in respect of the consummation of our initial business
combination, two-thirds) of the votes cast by such shareholders as, being entitled to do so, vote in person or, where proxies are allowed,
by proxy at the applicable general meeting of the company. In accordance with 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 Nasdaq.
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 officers as it deems appropriate pursuant to our amended and restated memorandum
and articles of association.
Director
Independence
Nasdaq
rules require that a majority of our board of directors be independent within one year of our initial public offering. An independent
director is defined generally as a person who, in the opinion of the companys board of directors, has no material relationship
with the listed company (either directly or as a partner, shareholder or officer of an organization that has a relationship with the
company). Upon the commencement of trading of our units on Nasdaq, we expect to have two independent directors as defined
in Nasdaq rules and applicable SEC rules prior to completion of the IPO. Our board of directors consists of four members and will be
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-yearterm. As permitted by Nasdaq, we intend to phase in compliance
with the Nasdaq director independence requirements within the schedule outlined in the Nasdaq rules, which require that a majority of
the members of our board of directors be independent within one year of listing. In accordance with 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 Nasdaq.
The term of office of the first class of directors, which will consist of Matthew Langsford and Erez Ichilov and will expire at our first
annual general meeting. The term of office of the second class of directors, which will consist of Ashley Zumwalt-Forbes, will expire
at the second annual general meeting. The term of office of the third class of directors, which will consist of Stephen Silver will expire
at the third annual general meeting. Our independent directors will have regularly scheduled meetings at which only independent directors
are present.
Executive
Officer and Director Compensation
Other
than the indirect ownership of founder shares through their purchase of membership interests in the sponsor (3,650,000 founder shares
to Stephen Silver, our Chief Executive Officer and Chairman of the Board, 608,333 to Ashley Zumwalt-Forbes, our Chief Operating Officer
and a director, 150,000 founder shares to Arthur Chen, our Chief Financial Officer, 500,000 founder shares to Matthew Langsford and 125,000
founder shares to Erez Ichilov, our independent directors (for an aggregate of 5,033,333 founder shares), all at the same per-share price
that our sponsor purchased such shares, or approximately $0.003 per share), none of our executive officers or directors have received
any cash compensation for services rendered to us as of the date of the prospectus. Other than quarterly audit committee review of such
reimbursements or payments, we do not expect to have any additional controls in place governing our reimbursement or payments to our
directors and executive 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.
We
are not prohibited from paying any fees (including advisory fees), reimbursements or cash payments to our sponsor, officers or directors,
or our or their affiliates, for services rendered to us prior to or in connection with the completion of our initial business combination,
including the following payments, all of which, if made prior to the completion of our initial business combination, will be paid from
funds held outside the trust account or pursuant to permitted withdrawals:
|
| Repayment
of up to an aggregate of $300,000 in loans made to us by our sponsor to cover offering-related
and organizational expenses; |
|
|
| Payment
of consulting, success or finder fees to our officers, independent directors, officers, consultants
or their respective affiliates in connection with and prior to the consummation of our initial
business combination; |
|
72
|
| Payment
of an advisory fee of $420,000 (which fee increases to $480,000 if the underwriters
over-allotment option is exercised in full) to the Sponsor Managing Member for management
consulting and corporate advisory services; |
|
|
| Reimbursement
for any out-of-pocket expenses related to identifying, investigating, negotiating and completing
an initial business combination; and |
|
|
| Repayment
of loans which may be made by our sponsor or an affiliate of our sponsor or certain of our
officers and directors to finance transaction costs in connection with an intended initial
business combination. Up to $1,500,000 of such loans may be convertible into private placement
warrants of the post-business combination entity at a price of $1.00 per warrant at the option
of the lender. Such warrants would be identical to the private placement warrants. Except
for the foregoing, the terms of such loans, if any, have not been determined and no written
agreements exist with respect to such loans. |
|
After
the completion of our initial business combination, directors or 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 fully disclosed to shareholders, to the extent then known, in
the proxy solicitation materials or tender offer materials furnished to our shareholders in connection with a proposed initial 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 initial business combination,
because the directors of the post-combination business will be responsible for determining executive officer and director compensation.
Any
compensation to be paid to our executive 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 managements 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 commencement of trading of our units on Nasdaq, our board of directors will establish two standing committees: an audit committee
and a compensation committee. Subject to phase-in rules, the rules of Nasdaq and Rule10A-3 of the ExchangeAct require that
the audit committee of a listed company be comprised solely of independent directors. Each committee will operate under a charter that
will be approved by our board and will have the composition and responsibilities described below.
Audit
Committee
Our
board of directors established an audit committee of the board of directors. Matthew Langsford, Gavin Apter and Erez Ichilov serve as
the members of our audit committee. Under the Nasdaq listing standards and applicable SEC rules, we are required to have three members
of the audit committee, all of whom must be independent. Messrs. Langsford, Apter and Ichilov are each independent.
Mr.Ichilov
serves as the chairman of the audit committee. Each member of the audit committee is financially literate and our board of directors
has determined that Mr.Ichilov qualifies as an audit committee financial expert as defined in applicable SEC rules.
We
adopted an audit committee charter, which details the principal functions of the audit committee, including:
|
| assisting
board oversight of (1)the integrity of our financial statements, (2)our compliance
with legal and regulatory requirements, (3)our independent registered public accounting
firms qualifications and independence, and (4)the performance of our internal
audit function and independent registered public accounting firm; the appointment, compensation,
retention, replacement, and oversight of the work of the independent registered public accounting
firm and any other independent registered public accounting firm engaged by us; |
|
|
| pre-approving
all audit and non-audit services to be provided by the independent registered public accounting
firm or any other registered public accounting firm engaged by us, and establishing pre-approval
policies and procedures; reviewing and discussing with the independent registered public
accounting firm all relationships the independent registered public accounting firm have
with us in order to evaluate their continued independence; |
|
73
|
| setting
clear policies for audit partner rotation in compliance with applicable laws and regulations;
obtaining and reviewing a report, at least annually, from the independent registered public
accounting firm describing (1)the independent registered public accounting firms
internal quality-control procedures and (2)any material issues raised by the most recent
internal quality-control review, or peer review, of the independent registered public accounting
firm, or by any inquiry or investigation by governmental or professional authorities, within
the preceding fiveyears respecting one or more independent audits carried out by the
firm and any steps taken to deal with such issues; |
|
|
| meeting
to review and discuss our annual audited financial statements and quarterly financial statements
with management and the independent registered public accounting firm, including reviewing
our specific disclosures under Managements Discussion and Analysis of Financial
Condition and Results of Operations; reviewing and approving any related party
transaction required to be disclosed pursuant to Item404 of RegulationS-K promulgated
by the SEC prior to us entering into such transaction; and |
|
|
| reviewing
with management, the independent registered public accounting firm, and our legal advisors,
as appropriate, any legal, regulatory or compliance matters, including any correspondence
with regulators or government agencies and any employee complaints or published reports that
raise material issues regarding our financial statements or accounting policies and any significant
changes in accounting standards or rules promulgated by the Financial Accounting Standards
Board, the SEC or other regulatory authorities. |
|
Compensation
Committee
Our
board of directors established a compensation committee of our board of directors. The members of our compensation committee are Matthew
Langsford, Gavin Apter and Erez Ichilov, and Mr. Apter serves as chair of the compensation committee. Under the Nasdaq listing standards
and applicable SEC rules, we are required to have a compensation committee of at least two members, all of whom must be independent.
Messrs.Langsford, Apter and Ichilov are each independent. We adopted a compensation committee charter, which details 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 officers compensation, evaluating our chief executive officers performance
in light of such goals and objectives and determining and approving the remuneration (if
any) of our chief executive officers based on such evaluation; |
|
|
| reviewing
and making recommendations to our board of directors with respect to the compensation, and
any incentive compensation and equity based plans that are subject to board approval of all
of our other officers; |
|
|
| reviewing
our executive compensation policies and plans; |
|
|
| implementing
and administering our incentive compensation equity-based remuneration plans; |
|
|
| assisting
management in complying with our proxy statement and annual report disclosure requirements; |
|
|
| approving
all special perquisites, special cash payments and other special compensation and benefit
arrangements for our executive 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 also provides 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 Nasdaq and the SEC.
Clawback
Policy
We
adopted a compensation recovery policy that is compliant with Nasdaq listing rules as required by the Dodd-Frank Act.
74
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 Rule5605(e)(2)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 are Matthew Langsford
and Erez Ichilov. In accordance with Rule5605(e)(1)(A)of the Nasdaq rules, all such directors are independent. As there is
no standing nominating committee, we do not have a nominating committee charter in place.
The
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 appointment at the next annual general meeting (or, if applicable, an extraordinary general meeting).
Our shareholders that wish to nominate a director for appointment to our board of directors should follow the procedures set forth in
our amended and restated memorandum and articles of association.
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 educational background, diversity of
professional experience, knowledge of our business, integrity, professional reputation, independence, wisdom, and the ability to represent
the best interests of our shareholders. 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.
Compensation
Committee Interlocks and Insider Participation
None
of our executive 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 executive officers serving on our board of directors.
Code
of Ethics
We
have adopted a Code of Ethics applicable to our directors, officers and employees. We have filed a copy of our Code of Ethics as an exhibit
to the registration statement. You will be able to review this document by accessing our public filings at the SECs website at
*www.sec.gov*. In addition, a copy of the Code of Ethics and the charters of the committees of our board of directors will be provided
without charge upon request from us. If we make any amendments to our Code of Ethics other than technical, administrative or other non-substantive
amendments, or grant any waiver, including any implicit waiver, from a provision of the Code of Ethics applicable to our principal executive
officer, principal financial officer, principal accounting officer or controller or persons performing similar functions requiring disclosure
under applicable SEC or Nasdaq rules, we will disclose the nature of such amendment or waiver on our website. The information included
on our website is not incorporated by reference into this FormS-1 or in any other report or document we file with the SEC, and
any references to our website are intended to be inactive textual references only.
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; |
|
|
| duty
to not improperly fetter the exercise of future discretion; |
|
|
| duty
to exercise authority for the purpose for which it is conferred and a 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. |
|
75
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 at the expense of the company. However, in some instances what would otherwise
be a breach of this duty can be forgiven 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. Each of our officers and directors presently has, and any of them in the future may have
additional, fiduciary, contractual or other obligations or duties to one or more other entities pursuant to which such officer or director
is or will be required to present a business combination opportunity to such entities. 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, he or she will honor his or her fiduciary or contractual obligations to present such business combination opportunity
to such other entity, subject to their fiduciary duties under Cayman Islands law. Our amended and restated memorandum and articles of
association provide that, to the fullest extent permitted by law: (i)no individual serving as a director or an officer, among other
persons, shall have any duty, except and 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 (a)may be a corporate opportunity for
any director or officer, on the one hand, and us, on the other or (b)the presentation of which would breach an existing legal obligation
of a director or officer to any other entity.
Below
is a table summarizing the entities to which our officers and directors currently have fiduciary duties or contractual obligations:
|
Individual(1) |
|
Entity |
|
Entitys
Business |
|
Affiliation | |
|
Stephen Silver |
|
Evolution Capital Pty Ltd |
|
Australian Corporate Advisory Firm |
|
Managing Director | |
|
|
|
LTO Capital Pty Ltd |
|
|
|
Director | |
|
|
|
M Evo Acquisition Corp II |
|
SPAC |
|
Chief Executive Officer and Chairman | |
|
|
|
|
|
|
|
| |
|
Arthur Chen |
|
Financial Consultant |
|
Financial Consulting |
|
Financial Consultant | |
|
|
|
M Evo Acquisition Corp II |
|
SPAC |
|
Chief Financial Officer | |
|
|
|
|
|
|
|
| |
|
Ashley Zumwalt-Forbes |
|
Smoketree Resources LLC |
|
InvestmentFamily Office |
|
Principal and Director | |
|
|
|
M Evo Acquisition Corp II |
|
SPAC |
|
Chief Operating Officer and Director | |
|
|
|
Rice University Baker Institute Center for Energy Studies |
|
University |
|
Non-Resident Fellow | |
|
|
|
|
|
|
|
| |
|
Matthew Langsford |
|
Terra Capital Holdings Pty Ltd |
|
Investment Management Firm |
|
Portfolio Manager and Director | |
|
|
|
|
|
|
|
| |
|
Erez Ichilov |
|
Cedrus Arbor LLC |
|
Business Development Consulting |
|
Principal and Managing Member | |
|
|
|
M Evo Acquisition Corp II |
|
SPAC |
|
Director | |
|
|
|
Cotec Holdings Limited |
|
Public Canadian Company |
|
Director
Compensation Committee Member
Investment Committee Member | |
|
|
|
CLN Global Inc. (formerly Clean Metals Recycling N.A
Inc.) |
|
Private Metals & Plastics Recycling Company |
|
Director | |
|
|
|
Lacero Solutions Inc. |
|
Private Airbags Recycling Company |
|
Director | |
|
|
|
Luna Energy Limited |
|
Private Mining Company |
|
Director | |
|
|
|
Mn 48 (Pty) Limited |
|
Private Mining Company |
|
Director | |
|
|
|
|
|
|
|
| |
|
Gavin Apter |
|
Loyalsnap, Inc. |
|
Technology Company |
|
Founder | |
|
(1) | Each
individual listed has a fiduciary duty with respect to each of the listed entities opposite
from his/her name. |
|
In
addition, our sponsor and our officers and directors may sponsor or form other special purpose acquisition companies similar to ours
or may pursue other business or investment ventures during the period in which we are seeking an initial business combination. As a result,
our sponsor, officers and directors could have conflicts of interest in determining whether to present business combination opportunities
to us or to any other special purpose acquisition company with which they may become involved. Any such companies, businesses or investments
may present additional conflicts of interest in pursuing an initial business combination target.
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 is engaged in several other business endeavors for which he may be entitled
to substantial compensation, and our officers are not obligated to contribute any specific
number ofhours per week to our affairs. |
|
76
|
| Our
initial shareholders purchased founder shares prior to the date of the prospectus and purchased
private placement warrants in a transaction that closed simultaneously with the closing of
the IPO. Our sponsor, officers and directors have entered into a letter agreement with us,
pursuant to which they have agreed to waive their redemption rights with respect to their
founder shares and public shares in connection with the completion of our initial business
combination. Additionally, our sponsor, officers and directors have agreed to waive their
rights to liquidating distributions from the trust account with respect to their founder
shares if we fail to complete our initial business combination within the prescribed time
frame, although they will be entitled to liquidating distributions from assets outside the
trust account. If we do not complete our initial business combination within the prescribed
time frame, the private placement warrants will expire worthless. Furthermore, our sponsor,
officers and directors have agreed not to transfer, assign or sell any of their founder shares
and any ClassA ordinary shares issuable upon conversion thereof until the earlier to
occur of: (i)one year after the completion of our initial business combination and
(ii)the date following the completion of our initial business combination on which
we complete a liquidation, merger, share exchange or other similar transaction that results
in all of our shareholders having the right to exchange their ordinary shares for cash, securities
or other property. Notwithstanding the foregoing, if the last sale price of our ClassA
ordinary shares equals or exceeds $12.00 per share (as adjusted for share sub-divisions,
share capitalizations, reorganizations, recapitalizations and the like) for any 20tradingdays
within any 30-tradingday period commencing at least 150days after our initial
business combination, the founder shares will be released from the lockup. The private placement
warrants (including the ClassA ordinary shares issuable upon exercise of the private
placement warrants) will not be transferable until 30days following the completion
of our initial business combination. Because each of our officers 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 was
included by a target business as a condition to any agreement with respect to our initial
business combination. |
|
|
| Our
sponsor paid only a nominal aggregate purchase price of $25,000 for the founder shares, or
approximately $0.003 per share. Accordingly, our management team, which owns interests in
our sponsor, may be more willing to pursue a business combination with a riskier or less-established
target business than would be the case if our sponsor had paid the same per share price for
the founder shares as our public shareholders paid for their public shares. |
|
|
| Our
sponsor had agreed to loan us up to $300,000 to be used for a portion of the expenses of
the IPO. In connection with the offering or in the event our sponsor or members of our management
team provide additional loans to us to finance transaction costs and/or incur expenses on
our behalf in connection with an initial business combination, such persons 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 as such loans may not be repaid
and/or such expenses may not be reimbursed unless we consummate such business combination. |
|
|
| Our
officers, independent directors, or their affiliates may be paid consulting, success, or
finder fees upon the successful completion of our initial business combination as described
under Limited payments to insiders. |
|
|
| In
the event that we seek to complete our initial business combination with a company that is
affiliated with our sponsor, officers or directors (or their respective affiliates or related
entities), we, or a committee of independent directors, will obtain an opinion from an independent
investment banking firm which is a member of FINRA or a valuation or appraisal firm stating
that the consideration to be paid by us in such an initial business combination is fair to
our company from a financial point of view. We are not required to obtain such an opinion
in any other context. |
|
Members
of our management team may directly or indirectly own our founders shares, ClassA ordinary shares and/or private placement warrants
following the IPO, 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. In particular, because the founder shares were purchased at approximately
$0.003 per share, the holders of our founder shares (including members of our management team that directly or indirectly own founder
shares) could make a substantial profit after our initial business combination even if our public shareholders lose money on their investment
as a result of a decrease in the post-combination value of their ordinary shares (after accounting for any adjustments in connection
with an exchange or other transaction contemplated by the business combination).
We
are not prohibited from pursuing an initial business combination with a company that is affiliated with our sponsor, officers, directors
(or their respective affiliates or related entities). In the event that we seek to complete our initial business combination with a company
that is affiliated (as defined in our amended and restated memorandum and articles of association) with our sponsor, officers, directors
(or their respective affiliates or related entities), we, or a committee of independent directors, will obtain an opinion from an independent
investment banking firm which is a member of FINRA or a valuation or appraisal firm stating that the consideration to be paid by us in
such an initial business combination is fair to our company from a financial point of view. We are not required to obtain such an opinion
in any other context.
77
Prior
to or in connection with the completion of our initial business combination, there may be payment by the company to our officers, independent
directors, or their respective affiliates, of a finders fee, advisory fee, consulting fee or success fee for any services they
render in order to effectuate the completion of our initial business, which, if made prior to the completion of our initial business
combination, will be paid from funds held outside the trust account, including permitted withdrawals from the trust account.
We
cannot assure you that any of the above-mentioned conflicts will be resolved in our favor.
In
the event that we submit our initial business combination to our public shareholders for a vote, our sponsor, officers and directors
have agreed to vote their founder shares, and they and the other members of our management team have agreed to vote their founder shares
and any shares purchased during or after the offering in favor of our initial business combination (including any proposals recommended
by the Companys board of directors in connection with such business combination) (except with respect to any public shares which
may not be voted in favor of approving the business combination transaction in accordance with the requirements of Rule14e-5 under
the ExchangeAct and any SEC interpretations or guidance relating thereto).
Limitation
on Liability and Indemnification of Officers and Directors
Cayman
Islands law does not limit the extent to which a companys 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, actual fraud or the consequences of committing a
crime. Our amended and restated memorandum and articles of association will provide that our officers and directors will be indemnified
by us to the fullest extent permitted by law, as it now exists or may in the future be amended, including for any liability incurred
in their capacities as such, except through their own actual fraud, willful default or willful neglect. 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, and any persons who may become officers or directors prior to the initial business combination will
agree, to waive any right, title, interest or claim of any kind in or to any monies in the trust account, and 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 shareholders
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.
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.
Item11.
EXECUTIVE COMPENSATION
Executive
Officers and Director Compensation
No
executive officer has received any cash compensation for services rendered to us. No compensation of any kind, including finders, consulting
or other similar fees, will be paid to any of our existing shareholders, including our directors, or any of their respective affiliates,
prior to, or for any services they render in order to effectuate, the consummation of a business combination. However, such individuals
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. There is no limit on the amount of these out-of-pocket
expenses and there will be no review of the reasonableness of the expenses by anyone other than our board of directors and audit committee,
which includes persons who may seek reimbursement, or a court of competent jurisdiction if such reimbursement is challenged.
78
Clawback
Policy
As
required by the NASDAQ rules, our Board has adopted a clawback policy (the Clawback Policy) permitting the Company to seek
the recovery of incentive compensation received by any the Companys current and former executive officers (as determined by the
Compensation Committee of the Companys Board in accordance with Section 10D of the Exchange Act and the rules of the Nasdaq Global
Market) and such other senior executives/employees who may from time to time be deemed subject to the Clawback Policy by the Compensation
Committee (collectively, the Covered Executives) during the three completed fiscal years immediately preceding the date
on which the Company is required to prepare an accounting restatement of its financial statements due to the Companys material
noncompliance with any financial reporting requirement under the securities laws. The amount to be recovered will be the excess of the
incentive compensation paid to the Covered Executive based on the erroneous data over the incentive compensation that would have been
paid to the Covered Executive had it been based on the restated results, as determined by the Compensation Committee. If the Compensation
Committee cannot determine the amount of excess incentive compensation received by the Covered Executive directly from the information
in the accounting restatement, then it will make its determination based on a reasonable estimate of the effect of the accounting restatement.
Because we do not anticipate paying any cash compensation to our prospective Covered Executives, we do not anticipate paying any incentive
compensation which could become subject to clawback under the Clawback Policy.
Item12.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED SHAREHOLDER MATTERS
The
following table sets forth information regarding the beneficial ownership of our ordinary shares as of March 3, 2026 by:
|
| each
person known by us to be the beneficial owner of more than 5% of our outstanding Ordinary
Shares; | |
|
| each
of our executive officers and directors that beneficially owns our Ordinary Shares; and | |
|
| all
our executive officers and director as a group. | |
The
following table is based on 32,000,000 Ordinary Shares issued and outstanding as of December 31, 2025, of which 24,000,000 were Class
A Ordinary Shares and 8,000,000 were Class B Ordinary Shares. 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.
|
| |
Numberof
ClassA Ordinary Shares | | |
Approximate
Percentageof Issued and Outstanding ClassA Ordinary Shares | | |
Numberof
ClassB Ordinary Shares | | |
Approximate
Percentageof Issued and Outstanding ClassB Ordinary Shares | | |
|
NameandAddressofBeneficial
Owner(1) | |
Beneficially
Owned | | |
Before
Offering | | |
After
Offering | | |
Beneficially
Owned(2) | | |
Before
Offering | | |
After
Offering | | |
|
Evolution
Sponsor Holdings LLC(3) | |
| | | |
| | | |
| | | |
| 8,000,000 | | |
| 100 | % | |
| 25 | % | |
|
Stephen
Silver(3)(4) | |
| | | |
| | | |
| | | |
| 8,000,000 | | |
| 100 | % | |
| 25 | % | |
|
Arthur
Kuan-Lin Chen(4) | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
|
Ashley
Elizabeth Zumwalt-Forbes(4) | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
|
Matthew
Ryan Langsford(5) | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
|
Erez
Ichilov(4) | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
|
Gavin
Apter(4) | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
|
All
officers and directors as a group (five persons) | |
| | | |
| | | |
| | | |
| 8,000,000 | | |
| 100 | % | |
| 25 | % | |
|
(1) | Unless
otherwise noted, the business address of each of our shareholders is c/o Evolution Global
Acquisition Corp, 2727 LBJ Freeway Suite 1010, Farmers Branch, TX75234. |
|
|
(2) | Interests
shown consist solely of founder shares, classified as ClassB ordinary shares. Such
shares will automatically convert into ClassA ordinary shares immediately prior to,
concurrently with or immediately following the consummation of our initial business combination
or at any time prior thereto at the option of the holder on a one-for-one basis, subject
to adjustment, as described in the section entitled Description of Securities. |
|
|
(3) | Evolution
Sponsor Holdings LLC, our sponsor, is the record holder of such shares. Stephen Silver, our
Chief Executive Officer and Chairman, is the managing member of Evolution Capital Pty Ltd,
the Sponsor Managing Member.Accordingly, Mr.Silver may be deemed to have or share
beneficial ownership of the ClassB ordinary shares held directly by our sponsor. Mr.Silver
disclaims such beneficial ownership other than to the extent of his pecuniary interest. |
|
|
(4) | Our
officers and directors have indirect ownership interests in 5,033,333 ClassB ordinary
shares through their membership interests in the sponsor as follows: 500,000 Class B ordinary
shares to Matthew Langsford and 125,000 Class B ordinary shares to Erez Ichilov, our independent
director nominees; 3,650,000 Class B ordinary shares to Stephen Silver, our Chief Executive
Officer and Chairman of the Board; 608,333 Class B ordinary shares to Ashley Zumwalt-Forbes,
our Chief Operating Officer and Director; and 150,000 Class B ordinary shares to Arthur Chen,
our Chief Financial Officer, which will be distributed upon the completion of the Companys
initial business combination. |
|
79
Immediately
after the IPO, our initial shareholders beneficially own 25% of the then issued and outstanding ordinary shares (assuming they do not
purchase any units in the IPO). Prior to the closing of our initial business combination, only holders of our ClassB ordinary shares
will be entitled to vote on the appointment and removal of directors or continuing our company in a jurisdiction outside the Cayman Islands
(including any special resolution required to amend our constitutional documents or to adopt new constitutional documents, in each case,
as a result of our approving a transfer by way of continuation in a jurisdiction outside the Cayman Islands). Because of this ownership
block, our initial shareholders may be able to effectively influence the outcome of all other matters requiring approval by our shareholders,
including the appointment of directors or continuing the company in a jurisdiction outside the Cayman Islands (including any special
resolution required to amend our constitutional documents or to adopt new constitutional documents, in each case, as a result of our
approving a transfer by way of continuation in a jurisdiction outside the Cayman Islands), and approval of significant corporate transactions
including our initial business combination.
Our
sponsor and the underwriters have purchased an aggregate of 6,800,000 private placement warrants, each exercisable to purchase one ClassA
ordinary share at $11.50 per share, at a price of $1.00 per warrant, or $6,800,000 in the aggregate, in a private placement that closed
simultaneously with the closing of the IPO. Of those 6,800,000 private placement warrants, our sponsor has purchased 4,400,000 private
placement warrants and the underwriters have purchased 2,400,000 private placement warrants consistent with their pro rata allocation
of the base offering.
The
private placement warrants are identical to the warrants sold in the IPO except that the private placement warrants (i)will not
be redeemable by us, (ii)may not (including the ClassA ordinary shares issuable upon exercise of these warrants), subject
to certain limited exceptions, be transferred, assigned or sold by the holders until 30days after the completion of our initial
business combination, (iii)may be exercised by the holders on a cashless basis, (iv)will be entitled to registration rights
and (v)with respect to private placement warrants held by the underwriters and/or their respective designees, will not be exercisable
more than fiveyears from the commencement of sales in the IPO in accordance with FINRA Rule5110(g)(8). A portion of the purchase
price of the private placement warrants were added to the proceeds from the IPO to be held in the trust account such that at the time
of closing of the IPO $240,000,000 were held in the trust account. If we do not complete our initial business combination within the
completion window, the private placement warrants will expire worthless. The private placement warrants are subject to the transfer restrictions
described below.
Evolution
Sponsor Holdings LLC, our sponsor, and our officers and directors are deemed to be our promoters as such term is defined
under the federal securities laws. Please see *Certain Relationships and Related Party Transactions* for additional
information regarding our relationships with our promoters.
Restrictions
on Transfers of Founder Shares and Private Placement Warrants
The
founder shares and private placement warrants and any ClassA ordinary shares issued upon conversion or exercise thereof are each
subject to transfer restrictions pursuant to lock-up provisions in the agreements entered into by our sponsor and management team. Those
lock-up provisions provide that such securities are not transferable or saleable (i)in the case of the founder shares, until the
earlier of (A)one year after the completion of our initial business combination or earlier if, subsequent to our initial business
combination, the last sale price of the ClassA ordinary shares equals or exceeds $12.00 per share (as adjusted for share sub-divisions,
share capitalizations, reorganizations, recapitalizations and the like) for any 20tradingdays within any 30-tradingday
period commencing at least 150days after our initial business combination and (B)the date following the completion of our
initial business combination on which we complete a liquidation, merger, share exchange or other similar transaction that results in
all of our shareholders having the right to exchange their ClassA ordinary shares for cash, securities or other property and (ii)in
the case of the private placement warrants and any ClassA ordinary shares issuable upon conversion or exercise thereof, until 30days
after the completion of our initial business combination except in each case (a)to our or the underwriters officers, directors,
advisors or consultants, any affiliate or family member of any of our or the underwriters officers, directors, advisors or consultants,
any members or partners of the sponsor or their affiliates and funds and accounts advised by such members or partners, any affiliates
of the sponsor, or any employees of such affiliates, (b)in the case of an individual, as a gift to such persons immediate
family or to a trust, the beneficiary of which is a member of such persons 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 such person;
(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, in connection with an extension of the completion window or
in connection with the consummation of a business combination at prices no greater than the price at which the shares or warrants were
originally purchased; (f)distributions from our sponsor or the underwriters to their respective members, partners or shareholders
pursuant to our sponsors or the underwriters limited liability company agreement or other charter documents; (g)by
virtue of the laws of the Cayman Islands or our sponsors limited liability company agreement upon dissolution of our sponsor or
upon dissolution of the underwriters, (h)in the event of our liquidation prior to our consummation of our initial business combination;
(i)in the event that, subsequent to our consummation of an initial business combination, we complete a liquidation, merger, share
exchange or other similar transaction which results in all of our shareholders having the right to exchange their ClassA ordinary
shares for cash, securities or other property or (j)to a nominee or custodian of a person or entity to whom a transfer would be
permissible under clauses (a)through (g); provided, however, that in the case of clauses (a)through (g)and clause (j)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.
80
Registration
Rights
The
holders of the (i)founder shares, which were issued in a private placement prior to the closing of the IPO, (ii)private
placement warrants which were issued in a private placement simultaneously with the closing of the IPO and the ClassA ordinary
shares underlying such private placement warrants and (iii)private placement warrants that may be issued upon conversion of
working capital loans will have registration rights to require us to register a sale of any of our securities held by them and any
other securities of the company acquired by them prior to the consummation of our initial business combination pursuant to a
registration rights agreement to be signed on the effective date of the IPO. Pursuant to the registration rights agreement and
assuming the underwriters exercise their over-allotment option in full and $1,500,000 of working capital loans are converted into
private placement warrants, we have registered up to 15,200,000 ClassA ordinary shares and 8,700,000warrants. The number
of ClassA ordinary shares includes (i)8,000,000 ClassA ordinary shares to be issued upon conversion of the founder
shares, (ii) 6,800,000 ClassA ordinary shares underlying the private placement warrants and (iii)1,500,000 ClassA
ordinary shares underlying the private placement warrants issued upon conversion of working capital loans. The number of warrants
includes up to 6,800,000 private placement warrants and 1,500,000 private placement warrants issued upon the conversion of working
capital loans. 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 our initial business combination. Notwithstanding anything to the
contrary, the underwriters may only make a demand on one occasion and only during the five-year period beginning on the effective
date of the registration statement. In addition, underwriters may participate in a piggy-back registration only during
the seven-year period beginning on the effective date of the registration statement.
Item13.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE
On
June30, 2025, our sponsor paid $25,000, or approximately $0.004 per share, to cover certain of our offering costs in exchange for
6,666,667 founder shares (the Company initially issued 100 class B ordinary shares to the sponsor for a consideration of $1.00 on June
27, 2025, and subsequently issued 5,749,000 class B ordinary shares to the sponsor for a consideration of $24,999 on June 30, 2025).
On November 10, 2025, the Company issued 1,333,333 class B ordinary shares to our sponsor in a share capitalization, resulting in the
total Class B ordinary shares increasing to 8,000,000 class B ordinary shares. The number of founder shares issued and outstanding was
determined based on the expectation that the total size of the IPO would be a maximum of 24,000,000units and therefore that such
founder shares would represent 25% of the issued and outstanding shares after the IPO.
Our
sponsor and the underwriters have purchased an aggregate of 6,800,000 private placement warrants each exercisable to purchase one ClassA
ordinary share at $11.50 per share, at a price of $1.00 per warrant, or $6,800,000 in the aggregate, in a private placement that closed
simultaneously with the closing of the IPO. Of those 6,800,000 private placement warrants, our sponsor has purchased 4,400,000 private
placement warrants and the underwriters have purchased 2,400,000 private placement warrants consistent with their pro rata allocation
of the base offering. The private placement warrants are identical to the warrants sold in the IPO except that the private placement
warrants (i)will not be redeemable by us, (ii)may not (including the ClassA ordinary shares issuable upon exercise
of these warrants), subject to certain limited exceptions, be transferred, assigned or sold by the holders until 30days after the
completion of our initial business combination, (iii)may be exercised by the holders on a cashless basis, (iv)will be entitled
to registration rights and (v)with respect to private placement warrants held by the underwriters and/or their respective designees,
will not be exercisable more than fiveyears from the commencement of sales in the IPO in accordance with FINRA Rule5110(g)(8).
81
The
interests of the members of our sponsor are denominated in two classes of membership interest units: (i) class A membership units that
will represent an interest in founder shares held by our sponsor, and (ii) class B membership units that will represent an interest in
the private placement warrants held by our sponsor. All members of our sponsor, including any non-managing sponsor investor that may
join our sponsor concurrently with the IPO will hold classes of membership units representing their proportional interest in the founder
shares and private placement warrants. While the non-managing sponsor investors would have an interest in our completion of an initial
business combination, pursuant to an agreement of all members of our sponsor, the management and control of our sponsor is vested exclusively
in the managing member of our sponsor, which is Stephen Silver, the managing member of our Sponsor Managing Member, our Chief Executive
Officer. As a result of this management structure, non-managing sponsor investors will have no right to control our sponsor, or participate
in any decision regarding the disposal of any security held by our sponsor, or otherwise.
Prior
to or in connection with the completion of our initial business combination, there may be payment by the company to our officers, independent
directors, or their respective affiliates, of a finders fee, advisory fee, consulting fee or success fee for any services they
render in order to effectuate the completion of our initial business, which, if made prior to the completion of our initial business
combination, will be paid from funds held outside the trust account, including permitted withdrawals from the trust account.
Our
sponsor is providing office space and administrative support services to us at no cost. In addition, prior to the closing of the IPO,
our sponsor may loan us funds in an aggregate amount of up to $300,000 to be used for a portion of the expenses of the IPO. These loans
would be non-interest bearing, unsecured and are due at the earlier of March31, 2026 and the closing of the IPO.
In
order to 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 on a non-interest basis. If
we complete an initial business combination, we would repay such loaned amounts. In the event that the initial business combination does
not close, we may use amounts 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 may be convertible into private placement warrants of the post business combination
entity at a price of $1.00 per warrant at the option of the lender. Such warrants would be identical to the private placement warrants.
Except as set forth above, the terms of such loans, if any, 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 an affiliate of our sponsor as we do not believe third parties will be willing to loan such funds and provide a waiver against any
and all rights to seek access to funds in our trust account.
We
may pay a consulting, success or finder fees to our sponsor, officers, directors, or their respective affiliates in connection with the
consummation of our initial business combination. Further, we may engage our sponsor or an affiliate of our sponsor as an advisor or
otherwise in connection with our initial business combination and certain other transactions and pay such person or entity a salary or
fee in an amount that constitutes a market standard for comparable transactions. In addition, these individuals 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, officers, directors or our or their 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.
We
have until the date that is 24months from the closing of the IPO or until such earlier liquidation date as our board of directors
may approve, to consummate our initial business combination. If we anticipate that we may be unable to consummate our initial business
combination within such 24-month period, we may seek shareholder approval to amend our amended and restated memorandum and articles of
association to extend the date by which we must consummate our initial business combination. If we seek shareholder approval for an extension,
holders of public shares will be offered an opportunity to redeem their shares, regardless of whether they abstain, vote for, or against,
the proposed extension, at a per share price, payable in cash, equal to the aggregate amount then on deposit in the trust account, including
interest earned thereon (net of taxes paid or payable) and not previously released to us for permitted withdrawals, divided by the number
of then issued and outstanding public shares, subject to applicable law. There is no limit on the number or length of extensions that
we may seek; however, we do not expect to extend the time period to consummate our initial business combination beyond 36months
from the closing of the IPO. If we determine not to or are unable to extend the time period to consummate our initial business combination
or fail to obtain shareholder approval to extend, our sponsor, management team and other initial shareholders will lose their entire
investment in our founder shares and our private placement warrants, except to the extent they entitle the holders thereof to receive
liquidating distributions from assets outside the trust account. For more information, also see *Risk FactorsRisks
Relating to our SecuritiesSince our sponsor, officers and directors, any other holder of our founder shares, and the
underwriters may lose their entire investment in us if our initial business combination is not completed (other than with respect to
public shares they may acquire during or after the IPO), a conflict of interest may arise in determining whether a particular business
combination target is appropriate for our initial business combination*.
82
Any
of the foregoing payments to our sponsor, repayments of loans from our sponsor or repayments of working capital loans prior to our initial
business combination will be made using funds held outside the trust account.
After
our initial business combination, members of our management team who remain with us may be paid consulting, management or other fees
from the combined company with any and all amounts being fully disclosed to our shareholders, to the extent then known, in the proxy
solicitation or tender offer 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-combination business to determine executive and director
compensation.
We
have entered into a registration rights agreement with respect to the founder shares and private placement warrants, which is described
under the heading *Principal ShareholdersRegistration Rights*.
We
have engaged Evolution Capital Pty Ltd, the Sponsor Managing Member, of which our Chief Executive Officer and Chairman of the Board,
Stephen Silver, is the managing member, to act as a management consulting and corporate advisor in the preparation of corporate strategies,
management support and business plans for us. Pursuant to the agreement, upon the closing of the IPO, we paid an advisory fee of $480,000
to the Sponsor Managing Member for such management consulting and corporate advisory services.
Policy
for Approval of Related Party Transactions
The
audit committee of our board of directors have adopted a policy setting forth the policies and procedures for its review and approval
or ratification of related party transactions. A related party transaction is any consummated or proposed
transaction or series of transactions: (i)in which the company was or is to be a participant; (ii)the amount of which exceeds
(or is reasonably expected to exceed) the lesser of $120,000 or 1% of the average of the companys total assets at year-end for
the prior two completed fiscalyears in the aggregate over the duration of the transaction (without regard to profit or loss); and
(iii)in which a related party had, has or will have a direct or indirect material interest. Related parties
under this policy will include: (i)our directors, nominees for director or officers or any person who has served in such roles
since the beginning of the most recent fiscal year, even if he or she does not currently serve in that role; (ii)any record or
beneficial owner of more than 5% of any class of our voting securities; (iii)any immediate family member of any of the foregoing
if the foregoing person is a natural person; and (iv)any other person who maybe a related person pursuant to Item404
of RegulationS-K under the ExchangeAct. Pursuant to the policy, the audit committee will consider (i)the relevant facts
and circumstances of each related party transaction, including if the transaction is on terms comparable to those that could be obtained
in arms-length dealings with an unrelated third party, (ii)the extent of the related partys interest in the transaction,
(iii)whether the transaction contravenes our code of ethics or other policies, (iv)whether the audit committee believes the
relationship underlying the transaction to be in the best interests of the company and its shareholders and (v)if the related party
is a director or an immediate family member of a director, the effect that the transaction may have on a directors status as an
independent member of the board and on his or her eligibility to serve on the boards committees. Management will present to the
audit committee each proposed related party transaction, including all relevant facts and circumstances relating thereto. Under the policy,
we may consummate related party transactions only if our audit committee approves or ratifies the transaction in accordance with the
guidelines set forth in the policy. The policy does not permit any director or officer to participate in the discussion of, or decision
concerning, a related person transaction in which he or she is the related party.
We
are not prohibited from paying any fees (including advisory fees), reimbursements or cash payments to our sponsor, officers or directors,
or our or their affiliates, for services rendered to us prior to or in connection with the completion of our initial business combination,
including the following payments, all of which, if made prior to the completion of our initial business combination, will be paid from
funds held outside the trust account or pursuant to permitted withdrawals:
|
| Repayment
of up to an aggregate of $300,000 in loans made to us by our sponsor to cover offering-related
and organizational expenses; |
|
|
| Payment
of consulting, success or finder fees to our officers, independent directors, officers, advisors,
consultants or their respective affiliates in connection with and prior to the consummation
of our initial business combination; |
|
83
|
| Reimbursement
for any out-of-pocket expenses related to identifying, investigating, negotiating and completing
an initial business combination; and |
|
|
| Repayment
of loans which may be made by our sponsor or an affiliate of our sponsor or certain of our
officers and directors to finance transaction costs in connection with an intended initial
business combination. Up to $1,500,000 of such loans may be convertible into private placement
warrants of the post-business combination entity at a price of $1.00 per warrant at the option
of the lender. Such warrants would be identical to the private placement warrants. Except
for the foregoing, the terms of such loans, if any, have not been determined and no written
agreements exist with respect to such loans. |
|
Our
audit committee will review on a quarterly basis all payments that were made to our sponsor, officers, directors or our or their affiliates.
Item14.
PRINCIPAL ACCOUNTANT FEES AND SERVICES
The
firm of WithumSmith+Brown acts as our independent registered public accounting firm. The following is a summary of fees paid to Withum
for services rendered.
*Audit
Fees.*During the period from June 26, 2025 (inception) through December 31, 2025, fees for our independent registered public accounting
firm were $150,205, for the services Withum performed in connection with our Initial Public Offering and the audit of our December 31,
2025 financial statements included in this Annual Report on Form 10-K.
*Audit-Related
Fees.* During the period from June 26, 2025 (inception) through December 31, 2025, our independent registered public accounting firm
did not render assurance and related services related to the performance of the audit or review of financial statements.
*Tax
Fees*. During the period from June 26, 2025 (inception) through December 31, 2025, our independent registered public accounting firm
did not render services to us for tax compliance, tax advice and tax planning.
*All
Other Fees*. During the period from June 26, 2025 (inception) through December 31, 2025, there were no fees billed for products and
services provided by our independent registered public accounting firm other than those set forth above.
Pre-Approval
Policy
Our
audit committee was formed upon the consummation of our Initial Public Offering. As a result, the audit committee did not pre-approve
all of the foregoing services, although any services rendered prior to the formation of our audit committee were approved by our board
of directors. Since the formation of our audit committee, and on a going-forward basis, the audit committee has and will pre-approve
all auditing services and permitted non-audit services to be performed for us by our auditors, including the fees and terms thereof (subject
to the de minimis exceptions for non-audit services described in the Exchange Act which are approved by the audit committee prior to
the completion of the audit).
84
PARTIV
Item15.
EXHIBITAND FINANCIAL STATEMENT SCHEDULES
|
(a) | The
following documents are filed as a part of this Report: |
|
|
(1) | Financial
statements: Our financial statements are listed in the Index to Audited Financial
Statements on pageF-1. | |
|
(2) | Financial
statements | |
|
|
Page | |
|
Report
of Independent Registered Public Accounting Firm |
|
F-2 | |
|
Balance
Sheet as of December 31, 2025 |
|
F-3 | |
|
Statement
of Operations for the Period from June 26, 2025 (Inception) through December 31, 2025 |
|
F-4 | |
|
Statement
of Changes in Shareholders Deficit for the Period from June 26, 2025 (Inception) through December 31, 2025 |
|
F-5 | |
|
Statement
of Cash Flows for the Period from June 26, 2025 (Inception) through December 31, 2025 |
|
F-6 | |
|
Notes
to Financial Statements |
|
F-7 | |
|
(3) | Exhibits | |
We
hereby file as part of this Report the exhibits listed in the attached Exhibit Index. Exhibits which are incorporated herein by reference
can be inspected and copied at the public reference facilities maintained by the SEC, 100 F Street, N.E., Room 1580, Washington, D.C.
20549. Copies of such material can also be obtained from the Public Reference Section of the SEC, 100 F Street, N.E., Washington, D.C.
20549, at prescribed rates or on the SEC website at www.sec.gov.
|
ExhibitNo. |
|
Description | |
|
1.1 |
|
Underwriting
Agreement.(1) | |
|
3.1 |
|
Amended
and Restated Memorandum and Articles of Association.(1) | |
|
4.1 |
|
Specimen
Unit Certificate.(2) | |
|
4.2 |
|
Specimen
ClassA Ordinary Share Certificate.(2) | |
|
4.3 |
|
Specimen
Warrant Certificate.(2) | |
|
4.4 |
|
Warrant
Agreement between Continental Stock Transfer& Trust Company and the Company.(1) | |
|
4.5 |
|
Description
of Securities. | |
|
10.1 |
|
Investment
Management Trust Agreement between Continental Stock Transfer& Trust Company and the Company.(1) | |
|
10.2 |
|
Registration
Rights Agreement among the Company, the Sponsor and the holders signatory thereto.(1) | |
|
10.3 |
|
Private
Placement Warrant Purchase Agreement between the Company and the Sponsor.(1) | |
|
10.4 |
|
Private
Placement Warrant Purchase Agreement between the Company and Cohen.(1) | |
|
10.5 |
|
Private
Placement Warrant Purchase Agreement between the Company and Clear Street.(1) | |
|
10.6 |
|
Letter
Agreement among the Company, the Sponsor and the Companys officers and directors.(1) | |
|
10.7 |
|
Advisory
Agreement between the Company and Evolution Capital Pty Ltd.(1) | |
|
10.8 |
|
Form
of Indemnity Agreement (2) | |
|
14.1 |
|
Code
of Ethics (2) | |
|
31.1* |
|
Certification
of Chief Executive Officer Pursuant to Rules13a-14(a)and 15d-14(a)_under the Securities Exchange Act of 1934, as adopted
Pursuant to Section302 of the Sarbanes-Oxley Act of 2002. | |
|
31.2* |
|
Certification
of Chief Financial Officer Pursuant to Rules13a-14(a)and 15d-14(a)_under the Securities Exchange Act of 1934, as adopted
Pursuant to Section302 of the Sarbanes-Oxley Act of 2002. | |
|
32.1* |
|
Certification
of Chief Executive Officer Pursuant to 18 U.S.C. Section1350, as adopted Pursuant to Section906 of the Sarbanes-Oxley
Act of 2002. | |
|
32.2* |
|
Certification
of Principal Financial Officer Pursuant to 18 U.S.C. Section1350, as adopted Pursuant to Section906 of the Sarbanes-Oxley
Act of 2002. | |
|
97.1* |
|
Clawback
Policy. | |
|
99.1* |
|
Insider
Trading Policy | |
|
99.2 |
|
Audit
Committee Charter (2) | |
|
99.3 |
|
Compensation
Committee Charter. (2) | |
|
101.Ins |
|
Inline XBRL Instance Document. | |
|
101.SCH |
|
Inline XBRL Taxonomy Extension
Schema Document. | |
|
101.CAL |
|
Inline XBRL Taxonomy Extension
Calculation Linkbase Document. | |
|
101.DEF |
|
Inline XBRL Taxonomy Extension
Definition Linkbase Document. | |
|
101.LAB |
|
Inline XBRL Taxonomy Extension
Label Linkbase Document. | |
|
101.PRE |
|
Inline XBRL Taxonomy Extension
Presentation Linkbase Document. | |
|
104 |
|
Cover PageInteractive
Data File (formatted as Inline XBRL and contained in Exhibit101). | |
|
* | These
certifications are furnished to the SEC pursuant to Section906 of the Sarbanes-Oxley
Act of 2002 and are deemed not filed for purposes of Section18 of the Securities Exchange
Act of 1934, as amended, nor shall they be deemed incorporated by reference in any filing
under the Securities Act of 1933, except as shall be expressly set forth by specific reference
in such filing. |
|
|
(1) | Incorporated
by reference to our Current Report on Form8-K,filed with the SEC on November
13, 2025. |
|
|
(2) | Incorporated
by reference to Amendment No. 3 to our Registration Statement on FormS-1 filed with
the SEC on October 22, 2025. |
|
Item16.
FORM10K SUMMARY
None.
85
SIGNATURES
Pursuant
to the requirements of Section13 or 15(d)of the Securities Exchange Act of 1934, the registrant has duly caused this report
to be signed on its behalf by the undersigned, thereunto duly authorized.
|
|
EVOLUTION GLOBAL ACQUISITION CORP | |
|
|
| |
|
|
By: |
/s/
Stephen Silver | |
|
|
Name: |
Stephen Silver | |
|
|
Title: |
Chief Executive Officer
(Principal Executive Officer) | |
Dated:
March 3, 2026
Pursuant
to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the
registrant and in the capacities and on the dates indicated.
|
Name |
|
Position |
|
Date | |
|
|
|
|
|
| |
|
/s/
Stephen Silver |
|
Chief
Executive Officer and Director |
|
March
3, 2026 | |
|
Stephen Silver |
|
(Principal
Executive Officer) |
|
| |
|
|
|
|
|
| |
|
/s/
Arthur Chen |
|
Chief
Financial Officer |
|
March
3, 2026 | |
|
Arthur Chen |
|
(Principal
Financial Officer) |
|
| |
|
|
|
|
|
| |
|
/s/
Ashley Zumwalt-Forbes |
|
Chief
Operating Officer and Director |
|
March
3, 2026 | |
|
Ashley Zumwalt-Forbes |
|
|
|
| |
|
|
|
|
|
| |
|
/s/
Erez Ichilov |
|
Director |
|
March
3, 2026 | |
|
Erez Ichilov |
|
|
|
| |
|
|
|
|
|
| |
|
/s/
Gavin Apter |
|
Director |
|
March
3, 2026 | |
|
Gavin Apter |
|
|
|
| |
|
|
|
|
|
| |
|
/s/
Matthew Langsford |
|
Director |
|
March
3, 2026 | |
|
Matthew Langsford |
|
|
|
| |
|
|
|
|
|
| |
86
EVOLUTION
GLOBAL ACQUISITION CORP
INDEX
TO FINANCIAL STATEMENTS
|
Report
of Independent Registered Public Accounting Firm |
|
F-2 | |
|
Financial
Statements: |
|
| |
|
Balance
Sheet as of December 31, 2025 |
|
F-3 | |
|
Statement
of Operations for the Period from June 26, 2025 (Inception) through December 31, 2025 |
|
F-4 | |
|
Statement
of Changes in Shareholders Deficit for the Period from June 26, 2025 (Inception) through December 31, 2025 |
|
F-5 | |
|
Statement
of Cash Flows for the Period from June 26, 2025 (Inception) through December 31, 2025 |
|
F-6 | |
|
Notes
to Financial Statements |
|
F-7
to F-19 | |
F-1
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Shareholders and the Board of Directors of
Evolution Global Acquisition Corp
*Opinion on the Financial Statements*
We have audited the accompanying balance sheet of Evolution Global Acquisition Corp as of December 31, 2025, and the related statements of operations, changes in shareholders deficit, and cash flows for the period from June 26, 2025 (inception) through December 31, 2025, 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 Evolution Global Acquisition Corp as of December 31, 2025, and the results of its operations and its cash flows for the period from June 26, 2025 (inception) through December 31, 2025, in conformity with accounting principles generally accepted in the United States of America.
*Basis for Opinion*
**
These financial statements are the responsibility of the entitys management. Our responsibility is to express an opinion on these 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 Evolution Global Acquisition Corpin 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. Evolution Global Acquisition Corp 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 entitys internal control over financial reporting. Accordingly, we express no such opinion.
Our audit included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audit provides a reasonable basis for our opinion.
/s/ WithumSmith+Brown, PC
We have served as Evolution Global Acquisition Corp's auditor since 2025.
New York, New York
March 3, 2026
PCAOB ID Number 100
F-2
EVOLUTION
GLOBAL ACQUISITION CORP
BALANCE
SHEET
DECEMBER
31, 2025
|
Assets | |
| | |
|
Current assets | |
| | |
| Cash | | $ | 1,120,561 | | |
| Due from Sponsor | | | 803 | | |
| Prepaid expenses | | | 84,495 | | |
| Total current assets | | | 1,205,859 | | |
| Long-term prepaid insurance | | | 61,951 | | |
| Investments held in Trust Account | | | 241,206,744 | | |
| Total Assets | | $ | 242,474,554 | | |
|
| |
| | | |
|
Liabilities,
Class A Ordinary Shares Subject to Possible Redemption, and Shareholders Deficit | |
| | | |
|
Current liabilities | |
| | | |
| Accounts payable and accrued expenses | | $ | 68,262 | | |
| Accrued offering costs | | | 98,424 | | |
| Total current liabilities | | | 166,686 | | |
| Deferred underwriting fee | | | 9,600,000 | | |
| Total Liabilities | | | 9,766,686 | | |
|
| |
| | | |
| Commitments and Contingencies (Note 7) | | | | | |
| Class A ordinary shares subject to possible redemption, $0.0001 par value; 24,000,000 shares at redemption value of $10.00 per share | | | 241,206,744 | | |
|
| |
| | | |
|
Shareholders
Deficit | |
| | | |
| Preference shares, $0.0001 par value; 5,000,000 shares authorized; none issued or outstanding | | | | | |
| Class A ordinary shares, $0.0001 par value; 500,000,000 shares authorized; none issued or outstanding (excluding 24,000,000 shares subject to possible redemption) | | | | | |
| Class B ordinary shares, $0.0001 par value; 50,000,000 shares authorized; 8,000,000 shares issued and outstanding(1)(2) | | | 800 | | |
| Additional paid-in capital | | | | | |
| Accumulated deficit | | | (8,499,676 | ) | |
| Total Shareholders Deficit | | | (8,498,876 | ) | |
| Total Liabilities, Class A Ordinary Shares Subject to Possible Redemption, and Shareholders Deficit | | $ | 242,474,554 | | |
| (1) | On November 10, 2025, the Company issued an additional 1,333,333 class B ordinary shares to the Sponsor in a share capitalization, resulting in a total of 8,000,000 Founder Shares issued and outstanding, including up to 1,000,000 shares subject to forfeiture if the over-allotment option was not exercised in full or in part by the underwriters. All share and per share amounts have been retroactively restated (Note 6 and Note 9). | |
| | | |
| (2) | Includes up to 1,000,000 shares subject to forfeiture if the over-allotment option was not exercised in full or in part by the underwriters. On November 12, 2025, the underwriters exercised their over-allotment option in full as part of the closing of the Initial Public Offering. As such, the 1,000,000 Founder Shares are no longer subject to forfeiture (Note 6). | |
The
accompanying notes are an integral part of these financial statements.
F-3
EVOLUTION
GLOBAL ACQUISITION CORP
STATEMENT
OF OPERATIONS
FORTHE
PERIOD FROM JUNE 26, 2025 (INCEPTION) THROUGH DECEMBER31, 2025
| Formation, general and administrative | | $ | 287,063 | | |
| Loss from operations | | | (287,063 | ) | |
|
| |
| | | |
|
Other income (expense): | |
| | | |
| Compensation expense | | | (5,032,916 | ) | |
| Interest earned on investments held in Trust Account | | | 1,206,744 | | |
| Total other income (expense) | | | (3,826,172 | ) | |
|
| |
| | | |
| Net loss | | $ | (4,113,235 | ) | |
| Basic and diluted weighted average Class A Ordinary Shares outstanding | | | 6,349,206 | | |
| Basic and diluted net loss per share Class A Ordinary Shares | | $ | (0.30 | ) | |
| Basic and diluted weighted average Class B Ordinary Shares outstanding | | | 7,264,550 | | |
| Basic and diluted net loss per Class B Ordinary Shares | | $ | (0.30 | ) | |
| (1) | On November 10, 2025, the Company issued an additional 1,333,333 class B ordinary shares to the Sponsor in a share capitalization, resulting in a total of 8,000,000 Founder Shares issued and outstanding, including up to 1,000,000 shares subject to forfeiture if the over-allotment option was not exercised in full or in part by the underwriters. All share and per share amounts have been retroactively restated (Note 6 and Note 9). | |
| | | |
| (2) | Excludes up to 1,000,000 shares subject to forfeiture if the over-allotment option was not exercised in full or in part by the underwriters. On November 12, 2025, the underwriters exercised their over-allotment option in full as part of the closing of the Initial Public Offering. As such, the 1,000,000 Founder Shares are no longer subject to forfeiture (Note 6). | |
The
accompanying notes are an integral part of these financial statements.
F-4
EVOLUTION
GLOBAL ACQUISITION CORP
STATEMENT
OF CHANGES IN SHAREHOLDERS DEFICIT
FOR
THE PERIOD FROM JUNE 26, 2025 (INCEPTION) THROUGH DECEMBER 31, 2025
|
|
|
Class
A Ordinary Shares |
|
|
Class
B Ordinary Shares(1)(2) |
|
|
Additional
Paid-in |
|
|
Accumulated |
|
|
Total
Shareholders Equity |
| |
|
|
|
Shares |
|
|
Amount |
|
|
Shares |
|
|
Amount |
|
|
Capital |
|
|
Deficit |
|
|
(Deficit) |
| |
| Balance June 26, 2025 (Inception) | | | | | | $ | | | | | | | | $ | | | | $ | | | | $ | | | | $ | | | |
| Class B ordinary shares issued to Sponsor | | | | | | | | | | | 8,000,000 | | | | 800 | | | | 24,200 | | | | | | | | 25,000 | | |
| Sale of 5,300,000 Private Placement Warrants | | | | | | | | | | | | | | | | | | | 6,800,000 | | | | | | | | 6,800,000 | | |
| Fair Value of Public Warrants at issuance | | | | | | | | | | | | | | | | | | | 3,840,000 | | | | | | | | 3,840,000 | | |
| Allocated value of transaction costs to Class A shares | | | | | | | | | | | | | | | | | | | (270,868 | ) | | | | | | | (270,868 | ) | |
| Fair Value of founder Shares assigned to directors | | | | | | | | | | | | | | | | | | | 5,032,916 | | | | | | | | 5,032,916 | | |
| Accretion for Class A ordinary shares to subject to redemption | | | | | | | | | | | | | | | | | | | (15,426,248 | ) | | | (4,386,441 | ) | | | (19,812,689 | ) | |
| Net loss | | | | | | | | | | | | | | | | | | | | | | | (4,113,235 | ) | | | (4,113,235 | ) | |
| Balance December 31, 2025 | | | | | | $ | | | | | 8,000,000 | | | $ | 800 | | | $ | | | | $ | (8,499,676 | ) | | $ | (8,498,876 | ) | |
| (1) | On November 10, 2025, the Company issued an additional 1,333,333 class B ordinary shares to the Sponsor in a share capitalization, resulting in a total of 8,000,000 Founder Shares issued and outstanding, including up to 1,000,000 shares subject to forfeiture if the over-allotment option was not exercised in full or in part by the underwriters. All share and per share amounts have been retroactively restated (Note 6 and Note 9). | |
| | | |
| (2) | Includes up to 1,000,000 shares subject to forfeiture if the over-allotment option was not exercised in full or in part by the underwriters. On November 12, 2025, the underwriters exercised their over-allotment option in full as part of the closing of the Initial Public Offering. As such, the 1,000,000 Founder Shares are no longer subject to forfeiture (Note 6). | |
The
accompanying notes are an integral part of these financial statements.
F-5
EVOLUTION
GLOBAL ACQUISITION CORP
STATEMENT
OF CASH FLOWS
FOR
THE PERIOD FROM JUNE 26, 2025 (INCEPTION) THROUGH DECEMBER 31, 2025
|
Cash
Flows from Operating Activities: | |
| | |
| Net loss | | $ | (4,113,235 | ) | |
|
Adjustments
to reconcile net loss to net cash used in operating activities: | |
| | | |
| Payment of general and administrative costs through promissory note related party | | | 85,130 | | |
| Formation costs paid by Sponsor in exchange for issuance of Class B Ordinary Shares | | | 8,388 | | |
| Income earned on investments held in Trust Account | | | (1,206,744 | ) | |
| Compensation expense | | | 5,032,916 | | |
|
Changes
in operating assets and liabilities: | |
| | | |
| Prepaid expenses | | | (76,169 | ) | |
| Long-term prepaid insurance | | | (61,951 | ) | |
| Accounts payable and accrued expenses | | | 68,262 | | |
| Net cash used in operating activities | | | (263,403 | ) | |
|
| |
| | | |
|
Cash
Flows from Investing Activities: | |
| | | |
| Investment of cash into Trust Account | | | (240,000,000 | ) | |
| Net cash used in investing activities | | | (240,000,000 | ) | |
|
| |
| | | |
|
Cash
Flows from Financing Activities: | |
| | | |
| Proceeds from sale of Public Units, net of underwriting discounts paid | | | 235,200,000 | | |
| Underwriters reimbursement | | | 480,000 | | |
| Proceeds from sale of Private Placements Warrants | | | 6,800,000 | | |
| Repayment of advances from related party | | | (18,923 | ) | |
| Repayment of promissory note - related party | | | (241,910 | ) | |
| Payment of offering costs | | | (835,203 | ) | |
| Net cash provided by financing activities | | | 241,383,964 | | |
|
| |
| | | |
| Net Change in Cash | | | 1,120,561 | | |
| Cash Beginning of period | | | | | |
| Cash End of period | | $ | 1,120,561 | | |
|
| |
| | | |
|
Noncash
investing and financing activities: | |
| | | |
| Offering costs included in accrued offering costs | | $ | 98,424 | | |
| Offering costs paid by Sponsor in exchange for issuance of Class B ordinary shares | | $ | 8,286 | | |
| Prepaid expenses paid by Sponsor in exchange for issuance of Class B ordinary shares | | $ | 8,326 | | |
| Deferred offering costs paid through promissory note - related party | | $ | 155,977 | | |
| Deferred offering costs paid by related party | | $ | 18,923 | | |
The
accompanying notes are an integral part of these financial statements.
F-6
EVOLUTION
GLOBAL ACQUISITION CORP
NOTES
TO FINANCIAL STATEMENTS
DECEMBER
31, 2025
NOTE 1. DESCRIPTION OF ORGANIZATION AND BUSINESS OPERATIONS
Evolution Global Acquisition Corp (the Company) is a blank check company incorporated in the Cayman Islands on June26, 2025. The Company was formed for the purpose of entering into a merger, amalgamation, share exchange, asset acquisition, share purchase, reorganization or similar business combination with one or more businesses (a Business Combination). The Company is not limited to a particular industry or geographic region for purposes of consummating a Business Combination. The Company is an early stage and emerging growth company and, as such, the Company is subject to all of the risks associated with early stage and emerging growth companies.
As of December 31, 2025, the Company had not commenced any operations. All activity for the period June26, 2025 (inception) through December 31, 2025 related to the Companys formation and the initial public offering (the Initial Public Offering), which is described below. The Company will not generate any operating revenues until after the completion of a Business Combination, at the earliest. The Company generates non-operating income in the form of interest income from the proceeds derived from the Initial Public Offering. The Company has selected December31 as its fiscal year end.
The registration statement for the Companys Initial Public Offering was declared effective on November 12, 2025. On November 12, 2025, the Company consummated the Initial Public Offering of 24,000,000 units (the Units and, with respect to the Class A ordinary shares included in the Units being offered, the Public Shares), which includes the full exercise by the underwriters of their over-allotment option in the amount of 3,000,000 Units, at $10.00 per Unit, generating gross proceeds of $240,000,000. Each Unit consists of one Class A ordinary share and one-half of one redeemable warrant (each, a Public Warrant).
Simultaneously with the closing of the Initial Public Offering, the Company consummated the sale of 6,800,000 warrants (the Private Placement Warrants and together with the Public Warrants, the Warrants) at a price of $1.00 per Private Placement Warrant, in a private placement to the Companys sponsor, Evolution Sponsor Holdings LLC (the Sponsor), Cohen and Company Capital Markets, a division of Cohen & Company Securities, LLC (Cohen), and Clear Street LLC (Clear Street and, together with Cohen, the Underwriters), generating gross proceeds of $6,800,000. Each Warrant entitles the holder to purchase one Class A ordinary share at a price of $11.50 per share, subject to adjustment. Of those 6,800,000 Private Placement Warrants, the Sponsor purchased 4,400,000 Private Placement Warrants and the Underwriters purchased 2,400,000 Private Placement Warrants.
Transaction costs amounted to $15,036,813, consisting of $4,320,000 of cash underwriting fee (net of $480,000 underwriters reimbursement), $9,600,000 of deferred underwriting fee, and $1,116,813 of other offering costs.
The Companys management has broad discretion with respect to the specific application of the net proceeds of the Initial Public Offering and the sale of the Private Placement Warrants, 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 a Business Combination with one or more target businesses that together have an aggregate fair market value of at least 80% of the value of 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 an initial Business Combination. 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 Actof1940, as amended (the Investment Company Act).
Following the closing of the Initial Public Offering, on November 12, 2025, an amount of $240,000,000 ($10.00 per Unit) from the net proceeds of the sale of the Units and the Private Placement Warrants was placed in the trust account (the Trust Account), located in the United States, and to be invested only in U.S.government treasury obligations with a maturity of 185days or less or in money market funds meeting certain conditions under Rule2a-7 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 funds held in the Trust Account, as described below.
The Company will provide its holders of the outstanding Public Shares (the public shareholders) 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 $10.00 per Public Share, plus any pro rata interest earned on the funds held in the Trust Account and not previously released to the Company to pay its tax obligations). There will be no redemption rights upon the completion of a Business Combination with respect to the Companys warrants. The Public Shares subject to redemption were recorded at redemption value and classified as temporary equity upon the completion of the Initial Public Offering in accordance with the Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC) Topic480, *Distinguishing Liabilities from Equity*.
F-7
EVOLUTION GLOBAL ACQUISITION CORP
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2025
The Company will proceed with a Business Combination only if a majority of the shares voted are voted in favor of the Business Combination. If a shareholder vote is not required by law and the Company does not decide to hold a shareholder vote for business or other 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 transaction is required by law, or the Company decides to obtain shareholder approval for business or other 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. If the Company seeks shareholder approval in connection with a Business Combination, the Sponsor has agreed to vote its Founder Shares (as defined in Note6) and any Public Shares purchased during or after the Initial Public Offering in favor of approving a Business Combination. Additionally, each public shareholder may elect to redeem their Public Shares irrespective of whether they vote for or against the proposed transaction or dont vote at all.
Notwithstanding the above, if the Company seeks shareholder approval of a Business Combination and the Company does not conduct redemptions pursuant to the tender offer rules, the Amended and Restated Memorandum and Articles of Association provides 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 Section13 of the Securities ExchangeActof1934, as amended (the ExchangeAct), will be restricted from redeeming its shares with respect to more than an aggregate of 15% or more of the Public Shares, without the prior consent of the Company.
The Sponsor has agreed to waive redemption rights with respect to any Founder Shares (as defined in Note6) held and any Public Shares they may acquire during or after the Initial Public Offering in connection with the completion of Business Combination, except that Public Shares held by the initial shareholders will be subject to mandatory redemption upon any diminution of the Trust Account in connection with an extension, and such shares will be entitled to redemption at a price equal to the per share redemption value then held in the Trust Account in connection therewith.
The Company has 24months from the closing of the Initial Public Offering to complete a Business Combination (Completion Window). However, if the Company anticipates that it may not be able to consummate a Business Combination within such period, the Company may, but is not obligated to, by resolution of the board if requested by the initial shareholders, extend the period of time to consummate a Business Combination the Company may seek shareholder approval to amend the amended and restated memorandum and articles of association to extend the date by which the Company must consummate the initial Business Combination. If the Company seeks shareholder approval for an extension, holders of public shares will be offered an opportunity to redeem their shares, regardless of whether they abstain, vote for, or against, the Companys initial Business Combination, at a per share price, payable in cash, equal to the aggregate amount then on deposit in the Trust Account, including interest earned thereon (which interest shall be net of amounts not previously released to us for permitted withdrawals, divided by the number of then issued and outstanding public shares, subject to applicable law. For the avoidance of doubt, the time to complete a Business Combination shall not be extended beyond 24months without a shareholder vote. The Underwriters have agreed to waive their rights to its deferred underwriting commission held in the Trust Account in the event the Company does not complete a Business Combination within in the Completion Window 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 order to protect the amounts held in the Trust Account, the Sponsor has agreed that it will be liable to the Company if and to the extent any claims by a third party for services rendered or products sold to the Company, or a prospective target business with which the Company has entered into a written letter of intent, confidentiality or other similar agreement or Business Combination agreement, reduce the amount of funds in the Trust Account to below the lesser of (i)$10.00 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 $10.00 per Public Share due to reductions in the value of the trust assets, in each case less taxes paid or payable and up to $100,000 of interest to pay liquidation expenses, provided that such liability will not apply to any claims by a third party or prospective target business who executed a waiver of any and all rights to the monies held in the Trust Account (whether or not such waiver is enforceable) nor will it apply to any claims under the indemnity of the Underwriters of the Initial Public Offering against certain liabilities, including liabilities under the Securities Actof1933, as amended (the Securities Act).
F-8
EVOLUTION GLOBAL ACQUISITION CORP
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2025
NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
**
Basis of Presentation
The accompanying financial statements are presented in U.S. dollars and have been prepared in accordance with accounting principles generally accepted in the United States of America (U.S. GAAP) and pursuant to the accounting and disclosure rules and regulations of the Securities and Exchange Commission (the SEC).
*Liquidity and Capital Resources*
As of December 31, 2025, the Company had $1,120,561 of cash and working capital of $1,039,173.
In order to fund working capital deficiencies or finance transaction costs in connection with a Business Combination, the Sponsor or an affiliate of the Sponsor, or certain of the Companys officers and directors may, but is not obligated to, loan the Company funds as may be required (the Working Capital Loans). If the Company completes a Business Combination, the Company would repay such loaned amounts at that time. Up to $1,500,000 of such Working Capital Loans may be converted into private placement warrants upon consummation of the Business Combination at a price of $1.00 per warrant. The warrants would be identical to the Private Placement Warrants. As of December 31, 2025, the Company had no borrowings under the Working Capital Loans.
In connection with the Companys assessment of going concern considerations in accordance with ASC 205-40, Presentation of Financial Statements - Going Concern, the Company does not believe it will need to raise additional funds in order to meet the expenditures required for operating its business. However, if the estimate of the costs of identifying a target business, undertaking in-depth due diligence and negotiating a Business Combination are less than the actual amount necessary to do so, the Company may have insufficient funds available to operate its business prior to the initial Business Combination. The Company has the Completion Window to complete the initial Business Combination. Management has determined that the Company has sufficient funds to finance the working capital needs of the Company within one year from the date of issuance of the financial statement.
**
*Emerging Growth Company*
The Company is an emerging growth company, as defined in Section 2(a) of the Securities Act, as modified by the Jumpstart Our Business Startups Act of 2012 (the JOBS Act), and it may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies including, but not limited to, not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in its periodic reports and proxy statements, and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and shareholder approval of any golden parachute payments not previously approved.
Further, Section 102(b)(1) of the JOBS Act exempts emerging growth companies from being required to comply with new or revised financial accounting standards until private companies (that is, those that have not had a Securities Act registration statement declared effective or do not have a class of securities registered under the Exchange Act) are required to comply with the new or revised financial accounting standards. The JOBS Act provides that a company can elect to opt out of the extended transition period and comply with the requirements that apply to non-emerging growth companies but any such election to opt out is irrevocable. The Company has elected not to opt out of such extended transition period, which means that when a standard is issued or revised and it has different application dates for public or private companies, the Company, as an emerging growth company, can adopt the new or revised standard at the time private companies adopt the new or revised standard. This may make comparison of the Companys 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 U.S. GAAP used.
**
*Use of Estimates*
The preparation of the financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of expenses during the reporting period.
Making estimates requires management to exercise significant judgment. It is at least reasonably possible that the estimate of the effect of a condition, situation or set of circumstances that existed at the date of the financial statements, which management considered in formulating its estimate, could change in the near term due to one or more future confirming events. Accordingly, the actual results could differ significantly from those estimates.
F-9
**
EVOLUTION GLOBAL ACQUISITION CORP
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2025
*Cash and Cash Equivalents*
The Company considers all short-term investments with an original maturity of three months or less when purchased to be cash equivalents. The Company had $1,120,561 of cash and no cash equivalents as of December 31, 2025.
*Investments Held in Trust Account*
As of December 31, 2025, the assets held in the Trust Account, amounting to $241,206,744, were held in marketable securities invested in U.S. Treasury funds.
*Concentration of Credit Risk*
Financial instruments that potentially subject the Company to concentrations of credit risk consist of a cash account in a financial institution, which, at times, may exceed the Federal Deposit Insurance Corporation coverage limit of $250,000. Any loss incurred or a lack of access to such funds could have a significant adverse impact on the Companys financial condition, results of operations, and cash flows.
**
*Offering Costs*
The Company complies with the requirements of the ASC 340-10-S99 and SEC Staff Accounting Bulletin Topic 5A, Expenses of Offering. Offering costs consist principally of professional and registration fees that are related to the Initial Public Offering. FASB ASC 470-20, Debt with Conversion and Other Options, addresses the allocation of proceeds from the issuance of convertible debt into its equity and debt components. The Company applies this guidance to allocate Initial Public Offering proceeds from the Units between Class A ordinary shares and warrants, using the residual method by allocating Initial Public Offering proceeds first to assigned value of the warrants and then to the Class A ordinary shares. On November 12, 2025, offering costs allocated to the Public Shares were charged to temporary equity and offering costs allocated to the Public Warrants and Private Placement Warrants were charged to shareholders deficit as the Public Warrants and Private Placement Warrants, after managements evaluation, were accounted for under equity treatment.
**
*Income Taxes*
The Company accounts for income taxes under ASC Topic740, Income Taxes, which requires an asset and liability approach to financial accounting and reporting for income taxes. Deferred income tax assets and liabilities are computed for differences between the financial statement and tax bases of assets and liabilities that will result in future taxable or deductible amounts, based on enacted tax laws and rates applicable to the periods in which the differences are expected to affect taxable income. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amount expected to be realized.
ASC Topic740 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. The Companys management determined that the Cayman Islands is the Companys major tax jurisdiction. The Company recognizes accrued interest and penalties related to unrecognized tax benefits as income tax expense. As of December 31, 2025, there were no unrecognized tax benefits and no amounts accrued for interest and penalties. The Company is currently not aware of any issues under review that could result in significant payments, accruals or material deviation from its position.
The Company is considered to be an exempted Cayman Islands company with no connection to any other taxable jurisdiction and is presently not subject to income taxes or income tax filing requirements in the Cayman Islands or the UnitedStates. As such, the Companys tax provision was zero for the period presented.
**
*Fair Value of Financial Instruments*
The fair value of the Companys assets and liabilities, which qualify as financial instruments under ASC Topic820, Fair Value Measurements and Disclosures, approximates the carrying amounts represented in the accompanying balance sheet, primarily due to their short-term nature.
F-10
EVOLUTION GLOBAL ACQUISITION CORP
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2025
*Net Loss per Ordinary Share*
The Company complies with accounting and disclosure requirements of FASB ASC Topic 260, Earnings Per Share. Income and losses are shared pro rata to the shares. Net loss per Ordinary Share (as defined in Note 5) is computed by dividing net income by the weighted average number of Ordinary Shares outstanding for the period. Accretion associated with the redeemable Ordinary Shares is excluded from loss per Ordinary Share as the redemption value approximates fair value.
The calculation of diluted income per Ordinary Share does not consider the effect of the Warrants issued in connection with the (i) Initial Public Offering, (ii) the exercise of the Over-Allotment Option and (iii) Private Placement, since the average price of the Ordinary Shares for the period from June 26, 2025 (inception) through December 31, 2025, was less than the exercise price and therefore, the inclusion of such Warrants under the Treasury stock method would be anti-dilutive and the exercise is contingent upon the occurrence of future events. The Warrants are exercisable to purchase 24,000,000 Class A Ordinary Shares in the aggregate. As a result, diluted net loss per Ordinary Share is the same as basic net loss per Ordinary Share for the periods presented.
The following tables reflect the calculation of basic and diluted net loss per Ordinary Share:
| | | For the Period from June 26, 2025 (Inception) through December 31, | | |
| | | 2025 | | |
| | | Class A | | | Class B | | |
| | | Ordinary Shares | | | Ordinary Shares | | |
| Basic and Diluted net loss per Ordinary Share | | | | | | | |
| Numerator: | | | | | | | |
| Allocation of net loss, as adjusted | | $ | (1,918,337 | ) | | $ | (2,194,898 | ) | |
| | | | | | | | | | |
| Denominator: | | | | | | | | | |
| Basic and diluted weighted average Ordinary Shares outstanding | | | 6,349,206 | | | | 7,264,550 | | |
| Basic and diluted net loss per Ordinary Share | | $ | (0.30 | ) | | $ | (0.30 | ) | |
*Warrant Instruments*
The Company accounted for the Public Warrants and Private Placement Warrants issued in connection with the Initial Public Offering and the private placement in accordance with the guidance contained in FASB ASC Topic 815, Derivatives and Hedging. Accordingly, the Company evaluated and classified the warrant instruments under equity treatment at their assigned values. Such guidance provides that the warrants described above will not be precluded from equity classification. Equity-classified contracts are initially measured at fair value (or allocated value). Subsequent changes in fair value are not recognized as long as the contracts continue to be classified in equity in accordance with ASC 480 and ASC 815.
F-11
EVOLUTION GLOBAL ACQUISITION CORP
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2025
*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. For derivative financial instruments that are accounted for as liabilities, the derivative instrument is initially recorded at its fair value on the grant date and is then re-valued at each reporting date, with changes in the fair value reported in the statement of operations. The classification of derivative instruments, including whether such instruments should be recorded as liabilities or as equity, is evaluated at the end of each reporting period. Derivative 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 date. The underwriters over-allotment option is deemed to be a freestanding financial instrument indexed on the contingently redeemable shares and will be accounted for as a liability pursuant to ASC 480 if not fully exercised at the time of the Initial Public Offering. Subsequently on November 12, 2025, the Company consummated the Initial Public Offering of 24,000,000 Units, which includes the full exercise by the underwriters of their over-allotment option in the amount of 3,000,000 Units, as such no derivative financial instrument was recorded.
**
*Share-Based Payment Arrangements*
**
The Company accounts for stock awards in accordance with ASC 718, CompensationStock Compensation, which requires that all equity awards be accounted for at their fair value. Fair value is measured on the grant date and is equal to the underlying value of the stock. Costs equal to these fair values are recognized ratably over the requisite service period based on the number of awards that are expected to vest, in the period of grant for awards that vest immediately and have no future service condition, or in the period the awards vest immediately after meeting a performance condition becomes probable (i.e., the occurrence of a Business Combination). For awards that vest over time, cumulative adjustments in later periods are recorded to the extent actual forfeitures differ from the Companys initial estimates; previously recognized compensation cost is reversed if the service or performance conditions are not satisfied and the award is forfeited.
*Class A Ordinary Shares Subject to Possible Redemption*
The Public Shares contain a redemption feature which allows for the redemption of such Public Shares in connection with the Companys liquidation, or if there is a shareholder vote or tender offer in connection with the Companys initial Business Combination. In accordance with ASC 480-10-S99, the Company classifies Public Shares subject to possible redemption outside of permanent equity as the redemption provisions are not solely within the control of the Company. The Company recognizes changes in redemption value immediately as they occur and will adjust the carrying value of redeemable shares to equal the redemption value at the end of each reporting period. Immediately upon the closing of the Initial Public Offering, the Company recognized the accretion from initial book value to redemption value. The change in the carrying value of redeemable shares will result in charges against additional paid-in capital (to the extent available) and accumulated deficit. Accordingly, as of December 31, 2025, Class A ordinary shares subject to possible redemption are presented at redemption value as temporary equity, outside of the shareholders deficit section of the Companys balance sheet. As of December 31, 2025, the Class A ordinary shares subject to possible redemption reflected in the balance sheet are reconciled in the following table:
| Gross proceeds | | $ | 240,000,000 | | |
| Less: | | | | | |
| Proceeds allocated to Public Warrants | | | (3,840,000 | ) | |
| Public Shares issuance costs | | | (14,765,945 | ) | |
| Plus: | | | | | |
| Remeasurement of carrying value to redemption value | | | 19,812,689 | | |
| Class A ordinary shares subject to possible redemption, December 31, 2025 | | $ | 241,206,744 | | |
**
*Recently Issued Accounting Standards*
Management does not believe that any recently issued, but not yet effective, accounting standards, if currently adopted, would have a material effect on the Companys financial statements.
F-12
EVOLUTION GLOBAL ACQUISITION CORP
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2025
NOTE 3. INITIAL PUBLIC OFFERING
In the Initial Public Offering on November 12, 2025, the Company sold 24,000,000Units, which includes the full exercise by the underwriters of their over-allotment option in the amount of 3,000,000 Units,at a purchase price of $10.00 per Unit. Each Unit consists of one ClassA ordinary share and one-half of one redeemable Public Warrant. Each whole Public Warrant entitles the holder to purchase one ClassA ordinary share at an exercise price of $11.50 per share, subject to adjustment (see Note8).
NOTE 4. PRIVATE PLACEMENT
Simultaneously with the closing of the Initial Public Offering, the Sponsor and the Underwriters purchased an aggregate of 6,800,000 Private Placement Warrants, at a price of $1.00 per Warrant, or $6,800,000 in the aggregate, in a private placement. Of those 6,800,000 Private Placement Warrants, the Sponsor purchased 4,400,000 Private Placement Warrants and the Underwriters purchased 2,400,000 Private Placement Warrants. Each Private Placement Warrant entitles the registered holder to purchase one Class A ordinary share at a price of $11.50 per share, subject to adjustment. If the Company does not complete a Business Combination, the proceeds from the sale of the Private Placement Warrants held in the Trust Account will be used to fund the redemption of the Public Shares (subject to the requirements of applicable law) and the Private Placement Warrants will expire worthless.
NOTE 5. SEGMENT INFORMATION
**
ASC Topic 280, Segment Reporting, establishes standards for companies to report in their financial statement information about operating segments, products, services, geographic areas, and major customers. Operating segments are defined as components of an enterprise that engage in business activities from which it may recognize revenues and incur expenses, and for which separate financial information is available that is regularly evaluated by the Companys chief operating decision maker (CODM), or group, in deciding how to allocate resources and assess performance.
The Companys CODM has been identified as the Chief Financial Officer, who reviews the assets, operating results, and financial metrics for the Company as a whole to make decisions about allocating resources and assessing financial performance. Accordingly, management has determined that there is only one reportable segment.
The CODM assesses performance for the single segment and decides how to allocate resources based on net income or loss that also is reported on the statement of operations as net income or loss. The measure of segment assets is reported on the balance sheet as total assets. When evaluating the Companys performance and making key decisions regarding resource allocation, the CODMs review several key metrics, which include the following:
| | | December31, 2025 | | |
| Cash | | $ | 1,120,561 | | |
| Cash held in Trust Account | | $ | 241,206,744 | | |
| | | For the Periodfrom June 26, 2025 (Inception) through December31, 2025 | | |
| Operating and formation costs | | $ | 287,063 | | |
| Interest earned on investments held in Trust Account | | $ | 1,206,744 | | |
The CODM reviews interest earned on investments held in the Trust Account to measure and monitor shareholder value and determine the most effective strategy of investment with the Trust Account funds while maintaining compliance with the Trust Agreement.
Operating and formation costs are reviewed and monitored by the CODM to manage and forecast cash to ensure enough capital is available to complete a Business Combination or similar transaction within the Business Combination period. The CODM also reviews operating and formation costs to manage, maintain and enforce all contractual agreements to ensure costs are aligned with all agreements and budget. Operating and formation costs, as reported on the accompanying statements of operations, are the significant segment expenses provided to the CODM on a regular basis.
All other segment items included in net income or loss are reported on the accompanying statements of operations and described within their respective disclosures.
F-13
EVOLUTION GLOBAL ACQUISITION CORP
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2025
NOTE 6. RELATED PARTY TRANSACTIONS
**
*Founder Shares*
On June 26, 2025, the Sponsor was issued 5,750,000 Class B ordinary shares (the Founder Shares) for an aggregate price of $25,000 paid to cover certain expenses on behalf of the Company. On August 20, 2025, the Company issued an additional 916,667 Class B ordinary shares to the Sponsor in a share capitalization, resulting in a total of 6,666,667 Founder Shares outstanding. On November 10, 2025, the Company issued an additional 1,333,333 class B ordinary shares to the Sponsor in a share capitalization, resulting in a total of 8,000,000 Founder Shares outstanding. All share and per share data has been retroactively restated (Note 9). The Founder Shares include an aggregate of up to 1,000,000 Class B ordinary shares subject to forfeiture by the Sponsor to the extent that the Underwriters over-allotment option is not exercised in full or in part, so that the Sponsor will own, on an as-converted basis, 25% of the Companys issued and outstanding shares after the Initial Public Offering (assuming the Sponsor does not purchase any Public Shares in the Initial Public Offering). On November 12, 2025, the underwriters exercised their over-allotment option in full as part of the closing of the Initial Public Offering. As such, the 1,000,000 Founder Shares are no longer subject to forfeiture.
On November 10, 2025, the Sponsor granted membership interests equivalent to an aggregate of 1,958,333 Founder Shares to the officers and directors of the Company for an aggregate consideration of $8,421, or approximately $0.004 per share. The membership interests in Founder Shares granted to the officers and directors are in the scope of FASB ASC Topic 718, Compensation-Stock Compensation (ASC 718). Under ASC 718, stock-based compensation associated with equity-classified awards is measured at fair value on the assignment date. On November 10, 2025, the 1,958,333 Founder Shares have an aggregate fair value of $5,032,916, or $2.57 per share. The membership interests in Founder Shares have no service restrictions, thus, the total fair value of $5,032,916 was recorded as compensation expense on November 10, 2025. The Company established the fair value of Founder Shares using a calculation prepared by a third party valuation team, which takes into consideration the following market assumptions; (i) implied share price of $9.84, (ii) probability of De-SPAC and instrument-specific market adjustment of 30.0%, and (iii) discount for lack of marketability of $0.38. The Founder Shares are classified as Level 3 at the measurement date due to the use of unobservable inputs, and other risk factors (Note 9).
The Founder Shares are designated as ClassB ordinary shares and, except as described below, are identical to the ClassA 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 (i)the Founder Shares are subject to certain transfer restrictions, as described in more detail below, (ii)the Founder Shares are entitled to registration rights, (iii)the Companys Sponsor, officers and directors have entered into a letter agreement with the Company, pursuant to which they have agreed to (A)waive their redemption rights with respect to their Founder Shares and public shares in connection with the completion of the Companys initial Business Combination, (B)waive their redemption rights with respect to their Founder Shares and public shares in connection with a shareholder vote to approve an amendment to the Companys amended and restated memorandum and articles of association (1)to modify the substance or timing of the Companys obligation to allow redemption in connection with the Companys initial Business Combination or to redeem 100% of the Companys public shares if the Company has not consummated an initial Business Combination within the Completion Window or (2)with respect to any other material provisions relating to shareholders rights or pre-initial Business Combination activity, (3)waive their rights to liquidating distributions from the Trust Account with respect to their Founder Shares if the Company fails to complete the Companys initial Business Combination within the Completion Window, although they will be entitled to liquidating distributions from the Trust Account with respect to any public shares they hold if the Company fails to complete the initial Business Combination within such time period and to liquidating distributions from assets outside the Trust Account and (4)vote any Founder Shares held by them and any public shares purchased during or after this offering (including in open market and privately negotiated transactions) in favor of the initial Business Combination (including any proposals recommended by the Companys board of directors in connection with such Business Combination) (except with respect to any public shares which may not be voted in favor of approving the Business Combination transaction with the requirements of Rule14e-5 under the ExchangeAct and any SEC interpretations or guidance relating thereto), (iv)the Founder Shares are automatically convertible into ClassA ordinary shares immediately prior to, concurrently with or immediately following the consummation of the Companys initial Business Combination or at any time prior thereto at the option of the holder on a one-for-one basis, subject to adjustment as described herein and in the amended and restated memorandum and articles of association, and (v)prior to the closing of the Companys initial Business Combination, only holders of ClassB ordinary shares will be entitled to vote on the appointment and removal of directors or continuing in a jurisdiction outside the Cayman Islands (including any special resolution required to amend the constitutional documents or to adopt new constitutional documents, in each case, as a result of approving a transfer by way of continuation in a jurisdiction outside the Cayman Islands).
F-14
EVOLUTION GLOBAL ACQUISITION CORP
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2025
The Founder Shares will automatically convert into ClassA ordinary shares immediately prior to, concurrently with or immediately following the consummation of the initial Business Combination or at any time prior thereto at the option of the holder on a one-for-one basis, subject to adjustment for share subdivisions, share capitalizations, reorganizations, recapitalizations and the like, and subject to further adjustment as provided herein. In the case that additional ClassA ordinary shares, or any other equity-linked securities, are issued or deemed issued in excess of the amounts sold in this offering and related to or in connection with the closing of the initial Business Combination, the ratio at which ClassB ordinary shares convert into ClassA ordinary shares will be adjusted (unless the holders of a majority of the issued and outstanding ClassB ordinary shares agree to waive such adjustment with respect to any such issuance or deemed issuance) so that the number of ClassA ordinary shares issuable upon conversion of all ClassB ordinary shares will equal, in the aggregate, 25% of the sum of (i)the total number of all ClassA ordinary shares issued and outstanding upon the completion of this offering (including any ClassA ordinary shares issued pursuant to the Underwriters over-allotment option and excluding the ClassA ordinary shares underlying the private placement warrants issued to the Sponsor and the Underwriters), plus (ii)all ClassA ordinary shares and equity-linked securities issued or deemed issued in connection with the Companys 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 Companys Sponsor or any of its affiliates or to the Companys officers and directors upon conversion of working capital loans) minus (iii)any redemptions of ClassA ordinary shares by public shareholders in connection with an initial Business Combination; provided that such conversion of Founder Shares will never occur on a less than one-for-one basis.
With certain limited exceptions, the Founder Shares are not transferable, assignable or saleable (except to the Companys officers and directors and other persons or entities affiliated with the Companys Sponsor, each of whom will be subject to the same transfer restrictions) until the earlier of (A)one year after the completion of the Companys initial Business Combination or earlier if, subsequent to the Companys initial Business Combination, the last sale price of the ClassA ordinary shares equals or exceeds $12.00 per share (as adjusted for share subdivisions, share capitalizations, reorganizations, recapitalizations and the like) for any 20trading days within any 30-tradingday period commencing at least 150days after the Companys initial Business Combination, and (B)the date following the completion of the Companys initial Business Combination on which the Company completes a liquidation, merger, share exchange or other similar transaction that results in all of the Companys shareholders having the right to exchange their ClassA ordinary shares for cash, securities or other property.
*Promissory NoteRelated Party*
On June30, 2025, the Sponsor agreed to loan the Company an aggregate of up to $300,000 to cover expenses related to the Initial Public Offering pursuant to a promissory note (the Promissory Note). This loan was non-interest bearing and payable on the earlier of March31, 2026 or the date on which the Company consummates the Initial Public Offering of its securities. On November 12, 2025, the Company repaid the total outstanding balance of the Promissory Note amounting to $241,107 (Note 9). Borrowings under the Note are no longer available.
*Due from Sponsor*
The Company paid the Sponsor an amount of $803 in excess of the outstanding Promissory Note balance at the closing of the Initial Public Offering. The excess payment of $803 is denoted as a due from Sponsor on the accompanying balance sheet as of December 31, 2025.
*Management Consulting Agreement*
On November 10, 2025, the Company engaged Evolution Capital Pty Ltd, the managing member of the Sponsor, of which the Companys Chief Executive Officer and Chairman of the Board, Stephen Silver, is the managing member, to act as a management consulting and corporate advisor in the preparation of corporate strategies, management support and business plans for the Company. Pursuant to the agreement, the Company paid an advisory fee of $480,000 to Evolution Capital Pty Ltd upon the closing of the Initial Public Offering, for such management consulting and corporate advisory services. As of December 31, 2025, no amounts were incurred under this agreement (Note 9).
*Related Party Loans*
In order to finance transaction costs in connection with the initial Business Combination, the Sponsor or an affiliate of the Sponsor or certain of the Companys officers and directors may, but are not obligated to, loan the Company funds as may be required. If the Company completes the initial Business Combination, the Company will repay such loaned amounts. In the event that the initial Business Combination does not close, the Company may use a portion of the working capital held outside the Trust Account to repay such loaned amounts, including the repayment of loans from the Sponsor to pay for any amount deposited to pay for any extension of the time to complete the initial Business Combination, but no proceeds from the Trust Account would be used for such repayment. Up to $1,500,000 of such loans may be convertible into warrants, at a price of $1.00 per warrant at the option of the lender, upon consummation of the initial Business Combination. Such warrants would be identical to the Private Placement Warrants. The terms of such loans by the Companys officers and directors, if any, have not been determined and no written agreements exist with respect to such loans. There are no such outstanding related party loans as of December 31, 2025.
F-15
EVOLUTION GLOBAL ACQUISITION CORP
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2025
NOTE 7. COMMITMENTS AND CONTINGENCIES
**
*Risks and Uncertainties*
The Companys ability to complete an initial Business Combination may be adversely affected by various factors, many of which are beyond the Companys control. The Companys ability to consummate an initial Business Combination could be impacted by, among other things, changes in laws or regulations, downturns in the financial markets or in economic conditions, inflation, fluctuations in interest rates, increases in tariffs, supply chain disruptions, declines in consumer confidence and spending, public health considerations, and geopolitical instability, such as the military conflicts in Ukraine and the Middle East. The Company cannot at this time predict the likelihood of one or more of the above events, their duration or magnitude or the extent to which they may negatively impact the Companys ability to complete an initial Business Combination.
*Registration Rights Agreement*
The holders of the (i)Founder Shares, which were issued in a private placement prior to the closing of this offering, (ii)private placement warrants which will be issued in a private placement simultaneously with the closing of this offering and the ClassA ordinary shares underlying such private placement warrants and (iii)private placement warrants that may be issued upon conversion of working capital loans will have registration rights to require the Company to register a sale of any of the Companys securities held by them and any other securities of the company acquired by them prior to the consummation of the Companys initial Business Combination pursuant to a registration rights agreement signed on November 10, 2025. The holders of these securities are entitled to make up to three demands, excluding short form demands, that the Company registers such securities. In addition, the holders have certain piggyback registration rights with respect to registration statements filed subsequent to the Companys completion of the Companys initial Business Combination. The Company will bear the expenses incurred in connection with the filing of any such registration statements.
*Underwriting Agreement*
Pursuant to the underwriting agreement, the Sponsor and the executive officers and directors have agreed that, for a period of 180days from the date of the Initial Public Offering, will not, without the prior written consent of the representative, offer, sell, contract to sell, pledge, sell any option or contract to purchase, purchase any option or contract to sell, grant any option, right or warrant to purchase, lend or otherwise transfer or dispose of, directly or indirectly, any units, warrants, ordinary shares or any other securities convertible into, or exercisable or exchangeable for, any units, ordinary shares, Founder Shares or warrants, subject to certain exceptions. The representative in its discretion may release any of the securities subject to these lock-up agreements at any time without notice, other than in the case of the officers and directors, which shall be with notice. The Sponsor, officers and directors are also subject to separate transfer restrictions on their Founder Shares and private placement warrants pursuant to the letter agreement described herein.
The Company granted the Underwriters a 45-day option from the date of the Initial Public Offering to purchase up to 3,000,000 additional Unitsto cover over-allotments, if any, at the Initial Public Offering price less the underwriting discounts and commissions. On November 12, 2025, the underwriters elected to fully exercise their over-allotment option to purchase an additional 3,000,000 Units at a price of $10.00 per Unit.
The Underwriters were entitled to an underwriting discount of $0.20 per Unit, or $4,800,000 in the aggregate, which was paid upon the closing of the Initial Public Offering. The underwriter paid the Company an aggregate amount of $480,000 at the closing of the Initial Public Offering as reimbursement to the Company for certain of its expenses and fees incurred in connection with the Initial Public Offering. In addition, the Underwriters were entitled to a deferred fee of $0.40 per Unit, or $9,600,000 in the aggregate. The deferred fee will become payable to the Underwriters from the amounts held in the Trust Account solely in the event that the Company completes a Business Combination, subject to the terms of the underwriting agreement.
F-16
EVOLUTION GLOBAL ACQUISITION CORP
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2025
NOTE 8. SHAREHOLDERS DEFICIT
*Preference shares*The Company is authorized to issue 5,000,000 preference shares with a par value of $0.0001 per share, with such designations, voting and other rights and preferences as may be determined from time to time by the Companys board of directors. As of December 31, 2025, there were no preference shares issued or outstanding.
**
*ClassA ordinary shares*The Company is authorized to issue 500,000,000 ClassA ordinary shares with a par value of 0.0001 per share. Holders of the Companys ClassA ordinary shares are entitled to one vote for each share. As of December 31, 2025, there were no Class A ordinary shares issued or outstanding, , excluding 24,000,000 shares subject to possible redemption.
**
*ClassB ordinary shares*The Company is authorized to issue 50,000,000 ClassB ordinary shares with a par value of 0.0001 per share. Holders of the Companys ClassB ordinary shares are entitled to one vote for each share. As of December 31, 2025, there were 8,000,000 Class B ordinary shares issued and outstanding. Up to 1,000,000 Class B ordinary shares were subject to forfeiture if the over-allotment option was not exercised in full or in part by the underwriters.
Ordinary shareholders of record are entitled to one vote for each share held on all matters to be voted on by shareholders. Except as described below, holders of ClassA ordinary shares and holders of ClassB ordinary shares will vote together as a single class on all matters submitted to a vote of the Companys shareholders except as required by law. Prior to the closing of the initial Business Combination, only holders of ClassB ordinary shares (i)will have the right to appoint and remove directors prior to or in connection with the completion of the initial Business Combination and (ii)will be entitled to vote on continuing the Company in a jurisdiction outside the Cayman Islands (including any special resolution required to amend constitutional documents or to adopt new constitutional documents, in each case, as a result of approving a transfer by way of continuation in a jurisdiction outside the Cayman Islands). On any other matters submitted to a vote of shareholders prior to or in connection with the completion of the initial Business Combination, holders of the ClassB ordinary shares and holders of the ClassA ordinary shares will vote together as a single class, except as required by law.
The Founder Shares will automatically convert into ClassA ordinary shares immediately prior to, concurrently with or immediately following the consummation of a Business Combination, and may be converted at any time prior to the Business Combination, at the option of the holder, on a one-for-one basis (unless otherwise provided in the Business Combination agreement), subject to adjustment for share subdivisions, share dividends, reorganizations, recapitalizations and the like, and subject to further adjustment as provided herein. In the case that additional ClassA ordinary shares or equity-linked securities are issued or deemed issued in connection with the Business Combination, the number of ClassA ordinary shares issuable upon conversion of all Founder Shares will equal, in the aggregate, on an as-converted basis, approximately 25% of the total number of ClassA ordinary shares issued and outstanding after such conversion (not including the ClassA ordinary shares underlying the Private Placement Warrants), including the total number of ClassA 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 Business Combination, excluding any ClassA ordinary shares or equity-linked securities or rights exercisable for or convertible into ClassA ordinary shares issued, or to be issued, to any seller in the Business Combination and any Private Placement Warrants issued to the Sponsor, officers or directors upon conversion of Working Capital Loans, provided that such conversion of Founder Shares will never occur on a less than one-for-one basis.
**
*Warrants*As of December 31, 2025, there were 18,800,000 Warrants outstanding, including 12,000,000 Public Warrants and 6,800,000 Private Placement Warrants. Each whole Warrant entitles the registered holder to purchase one ClassA ordinary share at a price of $11.50 per share, subject to adjustment as discussed below, at any time commencing 30days after the completion of the initial Business Combination. Pursuant to the warrant agreement, a warrant holder may exercise its Public Warrants only for a whole number of ClassA ordinary shares. No fractional Public Warrants will be issued upon separation of the units and only whole Public Warrants will trade. The Public Warrants will expire fiveyears after the completion of the initial Business Combination, at 5:00p.m., NewYork City time, or earlier upon redemption or liquidation.
F-17
EVOLUTION GLOBAL ACQUISITION CORP
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2025
The Company has agreed that as soon as practicable, but in no event later than 20businessdays after the closing of the initial Business Combination, the Company will use commercially reasonable efforts to file with the SEC a post-effective amendment to the registration statement of which the prospectus forms a part or a new registration statement covering the registration, under the Securities Act, of the ClassA ordinary shares issuable upon exercise of the warrants and thereafter will use the Companys commercially reasonable efforts to cause the same to become effective within 60businessdays following the initial Business Combination and to maintain a current prospectus relating to the ClassA ordinary shares issuable upon exercise of the warrants, until the expiration of the warrants in accordance with the provisions of the warrant agreement. If a registration statement covering the ClassA ordinary shares issuable upon exercise of the warrants is not effective by the sixtieth (60)businessday after the closing of the initial Business Combination, warrant holders may, until such time as there is an effective registration statement and during any period when the Company will have failed to maintain an effective registration statement, exercise warrants on a cashless basis in accordance with Section3(a)(9)of the Securities Act or another exemption.
Once the warrant become exercisable, the Company may call the warrants for redemption for cash:
| | in whole and not in part; | |
| | at a price of $0.01 per warrant; | |
| | upon a minimum of 30days prior written notice of redemption; | |
| | if, and only if, the closing price of the ClassA 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) for any 20tradingdays within a 30-tradingday period commencing at least 30days after completion of the Companys initial Business Combination and ending threebusinessdays before the Company sends the notice of redemption to the warrant holders. | |
If and when the warrants become redeemable by the Company for cash, the Company may exercise the redemption right even if the Company is unable to register or qualify the underlying securities for sale under all applicable state securities laws.
In addition, if (x)the Company issues additional ClassA ordinary shares or equity-linked securities for capital raising purposes in connection with the closing of the initial Business Combination at an issue price or effective issue price of less than $9.20 per ClassA ordinary shares (with such issue price or effective issue price to be determined in good faith by the Companys 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 the 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 the initial Business Combination on the date of the consummation of the initial Business Combination (net of redemptions), and the volume weighted average trading price of the ClassA ordinary shares during the 20tradingday period starting on thetradingday after theday on which the Company consummate the 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, and the $18.00 per share redemption trigger price will be adjusted (to the nearest cent) to be equal to 180% of the higher of the Market Value and the Newly Issued Price.
The Private Placement Warrants (including the ClassA ordinary shares issuable upon exercise of the Private Placement Warrants) will not be transferable, assignable or salable until 30days after the completion of the initial Business Combination. The Private Placement Warrants have terms and provisions that are identical to those of the Public Warrants being sold as part of the units in the Initial Public Offering.
F-18
EVOLUTION GLOBAL ACQUISITION CORP
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2025
NOTE 9. 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. US 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. | |
The fair value of the Public Warrants issued in the Initial Public Offering is $3,840,000, or $0.32 per Public Warrant and was determined using Monte Carlo Simulation Model. The Public Warrants issued in the Initial Public Offering have been classified within shareholders deficit and will not require remeasurement after issuance. The following table presents the quantitative information regarding market assumptions used in the Level 3 valuation of the Public Warrants issued in the Initial Public Offering:
| | | November12, 2025 | | |
| Implied class A share price | | $ | 9.84 | | |
| Expected term to De-SPAC | | | 2.0 | | |
| Warrant term | | | 7.0 | | |
| Probability of De-SPAC and Market Adjustment | | | 30.0 | % | |
| Risk-free rate (continuous) | | | 3.82 | % | |
| Selected volatility | | | 2.5 | % | |
NOTE 10. SUBSEQUENT EVENTS
The Company evaluated subsequent events and transactions that occurred after the balance sheet date up to the date that the financial statements were issued. Based upon this review, the Company did not identify any subsequent events that would have required adjustment or disclosure in the financial statements.
F-19