DEFM14A 1 tm235988-15_defm14a.htm DEFM14A tm235988-15_defm14a - block - 61.5260486s
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
Filed by the Registrant ☒
Filed by a Party other than the Registrant ☐
Check the appropriate box:

Preliminary Proxy Statement

CONFIDENTIAL, FOR USE OF THE COMMISSION ONLY (AS PERMITTED BY RULE 14A‑6(E)(2))

Definitive Proxy Statement

Definitive Additional Materials

Soliciting Material under §240.14a-12
SportsMap Tech Acquisition Corp.
(Name of Registrant as Specified in Its Charter)*
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
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No fee required

Fee paid previously with preliminary materials

Fee computed on table in exhibit required by Item 25(b) per Exchange Act Rules 14a-6(i)(1) and 0-11

 
SportsMap Tech Acquisition Corp.
5353 WEST ALABAMA, SUITE 415
HOUSTON, TEXAS 77056
(713) 479-5302
November 13, 2023
Dear SportsMap Tech Acquisition Corp. Stockholder:
You are cordially invited to attend the special meeting of stockholders of SportsMap Tech Acquisition Corp., a Delaware corporation (“SportsMap”), to be held at 10:00 a.m., Eastern Time, on December 5, 2023 (the “Special Meeting”). The Special Meeting will be conducted via live webcast at www.virtualshareholdermeeting.com/SMAP2023SM2.
At the Special Meeting, our stockholders will be asked to consider and vote upon a proposal, which is referred to herein as the “Business Combination Proposal,” to approve and adopt the Business Combination Agreement, dated as of December 5, 2022 (as amended by Amendment No. 1, dated June 27, 2023, and Amendment No. 2, dated September 17, 2023, and as may be further amended, supplemented or otherwise modified from time to time, the “Business Combination Agreement”), by and among SportsMap, ICH Merger Sub Inc., a Delaware corporation and a direct, wholly-owned subsidiary of SportsMap (“Merger Sub”), and Infrared Cameras Holdings, Inc., a Delaware corporation (“ICI”), a copy of which is attached to the accompanying proxy statement as Annex A, including the transactions contemplated thereby. In connection with the transactions contemplated in the Business Combination Agreement, SportsMap will change its name to “Infrared Cameras Holdings, Inc.” ​(referred to herein as “New ICI”). The merger and the other transactions contemplated by the Business Combination Agreement are hereinafter referred to as the “Business Combination”.
As further described in the accompanying proxy statement, the Business Combination Agreement provides that, on the terms and subject to the conditions of the Business Combination Agreement, Merger Sub will merge with and into ICI (the “Merger”), with ICI surviving the Merger as a wholly-owned subsidiary of SportsMap. In accordance with the terms and subject to the conditions of the Business Combination Agreement, at the effective time of the Merger (the “Effective Time”), among other things and as more fully described elsewhere in this proxy statement: (i) each share of ICI common stock, par value $0.001 per share (whether designated as “Class A Voting Common Stock” or “Class B Non-Voting Common Stock” pursuant to ICI’s certificate of incorporation) (“ICI Common Stock”), issued and outstanding immediately prior to the Effective Time (other than dissenting shares and shares held immediately prior to the Effective Time by ICI as treasury stock) will be converted into the right to receive a number of shares of SportsMap common stock, par value $0.0001 per share (“SportsMap Common Stock”) equal to the Exchange Ratio described below, (ii) each option to purchase shares of ICI common stock, par value $0.001 per share, designated as “Class B Non-Voting Common Stock” pursuant to ICI’s certificate of incorporation (“ICI Class B Common Stock” and collectively with the ICI Class A Common Stock, “ICI Common Stock”) that is outstanding and unexercised immediately prior to the Effective Time, whether vested or unvested, other than any Out-of-the-Money Options (as defined in the accompanying proxy statement) (“Participating Company Options”), will be converted into an option to purchase a number of shares of SportsMap Common Stock upon substantially the same terms and conditions (but taking into account any accelerated vesting provided for in ICI’s equity plan or any award agreement by reason of the Business Combination Agreement or the Business Combination) as are in effect with respect to such option prior to the Effective Time, except that such option shall represent the right to receive a number of shares of SportsMap Common Stock equal to the number of shares of ICI Class B Common Stock subject to such option prior to the Effective Time multiplied by the Exchange Ratio, and the exercise price per share shall be equal to the exercise price per share of such option prior to the Effective Time multiplied by the Exchange Ratio, and each Out-of-the-Money Option will be cancelled and (iii) each restricted stock unit award covering ICI Class B Common Stock that is outstanding immediately prior to the Effective Time, whether vested or unvested, (“Participating Company RSU Awards”), will be converted into a restricted stock unit award covering a number of shares of SportsMap Common Stock upon substantially the same terms and conditions as are in effect with respect to such award prior to the Effective Time, except that such award shall represent the right to receive a number of shares of SportsMap Common Stock equal to the number of shares of ICI Class B Common Stock subject to such award prior to the Effective Time multiplied by the Exchange Ratio. The
 

 
Exchange Ratio will be based on an equity valuation of ICI of $100,000,000, subject to adjustment as set forth in the Business Combination Agreement and described in more detail below, divided by an assumed value of SportsMap Common Stock of $10.00 per share. It is expected that, if the Business Combination is consummated, SportsMap’s shares and warrants would continue to be listed on The Nasdaq Stock Market LLC (“Nasdaq”).
Concurrently with the execution of the Business Combination Agreement, SportsMap, ICI and each of the holders of ICI common stock, par value $0.001 per share, designated as “Class A Voting Common Stock” pursuant to ICI’s certificate of incorporation, entered into a sponsor letter agreement (the “Sponsor Letter Agreement”), pursuant to which the Sponsor and each such other holder agreed, among other things, (i) to vote all of the shares of SportsMap Common Stock beneficially owned by the Sponsor and such other holder in favor of the adoption of the Business Combination Agreement and the approval of the Business Combination, (ii) not to redeem any of its shares of SportsMap Common Stock in connection with the Business Combination, (iii) to be bound by certain other covenants and agreements related to the Business Combination, and (iv) to be bound by certain transfer restrictions with respect to its shares of SportsMap Common Stock prior to the closing of the Business Combination, in each case, on the terms and subject to the conditions set forth in the Sponsor Letter Agreement.
Concurrently with the execution of the Business Combination Agreement, SportsMap, ICI and each of the holders of ICI Common Stock designated as Class A Voting Common Stock, par value $0.001 per share, entered into a Transaction Support Agreement (the “Transaction Support Agreement”), pursuant to which each such holder agreed, among other things, (a) to vote all of the shares of ICI Common Stock beneficially owned by such holder (which vote may be done by executing a written consent) in favor of any actions required in furtherance of the Merger, the conversion of any convertible promissory notes issued by ICI on or after the date of the Business Combination Agreement but prior to the closing of the Business Combination, and the transactions contemplated by the Business Combination Agreement, (b) to be bound by certain other covenants and agreements related to the Business Combination, and (c) to be bound by certain transfer restrictions with respect to its shares in ICI prior to the closing of the Business Combination, in each case, on the terms and subject to the conditions set forth in the Transaction Support Agreement.
In addition to the Business Combination Proposal, you will also be asked to consider and vote upon (a) a proposal to approve and adopt an amended and restated certificate of incorporation (the “Proposed Certificate of Incorporation”), a copy of which is attached hereto as Annex B, to replace SportsMap’s amended and restated certificate of incorporation as in effect as of the date hereof (the “Current Certificate of Incorporation”), which is referred to herein as the “Charter Proposal”, (b) a proposal to approve, for purposes of complying with SEC requirements, certain other matters set forth in the Proposed Certificate of Incorporation, which is referred to as the “Advisory Governance Proposals”, (c) a proposal to approve, for purposes of complying with Nasdaq Listing Rule 5635, the issuance of SportsMap Common Stock in connection with the Business Combination, which is referred to herein as the “Nasdaq Proposal”, (d) a proposal to elect the members to serve on the board of directors of New ICI, which is referred to as the “Director Election Proposal”, (e) a proposal to approve and adopt the equity incentive plan, a copy of which is attached to the proxy statement as Annex F, which is referred to herein as the “Equity Incentive Plan Proposal”, and (f) a proposal to adjourn the Special Meeting to a later date or dates to the extent necessary, which is referred to herein as the “Adjournment Proposal”.
The Business Combination will be consummated only if the Business Combination Proposal, the Charter Proposal, the Nasdaq Proposal and the Equity Incentive Plan Proposal (collectively, the “Condition Precedent Proposals”) are approved at the Special Meeting. The Adjournment Proposal is not conditioned upon the approval of any other proposal. Each of these proposals is more fully described in the accompanying proxy statement, which each stockholder is encouraged to read carefully and in its entirety.
The Adjournment Proposal provides for a vote to adjourn the Special Meeting to a later date or dates, if necessary, (i) to ensure that any required supplement or amendment to the accompanying proxy statement is provided to holders of SportsMap Common Stock (the “SportsMap Stockholders”) or, if as of the time for which the Special Meeting is scheduled, there are insufficient shares of SportsMap Common Stock represented (either in person or by proxy) to constitute a quorum necessary to conduct business at the Special Meeting or (ii) in order to solicit additional proxies from SportsMap Stockholders in favor of one or more of the proposals at the Special Meeting.
 

 
Pursuant to the Current Certificate of Incorporation, SportsMap will provide holders of SportsMap’s public shares (“public stockholders” and such shares, “public shares”) with the opportunity to redeem their public shares for cash equal to their pro rata share of the aggregate amount on deposit in the trust account (the “Trust Account”), which holds the proceeds of SportsMap’s initial public offering, as of two business days prior to the consummation of the transactions contemplated by the Business Combination Proposal (including interest earned on the funds held in the Trust Account and not previously released to SportsMap to pay its taxes). For illustrative purposes, based on funds in the Trust Account of approximately $17.2 million on June 30, 2023, the estimated per-share redemption price would have been approximately $10.54, less any taxes payable from interest proceeds. Public stockholders may elect to redeem their shares even if they vote for the Business Combination Proposal. A public stockholder, together with any affiliate of his or any other person with whom he is acting in concert or as a “group” ​(as defined in Section 13(d)(3) of the U.S. Securities Exchange Act of 1934, as amended), will be restricted from seeking redemption rights with respect to more than 20% of the public shares without the consent of SportsMap. Accordingly, all public shares in excess of 20% held by a public stockholder, together with any affiliate of such holder or any other person with whom such holder is acting in concert or as a “group,” will not be redeemed for cash without the consent of SportsMap. See “Special Meeting of SportsMap — Redemption Rights” in the accompanying proxy statement for a detailed description of the procedures to be followed if you wish to redeem your public shares for cash.
The consummation of the transactions contemplated by the Business Combination Agreement, including the occurrence of the closing of the Business Combination, is subject to the satisfaction or waiver of certain other closing conditions as described in the accompanying proxy statement under the section entitled “Proposal No. 1 — The Business Combination Proposal — Business Combination Agreement — Conditions to Closing”. There can be no assurance that the parties to the Business Combination Agreement would waive any such provision of the Business Combination Agreement or that the transactions contemplated by the Business Combination Agreement, including the closing of the Business Combination, will be consummated.
SportsMap Common Stock and SportsMap’s Public Warrants and units are currently listed on The Nasdaq Global Market under the symbols “SMAP”, “SMAPW” and “SMAPU”, respectively. Upon consummation of the Business Combination, New ICI’s shares of common stock and Public Warrants are expected to be listed on Nasdaq under the symbols “MSAI” and “MSAIW”, respectively. New ICI will not have units traded. SportsMap’s units commenced public trading on October 19, 2021. The SportsMap Common Stock and SportsMap’s warrants began separate trading on November 16, 2021. SportsMap is providing the accompanying proxy statement and accompanying proxy card to SportsMap Stockholders in connection with the solicitation of proxies to be voted at the Special Meeting and at any adjournments of the Special Meeting. Information about the Special Meeting, the Business Combination and other related business to be considered by SportsMap Stockholders at the Special Meeting is included in the accompanying proxy statement. Whether or not you plan to attend the Special Meeting, all of SportsMap Stockholders are urged to read the accompanying proxy statement, including the annexes and other documents referred to therein, carefully and in their entirety. You should also carefully consider the risk factors described in “Risk Factors” beginning on page 44 of the accompanying proxy statement.
The accompanying proxy statement describes the Business Combination Agreement, the Business Combination and related transactions in detail, and you should read it carefully. Please pay particular attention to the section entitled “Risk Factors”, beginning on page 44.
Our board of directors (the “SportsMap Board”) has unanimously approved and adopted the Business Combination Agreement and unanimously recommends that our stockholders vote FOR all of the proposals to be presented at the Special Meeting. Our Sponsor, directors and officers, and other Insiders have agreed to vote all of their shares, which represent approximately 68.5% of the outstanding shares of SportsMap Common Stock, in favor of all such proposals. When you consider the SportsMap Board’s recommendation and such persons’ agreement to vote in favor, you should keep in mind that our directors and our officers have interests in the Business Combination that may differ from or conflict with your interests as a stockholder. See the section entitled “Proposal No. 1 — The Business Combination Proposal — Interests of SportsMap’s Directors and Officers in the Business Combination”.
 

 
After careful consideration, the SportsMap Board has unanimously approved the Business Combination Agreement and the transactions contemplated thereby, including the Business Combination, and unanimously recommends that stockholders vote “FOR” the adoption of the Business Combination Agreement and approval of the transactions contemplated thereby, including the Business Combination, and “FOR” all other proposals presented to SportsMap Stockholders in the accompanying proxy statement. When you consider the recommendation of these proposals by the SportsMap Board, you should keep in mind that SportsMap’s directors and officers have interests in the Business Combination that may differ from or conflict with your interests as a stockholder. For instance, the Sponsor will benefit from the completion of a business combination and may be incentivized to complete a business combination that is less favorable to stockholders of SportsMap than liquidating SportsMap. See “Business Combination Proposal — Interests of SportsMap’s Directors and Officers in the Business Combination” in the accompanying proxy statement for a further discussion of these considerations.
Your vote is very important. Whether or not you plan to attend the Special Meeting, please vote as soon as possible by following the instructions in the accompanying proxy statement to make sure that your shares are represented at the Special Meeting. If you hold your shares in “street name” through a bank, broker or other nominee, you will need to follow the instructions provided to you by your bank, broker or other nominee to ensure that your shares are represented and voted at the Special Meeting. The Business Combination will be consummated only if the Condition Precedent Proposals are approved at the Special Meeting. Each of the Condition Precedent Proposals is cross-conditioned on the approval of each other. If the Condition Precedent Proposals are not approved and the applicable conditions in the Business Combination Agreement are not waived, the Director Election Proposal and the Advisory Governance Proposals will not be presented at the meeting. The Adjournment Proposal is not conditioned on the approval of any other proposal set forth in the accompanying proxy statement.
If you sign, date and return your proxy card without indicating how you wish to vote, your proxy will be voted FOR each of the proposals presented at the Special Meeting. If you fail to return your proxy card or fail to instruct your bank, broker or other nominee how to vote, and do not attend the Special Meeting in person, the effect will be, among other things, that your shares will not be counted for purposes of determining whether a quorum is present at the Special Meeting. If you are a stockholder of record and you attend the Special Meeting and wish to vote in person, you may withdraw your proxy and vote in person.
TO EXERCISE YOUR REDEMPTION RIGHTS, YOU MUST DEMAND IN WRITING THAT YOUR PUBLIC SHARES ARE REDEEMED FOR A PRO RATA PORTION OF THE FUNDS HELD IN THE TRUST ACCOUNT AND TENDER YOUR SHARES TO SPORTSMAP’S TRANSFER AGENT TWO (2) BUSINESS DAYS PRIOR TO THE ORIGINALLY SCHEDULED DATE OF THE SPECIAL MEETING. IN ORDER TO EXERCISE YOUR REDEMPTION RIGHT, YOU NEED TO IDENTIFY YOURSELF AS A BENEFICIAL HOLDER AND PROVIDE YOUR LEGAL NAME, PHONE NUMBER AND ADDRESS IN YOUR WRITTEN DEMAND. YOU MAY TENDER YOUR SHARES BY EITHER DELIVERING YOUR SHARE CERTIFICATE TO THE TRANSFER AGENT OR BY DELIVERING YOUR SHARES ELECTRONICALLY USING THE DEPOSITORY TRUST COMPANY’S DWAC (DEPOSIT WITHDRAWAL AT CUSTODIAN) SYSTEM. IF THE BUSINESS COMBINATION IS NOT COMPLETED, THEN THESE SHARES WILL BE RETURNED TO YOU OR YOUR ACCOUNT. IF YOU HOLD THE SHARES IN STREET NAME, YOU WILL NEED TO INSTRUCT THE ACCOUNT EXECUTIVE AT YOUR BANK OR BROKER TO WITHDRAW THE SHARES FROM YOUR ACCOUNT IN ORDER TO EXERCISE YOUR REDEMPTION RIGHTS.
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES REGULATORY AGENCY HAS APPROVED OR DISAPPROVED THE TRANSACTIONS DESCRIBED IN THIS PROXY STATEMENT, PASSED UPON THE MERITS OR FAIRNESS OF THE BUSINESS COMBINATION OR RELATED TRANSACTIONS OR PASSED UPON THE ADEQUACY OR ACCURACY OF THE DISCLOSURE IN THIS PROXY STATEMENT. ANY REPRESENTATION TO THE CONTRARY CONSTITUTES A CRIMINAL OFFENSE.
This proxy statement is dated November 13, 2023, and is first being mailed to SportsMap Stockholders on or about November 13, 2023.
 

 
SportsMap Tech Acquisition Corp.
5353 WEST ALABAMA, SUITE 415
HOUSTON, TEXAS 77056
(713) 479-5302
NOTICE OF SPECIAL MEETING OF STOCKHOLDERS TO BE HELD ON DECEMBER 5, 2023
To the Stockholders of SportsMap Tech Acquisition Corp:
NOTICE IS HEREBY GIVEN that a special meeting of stockholders of SportsMap Tech Acquisition Corp., a Delaware corporation (“SportsMap”), will be held on December 5, 2023, at 10:00 a.m., Eastern Time (the “Special Meeting”). The Special Meeting will be completely virtual. There will be no physical meeting location and the Special Meeting will only be conducted via live webcast at the following address: www.virtualshareholdermeeting.com/SMAP2023SM2. You are cordially invited to attend the Special Meeting for the following purposes:
1.
The Business Combination Proposal — To consider and adopt the Business Combination Agreement (as it may be amended, supplemented or otherwise modified from time to time, the “Business Combination Agreement”), by and among SportsMap, ICH Merger Sub Inc., a Delaware corporation and a wholly-owned subsidiary of SportsMap, and Infrared Cameras Holdings, Inc., a Delaware corporation (“ICI”), a copy of which is attached to the accompanying proxy statement as Annex A, including the transactions contemplated thereby (Proposal No. 1);
2.
The Charter Proposal — To consider and vote upon a proposal to adopt the second amended and restated certificate of incorporation (the “Proposed Certificate of Incorporation”) of SportsMap, a copy of which is attached to the accompanying proxy statement as Annex B (Proposal No. 2);
3.
The Advisory Governance Proposals — To consider and vote upon, on a non-binding advisory basis, proposals to approve certain governance provisions contained in the Proposed Certificate of Incorporation, presented separately in accordance with the requirements of the United States Securities and Exchange Commission (Proposal No. 3);
4.
The Nasdaq Proposal — To consider and vote upon, for purpose of complying with Nasdaq Listing Rule 5635, the issuance of SportsMap common stock, par value $0.0001 per share (“SportsMap Common Stock”), in connection with the Business Combination (Proposal No. 4);
5.
The Director Election Proposal — To consider and vote upon a proposal to elect the seven individuals as directors to the board of directors of SportsMap (the “SportsMap Board”), effective immediately upon the closing of the Business Combination, in each case, until their respective successor is duly elected and qualified, or until their earlier resignation, removal or death (Proposal No. 5);
6.
The Equity Incentive Plan Proposal — To consider and vote upon the equity incentive plan, a copy of which is attached to the proxy statement as Annex F (Proposal No. 6); and
7.
The Adjournment Proposal — To consider and vote upon a proposal to approve the adjournment of the Special Meeting to a later date or dates, if necessary, to permit further solicitation and vote of proxies in the event that there are insufficient votes for, or otherwise in connection with, the approval of the Business Combination Proposal, the Charter Proposal, the Equity Incentive Plan Proposal, the Director Election Proposal, and the Nasdaq Proposal, or if we determine that one or more of the closing conditions to Business Combination Agreement is not satisfied or waived (Proposal No. 7).
These items of business are described in the attached proxy statement, which we encourage you to read in its entirety before voting. Only holders of record of SportsMap Common Stock at the close of business on October 17, 2023, are entitled to notice of the Special Meeting and to vote and have their votes counted at the Special Meeting and any adjournments or postponements of the Special Meeting. IN PARTICULAR, WE URGE YOU TO CAREFULLY READ THE SECTION ENTITLED “RISK FACTORS”.
Pursuant to SportsMap’s amended and restated certificate of incorporation as in effect as of the date hereof, SportsMap will provide holders of SportsMap’s public shares (“public stockholders” and such shares, “public shares”) with the opportunity to redeem their public shares for cash equal to their pro rata share of
 

 
the aggregate amount on deposit in the Trust Account (as defined herein), which holds the proceeds of SportsMap’s initial public offering, as of two business days prior to the consummation of the transactions contemplated by the Business Combination Proposal (including interest earned on the funds held in the Trust Account and not previously released to SportsMap to pay its taxes). For illustrative purposes, based on funds in the Trust Account of approximately $17.2 million on June 30, 2023, the estimated per-share redemption price would have been approximately $10.54, less any taxes payable from interest proceeds. Public stockholders may elect to redeem their shares even if they vote for the Business Combination Proposal. A public stockholder, together with any affiliate of his or any other person with whom he is acting in concert or as a “group” ​(as defined in Section 13(d)(3) of the Exchange Act), will be restricted from seeking redemption rights with respect to more than 20% of the public shares without the consent of SportsMap. Accordingly, all public shares in excess of 20% held by a public stockholder, together with any affiliate of such holder or any other person with whom such holder is acting in concert or as a “group,” will not be redeemed for cash without the consent of SportsMap. SportsMap, LLC (the “Sponsor”) and SportsMap’s directors and officers have, for no consideration, agreed to waive their redemption rights in connection with the consummation of the Business Combination with respect to any shares of SportsMap Common Stock they may hold. Collectively, the Sponsor and the SportsMap directors and officers own 68.5% of issued and outstanding SportsMap Common Stock. The Sponsor and SportsMap’s directors and officers have agreed to vote any shares of SportsMap Common Stock owned by them in favor of each of the proposals presented at the Special Meeting.
After careful consideration, the SportsMap Board has determined that the Business Combination Proposal, the Charter Proposal, the Advisory Governance Proposals, the Nasdaq Proposal, the Director Election Proposal, the Equity Incentive Plan Proposal and the Adjournment Proposal are fair to and in the best interests of SportsMap and its stockholders and unanimously recommends that you vote or give instruction to vote “FOR” the Business Combination Proposal, “FOR” the Charter Proposal, “FOR” the Advisory Governance Proposals, “FOR” the Nasdaq Proposal, “FOR” the Director Election Proposal, “FOR” the Equity Incentive Plan Proposal and “FOR” the Adjournment Proposal, if presented.
Consummation of the Business Combination is conditional on approval of each of the Business Combination Proposal, the Charter Proposal, the Nasdaq Proposal and the Equity Incentive Plan Proposal. If the Business Combination Proposal is not approved, the other proposals, except the Adjournment Proposal, will not be presented to stockholders for a vote. The proxy statement accompanying this notice explains the Business Combination Agreement and the transactions contemplated thereby, as well as the proposals to be considered at the Special Meeting. Please review the proxy statement carefully.
All SportsMap Stockholders are invited to attend the Special Meeting in virtual format. SportsMap Stockholders may attend, vote and examine the list of SportsMap Stockholders entitled to vote at the Special Meeting by visiting www.proxyvote.com prior to the meeting, or by visiting www.virtualshareholdermeeting.com/SMAP2023SM2 during the meeting, and entering the control number found on their proxy card, voting instruction form or notice included in their proxy materials. In light of public health concerns regarding the coronavirus (“COVID-19”) pandemic, the Special Meeting will be held in virtual meeting format only. You will not be able to attend the Special Meeting physically. To ensure your representation at the Special Meeting, you are urged to complete, sign, date and return the enclosed proxy card as soon as possible. If your shares are held in an account at a brokerage firm or bank, you must instruct your broker or bank on how to vote your shares.
A complete list of SportsMap Stockholders of record entitled to vote at the Special Meeting will be available for ten days before the Special Meeting at the principal executive offices of SportsMap for inspection by stockholders during business hours for any purpose germane to the Special Meeting.
Your vote is important regardless of the number of shares you own. Whether you plan to attend the Special Meeting or not, please sign, date and return the enclosed proxy card as soon as possible in the envelope provided. If your shares are held in “street name” or are in a margin or similar account, you should contact your broker to ensure that votes related to the shares you beneficially own are properly counted.
 

 
Thank you for your participation. We look forward to your continued support.
By Order of the Board of Directors,
SPORTSMAP TECH ACQUISITION CORP.
/s/ David Gow
November 13, 2023 David Gow
Chairman of the Board of Directors
IF YOU SIGN, DATE AND RETURN YOUR PROXY CARD WITHOUT INDICATING HOW YOU WISH TO VOTE, YOUR PROXY WILL BE VOTED IN FAVOR OF EACH OF THE PROPOSALS PRESENTED AT THE SPECIAL MEETING. IF YOU FAIL TO RETURN YOUR PROXY CARD OR FAIL TO INSTRUCT YOUR BANK, BROKER OR OTHER NOMINEE HOW TO VOTE, AND DO NOT ATTEND THE SPECIAL MEETING IN PERSON, THE EFFECT WILL BE, AMONG OTHER THINGS, THAT YOUR SHARES WILL NOT BE COUNTED FOR PURPOSES OF DETERMINING WHETHER A QUORUM IS PRESENT AT THE SPECIAL MEETING. IF YOU ARE A STOCKHOLDER OF RECORD AND YOU ATTEND THE SPECIAL MEETING AND WISH TO VOTE IN PERSON, YOU MAY WITHDRAW YOUR PROXY AND VOTE IN PERSON.
TO EXERCISE YOUR REDEMPTION RIGHTS, YOU MUST DEMAND IN WRITING THAT YOUR PUBLIC SHARES ARE REDEEMED FOR A PRO RATA PORTION OF THE FUNDS HELD IN THE TRUST ACCOUNT AND TENDER YOUR SHARES TO SPORTSMAP’S TRANSFER AGENT TWO (2) BUSINESS DAYS PRIOR TO THE ORIGINALLY SCHEDULED DATE OF THE SPECIAL MEETING. IN ORDER TO EXERCISE YOUR REDEMPTION RIGHT, YOU NEED TO IDENTIFY YOURSELF AS A BENEFICIAL HOLDER AND PROVIDE YOUR LEGAL NAME, PHONE NUMBER AND ADDRESS IN YOUR WRITTEN DEMAND. YOU MAY TENDER YOUR SHARES BY EITHER DELIVERING YOUR SHARE CERTIFICATE TO THE TRANSFER AGENT OR BY DELIVERING YOUR SHARES ELECTRONICALLY USING THE DEPOSITORY TRUST COMPANY’S DWAC (DEPOSIT WITHDRAWAL AT CUSTODIAN) SYSTEM. IF THE BUSINESS COMBINATION IS NOT COMPLETED, THEN THESE SHARES WILL BE RETURNED TO YOU OR YOUR ACCOUNT. IF YOU HOLD THE SHARES IN STREET NAME, YOU WILL NEED TO INSTRUCT THE ACCOUNT EXECUTIVE AT YOUR BANK OR BROKER TO WITHDRAW THE SHARES FROM YOUR ACCOUNT IN ORDER TO EXERCISE YOUR REDEMPTION RIGHTS. SEE “SPECIAL MEETING OF SPORTSMAP STOCKHOLDERS — REDEMPTION RIGHTS” FOR MORE SPECIFIC INSTRUCTIONS.
 

 
PROXY STATEMENT FOR SPECIAL MEETING OF
THE STOCKHOLDERS OF SPORTSMAP TECH ACQUISITION CORP.
(A DELAWARE CORPORATION)
The board of directors (the “SportsMap Board”) of SportsMap Tech Acquisition Corp., a Delaware corporation (“SportsMap”, “we” or “our”), has unanimously approved (1) the merger (the “Merger”) of ICH Merger Sub Inc., a Delaware corporation and a direct wholly-owned subsidiary of SportsMap (“Merger Sub”), with and into Infrared Cameras Holdings, Inc., a Delaware corporation (“ICI”), with New ICI surviving the Merger as a wholly-owned subsidiary of SportsMap (the time that the Merger becomes effective being referred to as the “Effective Time”), pursuant to the terms of the Business Combination Agreement, dated as of December 5, 2022 (the “Business Combination Agreement”), by and among SportsMap, Merger Sub and ICI, a copy of which is attached to this proxy statement as Annex A and as more fully described elsewhere in this proxy statement and (2) the other transactions contemplated by the Business Combination Agreement and documents related thereto (collectively, the “Business Combination”). As used in this proxy statement, “New ICI” refers to SportsMap after giving effect to the Business Combination.
As a result of, and upon the consummation of the Business Combination (the “Closing”), on the terms and subject to the conditions set forth in the Business Combination Agreement, at the Effective Time, among other things and as more fully described elsewhere in this proxy statement: (i) each share of issued and outstanding ICI common stock, par value $0.001 per share (“ICI Common Stock”), other than dissenting shares and shares held immediately prior to the Effective Time by ICI as treasury stock, will be converted into the right to receive a number of shares of SportsMap common stock, par value $0.0001 per share (“SportsMap Common Stock”), based on the Exchange Ratio described below, (ii) each option to purchase shares of ICI Common Stock designated as “Class B Non-Voting Common Stock” ​(“ICI Class B Common Stock”) that is outstanding and unexercised immediately prior to the Effective Time, whether vested or unvested, other than any Out-of-the-Money Options (as defined in this proxy statement), (“Participating Company Options”) will be converted into an option to purchase a number of shares of SportsMap Common Stock upon substantially the same terms and conditions (taking into account any accelerated vesting provided for in ICI’s existing equity plan or any related award agreement by reason of the Business Combination Agreement or the Business Combination) as are in effect with respect to such option prior to the Effective Time, except that such option shall represent the right to receive a number of shares of SportsMap Common Stock equal to the number of shares of ICI Class B Common Stock subject to such option prior to the Effective Time multiplied by the Exchange Ratio, and the exercise price per share shall be equal to the exercise price per share of such option prior to the Effective Time multiplied by the Exchange Ratio, (iii) each restricted stock unit award covering ICI Class B Common Stock that is outstanding immediately prior to the Effective Time, whether vested or unvested (“Participating Company RSU Awards”), will be converted into a restricted stock unit award covering a number of shares of SportsMap Common Stock upon substantially the same terms and conditions as are in effect with respect to such award prior to the Effective Time, except that such award shall represent the right to receive a number of shares of SportsMap Common Stock equal to the number of shares of ICI Class B Common Stock subject to such award prior to the Effective Time multiplied by the Exchange Ratio and (iv) the governing documents of SportsMap will be amended and restated and will be the governing documents of New ICI as described in this proxy statement. The Exchange Ratio will be equal to the value of a share of ICI Common Stock, based on an equity valuation of ICI of $100,000,000, subject to adjustment as set forth in the Business Combination Agreement and described in more detail below, divided by an assumed value of SportsMap Common Stock of $10.00 per share. As of the Effective Time, SportsMap will change its name to ‘Infrared Cameras Holdings, Inc.’
SportsMap is, and immediately following the Effective Time New ICI will be, an “emerging growth company”, as defined under the Jumpstart Our Business Startups Act of 2012, or the JOBS Act, and a “smaller reporting company”, as defined in federal securities laws. New ICI may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies and smaller reporting company.
SportsMap Common Stock and SportsMap’s Public Warrants and units are currently listed and traded on The Nasdaq Global Market under the symbols “SMAP”, “SMAPW” and “SMAPU”, respectively. Upon consummation of the Business Combination, New ICI intends to apply for listing, effective at the time of
 

 
the Closing, of New ICI’s shares of common stock and public warrants on The Nasdaq Stock Market LLC under the symbols “MSAI” and “MSAIW”, respectively. New ICI will not have units traded. This proxy statement provides stockholders of SportsMap with detailed information about the proposed Business Combination and other matters to be considered at the Special Meeting of SportsMap. We encourage you to read this entire document, including the annexes and other documents referred to herein, carefully and in their entirety. You should also carefully consider the risk factors described in the section entitled “Risk Factors” beginning on page 44 of this proxy statement.
NEITHER THE U.S. SECURITIES AND EXCHANGE COMMISSION NOR ANY U.S. STATE SECURITIES REGULATORY AGENCY HAS APPROVED OR DISAPPROVED THE TRANSACTIONS DESCRIBED IN THIS PROXY STATEMENT OR ANY OF THE SECURITIES TO BE ISSUED IN THE BUSINESS COMBINATION, PASSED UPON THE MERITS OR FAIRNESS OF THE BUSINESS COMBINATION OR RELATED TRANSACTIONS OR PASSED UPON THE ADEQUACY OR ACCURACY OF THE DISCLOSURE IN THIS PROXY STATEMENT. ANY REPRESENTATION TO THE CONTRARY CONSTITUTES A CRIMINAL OFFENSE.
This proxy statement is dated November 13, 2023 and is first being mailed to the stockholders of SportsMap on or about that date.
 

 
TABLE OF CONTENTS
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ANNEXES
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G-1
H-1
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MARKET AND INDUSTRY DATA
This proxy statement contains estimates, projections, and other information concerning ICI’s industry and business, as well as data regarding market research, estimates, and forecasts prepared by ICI’s management. Information that is based on estimates, forecasts, projections, market research, or similar methodologies is inherently subject to uncertainties, and actual events or circumstances may differ materially from events and circumstances that are assumed in this information. The industry in which ICI operates is subject to a high degree of uncertainty and risk due to a variety of factors, including those described in the section entitled “Risk Factors”. Unless otherwise expressly stated, ICI obtained this industry, business, market, and other data from reports, research surveys, studies, and similar data prepared by market research firms and other third parties, industry and general publications, government data, and similar sources that ICI did not pay for, sponsor, conduct or otherwise commission. Forecasts and other forward-looking information with respect to industry, business, market, and other data are subject to the same qualifications and additional uncertainties regarding the other forward-looking statements in this proxy statement. See “Cautionary Note Regarding Forward-Looking Statements.
TRADEMARKS
This proxy statement includes trademarks, tradenames and service marks, certain of which belong to us, ICI or Merger Sub and others that are the property of other organizations. Solely for convenience, trademarks, tradenames and service marks referred to in this proxy statement appear without the®, TM and SM symbols, but the absence of those symbols is not intended to indicate, in any way, that we or ICI will not assert our or their rights or that the applicable owner will not assert its rights to these trademarks, tradenames and service marks to the fullest extent under applicable law. We do not intend our use or display of other parties’ trademarks, trade names or service marks to imply, and such use or display should not be construed to imply, a relationship with, or endorsement or sponsorship of us by, these other parties.
SELECTED DEFINITIONS
In this document:
“Adjusted Equity Value” means an amount equal to (a) $100,000,000, less (b) the aggregate amount of ICI's outstanding indebtedness at the Effective Time, plus (c) the aggregate exercise price that would be paid in respect of Participating Company Options if all Participating Company Options were exercised in full immediately prior to the Effective Time, plus (d) all cash and cash equivalents of ICI as of immediately prior to the Effective Time, plus (e) the aggregate principal amount of any convertible promissory notes entered into by ICI on or after the date of the Business Combination Agreement but prior to the Closing in each case on terms and subject to conditions set forth in the Business Combination Agreement. As of September 18, 2023, we estimate the Adjusted Equity Value would be approximately $107,916,000.
“Aggregate Closing PIPE Proceeds” means the aggregate cash proceeds actually received by SportsMap and Merger Sub in respect of the PIPE Financing (whether prior to or on the date of Closing).
“Aggregate Transaction Proceeds” means an amount equal to (a) the sum of (i) the aggregate cash proceeds available for release to SportsMap or Merger Sub (or any designees thereof) from the Trust Account in connection with the transactions contemplated hereby (after giving effect to any redemptions by the SportsMap Stockholders), (ii) the Aggregate Closing PIPE Proceeds (which as of the date of this proxy statement was zero), (iii) the aggregate principal amount of the ICI Convertible Notes (which as of the date of this proxy statement was approximately $2.975 million), and (iv) the aggregate principal amount of any indebtedness of ICI incurred on or after the date of the Business Combination Agreement and prior to the Closing and convertible into equity securities of ICI (which as of the date of this proxy statement was zero, in the case of clauses (iii) and (iv), to the extent facilitated by SportsMap, the Sponsor or any of their respective affiliates, less (b) the aggregate amount of any unpaid transaction expenses of SportsMap incurred in connection with the Business Combination.
“Business Combination” means the transactions contemplated by the Business Combination Agreement, including the Merger.
 
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“Business Combination Agreement” means the Business Combination Agreement, dated as of December 5, 2022, as amended by Amendment No. 1, dated June 27, 2023, and Amendment No. 2, dated September 17, 2023, and as may be further amended, supplemented or otherwise modified from time to time, by and among SportsMap, Merger Sub and ICI.
“Business Combination Proposal” means the proposal to approve the adoption of the Business Combination Agreement and the Business Combination.
“Certificate of Merger” means the certificate of merger effecting the Merger pursuant to the DGCL.
“Charter Proposal” means the proposal to approve and adopt the Proposed Certificate of Incorporation upon the consummation of the Business Combination.
“Closing” means the consummation of the Business Combination.
“Closing Date” means the date upon which the Closing is to occur.
“Code” means the Internal Revenue Code of 1986, as amended.
“Condition Precedent Proposals” means the Business Combination Proposal, the Charter Proposal, the Nasdaq Proposal and the Equity Incentive Plan Proposal.
“Current Certificate of Incorporation” means SportsMap’s amended and restated certificate of incorporation as in effect as of the date hereof.
“DGCL” means the Delaware General Corporation Law.
“Director Election Proposal” means the proposal to elect the members to serve on the New ICI Board.
“Effective Time” means the effective time of the Merger.
“Equity Incentive Plan” means the Equity Incentive Plan of New ICI, attached hereto as Annex F.
“Equity Incentive Plan Proposal” means the proposal to approve and adopt the Equity Incentive Plan.
“Exchange Act” means the Securities Exchange Act of 1934, as amended.
“Exchange Ratio” means the number obtained by (i) dividing the Adjusted Equity Value by $10.00 (the “Per Share Merger Consideration”), which is the assigned value of one share of SportsMap Common Stock, and (ii) further dividing the quotient of the calculation in clause (i) by the aggregate number of shares of ICI Common Stock issued and outstanding immediately prior to the Effective Time (other than shares held immediately prior to the Effective Time by ICI as treasury stock) on a fully-diluted basis assuming the exercise of all Participating Company Options (excluding any such shares issuable upon exercise of Out-of-the-Money Options, which will be cancelled at the Effective Time) and assuming the settlement of all Participating Company RSU Awards.
“GAAP” means United States generally accepted accounting principles.
“ICI” means Infrared Cameras Holdings, Inc., a Delaware corporation, and, if the context requires, its consolidated subsidiaries.
“ICI Class A Common Stock” means shares of common stock, par value $0.001 per share, of ICI designated as “Class A Voting Common Stock” pursuant to ICI’s certificate of incorporation, as amended. For the avoidance of doubt, from and after the consummation of the ICI Convertible Note Conversion, “ICI Class A Common Stock” will be deemed to include the ICI Class A Common Stock issued in the ICI Convertible Note Conversion.
“ICI Class B Common Stock” means shares of common stock, par value $0.001 per share, of ICI designated as “Class B Non-Voting Common Stock” pursuant to ICI’s certificate of incorporation, as amended.
“ICI Common Stock” means, collectively, the ICI Class A Common Stock and the ICI Class B Common Stock.
 
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“ICI Convertible Noteholders” means holders of ICI Convertible Notes.
“ICI Convertible Notes” means the convertible promissory notes (in such form as mutually agreed among SportsMap, Merger Sub and ICI) issued on or after the date of the Business Combination Agreement and prior to the Closing, which shall have an aggregate principal amount of up to $10,000,000.
“ICI Shareholder Promissory Note” means the promissory note issued by ICI to Gary Strahan on July 14, 2020 with an aggregate principal amount $29,718,000.
“ICI Stockholders” means holders of ICI Common Stock.
“Insiders” has the meaning ascribed to it in the Sponsor Letter Agreement.
“IPO” means SportsMap’s initial public offering of SportsMap Units, consummated on October 21, 2021.
“JOBS Act” means the Jumpstart Our Business Startups Act of 2012, as amended.
“Merger” means the merger of Merger Sub with and into ICI, with ICI surviving as a wholly-owned subsidiary of SportsMap.
“Merger Sub” means ICH Merger Sub Inc., a Delaware corporation and wholly-owned subsidiary of SportsMap.
“Nasdaq” means The Nasdaq Stock Market LLC.
“New ICI” means SportsMap following the consummation of the Business Combination.
“New ICI Board” means the board of directors of New ICI.
“New ICI Common Stock” means the common stock of New ICI, par value $0.001 per share, after Closing.
“Out-of-the-Money Option” means any ICI Option (as defined below) that is outstanding immediately prior to the Effective Time (as defined below) and has a per-share exercise price equal to or greater than (i) the Adjusted Equity Value, divided by (ii) the aggregate number of shares of ICI Common Stock issued and outstanding immediately prior to the Effective Time (other than shares held immediately prior to the Effective Time by ICI as treasury stock) on a fully-diluted basis assuming the exercise of all Participating Company Options.
“Participating Company Option” means each option to purchase shares of ICI Class B Common Stock that is outstanding and unexercised immediately prior to the Effective Time, whether vested or unvested, other than any Out-of-the-Money Option.
“Participating Company RSU Award” means each award covering shares of ICI Class B Common Stock that is outstanding immediately prior to the Effective Time, whether vested or unvested.
“PCAOB” means the U.S. Public Company Accounting Oversight Board.
“PIPE Financing” means the private placement or other financing to be consummated simultaneously with the Closing on such terms as are mutually agreed among SportsMap, Merger Sub and ICI.
“Private Placement Units” means the 675,000 units sold concurrently with the closing of the IPO, at $10.00 per unit. Each unit consists of one share of SportsMap Common Stock and three-quarters of one Private Placement Warrant.
“Private Placement Warrants” means the 506,250 private warrants originally included as part of the Private Placement Units and any warrants included in units issued upon conversion of working capital loans, if any.
“Private Shares” means the 675,000 shares of SportsMap Common Stock originally included as part of the Private Placement Units.
 
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“Proposed Certificate of Incorporation” means the amended and restated certificate of incorporation of New ICI, attached hereto as Annex B.
“Public Warrants” means the SportsMap Warrants originally included as part of the SportsMap Units and redeemable following the initial business combination.
“Required SportsMap Stockholder Approval” means the approval of each of Proposal No. 1 (the Business Combination Proposal), Proposal No. 2 (the Charter Proposal), Proposal No. 4 (the Nasdaq Proposal) and Proposal No. 6 (the Equity Incentive Plan Proposal) by the requisite number of shares of SportsMap Common Stock entitled to vote thereon, whether in person or by proxy at the Special Meeting (or any adjournment or postponement thereof), in accordance with SportsMap’s governing documents and applicable law.
“SEC” means the U.S. Securities and Exchange Commission.
“Securities Act” means the Securities Act of 1933, as amended.
“Sponsor” means SportsMap, LLC, a Delaware limited liability company.
“Sponsor Letter Agreement” means the Sponsor Letter Agreement, dated December 5, 2022, by and among SportsMap, ICI, the Sponsor and certain other holders of SportsMap Common Stock.
“SportsMap” means SportsMap Tech Acquisition Corp., a Delaware corporation.
“SportsMap Advisors” means Craig-Hallum Capital Group LLC and Roth Capital Partners, LLC.
“SportsMap Board” means the board of directors of SportsMap.
“SportsMap Common Stock” means the common stock of SportsMap, par value $0.001 per share, prior to Closing.
“SportsMap Founder Shares” means the 2,875,000 shares of SportsMap Common Stock that were purchased by Sponsor and the other initial stockholders prior to SportsMap’s IPO.
“SportsMap Initial Stockholders” means the Sponsor, Roth Capital Partners, LLC, the representative of the underwriters in the IPO, and any other holder of SportsMap Founder Shares, including SportsMap officers and directors.
“SportsMap Stockholders” means holders of SportsMap Common Stock, including, without limitation, the SportsMap Initial Stockholders.
“SportsMap Record Date” means October 17, 2023.
“SportsMap Units” means the 11,500,000 units issued in the IPO, each of which consisted of one share of SportsMap Common Stock and three-quarters of one Public Warrant.
“SportsMap Warrants” means the Public Warrants together with the Private Placement Warrants.
“Transaction Support Agreement” means the Transaction Support Agreement, dated December 5, 2022, by and among SportsMap, ICI and each of the holders of ICI Class A Common Stock.
“Trust Account” means the trust account established pursuant to the IPO, with Continental Stock Transfer & Trust Company acting as trustee, in which the proceeds from the IPO and related private placement were placed.
“Warrant Agreement” means the existing Warrant Agreement, dated October 18, 2021, between Continental Stock Transfer & Trust Company, as warrant agent, and SportsMap, pursuant to which the SportsMap Warrants were issued.
 
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CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
Certain statements in this proxy statement may constitute “forward-looking statements” for purposes of the federal securities laws. Our forward-looking statements include, but are not limited to, statements regarding our or our management team’s expectations, hopes, beliefs, intentions or strategies regarding the future. In addition, any statements that refer to projections, forecasts or other characterizations of future events or circumstances, including any underlying assumptions, are forward-looking statements. The words “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “intends,” “may,” “might,” “plan,” “possible,” “potential,” “predict,” “project,” “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 proxy statement may include, for example, statements about:

our ability to consummate the Business Combination;

changes to the terms of or waivers of closing conditions in the Business Combination Agreement;

the benefits of the Business Combination;

the combined company’s financial performance following the Business Combination;

the ability to obtain or maintain the listing of our securities on Nasdaq following the Business Combination;

ICI’s expectation to incur significant expenses and continuing losses for the foreseeable future;

ICI’s expansion of its SaaS capabilities and offerings; and

ICI’s future research and development costs.
These forward-looking statements are based on information available as of the date of this proxy statement, and current expectations, forecasts and assumptions, and involve a number of judgments, risks and uncertainties. Accordingly, forward-looking statements should not be relied upon as representing our views as of any subsequent date, and we do not undertake any obligation to update forward-looking statements to reflect events or circumstances after the date they were made, whether as a result of new information, future events or otherwise, except as may be required under applicable securities laws.
As a result of a number of known and unknown risks and uncertainties, the actual results or performance of New ICI may be materially different from those expressed or implied by these forward-looking statements. Some factors that could cause actual results to differ include:

the occurrence of any event, change or other circumstances that could delay the Business Combination or give rise to the termination of the Business Combination Agreement, including, without limitation, our ability to close on our investments;

the outcome of any legal proceedings that may be instituted against SportsMap, Merger Sub or ICI following the date of this proxy statement;

the inability to complete the Business Combination due to the failure to obtain approval of the SportsMap Stockholders or to satisfy other conditions to the Closing in the Business Combination Agreement, including the requirement with respect to Aggregate Transaction Proceeds;

the inability to obtain or maintain the listing of the New ICI Common Stock on Nasdaq following the Business Combination;

the risk that the proposed Business Combination disrupts current plans and operations of ICI as a result of the announcement and consummation of the transactions described herein;

our ability to recognize the anticipated benefits of the Business Combination, which may be affected by, among other things, competition and the ability of New ICI to grow and manage growth profitably following the Business Combination;

costs related to the Business Combination;

changes in applicable laws or regulations;

the effects of the COVID-19 pandemic on ICI’s business;
 
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the lack of a third-party valuation in SportsMap determining whether or not to pursue the proposed transaction;

the ability of New ICI to implement business plans, forecasts, and other expectations after the completion of the proposed transaction, and identify and realize additional opportunities;

the risk of downturns and the possibility of rapid change in the highly competitive industry in which ICI operates;

the risk that ICI and its current and future collaborators are unable to successfully develop and commercialize ICI’s products or services, or experience significant delays in doing so;

the risk that New ICI may never achieve or sustain profitability;

the risk that New ICI will need to raise additional capital to execute its business plan, which may not be available on acceptable terms or at all;

the risk that New ICI experiences difficulties in managing its growth and expanding operations;

the risk that third-party suppliers and manufacturers are not able to fully and timely meet their obligations;

the risk that ICI is unable to secure or protect its intellectual property;

the possibility that SportsMap, Merger Sub or ICI may be adversely affected by other economic, business, and/or competitive factors; and

other risks and uncertainties described in this proxy statement, including those under the section entitled “Risk Factors”.
 
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QUESTIONS AND ANSWERS ABOUT THE PROPOSALS
The following questions and answers briefly address some commonly asked questions about the proposals to be presented at the Special Meeting, including with respect to the proposed Business Combination. The following questions and answers may not include all the information that is important to SportsMap Stockholders. Stockholders are urged to read carefully this entire proxy statement, including the financial statements and annexes attached hereto and the other documents referred to herein.
Questions and answers about the Business Combination
Q:
What is the Business Combination?
A:
SportsMap, Merger Sub, a wholly owned subsidiary of SportsMap, and ICI have entered into the Business Combination Agreement, pursuant to which Merger Sub will merge with and into ICI, with ICI surviving the merger as a wholly-owned subsidiary of SportsMap. In connection with the Merger, SportsMap will change its name to ‘Infrared Cameras Holdings, Inc.’
SportsMap will hold the Special Meeting to, among other things, obtain the approvals required for the Business Combination and the other transactions contemplated by the Business Combination Agreement and you are receiving this proxy statement in connection with such meeting. In addition, a copy of the Business Combination Agreement is attached to this proxy statement as Annex A. We urge you to read carefully this proxy statement, including the annexes and the other documents referred to herein, in their entirety.
Q:
Why am I receiving this proxy statement?
A:
SportsMap is sending this proxy statement to its stockholders to help them decide how to vote their shares of SportsMap Common Stock with respect to the matters to be considered at the Special Meeting.
SportsMap and ICI have agreed to the Business Combination under the terms of the Business Combination Agreement that is described in this proxy statement. A copy of the Business Combination Agreement is attached to this proxy statement as Annex A, and SportsMap encourages its stockholders to read it in its entirety. SportsMap Stockholders are being asked to consider and vote upon a proposal to approve the adoption of the Business Combination Agreement and approve the transactions contemplated by the Business Combination Agreement, which, among other things, include provisions for Merger Sub to be merged with and into ICI with ICI being the surviving corporation as a wholly-owned subsidiary of SportsMap. See “Proposal No. 1 — The Business Combination Proposal”.
The Business Combination cannot be completed unless SportsMap Stockholders approve (a) a proposal to approve the adoption of the Business Combination Agreement and the Business Combination, (b) a proposal to approve and adopt the Proposed Certificate of Incorporation, a copy of which is attached hereto as Annex B, which is referred to herein as the “Charter Proposal”, (c) a proposal to approve, for purpose of complying with Nasdaq Listing Rule 5635, the issuance of SportsMap Common Stock in connection with the Business Combination, which is referred to herein as the “Nasdaq Proposal” and (d) a proposal to approve and adopt the Equity Incentive Plan, a copy of which is attached to the proxy statement as Annex F, which is referred to herein as the “Equity Incentive Plan Proposal”, set forth in this proxy statement for their approval. Information about the Special Meeting, the Business Combination and the other business to be considered by stockholders at the Special Meeting is contained in this proxy statement.
This document constitutes a proxy statement of SportsMap. It is a proxy statement because the SportsMap Board is soliciting proxies using this proxy statement from its stockholders. See “Proposal No. 1 — The Business Combination Proposal — The Business Combination Agreement — Merger Consideration”.
Q:
What will ICI receive in the Business Combination?
A:
If the Business Combination is completed, each share of ICI Common Stock issued and outstanding immediately prior to the Effective Time (other than dissenting shares and shares held immediately prior
 
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to the Effective Time by ICI as treasury stock) will be converted into the right to receive 10.07 shares of New ICI Common Stock (deemed to have a value of $10 per share).
Q:
What is the expected per share value of the cash consideration to be received by ICI in the Business Combination?
A:
The net cash to the balance sheet of New ICI and the total number of shares of New ICI Common Stock to be issued to holders of ICI Common Stock at the closing of the Business Combination will depend upon the extent to which SportsMap Public Stockholders exercise their redemption rights with respect to SportsMap Common Stock. Although the parties to the Business Combination have deemed the value of New ICI Common Stock to be equal to $10.00 per share for determining the number of shares of New ICI Common Stock issuable to holders of ICI securities (including ICI Common Stock and holders of ICI Convertible Notes) and the cash value per share of New ICI Common Stock, the trading price of New ICI Common Stock following the Business Combination may be substantially less than $10.00 per share. Set forth below is a calculation of the net cash per New ICI Common Stock resulting from the proceeds of the Trust Account, as well as (i) the exercise of all public warrants and private warrants, (ii) the exercise of Participating Company Options and (iii) the issuance of the Earnout Shares, in both a no additional redemption scenario and a maximum redemption scenario. The maximum redemption scenario represents the estimated maximum number of shares of SportsMap Common Stock that can be redeemed in order for the condition in the Business Combination Agreement that the Aggregate Transaction Proceeds be at least $10.0 million to be satisfied.
Assuming No
Additional
Redemptions
Assuming
Maximum
Redemptions
Public shares(1)
1,634,944 965,525
Gross cash proceeds of Trust Account, as of Record Date
$ 17,238,000 $ 9,655,250
Redemption Price as of the Record Date
$ 10.54 $ 10.54
Unpaid transaction expenses of SportsMap
$ 2,580,000 $ 2,580,000
Net cash proceeds of Trust Account at Record Date
$ 14,658,000 $ 7,025,250
Principal amount of ICI Convertible Notes, to the extent facilitated by SportsMap, the Sponsor or their respective affiliates
$ 2,925,000 $ 2,925,000
Net cash proceeds from Business Combination (Trust Account plus principal amount of ICI Convertible Notes)
$ 17,583,000 $ 10,000,250
Total shares of New ICI Common Stock outstanding(2)
13,074,740 12,486,866
Net cash per share of New ICI Common Stock
$ 1.34 $ 0.80
Total cash received by New ICI assuming full exercise of public warrants and private warrants for cash(3)
$ 105,009,375 $ 105,009,375
Total cash received by New ICI assuming full exercise of Participating Company Options(4)
$ 8,952,825 $ 9,053,701
Total cash received by New ICI upon settlement of Participating Company
RSUs(5)
$ 0 $ 0
Total cash received by New ICI upon issuance of Earnout Shares(6)
$ 0 $ 0
Total net cash(7)
$ 131,545,200 $ 124,063,326
Fully diluted total shares of New ICI Common Stock outstanding(7)
28,160,331 27,497,807
Net cash per share(7)
$ 4.67 $ 4.51
(1)
Number of shares owned by SportsMap Public Stockholders shown is the number of shares outstanding following the redemption of 9,865,056 public shares of SportsMap Common Stock at the special meeting of SportsMap Stockholders on April 14, 2023. The 9,865,056 public shares of SportsMap Common Stock redeemed represented approximately 65.5% of the shares of SportsMap Common Stock issued and outstanding on such date and approximately 85.8% of the public shares then-outstanding.
 
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(2)
Includes (i) the number of shares of SportsMap Common Stock held by SportsMap Public Stockholders in each redemption scenario, (ii) 2,840,000 shares of SportsMap Common Stock held by SportsMap Sponsor and Insiders, (iii) 1,362,500 shares of SportsMap Common Stock held by SportsMap Advisors or to be issued to SportsMap Advisors at Closing and (iv) 7,237,296 shares of SportsMap Common Stock in a no additional redemptions scenario and 7,318,841 shares of SportsMap Common Stock in a maximum redemptions scenario to be issued to holders of ICI securities, including holders of ICI Convertible Notes. For a more detailed discussion of the ownership of New ICI following the Closing see “How will the level of redemptions by SportsMap Stockholders affect the ownership of non-redeeming SportsMap Stockholders in New ICI following the Closing?
(3)
Assumes the exercise of all of SportsMap’s 8,625,000 public warrants and 506,250 private warrants at an exercise price of $11.50 per warrant.
(4)
Assumes the exercise of 1,388,035 Participating Company Options in a no additional redemptions scenario and 1,403,674 Participating Company Options in a maximum redemptions scenario at an average strike price of $6.45 per share.
(5)
Assumes the settlement of 2,166,306 Participating Company RSUs in a no additional redemptions scenario and 2,076,016 Participating Company RSUs in a maximum redemptions scenario. The Participating Company RSUs are not currently outstanding, but are expected to be granted prior to the Effective Time.
(6)
Assumes the issuance of 2,400,000 Earnout Shares. The Earnout Shares will be issued pro rata to the holders of ICI Common Stock, Participating Company Options and Participating Company RSU Awards (other than any Participating Company Options or Participating Company RSU Awards that are forfeited prior to the achievement of the applicable earnout goal) if either (a) during the period beginning six months after the Closing and ending on December 31, 2024, the volume-weighted average price of the common stock of New ICI is greater than or equal to $12.50 per share over any 20 trading days within any 30 consecutive trading days, or the combined company consummates a transaction in which its stockholders have the right to receive consideration implying a value of at least $12.50 per share or (b) New ICI achieves revenue of $68.5 million during the fiscal year ending December 31, 2024, subject to certain limitations set forth in the Business Combination Agreement.
(7)
Assumes (i) full exercise of public warrants and private warrants, (ii) full exercise of Participating Company Options, (iii) full settlement of Participating Company RSUs and (iv) issuance of Earnout Shares. The Participating Company RSUs are not currently outstanding, but are expected to be granted prior to the Effective Time.
Q:
When do you expect the Business Combination to be completed?
A:
It is currently anticipated that the Business Combination will be consummated promptly following the Special Meeting, which is set for December 5, 2023. However, such meeting could be adjourned, as described herein. Neither SportsMap nor ICI can assure you of when or if the Business Combination will be completed and it is possible that factors outside the control of both companies could result in the Business Combination being completed at a different time or not at all. SportsMap must first obtain the approval of its stockholders for certain of the proposals set forth in this proxy statement for their approval, and satisfy other closing conditions.
Q:
What happens if the Business Combination is not completed?
A:
There are certain circumstances under which the Business Combination Agreement may be terminated. See the section entitled “The Business Combination Agreement” for information regarding the parties’ specific termination rights. In addition, the Business Combination will not be consummated if the Required SportsMap Stockholder Approval is not obtained or the other conditions to closing are not satisfied or waived. If SportsMap does not complete the Business Combination for whatever reason, SportsMap would search for another target business with which to complete a business combination.
If, as a result of the termination of the Business Combination Agreement or otherwise, SportsMap is unable to complete a business combination by November 20, 2023, as extended monthly at the election of SportsMap upon the contribution of $0.05 per public share outstanding (ultimately as late as December 20, 2023), or amend the Current Certificate of Incorporation to extend the date by which
 
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SportsMap must consummate an initial business combination, the Current Certificate of Incorporation provides that SportsMap will: (i) cease all operations except for the purpose of winding up, (ii) as promptly as reasonably possible but not more than ten business days thereafter, redeem 100% of the outstanding public shares at a per-share price, payable in cash, equal to the amount then held in the Trust Account including interest earned on the funds held in the Trust Account and not previously released to SportsMap to pay taxes (less up to $50,000 of interest to pay dissolution expenses), divided by the number of outstanding public shares, which redemption will completely extinguish public stockholders’ rights as stockholders (including the right to receive further liquidation distributions, if any), subject to applicable law, and (iii) as promptly as reasonably possible following such redemption, subject to the approval of the remaining holders of SportsMap Common Stock and the SportsMap Board, proceed to commence a voluntary liquidation and thereby a formal dissolution of SportsMap, subject (in the case of (ii) and (iii) above) to SportsMap’s obligations to provide for claims of creditors and the requirements of applicable law. See the section entitled “Risk Factors — Risks Related to SportsMap and the Business Combination.” The SportsMap Initial Stockholders have, for no consideration, waived any right to any liquidation distribution with respect to their shares of SportsMap Common Stock.
The Sponsor has no redemption rights in the event a business combination is not effected prior to such date and, accordingly, its SportsMap Founder Shares will be worthless. Additionally, in the event of liquidation, there will be no distribution with respect to outstanding SportsMap Warrants. Accordingly, the SportsMap Warrants will expire worthless.
Q:
How will the level of redemptions by SportsMap Stockholders affect the ownership of non-redeeming SportsMap Stockholders in New ICI following the Closing?
A:
Because the Business Combination is structured as an acquisition of ICI by SportsMap, all shares of SportsMap Common Stock outstanding prior to the Business Combination will remain outstanding after the Business Combination, subject to the redemption rights exercised by SportsMap Stockholders. Accordingly, the total number of shares of New ICI Common Stock outstanding at the Closing (and the relative ownership levels of non-redeeming SportsMap Stockholders) will be affected by: (i) the number of shares of SportsMap Common Stock that is redeemed in connection with the Business Combination and (ii) the issuance of New ICI Common Stock in connection with the Business Combination.
Furthermore, to the extent that holders of SportsMap Common Stock redeem their shares of SportsMap Common Stock prior to or in the Business Combination, their SportsMap Warrants will remain issued and outstanding notwithstanding the redemption of their shares of SportsMap Common Stock. SportsMap Warrants are not redeemable in connection with the Business Combination and they trade separately from SportsMap Common Stock. Based on the trading price of the SportsMap Warrants of $0.05 per SportsMap Warrant as of October 23, 2023, their most recent date of trading activity, the SportsMap Warrants owned by the holders of SportsMap Common Stock (other than the Sponsor and its affiliates) were worth approximately $431,250 in the aggregate, and the SportsMap Warrants owned by the Sponsor and its affiliates were worth approximately $25,313.
SportsMap’s public stockholders previously elected to redeem 9,865,056 shares of SportsMap Common Stock in connection with a stockholder meeting on April 14, 2023, pursuant to a stockholder vote to amend SportsMap’s certificate of incorporation to extend our business combination period monthly, for up to eight months, from April 20, 2023, ultimately until as late as December 20, 2023. The 9,865,056 public shares of SportsMap Common Stock redeemed at the stockholder meeting on April 14, 2023 represented approximately 65.5% of the shares of SportsMap Common Stock issued and outstanding on such date and approximately 85.8% of the public shares then-outstanding.
The table below shows the relative ownership levels of holders of New ICI Common Stock following the Business Combination under varying redemption scenarios.
 
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Assuming No Additional
Redemptions
Assuming Maximum
Redemptions
Shares
Ownership
Percentage
Shares
Ownership
Percentage
Ownership Group:
SportsMap Sponsor and Insiders
2,840,000 21.7% 2,840,000 22.7%
SportsMap Public Stockholders(1)
1,634,944 12.5% 965,525 7.7%
SportsMap Advisors(2)
1,362,500 10.4% 1,362,500 10.9%
ICI Securityholders (including holders of ICI Convertible Notes)(3)
7,237,296 55.4% 7,318,841 58.6%
Total(4) 13,074,740 100.0% 12,486,866 100.0%
(1)
Number of shares owned by SportsMap Public Stockholders shown is the number of shares outstanding following the redemption of 9,865,056 public shares of SportsMap Common Stock at the special meeting of SportsMap Stockholders on April 14, 2023. The 9,865,056 public shares of SportsMap Common Stock redeemed represented approximately 65.5% of the shares of SportsMap Common Stock issued and outstanding on such date and approximately 85.8% of the public shares then-outstanding.
(2)
Includes (i) 575,000 shares of SportsMap Common Stock purchased by Roth Capital Partners, LLC (“Roth”) in connection with the IPO, (ii) 135,000 Private Shares included as part of the Private Placement Units purchased by Roth in connection with the IPO, (iii) 402,500 shares of New ICI Common Stock to be issued to Roth at Closing as payment of their $4,025,000 fee to serve as underwriter for the IPO, (iv) 175,000 shares of New ICI Common Stock to be issued to Craig-Hallum Capital Group LLC (“Craig-Hallum”) at Closing as payment of their portion of the M&A Advisory Fee (as defined below) and (v) 75,000 shares of New ICI Common Stock to be issued to Roth as payment of their portion of the M&A Advisory Fee. The fees described in (iii), (iv) and (v) will not be reduced or altered due to redemptions.
(3)
Includes (i) shares of New ICI Common Stock to be issued in exchange for shares held by existing ICI stockholders and (ii) shares of New ICI Common Stock to be issued to holders of ICI Convertible Notes. Shares of ICI Common Stock have been converted into shares of New ICI Common Stock based on illustrative Exchange Ratios reflecting information as of September 18, 2023; however, the actual Exchange Ratio will be calculated based on the Adjusted Equity Value and on ICI’s outstanding capital stock and rights to acquire ICI capital stock (including capital stock issuable upon the conversion of the ICI Convertible Notes) as of immediately prior to the Effective Time.
(4)
Public Stockholders will experience additional dilution to the extent New ICI issues additional shares after the Closing. The tables above do not include (i) up to 8,625,000 shares of New ICI Common Stock that will be issuable upon exercise of the public warrants at an exercise price of $11.50 per share, (ii) up to 2,400,000 Earnout Shares that will be issuable if certain conditions are met, as described elsewhere in this proxy statement, (iii) up to 506,250 shares of New ICI Common Stock that will be issuable upon exercise of the private warrants at an exercise price of $11.50 per share, (iv) shares of New ICI Common Stock that will be issuable upon the exercise of Participating Company Options, (v) shares of New ICI Common Stock underlying the Participating Company RSU Awards or (vi) shares of New ICI Common Stock that will be available for issuance under the 2023 Plan, which will initially be equal to 12% of the fully-diluted shares as of the Closing. The Participating Company RSUs are not currently outstanding, but are expected to be granted prior to the Effective Time. The following table illustrates the impact on relative ownership levels assuming the issuance of all such shares.
 
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Assuming No Additional
Redemptions
Assuming Maximum
Redemptions
Shares
Ownership
Percentage
Shares
Ownership
Percentage
Total shares of New ICI Common Stock outstanding at closing of the transaction
13,074,740 41.84% 12,486,866 40.93%
Earnout Shares
2,400,000 7.68% 2,400,000 7.87%
Shares underlying public warrants
8,625,000 27.60% 8,625,000 28.27%
Shares underlying private warrants
506,250 1.62% 506,250 1.66%
Shares underlying Participating Company Options
1,388,035 4.44% 1,403,675 4.60%
Shares underlying Participating Company RSU
Awards(a)
2,166,306 6.93% 2,076,016 6.80%
Shares initially reserved for issuance under 2023 Plan(b)
3,092,080 9.89% 3,011,750 9.87%
Total 31,252,411 100.0% 30,509,556 100.0%
(a)
Consists of shares underlying the Pre-Closing ICI Transaction RSU Awards (as defined below), which will cover ICI Class B Common Stock and will be assumed by SportsMap and converted into a comparable restricted stock unit award covering shares of New ICI common stock, based upon the Exchange Ratio, and will otherwise be subject to the same terms and conditions as applied to the underlying award immediately prior to the Closing, and are expected to be settled for shares of New ICI Common Stock no earlier than the one-year anniversary of the Closing. The Pre-Closing ICI Transaction RSU Awards are not currently outstanding, but are expected to be granted prior to the Effective Time. The Pre-Closing ICI Transaction RSU Awards and the New ICI Transaction RSU Awards (as defined below) are expected to be granted to Mr. Winch, Mr. Baird and Mr. Guida prior to the closing of the Business Combination and following the consummation of the Business Combination, respectively. The Transaction RSU Awards are expected to, collectively, cover a number of shares of New ICI Common Stock such that Mr. Winch, Mr. Baird and Mr. Guida would own 10.0%, 6.0% and 6.0% respectively, of New ICI common stock on a fully-diluted basis immediately following the closing of the Business Combination (excluding shares of New ICI Common Stock underlying SportsMap’s public warrants and private warrants). Please see “Executive and Director Compensation of Infrared Cameras — Interests of Directors and Executive Officers in the Business Combination — Transaction-Related RSU Awards” in this proxy statement for additional information.
(b)
Includes shares underlying the New ICI Transaction RSU Awards, which RSUs will be issued following the Closing and are expected to be settled for shares of New ICI Common Stock no earlier than the one-year anniversary of the Closing. The Pre-Closing ICI Transaction RSU Awards and the New ICI Transaction RSU Awards are expected to be granted to Mr. Winch, Mr. Baird and Mr. Guida prior to the closing of the Business Combination and following the consummation of the Business Combination, respectively. The Transaction RSU Awards are expected to, collectively, cover a number of shares of New ICI Common Stock such that Mr. Winch, Mr. Baird and Mr. Guida would own 10.0%, 6.0% and 6.0% respectively, of New ICI common stock on a fully-diluted basis immediately following the closing of the Business Combination (excluding shares of New ICI Common Stock underlying SportsMap’s public warrants and private warrants). Please see “Executive and Director Compensation of Infrared Cameras — Interests of Directors and Executive Officers in the Business Combination — Transaction-Related RSU Awards” in this proxy statement for additional information.
If all of the shares described in the table immediately above were to be issued in the no additional redemptions scenario, the percentage ownership of SportsMap’s public stockholders in New ICI would decrease from 12.5% to 5.2%. If all of the shares described in the table immediately above were to be issued in the maximum redemptions scenario, the percentage ownership of SportsMap’s public stockholders in New ICI would decrease from 7.7% to 3.2%.
 
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Q:
What interests do SportsMap’s current officers and directors have in the Business Combination?
A:
Certain of SportsMap’s executive officers and certain non-employee directors may have interests in the Business Combination that are different from, or in addition to, the interests of SportsMap Stockholders generally. These interests include the continued service of certain directors of SportsMap as directors of New ICI and the indemnification of former SportsMap directors and officers by New ICI.
In addition, certain of SportsMap’s current executive officers and directors have financial interests in the Business Combination that are different from, or in addition to, the interests of SportsMap Stockholders, other than the SportsMap Initial Stockholders. With respect to SportsMap’s executive officers and directors, these interests include, among other things:

the Current Certificate of Incorporation provides that if a definitive agreement to consummate a Business Combination has been executed but no Business Combination is consummated by November 20, 2023, as extended monthly at the election of SportsMap upon the contribution of $0.05 per public share outstanding (ultimately until as late as December 20, 2023, or such later date as may be approved by SportsMap Stockholders), SportsMap is required to begin the dissolution process provided for in the Current Certificate of Incorporation. In the event of a dissolution:

the SportsMap Founder Shares held by the Sponsor and the other SportsMap Initial Stockholders would become worthless, as the holders have, for no consideration, waived any right to receive liquidation distributions with respect to these shares. Prior to the IPO, the SportsMap Initial Stockholders purchased an aggregate of 2,875,000 SportsMap Founder Shares for $25,000, or approximately $0.009 per share. Such SportsMap Founder Shares had an aggregate market value of approximately $30.8 million, based upon the closing price of $10.72 of SportsMap Common Stock on Nasdaq on the SportsMap Record Date.

The Sponsor and the other SportsMap Initial Stockholders also beneficially own 675,000 Private Placement Units, consisting of an aggregate of 675,000 shares of SportsMap Common Stock and an aggregate of 506,250 Private Placement Warrants, for which they paid $6,750,000 and which will expire and be worthless if SportsMap does not complete a business combination within the applicable time period. Such Private Placement Units had an aggregate market value of approximately $7.4 million, based upon the closing price of SportsMap Units of $10.92 on Nasdaq as of the SportsMap Record Date.

SportsMap’s officers and directors have an aggregate of $1,173,000 invested in the Sponsor, which will be lost in the event that the Business Combination is not approved and consummated.

We pay the Sponsor a total of $10,000 per month for office space, utilities, secretarial support and other administrative and consulting services pursuant to an administrative services agreement. Upon completion of the initial business combination or SportsMap’s liquidation, we will cease paying these monthly fees. If we fail to complete the Business Combination, there may not be sufficient funds available to pay any outstanding amounts due under the administrative services agreement. As of June 30, 2023, we had accrued and unpaid administrative service fees to our Sponsor of $51,356.

SportsMap’s directors will not receive reimbursement for the out-of-pocket expenses incurred by them on SportsMap’s behalf incident to identifying, investigating and consummating a business combination, unless a business combination is consummated. As of the date hereof, there are no such unpaid out-of-pocket expenses.

The Sponsor and its affiliates can earn a positive rate of return on their investments, even if the SportsMap public stockholders experience a negative rate of return on their investments in SportsMap and New ICI.

Two of SportsMap’s directors, David Gow and Reid Ryan, are expected to continue as directors of New ICI if the Business Combination is completed.

Because the Sponsor and the SportsMap directors will benefit from the completion of a business combination, they may be incentivized to recommend and complete a business
 
13

 
combination of a less favorable target company or on terms less favorable to SportsMap Stockholders, rather than liquidate SportsMap.

SportsMap would be unable to indemnify its current directors and officers or continue to provide directors’ and officers’ liability insurance unless the Business Combination is completed.
In addition, Roth Capital Partners, LLC, the representative of the underwriters of SportsMap’s IPO, purchased an aggregate of 575,000 SportsMap Founder Shares for $5,000, and purchased 135,000 Private Placement Units for $10.00 per unit in connection with the IPO. None of those shares or Private Placement Units will have any value if SportsMap fails to complete an initial business combination and liquidates. Also, pursuant to a business combination marketing agreement executed by Roth Capital Partners, LLC, in connection with the IPO, Roth Capital Partners, LLC, is entitled to receive a fee from SportsMap in connection with the Business Combination in an amount equal to, in the aggregate, $4,025,000, which we expect to pay in the form of New ICI Common Stock. This fee is payable only in the event that the Business Combination closes.
The members of the SportsMap Board were aware of and considered the interests summarized above, among other matters, in evaluating and negotiating the Business Combination Agreement and the Business Combination and in recommending to SportsMap Stockholders, that the Business Combination Agreement be approved and adopted. These interests are described in more detail in the section entitled “Proposal No. 1 — The Business Combination Proposal — Interests of the Sponsor and SportsMap’s Directors and Officers in the Business Combination”. You should be aware of these interests when you consider the SportsMap Board’s recommendation that you vote in favor of the approval and adoption of the Business Combination Agreement and the consummation of the transactions contemplated thereby.
Q:
When and where is the Special Meeting?
A:
The Special Meeting will be held at 10:00 a.m. Eastern Time, on December 5, 2023, in virtual format. SportsMap Stockholders may attend, vote and examine the list of SportsMap Stockholders entitled to vote at the Special Meeting by visiting www.virtualshareholdermeeting.com/SMAP2023SM2 and entering the control number found on their proxy card, voting instruction form or notice included in their proxy materials. The Special Meeting will be held in virtual meeting format only. You will not be able to attend the Special Meeting physically.
Q:
How do I attend the Special Meeting?
A:
As a registered SportsMap stockholder, you received a proxy card from Broadridge Financial Solutions. The form contains instructions on how to attend the virtual annual meeting including the URL address, along with your control number. You will need your control number for access. If you do not have your control number, contact SportsMap at the phone number (713) 479-5302 or e-mail jacobswain@sportsmaptech.com.
If you would like to attend the virtual meeting on December 5, 2023, at 10:00 a.m. Eastern Time, enter the URL address into your browser: www.virtualshareholdermeeting.com/SMAP2023SM2, and then enter your control number.
Beneficial owners who own their SportsMap shares through a bank or broker, will need to contact SportsMap to receive a control number. If you plan to vote at the meeting, you will need to have a legal proxy from your bank or broker. Please allow up to 72 hours prior to the meeting for processing your control number.
Q:
What am I being asked to vote on and why is this approval necessary?
A:
The SportsMap Stockholders are being asked to vote on the following:
1.
a proposal to approve the Business Combination described in this proxy statement, including (a) adopting the Business Combination Agreement and (b) approving the other transactions contemplated by the Business Combination Agreement and related agreements described in this proxy statement. Please see the section entitled “Proposal No. 1 — The Business Combination Proposal”;
 
14

 
2.
a proposal to approve and adopt the Proposed Certificate of Incorporation to replace the Current Certificate of Incorporation. Please see the section entitled “Proposal No. 2 — The Charter Proposal”;
3.
a proposal to approve, for purposes of complying with SEC requirements, certain other matters set forth in the Proposed Certificate of Incorporation of New ICI. Please see the section entitled “Proposal No. 3 — The Advisory Governance Proposals”;
4.
a proposal to approve, for purposes of complying with the applicable provisions of Nasdaq Listing Rule 5635, the issuance of more than 20% of the issued and outstanding shares of SportsMap Common Stock in connection with the Business Combination, including, without limitation, the ICI Convertible Note Conversion. Please see the section entitled “Proposal No. 4 —  The Nasdaq Proposal”;
5.
a proposal to elect seven individuals as directors to the New ICI Board, effective immediately upon the Closing, in each case, until their respective successor is duly elected and qualified, or until their earlier resignation, removal or death. Please see the section entitled “Proposal No. 5 — The Director Election Proposal”;
6.
a proposal to approve the Equity Incentive Plan for the purpose of providing a means to enhance the ability to attract, retain, and motive persons who make (or are expected to make) important contributions to New ICI by providing these individuals with equity ownership opportunities and/or equity-linked compensatory opportunities. Please see the section entitled “Proposal No. 6 —  The Equity Incentive Plan Proposal”; and
7.
a proposal to adjourn the Special Meeting to a later date or dates, if necessary, to permit further solicitation and vote of proxies in the event that there are insufficient votes for, or otherwise in connection with, the approval of Proposal Nos. 1 through 6. Please see the section entitled “Proposal No. 7 — The Adjournment Proposal.
SportsMap will hold the Special Meeting to consider and vote upon these proposals. This proxy statement contains important information about the proposed Business Combination and the other matters to be acted upon at the Special Meeting. Stockholders should read this proxy statement carefully, including the annexes and the other documents referred to herein.
Consummation of the Business Combination is conditional on approval of each of the Business Combination Proposal, the Charter Proposal, the Nasdaq Proposal and the Equity Incentive Plan Proposal, subject to the terms of the Business Combination Agreement. If the Business Combination Proposal is not approved, the other proposals, except the Adjournment Proposal, will not be presented to stockholders for a vote.
The vote of stockholders is important. Stockholders are encouraged to vote as soon as possible after carefully reviewing this proxy statement.
Q:
I am a SportsMap warrant holder. Why am I receiving this proxy statement?
A:
Upon consummation of the Business Combination, the SportsMap Warrants shall, by their terms, entitle the holders to purchase shares of SportsMap Common Stock at a purchase price of $11.50 per share beginning 30 days after the consummation of the Business Combination. This proxy statement includes important information about ICI and the business of New ICI following consummation of the Business Combination. SportsMap Warrants are not redeemable in connection with the Business Combination and they trade separately from SportsMap Common Stock. Holders of SportsMap Warrants will be entitled to purchase shares of New ICI Common Stock upon consummation of the Business Combination. Accordingly, SportsMap urges you to read the information contained in this proxy statement carefully.
 
15

 
Q:
What will happen to SportsMap securities upon consummation of the Business Combination?
A:
SportsMap Common Stock, SportsMap Warrants and SportsMap Units are currently listed on Nasdaq under the symbols SMAP, SMAPW and SMAPU, respectively. Upon consummation of the Business Combination, New ICI will have one class of common stock which will be listed on Nasdaq under the symbol “MSAI”, and its warrants will be listed on Nasdaq under the symbol “MSAIW”. New ICI will not have units traded. SportsMap warrant holders and those stockholders who do not elect to have their shares of SportsMap Common Stock redeemed for a pro rata share of the Trust Account need not submit their common stock or warrant certificates, and such shares of stock and warrants will remain outstanding.
Q:
Why is SportsMap proposing the Business Combination?
A:
SportsMap was organized to effect a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or other similar business combination with one or more businesses or entities.
On October 21, 2021, SportsMap completed its initial public offering of units, with each unit consisting of one public share and three-quarters of one Public Warrant, each whole Public Warrant to purchase one share of SportsMap Common Stock at a price of $11.50 per share, raising total gross proceeds of $115,000,000, reflecting the exercise in full of the underwriters’ over-allotment option. Since the IPO, SportsMap’s activity has been limited to the evaluation of business combination candidates.
ICI is a provider of sensing solutions built around high-resolution thermal imaging along with visible, acoustic, and laser spectroscopy imagers and sensors, that perceive and measure heat, sound, and gas in the surrounding environment, helping companies gain insight to efficiently manage their most important assets and infrastructure.
Based on its investigations of ICI and the industry in which it operates, including the financial and other information provided by ICI in the course of their negotiations in connection with the Business Combination Agreement, SportsMap believes that the Business Combination with ICI is advisable and in the best interests of SportsMap and its stockholders. See “Proposal No. 1 — The Business Combination Proposal — The SportsMap Board’s Reasons for the Business Combination”.
Q:
Did the SportsMap Board obtain a third-party valuation or fairness opinion in determining whether or not to proceed with the Business Combination?
A:
The SportsMap Board is not required to, and did not, obtain a third-party valuation or fairness opinion in connection with its determination to approve the Business Combination. In analyzing the Business Combination, the SportsMap Board and management conducted due diligence on ICI and relied on the analysis of SportsMap’s management and its advisors. The SportsMap Board, in reviewing such analysis, and based on discussions with its legal and financial advisors, determined that it had sufficient information to determine the fair market value of ICI, and that a fairness opinion was not necessary. The fair market value of ICI has been determined by the SportsMap Board based upon standards generally accepted by the financial community, such as potential sales and the price for which comparable businesses or assets have been valued. SportsMap Stockholders will be relying on the judgment of its board of directors with respect to such matters. For additional information regarding the valuation of ICI by the SportsMap Board, see the section titled “Proposal No. 1 — The Business Combination Proposal — The Background of SportsMap’s Interaction with ICI — Valuation of ICI’s Business.
Q:
Do I have redemption rights?
A:
If you are a holder of SportsMap public shares, you have the right to demand that SportsMap redeem such shares for a pro-rata portion of the cash held in the Trust Account. SportsMap sometimes refers to these rights to demand redemption of the public shares as “redemption rights”.
Notwithstanding the foregoing, a holder of public shares, together with any affiliate of such holder or any other person with whom such holder is acting in concert or as a “group” ​(as defined in Section 13(d)(3) of the Exchange Act) will be restricted from seeking redemption with respect to more
 
16

 
than 20% of the public shares without the consent of SportsMap. Accordingly, all public shares in excess of 20% held by a public stockholder, together with any affiliate of such stockholder or any other person with whom such holder is acting in concert or as a “group”, will not be redeemed without the consent of SportsMap. ICI is not required to consummate the Business Combination if there is not at least $10 million of Aggregate Transaction Proceeds after giving effect to payment of amounts that SportsMap will be required to pay to redeeming stockholders upon consummation of the Business Combination.
Q:
Will how I vote affect my ability to exercise redemption rights?
A:
No. You may exercise your redemption rights whether you vote your SportsMap public shares for or against, or whether you abstain from voting on, the Business Combination Proposal or any other proposal described in this proxy statement. As a result, the Business Combination Proposal can be approved by stockholders who will redeem their public shares and no longer remain stockholders and the Business Combination may be consummated even though the funds available from the Trust Account and the number of public stockholders are substantially reduced as a result of redemptions by public stockholders. However, ICI is not required to consummate the Business Combination if there is not at least $10 million of Aggregate Transaction Proceeds after giving effect to payment of amounts that SportsMap will be required to pay to redeeming stockholders upon consummation of the Business Combination. Also, with fewer public shares and public stockholders, the trading market for SportsMap Common Stock may be less liquid than the market for public shares prior to the Business Combination and SportsMap may not be able to meet the listing standards of a national securities exchange.
Q:
How do I exercise my redemption rights?
A:
If you are a holder of public shares and wish to exercise your redemption rights, you must demand that SportsMap redeem your shares for cash two (2) business days prior to the originally scheduled date of the Special Meeting by delivering your stock to SportsMap’s transfer agent physically or electronically using the Depository Trust Company’s DWAC (Deposit and Withdrawal at Custodian) system. Any holder of public shares will be entitled to demand that such holder’s shares be redeemed for a pro-rata portion of the amount then in the Trust Account (which, for illustrative purposes, was approximately $10.54 per share as of the June 30, 2023). Such amount, including interest earned on the funds held in the Trust Account and not previously released to SportsMap to pay its taxes, will be paid promptly upon consummation of the Business Combination. However, under Delaware law, the proceeds held in the Trust Account could be subject to claims which could take priority over those of SportsMap’s public stockholders exercising redemption rights, regardless of whether such holders vote for or against the Business Combination Proposal. Therefore, the per-share distribution from the Trust Account in such a situation may be less than originally anticipated due to such claims. Your vote on any proposal will have no impact on the amount you will receive upon exercise of your redemption rights.
Any request for redemption, once made by a holder of public shares, may be withdrawn at any time up to the time the vote is taken with respect to the Business Combination Proposal at the Special Meeting. If you deliver your shares for redemption to SportsMap’s transfer agent and later decide prior to the Special Meeting not to elect redemption, you may request that SportsMap’s transfer agent return the shares (physically or electronically). You may make such request by contacting SportsMap’s transfer agent at the address listed at the end of this section.
If a holder of public shares properly makes a request for redemption and the public shares are delivered as described to SportsMap’s transfer agent as described herein, then, if the Business Combination is consummated, SportsMap will redeem these shares for a pro rata portion of funds deposited in the Trust Account. If you exercise your redemption rights, then you will be exchanging your shares of SportsMap Common Stock for cash and you will cease to have any rights as a SportsMap Stockholder (other than the right to receive the redemption amount) upon consummation of the Business Combination.
For a discussion of the material U.S. federal income tax considerations for holders of public shares with respect to the exercise of these redemption rights, see “Material U.S. Federal Income Tax Considerations — Tax Consequences to Holders Electing to Exercise Redemption Rights”.
 
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If you are a holder of public shares and you exercise your redemption rights, it will not result in the loss of any Public Warrants that you may hold.
Q:
What are the U.S. federal income tax consequences of the Merger to SportsMap Stockholders?
A:
As discussed in more detail in the section titled in “Material U.S. Federal Income Tax Considerations — Tax Consequences to Holders of the Merger,” in the opinion of ArentFox Schiff LLP, counsel to SportsMap, the Merger will qualify as a reorganization within the meaning of Section 368(a) of the Code, subject to the assumptions, qualifications and limitations set forth or referred to in such opinion. The tax consequences of the Business Combination are complex and will depend on a holder’s particular circumstances. However, because holders of shares of SportsMap Common Stock do not exchange their shares of SportsMap Common Stock in the Merger, holders of SportsMap Common Stock are not expected to recognize any gain or loss under U.S. federal income tax laws in the event the Merger fails to qualify as a “reorganization” within the meaning of Section 368 of the Code. For a more complete discussion of the U.S. federal income tax considerations of the Business Combination, see the section entitled “Material U.S. Federal Income Tax Considerations”.
Q:
Do I have appraisal rights if I object to the proposed Business Combination?
A:
No. Neither SportsMap Stockholders nor SportsMap’s warrant holders have appraisal rights in connection with the Business Combination under the DGCL. See “Special Meeting of SportsMap Stockholders — Appraisal Rights”.
Q:
What happens to the funds deposited in the Trust Account after consummation of the Business Combination?
A:
A total of $117,300,000 in net proceeds of the IPO and the amount raised from the private sale of the Private Placement Units simultaneously with the consummation of the IPO was placed in the Trust Account following the IPO. In connection with a special meeting of SportsMap Stockholders, held on April 14, 2023, the SportsMap Stockholders elected to redeem 9,865,056 public shares of SportsMap Common Stock and to extend SportsMap’s business combination period monthly, for up to eight months, from April 20, 2023, ultimately until as late as December 20, 2023. Each monthly extension shall require Sponsor to contribute $0.05 per public share outstanding to the Trust Account. As of September 18, 2023, SportsMap had 1,634,944 public shares of SportsMap Common Stock outstanding, and held approximately $17.6 million in the Trust Account. After consummation of the Business Combination, the funds in the Trust Account will be used to pay holders of the public shares who exercise redemption rights, to pay fees and expenses incurred in connection with the Business Combination and for ICI’s working capital and general corporate purposes.
Q:
How do the SportsMap Initial Stockholders intend to vote in the proposals?
A:
The SportsMap Initial Stockholders are entitled to vote an aggregate of 68.5% of the outstanding shares of SportsMap Common Stock. The SportsMap Initial Stockholders have agreed to vote their SportsMap Common Stock as of the SportsMap Record Date in favor of each of the proposals presented at the Special Meeting.
Q:
What constitutes a quorum at the Special Meeting?
A:
A majority of the voting power of the issued and outstanding shares of SportsMap Common Stock entitled to vote at the Special Meeting must be present, in person (which would include presence at a virtual meeting) or represented by proxy, at the Special Meeting to constitute a quorum and in order to conduct business at the Special Meeting. Abstentions and broker non-votes will be counted as present for the purpose of determining a quorum. In the absence of a quorum, the chairman of the Special Meeting has power to adjourn the Special Meeting. The shares of SportsMap Common Stock owned by the SportsMap Initial Stockholders represent 68.5% of the issued and outstanding shares of SportsMap Common Stock, and will count towards this quorum. As a result, as of the SportsMap Record Date, quorum has been achieved.
 
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Q:
What vote is required to approve each proposal at the Special Meeting?
A:
The Business Combination Proposal:   The majority of the votes cast by the stockholders present in person (which would include presence at a virtual meeting) or represented by proxy at the Special Meeting is required to approve the Business Combination Proposal. Accordingly, a stockholder’s failure to vote by proxy or to vote in person (which would include presence at a virtual meeting) at the Special Meeting, as well as an abstention from voting and a broker non-vote with regard to the Business Combination Proposal, will have no effect on the Business Combination Proposal. SportsMap Stockholders must approve the Business Combination Proposal in order for the Business Combination to occur. If SportsMap Stockholders fail to approve the Business Combination Proposal, the Business Combination will not occur.
The Charter Proposal:   The majority of the votes cast by the stockholders present in person (which would include presence at a virtual meeting) or represented by proxy at the Special Meeting is required to approve required to approve the Charter Proposal. Accordingly, a stockholder’s failure to vote by proxy or to vote in person (which would include presence at a virtual meeting) at the Special Meeting, as well as an abstention from voting and a broker non-vote with regard to the Charter Proposal, will have the same effect as a vote “AGAINST” such Charter Proposal. The Business Combination is conditioned upon the approval of the Charter Proposal, subject to the terms of the Business Combination Agreement. Notwithstanding the approval of the Charter Proposal, if the Business Combination is not consummated for any reason, the actions contemplated by the Charter Proposal will not be effected.
The Advisory Governance Proposals:   The majority of the votes cast by the stockholders present in person (which would include presence at a virtual meeting) or represented by proxy at the Special Meeting is required to approve the Advisory Governance Proposals. Accordingly, a stockholder’s failure to vote by proxy or to vote in person (which would include presence at a virtual meeting) at the Special Meeting, as well as an abstention from voting and a broker non-vote with regard to the Advisory Governance Proposals, will have no effect on the Advisory Governance Proposals. The Business Combination is not conditioned upon the approval of the Advisory Governance Proposals, subject to the terms of the Business Combination Agreement. Notwithstanding the approval of the Advisory Governance Proposals
The Nasdaq Proposal:   The majority of the votes cast by the stockholders present in person (which would include presence at a virtual meeting) or represented by proxy at the Special Meeting is required to approve the Nasdaq Proposal. Accordingly, a stockholder’s failure to vote by proxy or to vote in person (which would include presence at a virtual meeting) at the Special Meeting, as well as an abstention from voting and a broker non-vote with regard to the Nasdaq Proposal, will have no effect on the Nasdaq Proposal. The Business Combination is conditioned upon the approval of the Nasdaq Proposal, subject to the terms of the Business Combination Agreement. Notwithstanding the approval of the Nasdaq Proposal, if the Business Combination is not consummated for any reason, the actions contemplated by the Nasdaq Proposal will not be effected.
The Director Election Proposal:   Directors are elected by a plurality of all of the votes cast by the stockholders present in person (which would include presence at a virtual meeting) or represented by proxy at the Special Meeting. This means that the seven director nominees who receive the most affirmative votes will be elected. Stockholders may not cumulate their votes with respect to the election of directors. Accordingly, a stockholder’s failure to vote by proxy or to vote in person (which would include presence at a virtual meeting) at the Special Meeting, as well as an abstention from voting and a broker non-vote with regard to the Director Election Proposal, will have no effect on the Director Election Proposal. The Business Combination is not conditioned on the approval of the Director Election Proposal.
The Equity Incentive Plan Proposal:   The majority of the votes cast by the stockholders present in person (which would include presence at a virtual meeting) or represented by proxy at the Special Meeting is required to approve the Equity Incentive Plan Proposal. Accordingly, a stockholder’s failure to vote by proxy or to vote in person (which would include presence at a virtual meeting) at the Special Meeting, as well as an abstention from voting and a broker non-vote with regard to the Equity
 
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Incentive Plan Proposal, will have no effect on the Equity Incentive Plan Proposal. The Business Combination is conditioned upon the approval of the Equity Incentive Plan Proposal, subject to the terms of the Business Combination Agreement. Notwithstanding the approval of the Equity Incentive Plan Proposal, if the Business Combination is not consummated for any reason, the actions contemplated by the Equity Incentive Plan Proposal will not be effected.
The Adjournment Proposal:   The majority of the votes cast by the stockholders present in person (which would include presence at a virtual meeting) or represented by proxy at the Special Meeting is required to approve the Adjournment Proposal. Accordingly, a stockholder’s failure to vote by proxy or to vote in person (which would include presence at a virtual meeting) at the Special Meeting, as well as an abstention from voting and a broker non-vote with regard to the Adjournment Proposal, will have no effect on the Adjournment Proposal. The Business Combination is not conditioned on the approval of the Adjournment Proposal.
The Sponsor and certain of its affiliates, including certain directors and officers of SportsMap, have entered into the Sponsor Letter Agreement with SportsMap and ICI pursuant to which they have agreed to vote shares representing 68.5% of the aggregate voting power of the SportsMap Common Stock in favor of the each of the proposals presented at the Special Meeting, regardless of how public stockholders vote. The Sponsor Letter Agreement increases the likelihood that SportsMap will receive the requisite stockholder approval for the adoption of the Business Combination and the approval of the Business Combination.
Q:
What do I need to do now?
A:
SportsMap urges you to read carefully and consider the information contained in this proxy statement, including the annexes and the other documents referred to herein, and to consider how the Business Combination will affect you as a stockholder and/or warrant holder of SportsMap. Stockholders should then vote as soon as possible in accordance with the instructions provided in this proxy statement and on the enclosed proxy card.
Q:
How do I vote?
A:
If you are a holder of record of SportsMap Common Stock on the SportsMap Record Date, you may vote in person (which would include presence at a virtual meeting) at the Special Meeting or by submitting a proxy for the Special Meeting. You may submit your proxy by completing, signing, dating and returning the enclosed proxy card in the accompanying pre-addressed postage paid envelope. If you hold your shares in “street name”, which means your shares are held of record by a broker, bank or nominee, you should contact your broker to ensure that votes related to the shares you beneficially own are properly counted. In this regard, you must provide the broker, bank or nominee with instructions on how to vote your shares or, if you wish to attend the meeting and vote in person (which would include presence at a virtual meeting), obtain a proxy from your broker, bank or nominee.
Q:
If my shares are held in “street name” by a broker, bank or other nominee, will my broker, bank or other nominee vote my shares for me?
A:
If your shares are held in “street name” in a stock brokerage account or by a broker, bank or other nominee, you must provide the record holder of your shares with instructions on how to vote your shares. Please follow the voting instructions provided by your broker, bank or other nominee. Please note that you may not vote shares held in “street name” by returning a proxy card directly to SportsMap or by voting in person (which would include presence at a virtual meeting) at the Special Meeting unless you provide a “legal proxy”, which you must obtain from your broker, bank or other nominee.
Under the rules of Nasdaq, brokers who hold shares in “street name” for a beneficial owner of those shares typically have the authority to vote in their discretion on “routine” proposals when they have not received instructions from beneficial owners. However, brokers are not permitted to exercise their voting discretion with respect to the approval of matters that Nasdaq determines to be “non-routine” without specific instructions from the beneficial owner. It is expected that all proposals to be voted on at the Special Meeting are “non-routine” matters. Broker non-votes occur when a broker or nominee is
 
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not instructed by the beneficial owner of shares to vote on a particular proposal for which the broker does not have discretionary voting power.
If you are a SportsMap stockholder holding your shares in “street name” and you do not instruct your broker, bank or other nominee on how to vote your shares, your broker, bank or other nominee will not vote your shares on the Business Combination Proposal, the Charter Proposal, the Equity Incentive Plan Proposal and the Nasdaq Proposal. Such broker non-votes will be the equivalent of a vote “AGAINST” the Charter Proposal, but will have no effect on the vote count for such other proposals.
Q:
What if I attend the Special Meeting and abstain or do not vote?
A:
For purposes of the Special Meeting, an abstention occurs when a stockholder attends the meeting in person (which would include presence at a virtual meeting) and does not vote or returns a proxy with an “abstain” vote.
If you are a SportsMap stockholder that attends the Special Meeting in person (which would include presence at a virtual meeting) and fails to vote on the Charter Proposal, or if you respond to such proposal with an “abstain” vote, your failure to vote or “abstain” vote in each case will have the same effect as a vote “AGAINST” such proposals.
If you are a SportsMap stockholder that attends the Special Meeting in person (which would include presence at a virtual meeting) and fails to vote on the Business Combination Proposal, the Advisory Governance Proposals, the Nasdaq Proposal, the Director Election Proposal and the Equity Incentive Plan Proposal, or if you respond to such proposals with an “abstain” vote, your failure to vote or “abstain” vote in each case will have no effect on the vote count for such proposals.
Q:
What will happen if I return my proxy card without indicating how to vote?
A:
If you sign and return your proxy card without indicating how to vote on any particular proposal, the SportsMap Common Stock represented by your proxy will be voted as recommended by the SportsMap Board with respect to that proposal. The SportsMap Board intends to vote FOR all proposals.
Q:
May I change my vote after I have mailed my signed proxy card?
A:
Yes. Stockholders may send a later-dated, signed proxy card to Broadridge Financial Solutions at Vote Processing, c/o Broadridge, 51 Mercedes Way, Edgewood, NY 11717, as long as it is received prior to the vote at the Special Meeting or you may attend the Special Meeting in person (which would include presence at a virtual meeting) and vote. Stockholders also may revoke their proxy by sending a notice of revocation to Broadridge Financial Solutions, which must be received prior to the vote at the Special Meeting.
Q:
What happens if I fail to take any action with respect to the Special Meeting?
A:
If you fail to take any action with respect to the Special Meeting and the Business Combination is approved by stockholders and consummated, you will become a stockholder of New ICI. Failure to take any action with respect to the Special Meeting will not affect your ability to exercise your redemption rights. If you fail to take any action with respect to the Special Meeting and the Business Combination is not approved, you will continue to be a stockholder and/or warrant holder of SportsMap.
Q:
What should I do if I receive more than one set of voting materials?
A:
Stockholders may receive more than one set of voting materials, including multiple copies of this proxy statement and multiple proxy cards or voting instruction cards. For example, if you hold your shares in more than one brokerage account, you will receive a separate voting instruction card for each brokerage account in which you hold shares. If you are a holder of record and your shares are registered in more than one name, you will receive more than one proxy card. Please complete, sign, date and return each proxy card and voting instruction card that you receive in order to cast a vote with respect to all of your SportsMap shares.
 
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Q.
Who can help answer my questions?
A.
If you have questions about the stockholder proposals, or if you need additional copies of this proxy statement, or the proxy cards you should contact SportsMap’s proxy solicitor at:
D.F. King & Co., Inc.
48 Wall Street, 22nd Floor
New York, NY 10005
Banks and Brokers may call collect: (212) 269-5550
All Others Call Toll Free: (800) 431-9629
Email: SMAP@dfking.com
You may also contact SportsMap at:
SportsMap Tech Acquisition Corp.
Attn: David Gow
5353 WEST ALABAMA, SUITE 415
HOUSTON, TEXAS 77056
(713) 479-5302
To obtain timely delivery, SportsMap Stockholders and warrant holders must request the materials no later than five business days prior to the Special Meeting.
You may also obtain additional information about SportsMap from documents filed with the SEC by following the instructions in the section entitled “Where You Can Find More Information”.
 
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SUMMARY OF THE PROXY STATEMENT
This summary highlights selected information from this proxy statement and does not contain all of the information that is important to you. To better understand the Business Combination and the proposals to be considered at the Special Meeting, you should read this entire proxy statement carefully, including the annexes. See also the section entitled “Where You Can Find More Information.” Certain figures included in this section have been rounded for ease of presentation and, as a result, percentages may not sum to 100%.
Parties to the Business Combination
SportsMap Tech Acquisition Corp.
SportsMap is a blank check company incorporated as a Delaware corporation on May 14, 2021. SportsMap was formed for the purpose of entering into a merger, share exchange, asset acquisition, share purchase, recapitalization, reorganization or other similar business combination with one or more businesses or entities.
SportsMap’s business plan is dependent on the completion of a business combination by November 20, 2023 (as extended monthly at the election of the SportsMap Board, ultimately until as late as December 20, 2023). If a business combination is not consummated by the required date, there will be a mandatory liquidation and subsequent dissolution. These conditions raise substantial doubt about the Company’s ability to continue as a going concern. As a result, our independent registered public accounting firm included an explanatory paragraph in its report on our financial statements with respect to the substantial doubt about our ability to continue as a going concern.
The closing prices of the SportsMap Common Stock, SportsMap Units and Public Warrants as of the SportsMap Record Date, were $10.72 and $10.92 and $0.05, respectively.
Upon consummation of the Business Combination, New ICI will have one class of common stock which will be listed on Nasdaq under the symbol “MSAI” and its warrants will be listed on Nasdaq under the symbol “MSAIW”.
The mailing address of SportsMap’s principal executive offices is 5353 West Alabama, Suite 415 Houston, Texas 77056, and its telephone number is (713) 479-5302.
Merger Sub
ICH Merger Sub Inc. is a Delaware corporation and a direct wholly-owned subsidiary of SportsMap. Merger Sub was incorporated on November 16, 2022. Merger Sub was formed solely in contemplation of the Business Combination, has not commenced any operations, has only nominal assets and has no liabilities or contingent liabilities, nor any outstanding commitments other than in connection with the Business Combination. At the Effective Time, Merger Sub will merge with and into ICI, with ICI surviving as a direct wholly-owned subsidiary of SportsMap. In connection with the Merger, SportsMap will change its name to “Infrared Cameras Holdings, Inc.”
ICI
ICI is a Delaware corporation incorporated on July 14, 2020. ICI is a provider of sensing solutions built around high-resolution thermal imaging along with visible, acoustic, and laser spectroscopy imagers and sensors, that perceive and measure heat, sound, and gas in the surrounding environment, helping companies gain insight to efficiently manage their most important assets and infrastructure. The mailing address of ICI’s principal executive offices is 2105 West Cardinal Drive, Beaumont, Texas 77705 and its telephone number is (866) 861-0788.
ICI builds thermal imaging and sensing platforms that are utilized by organizations to protect critical assets and improve quality control and manufacturing processes across a wide range of industries. ICI is a provider of sensing solutions built around high-resolution thermal imaging along with visible, acoustic, and laser spectroscopy imagers and sensors, that perceive and measure heat, sound, and gas in the surrounding environment, helping companies gain insight to efficiently manage and protect their most important assets
 
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and infrastructure. ICI also offers edge and cloud-based software solutions to accompany its thermal imaging and sensing platforms. ICI believes its products to be high performing and attractively priced across each of their four target markets: distribution & logistics; oil & gas; manufacturing; and utilities.
ICI continues to develop and implement its SmartIR SaaS platform to support its customers as it increasingly adopts continuous monitoring solutions and data-driven analytics. ICI’s SmartIR technology has been developed and continues to be refined primarily for use in its four target markets.
ICI’s thermal-sensor devices cover a large range of the electromagnetic and spectrum, encompassing visible-light imagers, shortwave, midwave, and longwave infrared imagers, ultraviolet imagers, acoustic imagers, and tunable diode laser emitter-detector pairs for laser absorption spectrometry. While ICI’s sensor devices generally include an infrared imager as a core sensor technology, many of them are multi-sensor and include two or more of the aforementioned sensor devices. ICI offers a wide range of form factors for such sensor devices, ranging from small to large handheld designs with built-in displays and controls, fixed-mounted single- and multi-sensor camera systems with or without displays and controls, fixed-mounted pan-tilt-zoom single- and multi-sensor camera standalone systems, and mobile multi-sensor payload and gimbal systems for UAVs and unmanned ground vehicles.
ICI has also developed a suite of edge and cloud software systems to ingest, store, analyze, and automatically activate responses to sensor data. The edge and cloud software systems can operate independently or be combined for maximum capability. ICI believes that the combination of their edge and cloud software together creates a multitude of turn-key software solutions for ICI’s customers that solve industrial problems in ways previously unavailable. For more information on ICI’s hardware and software offerings, see “Information About ICI — Products
ICI has a history of losses or low income, and expects to incur significant expenses and possible continuing losses for the foreseeable future. ICI incurred a net loss of $13.3 million for the year ended December 31, 2022 and $3.6 million for the six months ended June 30, 2023. ICI had an accumulated deficit of $14.5 million as of June 30, 2023. While ICI has conducted operations since 1995, it launched its SmartIR cloud-software product suite only in the first quarter of 2023 and has not recorded any revenue for its SmartIR product through June 30, 2023. ICI also has a limited operating history providing SaaS solutions, which makes it difficult to evaluate its future prospects and the risks and challenges it may encounter. Additionally, ICI’s limited operating history providing SaaS solutions makes it difficult for it to evaluate its future prospects. The loss of large customers could result in a material adverse effect to ICI’s financial results. For the years ended December 31, 2022 and 2021, ICI’s top 10 customers represented 45% and 81% of its revenue, respectively, which percentages may increase going forward as ICI continues to grow or develop additional relationships with new large customers. The loss of business from ICI’s large customers (whether by lower overall demand for ICI’s products, cancellation of existing contracts or product orders or the failure to incorporate ICI’s product designs or award ICI new business) could have a material adverse effect on its business. For more information, you are encouraged to consider the matters discussed under “Risk Factors” beginning on page 44.
The Business Combination
The Business Combination Agreement
On December 5, 2022, SportsMap, ICI and Merger Sub entered into the Business Combination Agreement, which contains customary representations and warranties, covenants, closing conditions, termination provisions and other terms relating to the Business Combination and the other transactions contemplated thereby, as summarized below. Capitalized terms used in this section but not otherwise defined herein have the meanings given to them in the Business Combination Agreement.
The Structure of the Business Combination
Pursuant to the Business Combination Agreement, on the Closing Date, at the Effective Time, Merger Sub will merge with and into ICI, with ICI the surviving company in the Merger and, after giving effect to the Merger, ICI, a wholly-owned subsidiary of SportsMap. In connection with the Merger, SportsMap will change its name to “Infrared Cameras Holdings, Inc.” For more information, see the
 
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section entitled “Proposal No. 1 — The Business Combination Proposal — The Business Combination Agreement — The Structure of the Business Combination”.
Consideration to be Received in the Business Combination
The aggregate consideration to be received by the ICI Stockholders is based on a pre-transaction equity value of $100,000,000. In accordance with the terms and subject to the conditions of the Business Combination Agreement, at the Effective Time, among other things and as more fully described elsewhere in this proxy statement: (i) each share of ICI Common Stock issued and outstanding immediately prior to the Effective Time (other than dissenting shares and shares held immediately prior to the Effective Time by ICI as treasury stock) will be converted into the right to receive a number of shares of SportsMap Common Stock equal to the Exchange Ratio, (ii) each Participating Company Option will be converted into an option to purchase a number of shares of SportsMap Common Stock upon substantially the same terms and conditions (but taking into account any accelerated vesting provided for in ICI’s equity plan or any award agreement by reason of the Business Combination Agreement or the Business Combination) as are in effect with respect to such option prior to the Effective Time, except that such option shall represent the right to receive a number of shares of SportsMap Common Stock equal to the number of shares of ICI Class B Common Stock subject to such option prior to the Effective Time multiplied by the Exchange Ratio, and the exercise price per share shall be equal to the exercise price per share of such option prior to the Effective Time multiplied by the Exchange Ratio, and each Out-of-the-Money Option will be cancelled and (iii) each Participating Company RSU Award will be converted into a restricted stock unit award covering a number of shares of SportsMap Common Stock upon substantially the same terms and conditions as are in effect with respect to such award prior to the Effective Time, except that such award shall represent the right to receive a number of shares of SportsMap Common Stock equal to the number of shares of ICI Class B Common Stock subject to such award prior to the Effective Time multiplied by the Exchange Ratio. The “Exchange Ratio” will be determined by (i) dividing the Adjusted Equity Value by $10.00, which is the value of one share of SportsMap Common Stock, and (ii) further dividing the quotient of the calculation in clause (i) by the aggregate number of shares of ICI Common Stock issued and outstanding immediately prior to the Effective Time (other than shares held immediately prior to the Effective Time by ICI as treasury stock) on a fully-diluted basis assuming the exercise of all Participating Company Options (excluding any such shares issuable upon exercise of Out-of-the-Money Options, which will be cancelled at the Effective Time) and assuming the settlement of all Participating Company RSU Awards. The “Adjusted Equity Value” will be equal to (a) $100,000,000, less (b) the aggregate amount of ICI’s outstanding indebtedness, plus (c) the aggregate exercise price that would be paid in respect of participating options to acquire shares of ICI Common Stock if all such options were exercised in full immediately prior to the Effective Time, plus (d) all cash and cash equivalents of ICI, plus (e) the aggregate principal amount of any ICI Convertible Notes entered into by ICI on or after the date of the Business Combination Agreement but prior to the Closing, in each case, on terms and subject to conditions set forth in the Business Combination Agreement. As of September 18, 2023, we estimate the Adjusted Equity Value would be approximately $107,916,000.
Pursuant to the Business Combination Agreement, SportsMap will reserve for issuance 2,400,000 shares of SportsMap Common Stock (the “Earnout Shares”). The Earnout Shares will be issued pro rata to the holders of ICI Common Stock, Participating Company Options and Participating Company RSU Awards (other than any Participating Company Options or Participating Company RSU Awards that are forfeited prior to the achievement of the applicable earnout goal) if either (a) during the period beginning six months after the Closing and ending on December 31, 2024, the volume-weighted average price of the common stock of New ICI is greater than or equal to $12.50 per share over any 20 trading days within any 30 consecutive trading days, or the combined company consummates a transaction in which its stockholders have the right to receive consideration implying a value of at least $12.50 per share, or (b) New ICI achieves revenue of $68.5 million during the fiscal year ending December 31, 2024, subject to certain limitations set forth in the Business Combination Agreement.
In addition, the Business Combination Agreement provides that, if ICI raises additional capital by the issuance of the ICI Convertible Notes on or after the date of the Business Combination Agreement but prior to the Closing, such ICI Convertible Notes will convert into shares of ICI Class A Common Stock immediately prior to the Effective Time and will convert in the Merger in the same manner as ICI Common Stock.
 
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For more information regarding the sources and uses of the funds utilized to consummate the transactions contemplated by the Business Combination Agreement, please see the section entitled “Proposal No. 1 — The Business Combination Proposal — The Business Combination Agreement — Merger Consideration”.
Conditions to the Closing
The obligation of SportsMap, ICI and Merger Sub to consummate the Business Combination is subject to the satisfaction (or waiver, if permitted by applicable law) of to the following closing conditions, (i) there being in effect no order or law issued, enacted or promulgated by any court or other governmental entity, or other legal restraint or prohibition, preventing or making unlawful, restraining or prohibiting the consummation of the Business Combination, (ii) this proxy statement receiving SEC clearance, (iii) New ICI Common Stock being approved for listing on Nasdaq or another National Exchange (as defined in the Business Combination Agreement), (iv) the Required SportsMap Stockholder Approval having been obtained, and (v) after giving effect to the Business Combination, SportsMap having at least $5,000,001 of net tangible assets (as determined in accordance with Rule 3a51-1(g)(1) of the Exchange Act) immediately after the Effective Time.
In addition, the obligation of SportsMap and Merger Sub to consummate the Business Combination is subject to the satisfaction (or waiver, if permitted by applicable law) of other closing conditions, including, but not limited to, (i) the representations and warranties of ICI being true and correct to the standards applicable to such representations and warranties and each of the covenants of ICI having been performed or complied with in all material respects, and (ii) no Material Adverse Effect (as defined below) having occurred.
The obligation of ICI to consummate the Business Combination is also subject to the satisfaction (or waiver, if permitted by applicable law) of other closing conditions, including, but not limited to, (i) the representations and warranties of SportsMap being true and correct to the standards applicable to such representations and warranties and each of the covenants of SportsMap having been performed or complied with in all material respects, (ii) the Aggregate Transaction Proceeds available to New ICI following the Business Combination being in excess of $10,000,000, and (iii) SportsMap having satisfied all initial and continued listing requirements of Nasdaq (or other applicable trading market) and not having received notice of non-compliance therewith that has not been cured prior to, or would not be cured at or immediately following, the Effective Time.
Termination Rights
The Business Combination Agreement may be terminated under certain customary and limited circumstances prior to the Closing, including, but not limited to, (i) by either SportsMap or ICI if the Business Combination is not consummated by December 20, 2023, by SportsMap if there is a material breach of the representations, warranties or covenants of ICI, subject to a 30-day cure period following notice of such breach, and (iii) by ICI upon a material breach of the representations, warranties or covenants of SportsMap, subject to a 30-day cure period following notice of such breach. If the Business Combination Agreement is validly terminated, none of the parties to the Business Combination Agreement will have any liability or any further obligation under the Business Combination Agreement, other than customary confidentiality obligations, except in the case of willful breach or fraud.
Other Agreements Related to the Business Combination
Sponsor Letter Agreement
Concurrently with the execution of the Business Combination Agreement, the Sponsor, SportsMap, ICI and certain other holders of SportsMap Common Stock entered into the Sponsor Letter Agreement, pursuant to which the Sponsor and each such holder agreed, among other things, (a) to vote all of the shares of SportsMap Common Stock beneficially owned by the Sponsor and such holder in favor of the adoption of the Business Combination Agreement and the approval of the Business Combination, (b) not to redeem any of its shares of SportsMap Common Stock in connection with the Business Combination, (c) to be bound by certain other covenants and agreements related to the Business Combination, and (d) to be bound
 
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by certain transfer restrictions with respect to its shares in SportsMap prior to the Closing, in each case, on the terms and subject to the conditions set forth in the Sponsor Letter Agreement.
For more information about the Sponsor Letter Agreement, see the section entitled “Proposal No. 1 — The Business Combination Proposal — Sponsor Letter Agreement”.
Transaction Support Agreement
Concurrently with the execution of the Business Combination Agreement, SportsMap, ICI and each of the holders of ICI Class A Common Stock entered into the Transaction Support Agreement, pursuant to which each such holder agreed, among other things, (a) to vote all of the shares of ICI Common Stock beneficially owned by such holder (which vote may be done by executing a written consent) in favor of any actions required in furtherance of the Merger, the conversion of any ICI Convertible Notes entered into on or after the date of the Business Combination Agreement but prior to the Closing, and the transactions contemplated by the Business Combination Agreement, (b) to be bound by certain other covenants and agreements related to the Business Combination, and (c) to be bound by certain transfer restrictions with respect to its shares in ICI prior to the Closing, in each case, on the terms and subject to the conditions set forth in the Transaction Support Agreement.
For more information about the Transaction Support Agreement, see the section entitled “Proposal No. 1 — The Business Combination Proposal — Transaction Support Agreement”.
Registration Rights Agreement
The Business Combination Agreement provides that at the Closing, New ICI, the Sponsor, certain other holders of New ICI Common Stock, each current holder of ICI Class A Common Stock and certain holders of Participating Company Options and Participating Company RSU Awards will enter into a registration rights agreement (the “Registration Rights Agreement”), pursuant to which, among other things, New ICI will grant to such holders certain customary registration rights with respect to the shares of New ICI Common Stock they hold or will receive in the Business Combination (or shares issuable in connection with the exercise of Participating Company Options or the settlement of Participating Company RSU Awards).
Pursuant to the Registration Rights Agreement, New ICI will agree to file a registration statement within 30 calendar days after the Closing registering the resale of the New ICI Common Stock under the Registration Rights Agreement, and New ICI must use its commercially reasonable efforts to have the registration statement declared effective by the SEC as soon as practicable after the filing thereof, but no later than the earlier of (a) the 90th calendar day following the filing date thereof if the SEC notifies New ICI that it will “review” the registration statement and (b) the 10th business day after the date New ICI is notified by the SEC that the registration statement will not be “reviewed” or will not be subject to further review. New ICI thereafter will be required to maintain a registration statement that is continuously effective and to cause the registration statement to regain effectiveness in the event that it ceases to be effective.
At any time the registration statement is effective, the Sponsor Majority Holders (as defined in the Registration Rights Agreement) may collectively demand not more than one underwritten shelf takedown and the ICI Holders (as defined in the Registration Rights Agreement) may collectively demand not more than three underwritten shelf takedowns, in each case, in any 12 month period, in order to sell all or a portion of its securities that are registrable pursuant to the registration statement for a total offering price reasonably expected to exceed, in the aggregate, $25 million. In addition, such holders will have certain “piggyback” registration rights with respect to registrations initiated by New ICI and other New ICI stockholders. New ICI will bear the expenses incurred in connection with the filing of any registration statements pursuant to the Registration Rights Agreement, subject to limited exceptions.
The foregoing description of the Registration Rights Agreement is subject to and qualified in its entirety by reference to the full text of the form Registration Rights Agreement, a copy of which is attached hereto as Annex H, and the terms of which are incorporated herein by reference.
 
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Lock-Up Agreements
At the Closing, New ICI, the Sponsor, certain holders of New ICI Common Stock, each current holder of ICI Class A Common Stock and certain holders of Participating Company Options and Participating Company RSU Awards are expected to enter into lock-up agreements (the “Lock-Up Agreements”), pursuant to which, among other things, such holders will agree to be subject to restrictions on the transfer of the shares of New ICI Common Stock (or shares issuable in respect of options to purchase, or restricted stock unit awards covering, shares of New ICI Common Stock) they hold or will receive in the Business Combination for, (i) with respect to 50% of such shares, the earlier of (a) six months after the date of Closing and (b) the first date on which the closing price of a share of New ICI Common Stock equals or exceeds $12.50 per share (as adjusted for stock splits, stock dividends, reorganizations, recapitalizations and similar transactions) for any 20 trading days within any 30-trading day period commencing after the Closing, and, (ii) with respect to the remainder of such shares, six months after the Closing Date.
The foregoing description of the Lock-Up Agreements is subject to and qualified in its entirety by reference to the full text of the form of Lock-Up Agreement, a copy of which is included as Annex G hereto, and the terms of which are incorporated herein by reference.
Interests of Certain Persons in the Business Combination
In considering the recommendation of the SportsMap Board to vote in favor of Proposal No. 1 (the Business Combination Proposal), SportsMap Stockholders should be aware that, aside from their interests as stockholders, the Sponsor and SportsMap’s directors and officers have interests in the Business Combination that are different from, or in addition to, those of other SportsMap Stockholders and warrant holders generally. SportsMap’s directors were aware of and considered these interests, among other matters, in evaluating the Business Combination, and in recommending to stockholders that they approve the Business Combination. SportsMap Stockholders should take these interests into account in deciding whether to approve the Business Combination. These interests include, among other things:

The SportsMap Founder Shares held by the Sponsor and the other SportsMap Initial Stockholders would become worthless, as the holders have, for no consideration, waived any right to receive liquidation distributions with respect to these shares. Prior to the IPO, the SportsMap Initial Stockholders purchased an aggregate of 2,875,000 SportsMap Founder Shares for $25,000, or approximately $0.009 per share. Such SportsMap Founder Shares had an aggregate market value of approximately $30.8 million, based upon the closing price of $10.72 of SportsMap Common Stock on Nasdaq on the SportsMap Record Date.

The Sponsor and the other SportsMap Initial Stockholders also beneficially own 675,000 Private Placement Units, consisting of an aggregate of 675,000 shares of SportsMap Common Stock and an aggregate of 506,250 Private Placement Warrants, for which they paid $6,750,000 and which will expire and be worthless if SportsMap does not complete a business combination within the applicable time period. Such Private Placement Units had an aggregate market value of approximately $ 7.4 million, based upon the closing price of SportsMap Units of $10.92 on Nasdaq as of the SportsMap Record Date.

SportsMap’s officers and directors have an aggregate of $1,173,000 invested in the Sponsor, which will be lost in the event that the Business Combination is not approved and consummated.

We pay the Sponsor a total of $10,000 per month for office space, utilities, secretarial support and other administrative and consulting services pursuant to an administrative services agreement. Upon completion of the initial business combination or SportsMap’s liquidation, we will cease paying these monthly fees. If we fail to complete the Business Combination, there may not be sufficient funds available to pay any outstanding amounts due under the administrative services agreement. As of June 30, 2023, we had accrued and unpaid administrative service fees to our Sponsor of $51,356.

SportsMap’s directors will not receive reimbursement for the out-of-pocket expenses incurred by them on SportsMap’s behalf incident to identifying, investigating and consummating a business combination, unless a business combination is consummated. As of the date hereof, there are no such unpaid out-of-pocket expenses.
 
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The Sponsor and its affiliates can earn a positive rate of return on their investments, even if the SportsMap public stockholders experience a negative rate of return on their investments in SportsMap and New ICI.

Two of SportsMap’s directors, David Gow and Reid Ryan, are expected to continue as directors of New ICI if the Business Combination is completed.

Because the Sponsor and the SportsMap directors will benefit from the completion of a business combination, they may be incentivized to recommend and complete a business combination of a less favorable target company or on terms less favorable to SportsMap Stockholders, rather than liquidate SportsMap.

SportsMap would be unable to indemnify its current directors and officers or continue to provide directors’ and officers’ liability insurance unless the Business Combination is completed.

In addition, Roth, the representative of the underwriters of SportsMap’s IPO, purchased an aggregate of 575,000 SportsMap Founder Shares for $5,000 and purchased 135,000 Private Placement Units for $10.00 per unit in connection with the IPO. None of those shares or Private Placement Units will have any value if SportsMap fails to complete an initial business combination and liquidates. Also, pursuant to a business combination marketing agreement executed by Roth, in connection with the IPO, Roth is entitled to receive a fee from SportsMap in connection with the Business Combination in an amount equal to, in the aggregate, $4,025,000. This fee is payable only in the event that the Business Combination closes.

Additionally, Craig-Hallum and Roth will receive 175,000 and 75,000 shares, respectively, of New ICI Common Stock upon closing of the Business Combination as payment of the M&A Advisory Fee (as defined below).
These interests may have influenced SportsMap’s directors in approving the Business Combination and making their recommendation to vote in favor of the approval of the Business Combination Proposal and the other proposals described in this proxy statement. You should also read the section entitled “Proposal No. 1 — The Business Combination Proposal — Interests of SportsMap’s Directors and Officers in the Business Combination”.
Reasons for the Approval of the Business Combination
After careful consideration, the SportsMap Board recommends that the SportsMap Stockholders vote “FOR” each proposal being submitted to a vote of the stockholders at the Special Meeting. For a description of SportsMap’s reasons for the approval of the Business Combination and the recommendation of the SportsMap Board, see the section entitled “Proposal No. 1 — The Business Combination Proposal — The SportsMap Board’s Reasons for the Business Combination”.
Redemption Rights
Pursuant to the Current Certificate of Incorporation, we are providing our public stockholders with the opportunity to redeem all or a portion of their public shares of SportsMap Common Stock for cash upon consummation of the Business Combination. The per share redemption price will be equal to the aggregate amount then on deposit in the Trust Account that holds the proceeds of our IPO, including interest (net of taxes payable), divided by the number of then outstanding public shares. For illustrative purposes, based on funds in the Trust Account of approximately $17.2 million, on June 30, 2023, the estimated per share redemption price would have been approximately $10.54, less any taxes payable from interest proceeds. In no event, however, will SportsMap redeem shares of SportsMap Common Stock in an amount that would cause SportsMap’s net tangible assets to be less than $5,000,001.
If you properly exercise your redemption rights, your shares of SportsMap Common Stock will cease to be outstanding immediately prior to the Business Combination and will only represent the right to receive a pro rata share of the aggregate amount on deposit in the Trust Account. You will no longer own the shares for which you have demanded redemption. However, you will continue to own any SportsMap Warrants you now hold, which will become exercisable for, or converted into, shares of New ICI Common
 
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Stock upon consummation of the Business Combination. See the section entitled “The Special Meeting of SportsMap Stockholders — Redemption Rights”.
SportsMap’s public stockholders previously elected to redeem 9,865,056 shares of SportsMap Common Stock in connection with a stockholder meeting on April 14, 2023, pursuant to a stockholder vote to amend SportsMap’s certificate of incorporation to extend our business combination period monthly, for up to eight months, from April 20, 2023, ultimately until as late as December 20, 2023. The 9,865,056 public shares of SportsMap Common Stock redeemed at the stockholder meeting on April 14, 2023 represented approximately 65.5% of the shares of SportsMap Common Stock issued and outstanding on such date and approximately 85.8% of the public shares then-outstanding.
Impact of the Business Combination and Potential Sources of Dilution on New ICI’s Public Float
It is anticipated that, upon completion of the Business Combination, (i) former equityholders of ICI will own, collectively, approximately 55.4% of the outstanding New ICI Common Stock; (ii) SportsMap’s public stockholders will retain an ownership interest of approximately 12.5% of the outstanding New ICI Common Stock; (iii) the Sponsor (and its affiliates) will own approximately 21.7% of the outstanding New ICI Common Stock; and (iv) the SportsMap Advisors will own approximately 10.4% of the outstanding New ICI Common Stock, in each case, on a fully diluted net-exercise basis.
The percentages set forth above are based on a number of assumptions. If the actual facts are different to such assumptions, the percentage ownership of each group of stockholders will be different.
The table below shows the relative ownership levels of holders of New ICI Common Stock following the Business Combination under varying redemption scenarios.
Assuming No Additional
Redemptions
Assuming Maximum
Redemptions
Shares
Ownership
Percentage
Shares
Ownership
Percentage
Ownership Group:
SportsMap Sponsor and Insiders
2,840,000 21.7% 2,840,000 22.7%
SportsMap Public Stockholders(1)
1,634,944 12.5% 965,525 7.7%
SportsMap Advisors(2)
1,362,500 10.4% 1,362,500 10.9%
ICI Securityholders (including holders of ICI Convertible Notes)(3)
7,237,296 55.4% 7,318,841 58.6%
Total(4) 13,074,740 100.0% 12,486,866 100.0%
(1)
Number of shares owned by SportsMap Public Stockholders shown is the number of shares outstanding following the redemption of 9,865,056 public shares of SportsMap Common Stock at the special meeting of SportsMap Stockholders on April 14, 2023. The 9,865,056 public shares of SportsMap Common Stock redeemed represented approximately 65.5% of the shares of SportsMap Common Stock issued and outstanding on such date and approximately 85.8% of the public shares then-outstanding.
(2)
Includes (i) 575,000 shares of SportsMap Common Stock purchased by Roth in connection with the IPO, (ii) 135,000 Private Shares included as part of the Private Placement Units purchased by Roth in connection with the IPO, (iii) 402,500 shares of New ICI Common Stock to be issued to Roth at Closing as payment of their $4,025,000 fee to serve as underwriter for the IPO, (iv) 175,000 shares of New ICI Common Stock to be issued to Craig-Hallum at Closing as payment of their portion of the M&A Advisory Fee and (v) 75,000 shares of New ICI Common Stock to be issued to Roth as payment of their portion of the M&A Advisory Fee. The fees described in (iii), (iv) and (v) will not be reduced or altered due to redemptions.
(3)
Includes (i) shares of New ICI Common Stock to be issued in exchange for shares held by existing ICI stockholders and (ii) shares of New ICI Common Stock to be issued to holders of ICI Convertible Notes. Shares of ICI Common Stock have been converted into shares of New ICI Common Stock based on illustrative Exchange Ratios reflecting information as of September 18, 2023; however, the actual
 
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Exchange Ratio will be calculated based on the Adjusted Equity Value and on ICI’s outstanding capital stock and rights to acquire ICI capital stock (including capital stock issuable upon the conversion of the ICI Convertible Notes) as of immediately prior to the Effective Time.
(4)
Public Stockholders will experience additional dilution to the extent New ICI issues additional shares after the Closing. The tables above do not include (i) up to 8,625,000 shares of New ICI Common Stock that will be issuable upon exercise of the public warrants at an exercise price of $11.50 per share, (ii) up to 2,400,000 Earnout Shares that will be issuable if certain conditions are met, as described elsewhere in this proxy statement, (iii) up to 506,250 shares of New ICI Common Stock that will be issuable upon exercise of the private warrants at an exercise price of $11.50 per share, (iv) shares of New ICI Common Stock that will be issuable upon the exercise of Participating Company Options, (v) shares of New ICI Common Stock underlying the Participating Company RSU Awards or (vi) shares of New ICI Common Stock that will be available for issuance under the 2023 Plan, which will initially be equal to 12% of the fully-diluted shares as of the Closing. The Participating Company RSUs are not currently outstanding, but are expected to be granted prior to the Effective Time. The following table illustrates the impact on relative ownership levels assuming the issuance of all such shares.
Assuming No Additional
Redemptions
Assuming Maximum
Redemptions
Shares
Ownership
Percentage
Shares
Ownership
Percentage
Total shares of New ICI Common Stock outstanding at closing of the transaction
13,074,740 41.84% 12,486,866 40.93%
Earnout Shares
2,400,000 7.68% 2,400,000 7.87%
Shares underlying public warrants
8,625,000 27.60% 8,625,000 28.27%
Shares underlying private warrants
506,250 1.62% 506,250 1.66%
Shares underlying Participating Company Options
1,388,035 4.44% 1,403,675 4.60%
Shares underlying Participating Company RSU
Awards(a)
2,166,306 6.93% 2,076,016 6.80%
Shares initially reserved for issuance under 2023 Plan(b)
3,092,080 9.89% 3,011,750 9.87%
Total 31,252,411 100.0% 30,509,556 100.0%
(a)
Consists of shares underlying the Pre-Closing ICI Transaction RSU Awards (as defined below), which will cover ICI Class B Common Stock and will be assumed by SportsMap and converted into a comparable restricted stock unit award covering shares of New ICI common stock, based upon the Exchange Ratio, and will otherwise be subject to the same terms and conditions as applied to the underlying award immediately prior to the Closing, and are expected to be settled for shares of New ICI Common Stock no earlier than the one-year anniversary of the Closing. The Pre-Closing ICI Transaction RSU Awards are not currently outstanding, but are expected to be granted prior to the Effective Time. The Pre-Closing ICI Transaction RSU Awards and the New ICI Transaction RSU Awards (as defined below) are expected to be granted to Mr. Winch, Mr. Baird and Mr. Guida prior to the closing of the Business Combination and following the consummation of the Business Combination, respectively. The Transaction RSU Awards are expected to, collectively, cover a number of shares of New ICI Common Stock such that Mr. Winch, Mr. Baird and Mr. Guida would own 10.0%, 6.0% and 6.0% respectively, of New ICI common stock on a fully-diluted basis immediately following the closing of the Business Combination (excluding shares of New ICI Common Stock underlying SportsMap’s public warrants and private warrants). Please see “Executive and Director Compensation of Infrared Cameras — Interests of Directors and Executive Officers in the Business Combination — Transaction-Related RSU Awards” in this proxy statement for additional information.
(b)
Includes shares underlying the New ICI Transaction RSU Awards, which RSUs will be issued following the Closing and are expected to be settled for shares of New ICI Common Stock no earlier than the one-year anniversary of the Closing. The Pre-Closing ICI Transaction RSU Awards and the New ICI Transaction RSU Awards are expected to be granted to Mr. Winch, Mr. Baird and Mr. Guida prior to the closing of the Business Combination and following the consummation of the Business Combination,
 
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respectively. The Transaction RSU Awards are expected to, collectively, cover a number of shares of New ICI Common Stock such that Mr. Winch, Mr. Baird and Mr. Guida would own 10.0%, 6.0% and 6.0% respectively, of New ICI common stock on a fully-diluted basis immediately following the closing of the Business Combination (excluding shares of New ICI Common Stock underlying SportsMap’s public warrants and private warrants). Please see “Executive and Director Compensation of Infrared Cameras — Interests of Directors and Executive Officers in the Business Combination — Transaction-Related RSU Awards” in this proxy statement for additional information.
If all of the shares described in the table immediately above were to be issued in the no additional redemptions scenario, the percentage ownership of SportsMap’s public stockholders in New ICI would decrease from 12.5% to 5.2%. If all of the shares described in the table immediately above were to be issued in the maximum redemptions scenario, the percentage ownership of SportsMap’s public stockholders in New ICI would decrease from 7.7% to 3.2%.
Organizational Structure
Prior to the Business Combination
The following diagram shows the current ownership structure of SportsMap.
[MISSING IMAGE: fc_businesscombination-bw.jpg]
The following diagram shows the current ownership structure of ICI.
[MISSING IMAGE: fc_ici-bwlr.jpg]
 
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The following diagram shows the proposed ownership structure of New ICI. Ownership percentages are shown assuming no additional redemptions.
[MISSING IMAGE: fc_ownership-bw.jpg]
Board of Directors of New ICI following the Business Combination
The parties have agreed to take actions such that, effective immediately after the Closing, the New ICI Board shall consist of seven directors, consisting of two SportsMap designees, three ICI designees, and two additional “independent” directors. Additionally, certain current ICI management personnel will become officers of SportsMap.
Material Tax Consequences
For a detailed discussion of the material U.S. federal income tax consequences to holders of shares of SportsMap Common Stock that elect to have their SportsMap Common Stock redeemed for cash if the Business Combination is completed, see the section entitled “Material U.S. Federal Income Tax Considerations.
Anticipated Accounting Treatment
The Business Combination contemplated by the Business Combination Agreement will be accounted for as a reverse acquisition in accordance with GAAP. Under this method of accounting, SportsMap will be treated as the “acquired” company for accounting purposes. The net assets of SportsMap will be stated at historical cost, with no goodwill or other intangible assets recorded. Operations prior to the Business Combination will be those of ICI. Under this method of accounting, ICI has been determined to be the accounting acquirer, as it will hold the majority composition of the board of directors and voting rights and is greater in overall asset, revenue and employee size following the Business Combination.
Matters Being Voted On
At the Special Meeting, SportsMap Stockholders will be asked to consider and vote on the following proposals:
 
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a proposal to approve the Business Combination described in this proxy statement, including (a) adopting the Business Combination Agreement and (b) approving the other transactions contemplated by the Business Combination Agreement and related agreements described in this proxy statement. Please see the section entitled “Proposal No. 1 — The Business Combination Proposal”;

a proposal to approve and adopt the Proposed Certificate of Incorporation to replace the Current Certificate of Incorporation. Please see the section entitled “Proposal No. 2 — The Charter Proposal”;

a proposal to consider and vote upon, on a non-binding advisory basis, proposals to approve certain governance provisions contained in the Proposed Certificate of Incorporation. Please see the section entitled “Proposal No. 3 — The Advisory Governance Proposals”;

a proposal to approve, for purposes of complying with the applicable provisions of Nasdaq Listing Rule 5635, the issuance of more than 20% of the issued and outstanding shares of SportsMap Common Stock in connection with the Business Combination. Please see the section entitled “Proposal No. 4 — The Nasdaq Proposal”;

a proposal to elect the seven individuals as directors to the New ICI Board, effective immediately upon the Closing, until their respective successor is duly elected and qualified, or until their earlier resignation, removal or death. Please see the section entitled “Proposal No. 5 — The Director Election Proposal”;

a proposal to approve the Equity Incentive Plan. Please see the section entitled “Proposal No. 6 — The Equity Incentive Plan Proposal”; and

a proposal to adjourn the Special Meeting to a later date or dates, if necessary, to permit further solicitation and vote of proxies in the event that there are insufficient votes for, or otherwise in connection with, the approval of Proposal Nos. 1 through 6. Please see the section entitled “Proposal No. 7 — The Adjournment Proposal.”
Appraisal or Dissenters’ Rights
No appraisal or dissenters’ rights are available to holders of shares of SportsMap Common Stock or SportsMap Warrants in connection with the Business Combination.
Date, Time and Place of Special Meeting
The Special Meeting will be held at 10:00 a.m., Eastern Time, on December 5, 2023, or such other date and time to which such meeting may be adjourned or postponed, for the purpose of considering and voting upon the proposals. The Special Meeting will be completely virtual. There will be no physical meeting location and the Special Meeting will only be conducted via live webcast at the following address: www.virtualshareholdermeeting.com/SMAP2023SM2.
Record Date and Voting
You will be entitled to vote or direct votes to be cast at the Special Meeting if you owned shares of SportsMap Common Stock at the close of business on October 17, 2023, which is the record date for the Special Meeting. You are entitled to one vote for each share of SportsMap Common Stock that you owned as of the close of business on the SportsMap Record Date. If your shares are held in “street name” or are in a margin or similar account, you should contact your broker, bank or other nominee to ensure that votes related to the shares you beneficially own are properly counted. On the SportsMap Record Date, there were 5,184,944 shares of SportsMap Common Stock outstanding.
The Sponsor, SportsMap directors and officers and certain other SportsMap Stockholders have agreed to vote all of their shares of SportsMap Common Stock in favor of the Business Combination Proposal and the other proposals described in this proxy statement. The SportsMap Warrants are not entitled to vote at the Special Meeting.
Proxy Solicitation
Proxies may be solicited by mail. SportsMap has engaged D.F. King to assist in the solicitation of proxies. If a stockholder grants a proxy, it may still vote its shares in person if it revokes its proxy before the
 
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Special Meeting. A stockholder may also change its vote by submitting a later-dated proxy as described in the section entitled “The Special Meeting of SportsMap Stockholders — Revocability of Proxies”.
Quorum and Required Vote for Proposals for the Special Meeting
A quorum of SportsMap Stockholders is necessary to hold a valid meeting. A quorum will be present at the Special Meeting if a majority of the issued and outstanding shares of SportsMap Common Stock entitled to vote as of the SportsMap Record Date is represented in person (which would include presence at a virtual meeting) or by proxy. Abstentions and broker non-votes will be counted as present for the purpose of determining a quorum. The SportsMap Common Stock owned by the Sponsor, which currently owns 68.5% of the issued and outstanding shares of SportsMap Common Stock, will count towards this quorum. As a result, as of the SportsMap Record Date, quorum has been achieved.
The approval of each of the Business Combination Proposal, the Advisory Governance Proposals, the Nasdaq Proposal, the Equity Incentive Plan Proposal and the Adjournment Proposal, if presented, will require the affirmative vote of the majority of the votes cast by the stockholders present in person (which would include presence at a virtual meeting) or represented by proxy at the Special Meeting and entitled to vote thereon. Accordingly, a stockholder’s failure to vote by proxy or to vote in person (which would include presence at a virtual meeting) at the Special Meeting, as well as an abstention from voting and a broker non-vote with regard to each of the Business Combination Proposal, the Advisory Governance Proposals, the Nasdaq Proposal, the Equity Incentive Plan Proposal or the Adjournment Proposal, if presented, will have no effect on the Business Combination Proposal, the Advisory Governance Proposals, the Equity Incentive Plan Proposal or the Adjournment Proposal. The Sponsor, the SportsMap Initial Stockholders, the Insiders and SportsMap’s directors and officers have agreed to vote their shares of SportsMap Common Stock in favor of each of the proposals presented at the Special Meeting.
The approval of the Charter Proposal will require the affirmative vote of the holders of a majority of the outstanding shares of SportsMap Common Stock. Accordingly, a stockholder’s failure to vote by proxy or to vote in person (which would include presence at a virtual meeting) at the Special Meeting, as well as an abstention from voting and a broker non-vote with regard to the Charter Proposal, will have the same effect as a vote “AGAINST” such proposal.
The Business Combination is conditioned on the approval of the Business Combination Proposal, the Charter Proposal, the Nasdaq Proposals and the Equity Incentive Plan Proposal at the Special Meeting, subject to the terms of the Business Combination Agreement. The Business Combination is not conditioned on the Advisory Governance Proposals, the Director Election Proposal or the Adjournment Proposal. If the Business Combination Proposal is not approved, the other proposals (except the Adjournment Proposal) will not be presented to the stockholders for a vote.
Recommendation to SportsMap Holders
The SportsMap Board believes that the Business Combination Proposal and the other proposals to be presented at the Special Meeting are fair to, and in the best interest of, SportsMap Stockholders and unanimously recommends that its stockholders vote “FOR” the Business Combination Proposal, “FOR” the Charter Proposal, “FOR” the Advisory Governance Proposals, “FOR” the Nasdaq Proposal, “FOR” the Director Election Proposal, “FOR” the Equity Incentive Plan Proposal and “FOR” the Adjournment Proposal, if presented.
When you consider the SportsMap Board’s recommendation of the proposals, you should keep in mind that the Sponsor and SportsMap’s directors and officers have interests in the Business Combination that are different from, or in addition to, the interests of SportsMap Stockholders generally. Please see the section entitled “Proposal No. 1 — The Business Combination Proposal — Interests of SportsMap’s Directors and Executive Officers in the Business Combination” for additional information. The SportsMap Board was aware of and considered these interests, among other matters, in evaluating and negotiating the transactions contemplated hereby and in recommending to the SportsMap Stockholders that they vote “FOR” the proposals presented at the Special Meeting.
 
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Risk Factors and Risk Factor Summary
This proxy statement provides you with detailed information about the Business Combination and related transactions. You are encouraged to carefully read the entire document and the documents incorporated by reference. IN PARTICULAR, YOU SHOULD CAREFULLY CONSIDER THE MATTERS DISCUSSED UNDER “RISK FACTORS” BEGINNING ON PAGE 44. Some of the risks related to ICI, SportsMap, and New ICI are summarized below:
Risks Related to ICI’s Business and Industry

ICI has a history of losses or low income, and ICI expects to incur significant expenses and continuing losses for the foreseeable future.

ICI’s history of net losses, negative cash flows from operations and negative net working capital and the expectation that ICI will continue to incur net losses and use cash it its operations in the foreseeable future raise substantial doubt about ICI’s ability to continue as a going concern.

ICI’s revenue and margins could be adversely affected if ICI fails to maintain competitive average selling prices, high sales volumes, and/or fails to reduce product costs.

If ICI fails to successfully manage the expansion of its SaaS capabilities and offerings, its business and financial results could be adversely affected.

ICI has a limited operating history providing SaaS solutions, which makes it difficult to evaluate its future prospects and the risks and challenges it may encounter.

If ICI’s products are not adopted in its targeted end markets, its business will be materially and adversely affected.

Certain trends relating to the global COVID-19 pandemic positively impacted ICI’s business during 2020 and 2021, and ICI’s performance during the periods that were most impacted by COVID-19 should not be considered indicative of ICI’s future performance.

ICI expects to incur substantial research and development costs and devote significant resources to developing and commercializing new products, which could significantly affect its ability to become profitable and may never result in revenue to ICI. Any delay or interruption of the development and commercialization of new products may adversely affect its existing business and prospects for winning future business.

Product liability claims, product recalls and field service actions could have a material adverse effect on ICI’s reputation, business, results of operations and financial condition and it may have difficulty obtaining product liability and other insurance coverage.

ICI creates innovative technology by designing and developing unique hardware and software solutions. A failure to achieve scale may affect ICI’s ability to sell at competitive prices, limit its customer base or lead to losses.

If ICI is not able to effectively grow its sales and marketing organization, or maintain or grow an effective network of distributors, its business prospects, results of operations and financial condition could be adversely affected.

Certain of ICI’s commercial contracts with its customers, suppliers or co-development agreements could be terminated or may not materialize into long-term contract partnership arrangements.

The loss of large customers could result in a material adverse effect to ICI’s financial results.

Components used in ICI’s sensors may fail as a result of manufacturing, design or other defects over which it has no control and render its devices permanently inoperable.
Risks Related to the Business Combination and New ICI

New ICI’s ability to successfully operate the business after consummation of the Business Combination will be largely dependent upon the efforts of certain key personnel of ICI.
 
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The unaudited pro forma financial information included elsewhere in this proxy statement may not be indicative of what New ICI’s actual financial position or results of operations would have been.

New ICI’s expected management team as of Closing has limited experience in operating a public company.

Following the completion of the Business Combination, New ICI will incur significant increased expenses and administrative burdens as a public company, which could negatively impact its business, financial condition and results of operations.

Following the completion of the Business Combination we may still require substantial additional funding to finance our operations, but adequate additional financing may not be available when we need it, on acceptable terms or at all.

There can be no assurance that the New ICI Warrants and the New ICI Common Stock that will be issued in connection with the Business Combination (including New ICI Common Stock underlying the New ICI Warrants) will be approved for listing on Nasdaq or, if approved, will continue to be so listed following the Closing, or that New ICI will be able to comply with the continued listing standards of Nasdaq.

Even after the Business Combination, New ICI may need to raise additional capital in the future in order to execute its business plan, which may not be available on terms acceptable to it, or at all.
Risks Related to SportsMap and the Business Combination

SportsMap has no operating or financial history and its results of operations and those of New ICI may differ significantly from the unaudited pro forma financial data included in this proxy statement.

SportsMap has not been successful to date, and may not be successful at all, in its efforts to obtain additional financing in connection with the Business Combination, which may adversely affect the likelihood of the consummation of the Business Combination or the financial condition of New ICI.

SportsMap may not be able to complete its initial business combination November 20, 2023, as extended monthly at the election of SportsMap upon the contribution of $0.05 per public share outstanding (ultimately as late as December 20, 2023, unless further extended by the SportsMap Stockholders), in which case SportsMap would cease all operations except for the purpose of winding up and SportsMap would redeem its public shares and liquidate. If this occurs, SportsMap’s public stockholders may only receive $10.20 per share of SportsMap Common Stock, or less than such amount in certain circumstances, and the SportsMap Warrants will expire worthless.

The exercise by the SportsMap Stockholders of redemption rights with respect to a large number of shares of SportsMap Common Stock could increase the probability that the Business Combination will be unsuccessful and that SportsMap Stockholders will have to wait for liquidation in order to redeem their SportsMap Common Stock.

If a SportsMap Stockholder wishing to redeem its SportsMap Common Stock in connection with the Business Combination fails to comply with the procedures for tendering its shares, such shares may not be redeemed.

You will not have any rights or interests in funds from the Trust Account, except under certain limited circumstances. To liquidate your investment, therefore, you may be forced to sell your public shares or warrants, potentially at a loss.

SportsMap Stockholders cannot be sure of the market value of the New ICI Common Stock upon completion of the Business Combination.
Market Prices and Dividends
SportsMap Securities
SportsMap Common Stock, SportsMap Units, and SportsMap Warrants are currently listed and traded on the Nasdaq Stock Market under the symbols “SMAP”, “SMAPU” and “SMAPW”, respectively.
 
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The closing price of SportsMap Common Stock, SportsMap Warrants and SportsMap Units on December 2, 2022, the last trading day prior to the public announcement of the merger, was $10.12 per share, $10.20 per unit, and $0.05 per warrant, respectively. The closing price of SportsMap Common Stock and SportsMap Units on November 2, 2023, the last practicable trading day prior to the date of this proxy statement, was $10.75 per share, $10.70 per unit, and $0.05 per warrant, respectively, each as reported on the Nasdaq Global Market. Because the market price of SportsMap Common Stock is subject to fluctuation, the market value of the shares of SportsMap Common Stock that ICI Stockholders will be entitled to receive in the merger may increase or decrease.
Assuming stockholder approval of the Business Combination Proposal, the Charter Proposal, the Nasdaq Proposal and the Equity Incentive Plan Proposal, and successful application for initial listing on Nasdaq, following the consummation of the Business Combination, SportsMap Common Stock and SportsMap Warrants will trade on Nasdaq under the new name, “Infrared Cameras Holdings, Inc.” and new trading symbols “MSAI” and “MSAIW”, respectively.
Dividend Policy
SportsMap has not paid any cash dividends on the SportsMap securities to date and does not intend to pay any cash dividends prior to the Closing of the Business Combination. The payment of cash dividends in the future will be dependent upon New ICI’s revenues and earnings, if any, capital requirements and general financial condition subsequent to the Closing of the Business Combination. The payment of any cash dividends subsequent to the Business Combination will be within the discretion of the New ICI’s board at such time.
 
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SUMMARY OF THE MATERIAL TERMS OF THE TRANSACTIONS
This summary term sheet, together with the sections entitled “Questions and Answers About the Proposals” and “Summary of the Proxy Statement,” summarizes certain information contained in this proxy statement, but does not contain all of the information that is important to you. You should read carefully this entire proxy statement, including the attached annexes, for a more complete understanding of the matters to be considered at the Special Meeting. In addition, for definitions used commonly throughout this proxy statement, including this summary term sheet, see “Selected Definitions”.

SportsMap Tech Acquisition Corp., a Delaware corporation, which we refer to as “SportsMap”, “we”, “us”, or “our”, is a special purpose acquisition company formed for the purpose of effecting a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or similar business combination with one or more businesses.

On October 21, 2021, we consummated the initial public offering of 11,500,000 units at a price of $10.00 per unit (including 1,500,000 units from the full exercise of the underwriters’ over-allotment option), generating gross proceeds of $115,000,000. Simultaneously with the closing of the IPO, we consummated the sale of 675,000 Private Placement Units to the Sponsor and Roth Capital, LLC, at a price of $10.00 per unit, generating gross proceeds of $6,750,000.

Following the IPO, the exercise of the over-allotment option and the sale of the Private Placement Units, a total of $117,300,000 was deposited into a U.S.-based trust account with Continental Stock Transfer & Trust Company, acting as trustee. Except as described in the prospectus for SportsMap’s IPO, these proceeds will not be released until the earlier of the completion of an initial business combination and SportsMap’s redemption of 100% of the outstanding public shares upon its failure to consummate a business combination within the completion window.

In connection with a special meeting of SportsMap Stockholders, held on April 14, 2023, the SportsMap Stockholders elected to redeem 9,865,056 public shares of SportsMap Common Stock and to extend SportsMap’s business combination period monthly, for up to eight months, from April 20, 2023, ultimately until as late as December 20, 2023. Each monthly extension shall require Sponsor to contribute $0.05 per public share outstanding to the Trust Account. As of September 18, 2023, SportsMap had 1,634,944 public shares of SportsMap Common Stock outstanding, and held approximately $17.6 million in the Trust Account. The 9,865,056 public shares of SportsMap Common Stock redeemed at the stockholder meeting on April 14, 2023 represented approximately 65.5% of the shares of SportsMap Common Stock issued and outstanding on such date and approximately 85.8% of the public shares then-outstanding.

Infrared Cameras Holdings, Inc., a Delaware corporation, which we refer to as “ICI”, is a provider of sensing solutions built around high-resolution thermal imaging along with visible, acoustic, and laser spectroscopy imagers and sensors, that perceive and measure heat, sound, and gas in the surrounding environment, helping companies gain insight to efficiently manage their most important assets and infrastructure.

On December 5, 2022, SportsMap entered into a Business Combination Agreement with Merger Sub and ICI, which, among other things, provides for Merger Sub to be merged with and into ICI with ICI being the surviving company in the Merger and a wholly-owned subsidiary of SportsMap.

Subject to the terms of the Business Combination Agreement, the aggregate merger consideration payable to holders of ICI Common Stock, Participating Company Options and Participating Company RSU Awards will be shares of SportsMap Common Stock having a value equal to the Adjusted Equity Value, together with any Earnout Shares to which the holder of ICI Common Stock, Participating Company Options and Participating Company RSU Awards may be entitled following the Closing. As of September 18, 2023, we estimate the Adjusted Equity Value would be approximately $107,916,000. As of September 18, 2023, the “Per Share Merger Consideration”, representing the ascribed value per share of SportsMap Common Stock to be payable as merger consideration, is $10.00.

Shares of SportsMap Common Stock were originally sold in the IPO as a component of the SportsMap Units for $10.00 per unit. Each SportsMap Unit consists of one share of SportsMap
 
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Common Stock and three-quarters of one SportsMap Warrant. As of the SportsMap Record Date, the closing price on Nasdaq of a share of SportsMap Common Stock was $10.72 per share and the closing price of a SportsMap Warrant was $0.05 per warrant.

SportsMap management and the SportsMap Board considered various factors in determining whether to approve the Business Combination Agreement and the transactions contemplated thereby, including the Merger. For more information about the factors the SportsMap Board considered in determining its recommendation, see “Proposal No. 1 — The Business Combination Proposal — The SportsMap Board’s Reasons for the Business Combination”. When you consider the SportsMap Board’s recommendation of these proposals, you should keep in mind that the Sponsor and SportsMap directors and officers have interests in the Business Combination that are different from, or in addition to, the interests of SportsMap’s shareholders generally. The SportsMap Board was aware of and considered these interests, among other matters, in evaluating and negotiating the Business Combination Agreement and the Merger and in recommending to SportsMap Stockholders that they vote “FOR” the proposals presented at the Special Meeting.

At the Special Meeting, SportsMap Stockholders will be asked to consider and vote on the following proposals:

a proposal to approve the Business Combination described in this proxy statement, including (a) adopting the Business Combination Agreement and (b) approving the Merger and the other transactions contemplated by the Business Combination Agreement and related agreements described in this proxy statement. Please see the section entitled “Proposal No. 1 — The Business Combination Proposal”;

a proposal to approve and adopt the Proposed Certificate of Incorporation to replace the Current Certificate of Incorporation. Please see the section entitled “Proposal No. 2 — The Charter Proposal”;

a proposal to approve, for purposes of complying with SEC requirements, certain other matters set forth in the Proposed Certificate of Incorporation of New ICI. Please see the section entitled “Proposal No. 3 — The Advisory Governance Proposals”;

a proposal to approve, for purposes of complying with the applicable provisions of Nasdaq Listing Rule 5635, the issuance of more than 20% of SportsMap’s issued and outstanding shares of SportsMap Common Stock in connection with the Business Combination. Please see the section entitled “Proposal No. 4 — The Nasdaq Proposal”;

a proposal to elect the seven individuals as directors to the New ICI Board, effective immediately upon the Closing, until their respective successor is duly elected and qualified, or until their earlier resignation, removal or death. Please see the section entitled “Proposal No. 5 — The Director Election Proposal”;

a proposal to approve the Equity Incentive Plan. Please see the section entitled “Proposal No. 6 — The Equity Incentive Plan Proposal”; and

a proposal to adjourn the Special Meeting to a later date or dates, if necessary, to permit further solicitation and vote of proxies in the event that there are insufficient votes for, or otherwise in connection with, the approval of Proposal Nos. 1 through 6. Please see the section entitled “Proposal No. 7 — The Adjournment Proposal”.
 
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SELECTED HISTORICAL FINANCIAL DATA OF SPORTSMAP
The following tables summarize certain financial data for SportsMap’s business and should be read in conjunction with the section entitled “SportsMap Management’s Discussion and Analysis of Financial Condition and Results of Operations” and SportsMap’s audited and unaudited interim financial statements, and the notes related thereto, which are included elsewhere in this proxy statement.
SportsMap’s balance sheet data as of December 31, 2022 and December 31, 2021, and statement of operations data for the year ended December 31, 2022, and for the period from May 14, 2021 (inception), through December 31, 2021, are derived from SportsMap’s audited financial statements included elsewhere in this proxy statement. SportsMap’s balance sheet data as of June 30, 2023 and statement of operations data for the six months ended June 30, 2023 are derived from SportsMap’s unaudited interim financial statements included elsewhere in this proxy statement.
The historical results presented below are not necessarily indicative of the results to be expected for any future period. You should read the following selected financial information in conjunction with SportsMap’s financial statements and related notes and the section entitled “SportsMap Management’s Discussion and Analysis of Financial Condition and Results of Operations” contained elsewhere in this proxy statement.
For the Six
Months Ended
June 30,
2023
For the Year
Ended
December 31,
2022
For the
period from
May 14, 2021
(inception)
through
December 31,
2021
Statement of Operations Data:
Loss from operations
$ 952,519 $ 1,385,573 $ 424,882
Other income:
Interest earned on investments held in Trust Account . . . . . . . .
1,765,580 1,739,145 10,928
Accrued interest on Promissory Notes. . . . . . . . . . . . . . . . . . . .
(911,167)
Income (Loss) before provision for income taxes
(98,106) 353,572 (413,954)
Provision for income taxes
(355,924) (316,711)
Net income (loss)
$ (454,030) $ 36,861 $ (413,954)
Basic and diluted weighted average shares outstanding, redeemable shares
7,575,779 11,500,000 3,568,966
Basic and diluted income (loss) per common stock, redeemable shares
$ (0.04) $ 0.00 $ (0.07)
Basic and diluted weighted average shares outstanding, non-redeemable shares
3,550,000 3,550,000 2,588,793
Basic and diluted net income per common stock, non-redeemable shares
$ (0.04) $ 0.00 $ (0.07)
June 30, 2023
(Unaudited)
December 31,
2022
December 31,
2021
Balance Sheet Data:
Working capital (deficit)
$ (1,327,066) $ 124,865 $ 1,194,449
Cash
255,452 222,266 931,271
Total assets
17,526,904 119,128,173 118,738,383
Total liabilities
1,716,347 553,203 200,274
Common stock subject to possible redemption
17,141,240 118,454,587 117,300,000
Total stockholders’ (deficit) equity
(1,330,683) 120,383 1,238,109
 
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SELECTED HISTORICAL FINANCIAL DATA OF ICI
The selected historical consolidated statements of operations and statements of cash flow data of ICI for the years ended December 31, 2022 and 2021, and the historical consolidated balance sheet data as of December 31, 2022 and 2021, are derived from ICI’s audited consolidated financial statements included elsewhere in this proxy statement. The summary historical consolidated statements of operations and statements of cash flow data of ICI for the six months ended June 30, 2023 and 2022, and the historical consolidated balance sheet data as of June 30, 2023 are derived from ICI’s unaudited interim condensed consolidated financial statements included elsewhere in this proxy statement. ICI’s historical results are not necessarily indicative of the results that may be expected in the future, and ICI’s results for the six months ended June 30, 2023 are not necessarily indicative of the results that may be expected for the full year ending December 31, 2023, or any other period. You should read the following summary historical consolidated financial data together with “ICI Management’s Discussion and Analysis of Financial Condition and Results of Operations” and ICI’s consolidated financial statements and related notes included elsewhere in this proxy statement.
Consolidated Statements of Operations Data
Six Months Ended
June 30,
Year Ended
December 31,
(in thousands)
2023
2022
2022
2021
Revenue, net
$ 2,317 $ 2,938 $ 7,268 $ 28,786
Cost of goods sold (exclusive of depreciation)
2,410 2,139 4,964 10,282
Operating expenses:
Selling, general and administrative
5,843 6,000 13,606 14,120
Depreciation
401 206 561 318
Casualty losses, net of recoveries
155
Total operating expenses
6,244 6,206 14,322 14,438
Operating (loss) income
(6,337) (5,407) (12,018) 4,066
Other (income) expenses, net
(2,774) 3 67 635
(Loss) income before income taxes
(3,563) (5,410) (12,085) 3,431
Income tax expense (benefit)
48 (1,251) 1,205 1,118
Net (loss) income
$ (3,611) $ (4,159) $ (13,290) $ 2,313
Consolidated Balance Sheets Data
(in thousands)
As of
June 30, 2023
As of
December 31, 2022
As of
December 31, 2021
Cash and cash equivalents
$ 1,158 $ 654 $ 3,374
Total assets
18,080 17,461 24,704
Total liabilities
11,224 25,670 20,267
Total shareholders’ equity
6,856 (8,209) 4,437
Total liabilities and shareholders’ equity
$ 18,080 $ 17,461 $ 24,704
Consolidated Statements of Cash Flow Data
Six Months Ended
June 30,
Year Ended
December 31,
(in thousands)
2023
2022
2022
2021
Net cash (used in) provided by operating activities . . .
$ (298) $ (2,028) $ (3,170) $ 4,412
Net cash (used in) investing activities . . . . . . .
(973) (924) (1,600) (1,414)
Net cash provided by (used in) financing activities . . .
1,775 400 2,050 (4,041)
 
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TRADING SYMBOLS, MARKET PRICE AND DIVIDEND INFORMATION
SportsMap
Market Price of SportsMap Securities
SportsMap Common Stock, SportsMap Warrants and SportsMap Units are listed on the Nasdaq Global Market under the symbols “SMAP”, “SMAPW” and “SMAPU”, respectively.
The closing price of SportsMap Common Stock, SportsMap Warrants and SportsMap Units on December 2, 2022, the last trading day prior to the public announcement of the merger, was $10.12 per share, $0.05 per warrant and $10.20 per unit, respectively, and the closing price of SportsMap Common Stock, SportsMap Warrants and SportsMap Units on November 2, 2023, the last practicable trading day prior to the date of this proxy statement, was $10.75 per share, $0.05 per warrant and $10.70 per unit, respectively, each as reported on the Nasdaq Global Market. Because the market price of SportsMap Common Stock is subject to fluctuation, the market value of the shares of SportsMap Common Stock that ICI Stockholders will be entitled to receive in the merger may increase or decrease.
Assuming stockholder approval of the Business Combination Proposal, the Charter Proposal, the Nasdaq Proposal and the Equity Incentive Plan Proposal, and successful application for initial listing on Nasdaq, following the consummation of the Business Combination, SportsMap Common Stock and SportsMap Warrants will trade on Nasdaq under the new name, “Infrared Cameras Holdings, Inc.” and new trading symbols “MSAI” and “MSAIW”, respectively.
Holders
As of February 8, 2023, there were fourteen holders of record for shares of SportsMap Common Stock, two holders of SportsMap Warrants and fifteen holders of SportsMap Units. These numbers do not include SportsMap Stockholders and warrant holders for whom shares and warrants, respectively, were held in “street name”.
Dividends
SportsMap has not paid any cash dividends on the SportsMap Common Stock to date and does not intend to pay cash dividends prior to the completion of the Business Combination.
ICI
Market Price of ICI Securities
Historical market price information regarding ICI is not provided because there is no public market for its securities.
Dividends
ICI has not paid any cash dividends on its shares to date and does not intend to pay cash dividends prior to the completion of the Business Combination.
Merger Sub
Price Range of Merger Sub Securities
Historical market price information regarding Merger Sub is not provided because there is no public market for its securities.
Dividends
Merger Sub has not paid any cash dividends to date and does not intend to pay cash dividends prior to the completion the Business Combination.
 
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RISK FACTORS
In addition to the other information contained in this proxy statement, including the matters addressed under the heading “Cautionary Note Regarding Forward-Looking Statements,” you should carefully consider the following risk factors in deciding how to vote on the proposals presented in this proxy statement. The occurrence of one or more of the events or circumstances described in these risk factors, alone or in combination with other events or circumstances, may have a material adverse effect on ICI’s and New ICI’s business, reputation, revenue, financial condition, results of operations and future prospects, in which event the market price of the New ICI Common Stock could decline, and you could lose part or all of your investment. Unless otherwise indicated, references in this section and elsewhere in this proxy statement to the ICI business being adversely affected, negatively impacted or harmed will include an adverse effect on, or a negative impact or harm to, the business, reputation, revenue, financial condition, results of operations and future prospects of New ICI.
Risks Related to ICI’s Business and Industry
Unless the context otherwise requires, all references in this subsection to the “Company,” “we,” “us” or “our” refer to ICI prior to the consummation of the Business Combination and New ICI after the consummation of the Business Combination.
ICI has a history of losses or low income, and ICI expects to incur significant expenses and continuing losses for the foreseeable future.
ICI has incurred net losses or low income in many years since its inception. ICI incurred a net loss of $13.3 million for the year ended December 31, 2022 and $3.6 million for the six months ended June 30, 2023. ICI recorded net income of $2.3 million for the year ended December 31, 2021, due in part to substantial sales that ICI believes were attributable to customers using its products in response to the COVID-19 pandemic. ICI believes that it will continue to incur operating and net losses each quarter until at least such time as it begins to realize the anticipated benefits of its planned investment in sales and marketing efforts, though those benefits may not be as great as ICI anticipates or may occur later that ICI anticipates or not at all. Even if ICI successfully develops and sells its devices and software solutions, there can be no assurance that it will be commercially successful. ICI believes its sustained profitability will be dependent upon the successful development and successful commercial introduction and acceptance of its solutions, which may not occur.
ICI expects to continue to incur losses in future periods as it:

expands its sales and marketing presence;

increases investment in SaaS solutions;

executes on its product roadmaps;

grows wallet share with enterprise customers;

expands its distribution network; and

pursues strategic acquisitions.
Because ICI will incur the costs and expenses from these efforts before it experiences any incremental revenue growth as a result of these initiatives, its losses in future periods may be significant. In addition, ICI may find that these efforts are more expensive than it currently anticipates or that these efforts may not result in revenues, which would further increase its losses.
These initiatives may prove more expensive than ICI currently anticipates, and it may not succeed in increasing its revenue, if at all, in an amount sufficient to offset these higher expenses and to achieve and maintain profitability. Certain of the market opportunities ICI is pursuing are at an early stage of development, and it may be many years before the end markets it expects to serve generate demand for its products at scale. ICI’s revenue may be adversely affected for a number of reasons, including an inability to up-sell or cross-sell SaaS offerings that ICI is seeking to expand or develop, the development and/or market acceptance of new technology that competes with its thermal imaging products, its ability to create, validate, and manufacture at high volume, and ship product to customers, its inability to effectively manage
 
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its inventory or manufacture products at scale, its inability to enter new markets or help its customers adapt its products for new applications or its failure to attract new customers or expand orders from existing customers or increasing competition. Furthermore, it is difficult to predict the size and growth rate of ICI’s target markets, customer demand for its products, commercialization timelines, the entry of competitive products or the success of existing competitive products and services. If ICI’s revenue does not grow, its ability to achieve and maintain profitability may be adversely affected, and the value of its business may significantly decrease.
ICI’s revenue and margins could be adversely affected if ICI fails to maintain competitive average selling prices, high sales volumes, and/or fails to reduce product costs.
Cost-cutting initiatives adopted by ICI’s customers can place increased downward pressure on ICI’s average selling prices. ICI also expects that any long-term or high-volume agreements with customers may require step-downs in pricing over the term of the agreement. ICI’s average selling price may be driven down by customer-specific selling price fluctuations such as non-standard discounts on large volume purchases. These lower average selling prices on large volume purchases may cause fluctuations in revenue and gross margins on a quarterly and annual basis and ultimately adversely affect its profitability.
ICI may also experience declines in the average selling prices of its products generally as its customers negotiate lower prices and as its competitors continue to produce and commercialize lower cost competing technologies. To achieve profitability and maintain margins, ICI will also need to continually reduce product and manufacturing costs. Reductions in product and manufacturing costs are principally achieved by scaling its production volumes and through step changes in manufacturing and continued engineering of the most cost-effective designs for its products. In addition, ICI must continuously drive initiatives to reduce labor cost, improve worker efficiency, reduce the cost of materials, use fewer materials and further lower overall product costs by carefully managing component prices, inventory and shipping cost. ICI needs to continually increase sales volume and introduce new, lower-cost products in order to maintain its overall gross margin. If ICI is unable to maintain competitive average selling prices, increase its sales volume or successfully introduce new, low-cost products, its revenue and overall gross margin would likely decline.
If ICI fails to successfully manage the expansion of its SaaS capabilities and offerings, its business and financial results could be adversely affected.
Expanding ICI’s SaaS capabilities and offerings will require considerable additional investment by ICI in its business. Whether this expansion will be successful and will accomplish ICI’s business and financial objectives is subject to uncertainties, including, but not limited to, customer demand, attach and renewal rates, channel adoption, ICI’s ability to further develop and scale infrastructure, ICI’s ability to include functionality and usability in such offerings that address customer requirements, and the related costs. If ICI is unable to successfully expand its existing offerings or establish new offerings and navigate its business expansion due to these risks and uncertainties, its business and financial results could be adversely impacted.
ICI has a limited operating history providing SaaS solutions, which makes it difficult to evaluate its future prospects and the risks and challenges it may encounter.
While ICI has been in operation since 1995, the company has a limited operating history providing SaaS solutions that it introduced to its industrial customers in 2022. ICI’s limited operating history providing SaaS solutions makes it difficult for it to evaluate its future prospects. Certain factors that could alone or in combination prevent ICI from successfully commercializing these solutions or its other products include:

its reliance on third parties to supply significant parts of its production process or to manufacture its products;

its ability to establish and maintain successful relationships with its suppliers or manufacturers;

its ability to achieve commercial scale production of its products on a cost-effective basis and in a timely manner;

its ability to successfully expand its product offerings;

its ability to develop and protect intellectual property;
 
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its ability to gain market acceptance of its products with customers and maintain and expand customer relationships, whether through strategic customer agreements or otherwise;

the adaptability of its products and the ability of its customers to integrate its products into their products and processes in a timely and effective manner;

the actions of direct and indirect competitors that may seek to enter the markets in which ICI expects to compete or that may seek to impose barriers to one or more markets that ICI intends to target;

the long-lead time for development of market opportunities for which ICI is only at an early stage of development;

its ability to forecast its revenue and budget for, and manage, its expenses;

its ability to comply with existing and new or modified laws and regulations applicable to its business, or laws and regulations applicable to its customers for applications in which they may use its products;

its ability to plan for and manage capital expenditures for its current and future products, and manage its supply chain and supplier relationships related to these current and future products;

its ability to anticipate and respond to macroeconomic changes and changes in the markets in which ICI operates and expects to operate;

its ability to maintain and enhance the value of its reputation and brand;

its ability to effectively manage its growth and business operations, including the impacts of the global COVID-19 pandemic on its business; and

its ability to recruit and retain talented people at all levels of its organization.
ICI’s relationships with many of its existing customers are limited as they may not be prepared to select ICI as a long-term supplier given the more recent nature of its business relationship. To establish preliminary relationships with certain customers and to build their confidence, ICI has entered, and may continue to enter, into pilot agreements, spot buy purchase orders, non-binding letters of intent and strategic customer agreements. These agreements are largely non-binding, often do not include any minimum obligation to purchase any quantities of any products, and do not require that the parties enter into a subsequent definitive, long-term, binding agreement. If ICI is unable to build confidence with its existing customers, either through these preliminary agreements (due to any failure to enter into or perform under the agreements) or otherwise, or if ICI is unable secure opportunity from these non-binding agreements, involving strategic customer agreements, it may be unable to produce accurate forecasts or increase its sales.
With respect to new customers, they may be less confident in ICI and less likely to purchase ICI’s products because of a lack of awareness about its products. They may also not be convinced that ICI’s business will succeed because of the absence of an established sales, service, support and operating history. To address this, ICI must, among other activities, grow and improve its marketing capability and brand awareness, which may be costly. These activities may not be effective or could delay ICI’s ability to capitalize on the opportunities that it believes are suitable to its technology and products and may prevent ICI from successfully commercializing its products.
To build and maintain ICI’s business, it must maintain confidence in its products, long-term financial viability and business prospects. Failure to establish and maintain customer confidence may also adversely affect ICI’s reputation and business among its suppliers, analysts, ratings agencies and other interested parties.
If ICI fails to understand fully or adequately address the challenges that it is currently encountering or that it may encounter in the future, including those challenges described here and elsewhere in this “Risk Factors” section, its business, financial condition and results of operations could be adversely and materially affected. If the risks and uncertainties that ICI plans for when operating its business is incorrect or change, or if it fails to manage these risks successfully, ICI’s results of operations could differ materially from its expectations and its business, financial condition and results of operations could be adversely affected.
 
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If ICI’s products are not adopted in its targeted end markets, its business will be materially and adversely affected.
Although ICI’s products are designed for use in multiple markets, each of its target or new markets may have unique barriers to entry. If ICI is unsuccessful in overcoming these barriers, it may affect its entrance into, or adoption by, these target or new markets, which could adversely affect its future results of operations.
ICI’s products are used in a wide variety of existing and emerging use cases in the distribution and logistics market, where ICI’s products provide conveyor system monitoring solutions assisting customers with process automation, predictive maintenance and failure avoidance. These customers tend to be large companies that move slowly to larger scale implementation, often with years-long timelines. If ICI’s products are not chosen for deployment in these projects, or ICI loses a program under any circumstances, ICI may not have an opportunity to obtain that business again for many years. Even if ICI’s products are chosen for deployment, implementation and adoption by ICI’s customers may not be on terms consistent with initial forecasts or agreements between ICI and the customer. Industrial automation is a demanding industry with product specifications that its products may not always meet.
ICI’s products also are used in a wide variety of existing and emerging use cases in the oil and gas market, which generally consists of gas and liquid leak detection, tank-level monitoring, pipeline leak detection and gas processing safety monitoring. This is a nascent market, and while this industry is experimenting with the use of thermal imaging in these applications, ICI’s customers may decide that thermal imaging is not a feasible solution for one of a variety of reasons, including current price points of sensors using thermal imaging technology.
ICI’s products also are used in a wide variety of existing and emerging use cases in the manufacturing market, in which ICI’s customers are generally engaged in power panel monitoring, early fire detection and electrified transport battery monitoring. Additionally, ICI’s products are also used in a wide variety of existing and emerging use cases in the utilities market. Both of these markets are competitive and customers often have strict functional and pricing requirements for products. If ICI is unable to make products that meet these requirements, or sell products at the required price point, it could lose this business to competitors or competitive technologies. ICI’s target markets involve risks of program delay, loss, and cancellation.
Certain trends relating to the global COVID-19 pandemic positively impacted ICI’s business during 2020 and 2021, and ICI’s performance during the periods that were most impacted by COVID-19 should not be considered indicative of ICI’s future performance.
Certain trends relating to the global COVID-19 pandemic positively impacted certain of ICI’s products and demand for such products. As a result of the global COVID-19 pandemic and the related monitoring procedures for febrile individuals implemented by numerous businesses and governmental organizations, ICI experienced significant demand for certain of its products in 2020 for biorisk applications, which declined substantially in 2021 and further in 2022. ICI generated total revenue of $83.2 million and $28.8 million for the years ended December 31, 2020 and 2021, respectively. ICI estimates that revenue of $75.7 million and $23.1 million, respectively, for the years ended December 31, 2020 and 2021 related to sales of products that were deployed primarily for biorisk applications in response to the COVID-19 pandemic. ICI generated total revenue of $7.3 million for the year ended December 31, 2022, which ICI estimates includes revenue of $0.9 million related to sales of products that were deployed primarily for biorisk applications in response to the COVID-19 pandemic. In future periods, ICI expects the use of its products for biorisk applications will continue to decline. Essentially all inventory that is specifically designed for biorisk applications and cannot be easily and economically viable adapted to industrial applications has been written down to net realizable value.
ICI expects to incur substantial research and development costs and devote significant resources to developing and commercializing new products, which could significantly affect its ability to become profitable and may never result in revenue to ICI. Any delay or interruption of the development and commercialization of new products may adversely affect its existing business and prospects for winning future business.
ICI’s future growth depends on penetrating new markets, adapting existing products to new applications and customer requirements, and introducing new and effective products on a timely basis that then achieve
 
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market acceptance. To remain competitive, ICI develops new products and upgrades to its software and will need to continue to do so. In connection with this development, ICI plans to incur substantial, and potentially increasing, research and development costs. Because ICI accounts for research and development as an operating expense, these expenditures could adversely affect its results of operations in the future.
Further, ICI’s research and development program may be delayed and may not produce timely results. If ICI cannot produce successful results in time to accommodate customers’ or potential customers’ implementation timelines, ICI may lose business. If ICI is unsuccessful in introducing these products in accordance with its product launch plans or any publicly announced launch dates, it may be injurious to ICI’s reputation and brand and adversely affect its ability to be competitive in its target and new markets.
ICI expects to rely on products it is currently developing for a significant portion of its future growth. However, even if its research and development efforts are successful and completed on time, there is no guarantee that ICI will be successful in adapting its business to its new products or that its new products will achieve market acceptance or generate sufficient revenue to make ICI profitable. ICI’s future products, such as any software solutions it develops, may be products ICI has limited or no experience commercializing. In launching such products, ICI may face foreseen and unforeseen difficulties that adversely affect such the commercialization and could have a material adverse effect on its operations and business. Additionally, the success of its competitors’ research and development efforts, including producing higher performing products, may result in loss of business for ICI.
The promise of new products and successful research and development may even decrease ICI’s expected and actual revenue attributable to existing products as customers may delay or cancel outstanding purchasing commitments for current generation products in anticipation of the release of new generation products from ICI.
Additionally, new products may trigger increased warranty costs as information on such products is augmented by actual usage.
Product liability claims, product recalls and field service actions could have a material adverse effect on ICI’s reputation, business, results of operations and financial condition and it may have difficulty obtaining product liability and other insurance coverage.
As a manufacturer and distributor of a wide variety of products used in the oil and gas, distribution and logistics, manufacturing and utilities markets, ICI’s results of operations are susceptible to adverse publicity regarding the quality or safety of its products. Product liability claims challenging the quality or safety of its products may result in a decline in sales for a product, which could adversely affect its results of operations. This could be the case even if the claims themselves are proven to be untrue or settled for immaterial amounts.
While ICI has general liability and other insurance policies concerning product liabilities and errors and omissions, it has deductibles under such policies with respect to a portion of these liabilities. Awarded damages could be more than ICI’s accruals. ICI could incur losses above the aggregate annual policy limit as well. ICI cannot ensure that insurance carriers will be willing to renew coverage or provide new coverage for product liability.
Product recalls can be expensive and tarnish ICI’s reputation and have a material adverse effect on the sales of its products. ICI cannot assure that it will not have additional product liability claims or that it will not recall any products.
ICI may face risks associated with its reliance on certain artificial intelligence and machine learning models.
ICI relies on artificial intelligence and machine learning (“AI/ML”) in the development of its deterministic artificial intelligence-driven sensing system for industrial applications. The AI/ML models that ICI uses are trained using various data sets. If the AI/ML models are incorrectly designed, the data ICI uses to train them is incomplete, inadequate, or biased in some way, or if ICI does not have sufficient rights to use the data on which its AI/ML models rely, the performance of its products, services, and business, as well as ICI’s reputation, could suffer or ICI could incur liability through the violation of laws, third-party privacy, or other rights, or contracts to which ICI is a party.
 
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ICI faces risks related to sales through distributors and other third parties which could harm its business.
ICI sells a portion of its products through third parties such as distributors and manufacturers representatives (collectively, “distributors” or “Strategic Channel Partners”). Using third parties for distribution exposes ICI to many risks, including concentration risk, credit risk and legal risk because, under certain circumstances, ICI may be held responsible for the actions of those third-party sales channels. ICI may rely on one or more key distributors for selling a product, and the loss of these distributors could reduce its revenue. Our Strategic Channel Partners may face financial difficulties, including bankruptcy, which could harm ICI’s collection of accounts receivables and financial results. Violations of the Foreign Corrupt Practices Act (“FCPA”) or similar anti-bribery laws by distributors or other third-party intermediaries could have a material impact on ICI’s business. Competitors could also block ICI’s access to such parties. Failing to manage risks related to ICI’s use of third-party sales channels may reduce sales, increase expenses, and weaken its competitive position, and could result in sanctions against ICI.
The period of time from initiating dialogue with potential customers to implementation is long and ICI is subject to the risks of cancellation or postponement of the contract or unsuccessful implementation.
Prospective customers generally must make significant commitments of resources to test and validate products like those produced by ICI and confirm that they can integrate these products with other technologies before including them in any particular system, product, or process. The selling cycle for ICI’s products with new customers varies widely depending on the application, market, customer, and the complexity of the product. In the warehouse and logistics market, for example, this selling cycle can be a year (or more). These selling cycles result in ICI investing its resources prior to realizing any revenue from commercialization. Further, ICI is subject to the risk that customers cancel or postpone implementation of its technology solution or its customers are unable to integrate its technology solution successfully into a larger system. If ICI’s customers face financial difficulties, they may also cancel current or future product programs that could materially and adversely impact ICI’s financial results. Further, ICI’s revenue could be less than forecasted if the system, product, or process that includes its products is unsuccessful, including for reasons unrelated to its technology. Long selling cycles and product cancellations or postponements may adversely affect its business, results of operations, and financial condition.
Developments in alternative technologies may adversely affect the demand for ICI’s technology.
Significant developments in alternative technologies may materially and adversely affect ICI’s business, prospects, financial condition, and operating results in ways it does not currently anticipate. Existing and future infrared technologies may emerge as customers’ preferred alternative to ICI’s solutions. Any failure by ICI to develop new or enhanced technologies or processes, or to react to changes in existing technologies, could materially delay ICI’s development and introduction of new and enhanced products in the industries it serves, which could result in the loss of competitiveness of its solutions, decreased revenue and a loss of market share to competitors (or a failure to increase revenue and/or market share). ICI’s research and development efforts may not be sufficient to adapt to changes in technology. As technologies change, ICI plans to upgrade or adapt its solutions with the latest technology. However, ICI’s solutions may not compete effectively with alternative systems if ICI is not able to source and integrate the latest technology into its existing products.
ICI’s manufacturing business model and use of contract manufacturers may not be successful, which could harm its ability to deliver products and recognize revenue.
ICI’s manufacturing strategy focuses on engaging contract manufacturers for its manufacturing needs while maintaining the design, engineering, prototyping, testing, and pilot manufacturing in-house at ICI’s facility in Beaumont, Texas. ICI currently has agreements with certain contract manufacturers to provide contract manufacturing, testing, and delivery of certain of its products. These arrangements are intended to lower ICI’s operating costs, but they also reduce its direct control over certain aspects of its operations. This diminished control may have an adverse effect on the quality or quantity of products or services, or ICI’s flexibility to respond to changing conditions.
Reliance on contract manufacturers reduces ICI’s control over the manufacturing process, including reduced control over quality, product costs, and product supply and timing. ICI may experience delays in
 
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shipments or issues concerning product quality from its contract manufacturers. If any of ICI’s contract manufacturers experience interruptions, delays, or disruptions in supplying its products, including by natural disasters, the global COVID-19 pandemic, other epidemics or outbreaks of other contagions, increased military conflict or tensions, such as in Eastern Europe or Asia, or work stoppages or capacity constraints, ICI’s ability to ship products would be delayed. In addition, unfavorable economic conditions could result in financial distress among contract manufacturers upon which ICI relies, thereby increasing the risk of disruption of supplies necessary to fulfill its production requirements and meet customer demands. Additionally, if any of ICI’s contract manufacturers experience quality control problems in their manufacturing operations and ICI’s products do not meet customer or regulatory requirements, such third parties could be required to cover the cost of repair or replacement of any defective products. These delays or product quality issues could have an immediate and material adverse effect on ICI’s ability to fulfill orders and could have a negative effect on ICI’s operating results. In addition, such delays or issues with product quality could adversely affect ICI’s reputation and its relationship with its channel partners. If ICI’s contract manufacturers experience financial, operational, manufacturing capacity, or other difficulties, or experience shortages in required components, or if they are otherwise unable or unwilling to continue to manufacture ICI’s products in required volumes or at all, its supply may be disrupted, ICI may be required to seek alternate manufacturers and ICI may be required to re-design its products. It would be time-consuming, and could be costly and impracticable, to begin to use new manufacturers or designs, and such changes could cause significant interruptions in supply. Such changes could also have an adverse effect on ICI’s ability to meet its scheduled product deliveries and may subsequently lead to the loss of sales. While ICI takes measures to protect its trade secrets, the use of contract manufacturers may also risk disclosure of ICI’s innovative and proprietary manufacturing methodologies, which could adversely affect its business.
ICI operates in a competitive landscape against market participants that may have substantially greater resources than it and against known and unknown market entrants who may disrupt its target markets.
ICI’s target markets are highly competitive and it may not be able to compete effectively in the market against these competitors. Competitors may offer products at lower prices than ICI’s products, including pricing that ICI believes is below their cost, or may offer superior performing products. These companies also compete with ICI indirectly by attempting to solve some of the same challenges with different technology. Certain competitors in the market for these devices and sensors may have significantly greater resources and more experience than ICI does. These competitors have commercialized technology that has achieved market adoption, strong brand recognition and may continue to improve in both anticipated and unanticipated ways. They may also have entered into commercial relationships with key customers and have built relationships and dependencies between themselves and those key customers.
In addition to the existing market competitors, new competitors may be preparing to enter or are entering the market in which ICI competes that may disrupt the commercial landscape of target markets in ways that ICI may not be able to prepare for, including customers of ICI’s products who may be developing their own competitive solutions. ICI does not know how close any of its current and potential competitors are to commercializing their similar products and services, if at all, nor what they intend to develop as part of their product roadmaps. The already competitive landscape of the thermal infrared technology market, along with both foreseeable and unforeseeable entries of competitors and similar technology from those competitors in ICI’s target markets, may result in pricing pressure, reduced margins and may impede its ability to increase the sales of its products or cause ICI to lose market share, any of which will adversely affect its business, results of operations and financial condition.
ICI’s manufacturing costs may increase and result in a market price for its products above the price that customers are willing to pay.
If the cost of manufacturing ICI’s products increases, ICI will be forced to charge its customers a higher price for the products in order to cover its costs and earn a profit. While ICI expects its products will benefit from continued cost reduction over time from scale and planned redesigns, there is no guarantee that these efforts will be successful, or that these savings would not be offset by additional required content. If the price of ICI’s products is too high, customers may be reluctant to purchase its products, especially if lower priced alternative products are available, and ICI may not be able to sell its products in sufficient volumes to recover its costs of development and manufacture or to earn a profit.
 
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ICI, its contract manufacturers and its suppliers may rely on complex machinery for production, which involves a significant degree of risk and uncertainty in terms of operational performance and costs.
ICI, its contract manufacturers and its suppliers may rely on complex machinery for the production, assembly and installation of ICI’s devices, which will involve a significant degree of uncertainty and risk in terms of operational performance and costs. ICI’s production facilities and the facilities of its contract manufacturers and suppliers may suffer unexpected malfunctions from time to time and will depend on repairs and spare parts to resume operations, which may not be available when needed. Unexpected malfunctions of these components may significantly affect the intended operational efficiency. Operational performance and costs can be difficult to predict and are often influenced by factors outside of ICI’s control, such as, but not limited to, scarcity of natural resources, environmental hazards and remediation, costs associated with decommissioning of machines, labor disputes and strikes, difficulty or delays in obtaining governmental permits, damages or defects in electronic systems, industrial accidents, fire, seismic activity and natural disasters. Should operational risks materialize, it may result in the personal injury to or death of workers, the loss of production equipment, damage to production facilities, monetary losses, delays and unanticipated fluctuations in production, environmental damage, administrative fines, increased insurance costs and potential legal liabilities, all which could have a material adverse effect on its business, prospects, financial condition or operating results.
If ICI does not maintain the correct level of inventory or if it does not adequately manage its inventory, ICI could lose sales or incur higher inventory-related expenses, which could negatively affect its operating results.
To ensure the correct level of inventory supply, ICI forecasts inventory needs and expenses, places orders sufficiently in advance with its suppliers and manufacturing partners and manufactures products based on its estimates of future demand. Fluctuations in the adoption of its products may affect ICI’s ability to forecast its future operating results, including revenue, gross margins, cash flows and profitability. ICI’s ability to accurately forecast demand for its products could be affected by many factors, including the rapidly changing nature of its current target markets, the uncertainty surrounding the market acceptance and commercialization of its technology, the emergence of new markets, an increase or decrease in customer demand for its products or for products and services of its competitors, product introductions by competitors, the global COVID-19 pandemic, other health epidemics and outbreaks, and any associated work stoppages or interruptions, unanticipated changes in general market conditions and the weakening of economic conditions or consumer confidence in future economic conditions. ICI may face challenges acquiring adequate supplies to manufacture its products and ICI and its partners may not be able to manufacture its products at a rate necessary to satisfy the levels of demand, which would negatively affect ICI’s short-term and long-term growth. This risk may be exacerbated by the fact that ICI may not carry or be able to obtain from its suppliers a significant amount of inventory to satisfy short-term demand increases. If ICI fails to accurately forecast customer demand, ICI may experience excess inventory levels or a shortage of products available for sale.
Inventory levels in excess of customer demand may result in inventory write-downs or write-offs and the sale of excess inventory at discounted prices, which would adversely affect ICI’s financial results, including its gross margin, and have a negative effect on its brand. Conversely, if ICI underestimates customer demand for its products, ICI may not be able to deliver products to meet its requirements, and this could result in damage to its brand and customer relationships and adversely affect its revenue and operating results.
Risks Related to ICI’s Growth Strategy
Unless the context otherwise requires, all references in this subsection to the “Company,” “we,” “us” or “our” refer to ICI prior to the consummation of the Business Combination and New ICI after the consummation of the Business Combination.
Even after the Business Combination, New ICI may need to raise additional capital in the future in order to execute its business plan, which may not be available on terms acceptable to it, or at all.
Following the Business Combination, and particularly in the event that a high volume of redemptions by SportsMap Stockholders reduce the cash available to New ICI and of a failure by SportsMap and ICI to
 
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secure additional financing in connection with the Business Combination, New ICI may require additional capital. Since the date of the Business Combination Agreement, SportsMap and its advisors have attempted to raise additional financing in order to help ensure that the condition in the Business Combination Agreement that the Aggregate Transaction Proceeds be at least $10.0 million is satisfied. Despite these efforts, as of the date of this proxy statement, no such financing has been secured.
New ICI may need additional capital to respond to technological advancements, competitive dynamics or technologies, customer demands, business opportunities, challenges, acquisitions or unforeseen circumstances and it may determine to engage in equity or debt financings or enter into credit facilities for other reasons. In order to stay on New ICI’s growth trajectory and further business relationships with current or potential customers or partners, or for other reasons, it may issue equity or equity-linked securities to such current or potential customers or partners. New ICI may not be able to timely secure additional debt or equity financing on favorable terms, or at all.
If New ICI raises additional funds through the issuance of equity or convertible debt or other equitylinked securities or if it issues equity or equity-linked securities to current or potential customers to further business relationships, its existing stockholders could experience significant dilution. Any debt financing obtained by New ICI in the future could involve restrictive covenants relating to its capital raising and operational matters, which may make it more difficult for New ICI to obtain additional capital and to pursue business opportunities, including potential acquisitions. If New ICI is unable to obtain adequate financing or financing on terms satisfactory to it, when New ICI requires it, its ability to continue to grow or support its business and to respond to business challenges could be significantly limited and its business could be materially and adversely affected.
ICI creates innovative technology by designing and developing unique hardware and software solutions. A failure to achieve scale may affect ICI’s ability to sell at competitive prices, limit its customer base or lead to losses.
ICI incurs significant costs related to procuring the materials and components required to manufacture and assemble its high-performance products as well as related to designing and developing its software solutions. If its product sales do not increase as planned, or if its SaaS offerings are not sufficiently adopted by its customers, ICI may be unable to obtain anticipated material cost benefits or expected levels of fixed cost absorption that are needed to achieve its targeted margins and its operating results, business and prospects will be harmed. Furthermore, many of the factors that impact ICI’s operating costs are beyond its control. For example, the costs of its materials and components could increase due to shortages as global demand for these products increases or the cost of maintaining its proprietary SaaS cloud could increase.
The manufacture of ICI’s products is a complex process, and it is often difficult for companies to achieve acceptable product yields that could decrease available supply and increase costs. Thermal imaging system yields depend on both its product design and manufacturing processes. Because low yields may result from either design defects or process difficulties, ICI may not identify yield problems until well into the production cycle, when an actual product defect exists and can be analyzed and tested. In addition, many of these yield problems are difficult to diagnose and time consuming or expensive to remedy.
If ICI is not able to effectively grow its sales and marketing organization, or maintain or grow an effective network of Strategic Channel Partners, its business prospects, results of operations and financial condition could be adversely affected.
In order to generate future sales growth, ICI will need to expand the size and geographic coverage of its field organization, including marketing, direct sales, customer support and technical services. Accordingly, ICI’s future success will depend largely on its ability to hire, train, retain, and motivate skilled regional sales managers and direct sales representatives with significant technical knowledge and understanding of its products. Because of the competition for their skill set, ICI may not be able to attract or retain such personnel on reasonable terms, if at all. If ICI is unable to grow its sales and marketing organization, ICI may not be able to increase its revenue, which would adversely affect its business, financial condition and results of operations.
 
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Additionally, ICI relies on a network of independent distributors to help generate sales of its products. If a dispute arises with a distributor, if ICI terminates its relationship with a distributor or if a distributor goes out of business, it may take time to identify an alternative distributor, to train new personnel to market its products, and its ability to sell those products in a region formerly serviced by a terminated distributor could be harmed. In addition, ICI’s distributors may not successfully market and sell its products and may not devote sufficient time and resources that it believes are necessary to enable its products to develop, achieve or sustain market acceptance. Any of these factors could reduce ICI’s revenue or impair its revenue growth in affected markets, increase its costs in those markets or damage its reputation. In addition, if an independent distributor were to depart and be retained by one of ICI’s competitors, ICI may be unable to prevent that distributor from soliciting business from its existing customers, which could further adversely affect ICI. As a result of its reliance on third-party distributors, ICI may be subject to disruptions and increased costs due to factors beyond its control, including labor strikes, third-party errors and other issues. If the services of any of these third-party distributors become unsatisfactory, ICI may experience delays in meeting its customers’ demands and it may be unable to find a suitable replacement on a timely basis or on commercially reasonable terms. Any failure to deliver products in a timely manner may damage its reputation and could cause ICI to lose potential customers.
If ICI engages in acquisitions to grow its business, it will incur a variety of costs and may potentially face numerous risks that could adversely affect its business and operations.
If appropriate opportunities become available, ICI may seek to acquire businesses, assets, technologies or products to enhance its business. In connection with any acquisitions, New ICI could issue additional equity securities, which would dilute its stockholders, incur substantial debt to fund the acquisitions or assume significant liabilities.
Acquisitions involve many and diverse risks and uncertainties, including problems evaluating or integrating the purchased operations, assets, technologies or products, as well as with unanticipated costs, liabilities, and economic, political, legal and regulatory challenges due to its inexperience operating in new regions or countries and ICI may fail to successfully integrate acquired companies or retain key personnel from the acquired company. To date, ICI has limited experience with acquisitions and the integration of acquired technology and personnel. Acquisitions may divert its attention from its core business. Acquisitions may require ICI to record goodwill and non-amortizable intangible assets that will be subject to testing on a regular basis and potential period impairment charges, incur amortization expenses related to certain intangible assets, and incur write offs and restructuring and other related expenses, any of which could harm its operating results and financial condition.
New business strategies, especially those involving acquisitions, are inherently risky and may not be successful. Failure to successfully identify, complete, manage and integrate acquisitions could materially and adversely affect its business, financial condition and results of operations.
ICI cannot guarantee it will optimally manage its lines of business or product lines.
Consistent with ICI’s strategy to emphasize growth in its core markets, ICI continually evaluates its businesses to ensure that they are aligned with its strategy and objectives. Over the years, ICI has also reorganized certain of its product lines, for example, to de-emphasize products used primarily for biorisk applications as the impact of the global COVID-19 pandemic began to lessen, among other reasons. ICI may not be able to realize efficiencies and cost savings from its reorganization activities. There is no assurance that ICI’s efforts will be successful. If ICI does not successfully manage its lines of business or product lines, or any other similar activities that it may undertake in the future, expected efficiencies and benefits might be delayed or not realized, and its operations and business could be disrupted. ICI’s ability to dispose of, exit or reconfigure businesses that may no longer be aligned with its growth strategy will depend on many factors, including the terms and conditions of any asset purchase and sale agreement or lease agreement, as well as industry, business and economic conditions. ICI cannot provide any assurance that it will be able to sell non-strategic businesses on terms that are acceptable to us, or at all. In addition, if the sale of any non-strategic business cannot be consummated or is not practical, alternative courses of action, including relocation of product lines or closure, may not be available to ICI or may be more costly than anticipated.
 
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Risks Related to ICI’s Customers and Suppliers
Unless the context otherwise requires, all references in this subsection to the “Company,” “we,” “us” or “our” refer to ICI prior to the consummation of the Business Combination and New ICI after the consummation of the Business Combination.
Certain of ICI’s commercial contracts with its customers, suppliers or co-development agreements could be terminated or may not materialize into long-term contract partnership arrangements.
ICI has commercial contracts with its customers, agreements with suppliers and co-development agreements with partners. Some of these arrangements are evidenced by memorandums of understandings, letters of intent or onboarding arrangements, each of which will require further negotiation at later stages of development to include additional terms relating to pricing, volume and payment terms, or replacement by production or master agreements that have yet to be implemented under separately negotiated statements of work, each of which could be terminated or might not materialize into next-stage contracts or long-term contract partnership arrangements. If these arrangements are terminated or if ICI is unable to enter into next-stage contracts or long-term operational contracts, or if these arrangements get delayed or postponed, its business, prospects, financial condition and operating results may be materially adversely affected. These arrangements may also be subject to renegotiation, which may affect product pricing or operating expenses. Therefore, even if ICI is successful in entering into long-term contract partnership arrangements, the discontinuation of, the loss of business with respect to, or a lack of commercial success of a particular product or technology package for which ICI is a significant supplier or an unfavorable adjustment in terms could mean that the expected sales of its products, or cost of inputs, will not materialize on the expected timeline or terms or will be less favorable than anticipated, potentially materially and adversely affecting its business and prospects.
The loss of large customers could result in a material adverse effect to ICI’s financial results.
For the years ended December 31, 2022 and 2021, ICI’s top 10 customers represented 45% and 81% of its revenue, respectively, which percentages may increase going forward as ICI continues to grow or develop additional relationships with new large customers. The loss of business from ICI’s large customers (whether by lower overall demand for ICI’s products, cancellation of existing contracts or product orders or the failure to incorporate ICI’s product designs or award ICI new business) could have a material adverse effect on its business.
There can be no assurance that ICI will be able to maintain its relationship with its large customers and secure orders for its products. If ICI is unable to maintain its relationship with its large customers, or if arrangements are modified so that the economic terms become less favorable to us, then ICI’s business, financial results and position could be materially adversely affected.
ICI generates revenue from companies in certain industries that may be subject to significant levels of volatility.
ICI generates revenue from companies in certain industries that may be subject to significant levels of volatility, such as the oil and gas industry. The oil and gas industry has historically been cyclical and characterized by significant changes in the levels of exploration and development activities, with resulting changes in midstream activities. ICI manufactures products used in the detection of gas or liquid leaks, monitoring of tank levels and flares, detection of pipeline leaks and safety monitoring of gas processing activities. When crude oil and natural gas prices are low, the level of midstream oil and gas activity typically decreases, potentially resulting in reduced demand for ICI’s products used in such activities. In addition, a decline in the level of capital spending by oil and natural gas companies may result in a reduced rate of development of new energy reserves, which could adversely affect demand for ICI’s products related to energy production, and, in certain instances, result in the cancellation, modification or rescheduling of existing orders and a reduction in customer-funded research and development related to next generation products. Other ICI end markets are similarly subject to potential volatility, including as a result of general economic factors.
 
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ICI is exposed to credit risk on its trade accounts receivable, supplier non-trade receivables, prepayments to manufacturers and software as a service subscription agreements, and this risk is heightened during periods when economic conditions worsen.
ICI sells certain of its products directly to small and mid-sized businesses and other customers. ICI’s outstanding trade receivables are not covered by collateral, third-party bank support or financing arrangements or credit insurance. ICI’s exposure to credit and collectability risk on its trade receivables is higher in certain markets and its ability to mitigate such risks may be limited. If one or more of ICI’s major customers would be unable to pay its invoices as they become due or a customer simply refuses to make such payments if it experiences financial difficulties, its business would be adversely affected. If a major customer were to enter into bankruptcy proceedings or similar proceedings whereby contractual commitments are subject to stay of execution and the possibility of legal or other modification, ICI could be forced to record a substantial loss.
ICI also has unsecured supplier non-trade receivables resulting from purchases of components by contract manufacturers and other vendors that manufacture sub-assemblies or assemble final products for ICI. In addition, from time to time, ICI may make prepayments associated with long-term supply agreements to secure supply of inventory components. While ICI is implementing procedures to monitor and limit exposure to credit risk on its trade and supplier non-trade receivables, there can be no assurance such procedures will effectively limit its credit risk and avoid losses.
ICI may not be able to anticipate changing customer and consumer preferences or respond quickly enough to changes in technology and standards to be able to develop and introduce commercially viable products.
ICI’s ability to maintain and improve existing products, anticipate changes in technology, regulatory and other standards, and to successfully develop and introduce new and enhanced technologies and products on a timely basis will be a significant factor in its ability to be competitive and gain market acceptance. If ICI is unsuccessful or is less successful than its competitors in predicting the course of market development, developing innovative products, processes, and/or use of materials, or adapting to new technologies or evolving regulatory, industry or customer requirements, it will suffer from a competitive disadvantage. ICI may need to adjust its strategy and projected timelines based on how certain technological challenges evolve over time. There is a risk that these challenges will not be overcome, and that ICI’s investments in research and developments initiatives will not lead to successful new products and a corresponding increase in revenue, which could have a material adverse effect on its business, results of operations and financial condition.
ICI currently targets many customers that are large corporations with substantial negotiating power and exacting product standards.
Many of ICI’s current and potential customers are large corporations that often possess significant leverage over their suppliers, and can successfully demand contract terms favorable to themselves, such as reserving the right to terminate their supply contracts for convenience. This disparate power has required, and may require in the future, that ICI accepts less favorable contract terms. These large corporations also have exacting technical specifications and requirements that ICI may be unable to meet, thereby precluding its ability to secure sales. Meeting the technical requirements to secure and maintain significant contracts with any of these companies will require a substantial investment of ICI’s time and resources, and if ICI fails to comply with its customers’ technical specifications and standards, ICI may lose existing and future business. Even when ICI succeeds in securing contracts, these large companies have been and may continue to be uncertain about their technical specifications for its products and terminate its agreement or make a later determination that ICI’s products are not satisfactory. ICI therefore has no assurance that it can establish relationships with these companies, that its products will meet the needs of these or other companies, or that a contract with these companies will culminate in significant, or any, product sales. Even when ICI secures agreements with these companies, ICI may not be effective in negotiating contract terms or managing such relationships, which could adversely affect its future results of operations.
Furthermore, in some instances, these large companies may have internally developed products and solutions that are competitive to ICI’s products. These companies may have substantial research and
 
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development resources, which may allow them to acquire or develop independently, or in partnership with others, competitive technologies. Such activities may foreclose significant sales opportunities for ICI’s products.
ICI’s revenue from U.S. government contracts depends on the continued availability of funding from the U.S. government, and, accordingly, ICI has the risk that funding for its existing contracts may be canceled or diverted to other uses or delayed or that funding for new programs will not be available.
ICI has performed, and may in the future perform, work on contracts with the Department of Health and Human Services and other federal agencies and departments of the U.S. government, including subcontracts with government prime contractors. Sales under contracts with the U.S. government, including sales under contracts with an agency or department acting as prime contractor or subcontractor, represented approximately 5.2% and 1.5% of its total revenue for the years ended December 31, 2022 and 2021, respectively. Performance under government contracts has inherent risks that could have a negative effect on ICI’s business, results of operations, and financial condition.
Government contracts are conditioned upon the continuing availability of congressional appropriations and the failure of Congress to appropriate funds for programs in which ICI participates could negatively affect its results of operations. U.S. government shutdowns have resulted in delays in anticipated contract awards and delayed payments of invoices for several of its businesses and any new shutdown could have similar or worse effects. The failure by Congress to approve future budgets on a timely basis could delay procurement of ICI’s products and services and cause ICI to lose future revenues. Any renewed emphasis on federal deficit and debt reduction could lead to a further decrease in overall defense spending. Budgetary concerns could result in future contracts being awarded more on price than on other competitive factors, and smaller budgets could result in government in-sourcing of programs and more intense competition on programs that are not in-sourced, which could result in lower revenues and profits.
Also, government spending does not necessarily correlate to continued business for ICI, because not all of the programs in which ICI has participated, or may participate, or has current capabilities may be provided with continued funding. It is also not uncommon for the U.S. government to delay the timing of awards or change orders for major programs for six to twelve months. These delays by the U.S. government could impact ICI’s revenues. Uncertainty over budgets or priorities with the U.S. presidential administration could result in further delays in funding and the timing of awards, and changes in funded programs that could have a material impact on ICI’s revenues. U.S. government operation under a continuing resolution could impact the business by preventing new programs from starting as planned and by limiting funding on existing programs. A significant shift in U.S. government priorities related to programs and acquisition strategies could have a material impact to ICI’s financial results.
Termination for convenience provisions provides only for the recovery of costs incurred or committed, settlement expenses, and profit on work completed prior to termination. Termination for default clauses imposes liability on the contractor for excess costs incurred by the U.S. government in re-procuring undelivered items from another source.
ICI’s suppliers could raise prices on key components, which may adversely affect its profitability.
Significant increases in the cost of certain components used in ICI’s products, to the extent they are not timely reflected in the price ICI charges its customers, could materially and adversely impact its results. For example, ICI has experienced significant increases in prices for certain electronic components, as well as significantly increased lead times. ICI sought to address these increases by carrying safety stock of critical components on deposit with its suppliers, evaluating alternative components, suppliers and processes, reviewing component substitution opportunities, and aggressively negotiating larger quantities with its vendors to ensure adequate supply. Certain of ICI’s key component manufacturers and suppliers have the ability, in its contracts, to periodically increase their prices. Accordingly, ICI cannot assure that it will not face increased prices in the future or, if ICI does, whether it will be effective in containing margin pressures from any further component price increases.
Additionally, supply chain constraints and improving economic conditions have resulted in increases in the prices ICI pays for many of the components and raw materials used in its products. In addition, ICI is
 
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experiencing higher costs due to increased competition for personnel in many regions in which it operates as well as general inflationary conditions, and higher shipping costs due to labor and vehicle shortages and rising energy prices. ICI expects inflationary pressures to persist through 2023. ICI may be unable to adjust its product pricing to reflect such higher costs. If ICI is unable to increase its product prices enough to offset these increased costs, its gross margins and profitability could decrease, perhaps significantly over a sustained period of time.
Key components in ICI’s products come from limited or single source third party suppliers. Interruptions in ICI’s relationships with these third parties could adversely impact its business.
ICI relies on third parties to supply key components of its products. If any of ICI’s major third-party component suppliers experience interruptions, delays or disruptions in supplying their products or services, including by natural disasters, the global COVID-19 pandemic, other health epidemics and outbreaks, or work stoppages or capacity constraints, ICI’s ability to ship products to distributors and customers may be delayed. In addition, unfavorable economic conditions could result in financial distress among third-party suppliers upon which ICI relies, thereby increasing the risk of disruption of supplies necessary to fulfill its production requirements and meet customer demands. Additionally, if any of these third parties on whom ICI relies were to experience quality control problems in their operations and its products do not meet customer or regulatory requirements, it could be required to cover the cost of repair or replacement of any defective products. These delays or product quality issues could have an immediate and material adverse effect on ICI’s ability to fulfill orders and could have a negative effect on its operating results. In addition, such delays or issues with product quality could adversely affect ICI’s reputation and its relationship with its customers and distributors.
If these third parties experience financial, operational, manufacturing capacity or other difficulties, or experience shortages in required components, ICI’s supply may be disrupted, it may be required to seek alternate suppliers and it may be required to re-design its products. It would be time-consuming, and could be costly and impracticable, to begin to use new suppliers and such changes could cause significant interruptions in supply. Such changes could also have an adverse effect on ICI’s ability to meet its scheduled product deliveries and may subsequently lead to the loss of sales. While ICI takes measures to protect its trade secrets, the use of third-party suppliers may also risk disclosure of its innovative and proprietary manufacturing methodologies, which could adversely affect its business.
ICI believes there are a limited number of competent, high-quality suppliers in the industry that meet its strict quality and control standards, and as ICI seeks to obtain additional or alternative supplier arrangements in the future, there can be no assurance that ICI would be able to do so on satisfactory terms, in a timely manner, or at all. ICI’s suppliers could also discontinue or modify components used in its products. In some cases, the lead times associated with certain components are lengthy and preclude rapid changes in quantities and delivery schedules. Developing alternate sources of supply for these components may be time-consuming, difficult, and costly and ICI may not be able to source these components on terms that are acceptable to it, or at all, which may undermine its ability to meet its requirements or to fill customer orders in a timely manner. Any interruption or delay in the supply of any of these parts or components, or the inability to obtain these parts or components from alternate sources at acceptable prices and within a reasonable amount of time, would adversely affect ICI’s ability to meet its scheduled product deliveries to its customers. This could adversely affect ICI’s relationships with customers and distributors and could cause delays in shipment of its products and adversely affect its operating results.
Risks Related to ICI’s Products
Unless the context otherwise requires, all references in this subsection to the “Company,” “we,” “us” or “our” refer to ICI prior to the consummation of the Business Combination and New ICI after the consummation of the Business Combination.
Components used in ICI’s sensors may fail as a result of manufacturing, design or other defects over which it has no control and render its devices permanently inoperable.
ICI relies on third-party component suppliers to provide certain functionalities needed for the operation and use of its devices. Any errors or defects in such third-party technology could result in errors in ICI’s
 
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sensors that could harm its business. If these components have a manufacturing, design or other defect, they can cause ICI’s sensors to fail and render them permanently inoperable. As a result, ICI may have to replace these sensors at its sole cost and expense. Should ICI have a widespread problem of this kind, its reputation in the market could be adversely affected and its replacement of these sensors would harm its business.
Product integration could face complications or unpredictable difficulties, which may adversely impact customer adoption of ICI’s products and its financial performance.
ICI’s products are typically integrated into customer workflows, applications and other technology solutions. Required integration efforts can be time-consuming and costly and there is no guarantee that results will be satisfactory to the end customer. While ICI works with system integrators that lend their experience to these workstreams, there is no guarantee that unforeseen delays or setback would not arise that would impair ICI’s ability to launch with key programs across its sectors of focus. In addition to the technical risks of integrating ICI’s products into its customers’ workflows, applications and other technology solutions, ICI’s customers must be comfortable with the cybersecurity and software integrity of ICI’s products, including the SmartIR system. ICI’s customers must also be comfortable that the integration of our products will not disrupt its supply chain operations, which are typically continuous in nature.
The complexity of ICI’s products could result in unforeseen delays or expenses from undetected defects, errors or reliability issues in hardware or software that could reduce the market adoption of its new products, damage its reputation with current or prospective customers, expose ICI to product liability and other claims and adversely affect its operating costs.
ICI’s products are highly technical and very complex. They require high standards to manufacture and have in the past, and will likely in the future, experience defects, errors or reliability issues at various stages of development. ICI may be unable to timely release new products, manufacture existing products, correct problems that have arisen or correct such problems to its customers’ satisfaction. Additionally, undetected errors, defects or reliability issues, especially as new products are introduced or as new versions are released, could result in serious injury to the end users of technology incorporating ICI’s products, or those in the surrounding area, its customers never being able to commercialize technology incorporating its products, litigation against us, negative publicity and other consequences. Some errors or defects in ICI’s products may only be discovered after they have been tested, commercialized and deployed by customers. If that is the case, ICI may incur significant additional development costs and product recall, repair or replacement costs. These problems may also result in claims, including class actions, against ICI by its customers or others. ICI’s reputation or brand may be damaged as a result of these problems and customers may be reluctant to buy its products, which could adversely affect its ability to retain existing customers and attract new customers and could adversely affect its financial results.
In addition, ICI could face material legal claims for breach of contract, product liability, fraud, tort or breach of warranty as a result of these problems. Defending a lawsuit, regardless of its merit, could be costly and may divert management’s attention and adversely affect the market’s perception of ICI and its products. In addition, ICI’s business liability insurance coverage could prove inadequate with respect to a claim and future coverage may be unavailable on acceptable terms or at all. These product-related issues could result in claims against ICI and its business could be adversely affected.
The markets in which ICI competes are characterized by technological change, which requires ICI to continue to develop new products and product innovations and could adversely affect market adoption of its products.
While ICI intends to invest substantial resources to remain on the forefront of technological development, continuing technological changes in sensing technology and the markets for these products could adversely affect adoption of ICI’s products, either generally or for particular applications. ICI’s future success will depend upon its ability to develop and introduce a variety of new capabilities and innovations to its existing product offerings, as well as introduce a variety of new product offerings, to address the changing needs of the markets in which ICI offers its products. Delays in delivering new products that meet customer requirements could damage ICI’s relationships with customers and lead them to seek alternative sources of supply. Delays in introducing products and innovations, the failure to choose correctly among technical
 
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alternatives or the failure to offer innovative products or configurations at competitive prices may cause existing and potential customers to purchase ICI’s competitors’ products or turn to alternative sensing technology.
If ICI is unable to devote adequate resources to develop products or cannot otherwise successfully develop products or system configurations that meet customer requirements on a timely basis or that remain competitive with technological alternatives, its products could lose market share, its revenue will decline, it may experience operating losses and its business and prospects will be adversely affected.
ICI may incur significant direct or indirect liabilities in connection with its product warranties which could adversely affect its business and operating results.
ICI typically offers a limited product warranty that requires its products to conform to the applicable specifications and be free from defects in materials and workmanship for a limited warranty period. As a result of increased competition and changing standards in ICI’s target markets, it may be required to increase its warranty period length and the scope of its warranty. To be competitive, ICI may be required to implement these increases before it is able to determine the economic impact of an increase. Accordingly, ICI may be at risk that any such warranty increase could result in foreseeable and unforeseeable losses.
In particular, the usage of ICI’s products by target customers could make ICI liable for warranty claims and pecuniary and reputational damages. In ICI’s target markets, its products may be placed in physical locations and environments that present harsh operating conditions, or that present a risk of product damage due to accidents or vandalism. This may result in more product failures than ICI anticipates, and may require ICI to provide warranties for its products beyond its knowledge of their performance. This could increase the rate of customer returns and warranty claims, resulting in higher than expected operating costs for us. Product failures may also affect market acceptance of ICI’s products and its ability to win future business. Any negative publicity related to the perceived quality of ICI’s products could affect its brand image, partner and customer demand, and adversely affect its operating results and financial condition.
Risks Related to ICI’s Financial Statements and Accounting
Unless the context otherwise requires, all references in this subsection to the “Company,” “we,” “us” or “our” refer to ICI prior to the consummation of the Business Combination and New ICI after the consummation of the Business Combination.
Our history of net losses, negative cash flows from operations and negative net working capital and our expectation that we will continue to incur net losses and use cash it its operations in the foreseeable future raise substantial doubt about our ability to continue as a going concern.
We have experienced recurring net losses, negative cash flows from operations and negative net working capital, and we expect to continue operating at a loss for the foreseeable future. We expect to incur additional losses in the foreseeable future. As a result, in connection with the preparation of the unaudited condensed consolidated financial statements for the three months ended June 30, 2023 we have included in this proxy statement, we determined that there was substantial doubt about our ability to continue as a going concern for a period of 12 months.
In response to these conditions, our plans to obtain additional liquidity include: completing the Business Combination, raising additional funds from investors (in the form of debt, equity or equity-like instruments), extending the maturity date of the our existing line of credit, and continuing to reduce operating expenses. Our future capital requirements will depend on many factors, including:

the timing, receipt and amount of sales from our current and future products and services;

the cost and timing of expanding our sales, marketing and distribution capabilities;

the terms and timing of any other partnership, licensing and other arrangements that we may establish;

the expenses needed to attract, hire and retain skilled personnel;

the costs associated with being a public company;
 
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the impact of macroeconomic events, such as inflation, recessions or depressions;

the costs involved in preparing, filing, prosecuting, maintaining, defending and enforcing our intellectual property portfolio; and

the extent to which we acquire or invest in businesses, products or technologies.
We may seek funds through borrowings or through additional rounds of financing, including private or public equity or debt offerings, or by other means. However, these plans are subject to market conditions, and are not within our control, and therefore, cannot be deemed probable. There is no assurance that we will be successful in implementing their plans. As a result, we have concluded that management’s plans do not alleviate substantial doubt about our ability to continue as a going concern. If we raise additional funds through further issuances of equity or convertible debt securities, our existing stockholders could suffer significant dilution, and any new equity preferred securities we issue could have rights, preferences, and privileges superior to those of holders of New ICI Common Stock. Any debt financing, if available, may involve restrictive covenants and could reduce our operational flexibility or profitability. If we are unable to obtain adequate financing or financing on terms satisfactory to us, when we require it, our ability to continue to pursue our business objectives and to respond to business opportunities, challenges, or unforeseen circumstances could be significantly limited, and our business, financial condition and results of operations could be materially adversely affected.
ICI’s operating results may fluctuate significantly, which makes its future operating results difficult to predict and could cause its operating results to fall below expectations or any guidance it may provide.
ICI’s quarterly and annual operating results may fluctuate significantly, which makes it difficult for ICI to predict its future operating results. ICI’s financial results may fluctuate as a result of a variety of factors, including:

the timing of ultimate end market and customer adoption of its products and particular versions of its products;

the varying length of time required for its customers to integrate its products into their broader platforms;

supply chain constraints and considerations and impacts on its costs of goods sold, such as shortages of semiconductor chips;

its product mix and average selling prices, including negotiated selling prices and long-term strategic customer agreements;

the cost of raw materials or supplied components critical for the manufacture of its products;

the timing and cost of, and level of investment in, research and development relating to its thermal infrared technology and related software;

developments involving its competitors;

changes in governmental regulations affecting ICI or applications in which its customers use its products;

future accounting pronouncements or changes in its accounting policies;

the impact of epidemics or pandemics, including current business disruption and related financial impact resulting from the global COVID-19 pandemic; and

general market conditions and other factors, including factors unrelated to its operating performance or the operating performance of its competitors.
Many of these factors are outside of ICI’s control and may not fully reflect the underlying performance of its business. The individual or cumulative effects of factors discussed above could result in large fluctuations and unpredictability in ICI’s quarterly and annual operating results. As a result, comparing ICI’s operating results on a period-to-period basis may not be meaningful.
This variability and unpredictability could also result in New ICI failing to meet the expectations of industry or financial analysts or investors for any period. If New ICI’s revenue or operating results fall
 
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below the expectations of analysts or investors or below any guidance it may provide, or if the guidance it provides is below the expectations of analysts or investors, the price of New ICI Common Stock could decline substantially. Such a stock price decline could occur even when New ICI has met any previously publicly stated guidance it may provide.
If New ICI fails to maintain an effective system of internal controls, its ability to produce timely and accurate financial statements or comply with applicable regulations could be adversely affected.
Following the Business Combination, New ICI will be subject to the reporting requirements of the Exchange Act, the Sarbanes-Oxley Act of 2002, and the rules and regulations of Nasdaq. New ICI expects that the requirements of these rules and regulations will increase New ICI’s legal, accounting, and financial compliance costs, make some activities more difficult, time-consuming, and costly and place significant strain on its personnel, systems, and resources.
The Sarbanes-Oxley Act requires, among other things, that New ICI maintains effective disclosure controls and procedures and internal control over financial reporting. ICI is continuing to establish, develop and refine its disclosure controls, internal control over financial reporting, and other procedures that are designed to ensure that information required to be disclosed by New ICI in the reports that it will file with the SEC are recorded, processed, summarized, and reported within the time periods specified in the rules of and on the forms required by the SEC, and that information required to be disclosed in reports under the Exchange Act is accumulated and communicated to its principal executive and financial officers. In connection with the preparation of the audited consolidated financial statements for the years ended December 31, 2022 and 2021, ICI identified material weaknesses in its internal controls over financial reporting. Specifically, these weaknesses related to having an insufficient number of personnel with an appropriate degree of accounting and internal controls knowledge, experience and training to appropriately analyze, record and disclose accounting matters commensurate with its accounting and reporting requirements, which resulted in an inability to consistently establish appropriate authorities and responsibilities in pursuit of its financial reporting objectives. See “ICI Management’s Discussion and Analysis of Financial Condition and Results of Operations — Internal Control Over Financial Reporting.”
Any new controls that New ICI develops may be inadequate because of changes in conditions in its business. Further, additional weaknesses in New ICI’s internal controls may be discovered in the future. Any failure to develop or maintain effective controls, or any difficulties encountered in their implementation or improvement, could adversely affect its operating results or cause New ICI to fail to meet its reporting obligations, and may result in a restatement of its financial statements for prior periods. Any failure to implement and maintain effective internal controls also could adversely affect the results of periodic management evaluations and annual independent registered public accounting firm attestation reports regarding the effectiveness of New ICI’s internal control over financial reporting that it is required to include in the periodic reports it will file with the SEC under Section 404 of the Sarbanes-Oxley Act. Ineffective disclosure controls and procedures and a lack of internal control over financial reporting could also cause investors to lose confidence in New ICI’s reported financial and other information.
In order to maintain and improve the effectiveness of New ICI’s disclosure controls and procedures and its internal control over financial reporting, it has expended, and anticipates that it will continue to expend, significant resources, including accounting-related costs, and provide significant management oversight. Any failure to maintain the adequacy of New ICI’s internal controls, or consequent inability to produce accurate financial statements on a timely basis, could increase its operating costs and could materially and adversely affect its ability to operate its business. If New ICI’s internal controls are perceived as inadequate or that it is unable to produce timely or accurate financial statements, investors may lose confidence in its operating results.
New ICI’s independent registered public accounting firm will not be required to formally attest to the effectiveness of New ICI’s internal control over financial reporting until after it is no longer an emerging growth company or smaller reporting company. At such time, New ICI’s independent registered public accounting firm may issue a report that is adverse in the event it is not satisfied with the level at which its controls are documented, designed, or operating. Any failure to maintain effective disclosure controls and internal control over financial reporting could have a material and adverse effect on New ICI’s business and operating results.
 
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Since many of the markets in which ICI competes are new and rapidly evolving, it is difficult to forecast long-term end-customer adoption rates and demand for its products.
ICI is pursuing opportunities in markets that are undergoing rapid changes, including technological and regulatory changes, and it is difficult to predict the timing and size of the opportunities. ICI is in the process of developing necessary relationships with commercial partners that may not result in the commercialization of its technology immediately, or at all. Regulatory, safety or reliability developments, many of which are outside of ICI’s control, could also cause delays or otherwise impair commercial adoption of these new technologies, which will adversely affect its growth. ICI’s future financial performance will depend on its ability to make timely investments in emerging market opportunities. If one or more of these markets experience a shift in customer or prospective customer demand, ICI’s products may not compete as effectively, if at all, and they may not be designed into commercialized products. Given the evolving nature of the markets in which ICI operates, it is difficult to predict customer demand or adoption rates for its products or the future growth of these markets. If demand does not develop or if ICI cannot accurately forecast customer demand, the size or timing of ICI’s markets, inventory requirements, or its future financial results, its business, results of operations, and financial condition will be adversely affected.
ICI’s estimate of total addressable market is subject to numerous uncertainties. If ICI has overestimated the size of its total addressable market now or in the future, its future growth rate may be limited.
ICI’s estimates of total addressable market are based on a combination of the total number of estimated potential customers in a given market, its expectations regarding the scope of potential use cases for its thermal infrared technology solutions in such markets, its estimates of average selling prices for its products in those markets and the potential opportunity for software solutions to increase the utility of thermal infrared technology solutions.
ICI cannot assure you of the accuracy or completeness of its estimates. While ICI believes its market size estimates are reasonable, such information is inherently imprecise. If internally-generated data used in ICI’s estimates proves to be inaccurate or it makes errors in its assumptions based on such data, its actual market may be more limited than its estimates. In addition, these inaccuracies or errors may cause ICI to misallocate capital and other critical business resources, which could harm ICI’s business. Even if ICI’s total addressable market meets its size estimates and experiences growth, ICI may not continue to grow its share of the market. ICI’s growth is subject to many factors, including the successful implementation of its business strategy, which is subject to many risks and uncertainties. Accordingly, the estimates of ICI’s total addressable market included in this proxy statement should not be taken as indicative of its ability to grow.
ICI is exposed to the risk of write-downs on the value of its inventory and other assets, in addition to purchase commitment cancellation risk.
ICI writes down its inventories that exceed anticipated demand, or for which cost exceeds net realizable value. ICI reviews long-lived assets, including capital assets held at its suppliers’ facilities, for impairment whenever events or circumstances indicate the assets may not be recoverable. If ICI determines that an impairment has occurred, it records a write-down equal to the amount by which the carrying value of the asset exceeds its fair value. For example, for the years ended December 31, 2021 and 2020, ICI wrote off $1,092,000 and $5,252,000 of inventory, respectively, related to inventories that had been designed and manufactured specifically for use in biorisk applications, and for which the market demand has largely receded. ICI recorded an inventory write down of $1,386,000 for the six months ended June 30, 2023 based on the updated version of ICI’s 2023 business plan and an assessment of inventory not expected to be sold within the next twelve months. Although ICI believes that its remaining inventory, capital assets, and other assets and purchase commitments are currently recoverable, no assurance can be given that it will not incur write-downs, fees, impairments and other charges.
ICI orders components for its products and builds inventory in advance of product manufacturing and shipments. Because ICI’s target markets are volatile, competitive and subject to rapid technology and price changes, and because it has limited sales history in certain new end-markets, there is a risk it will forecast incorrectly and order or produce excess or insufficient amounts of components or products or not fully utilize its purchase commitments.
 
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Our ability to use ICI’s net operating loss carryforwards and certain other tax attributes may be limited.
As of December 31, 2022, ICI had $11.75 million of U.S. federal net operating loss carryforwards available to reduce future taxable income. ICI’s U.S. federal operating loss carryforwards will be carried forward indefinitely for U.S. federal tax purposes. Of ICI’s U.S. state net operating loss carryforwards, earliest that any will expire is 2027. It is possible that ICI will not generate taxable income in time to use these net operating loss carryforwards before their expiration (or that it will not generate taxable income at all). Under legislative changes made in December 2017, U.S. federal net operating losses incurred in 2018 and in future years may be carried forward indefinitely, but the deductibility of such net operating losses is limited. It is uncertain if and to what extent various states will conform to these in federal tax laws.
In addition, ICI’s federal and state net operating loss carryforwards and certain tax credits may be subject to significant limitations under Section 382 and Section 383 of the U.S. Tax Code, respectively, and similar provisions of state law. Under those sections of the U.S. Tax Code, if a corporation undergoes an “ownership change,” the corporation’s ability to use its pre-change net operating loss carryforwards and other pre-change attributes, such as research tax credits, to offset its post-change income or tax may be limited. In general, an “ownership change” will occur if there is a cumulative change in our ownership by “5-percent shareholders” that exceeds 50 percentage points over a rolling three-year period. Similar rules may apply under state tax laws. There has been no limitation or loss of net operating losses or tax credits as of December 31, 2022. It has not yet been determined whether the Business Combination will give rise to an “ownership change” for purposes of Section 382 and Section 383 of the Code. Furthermore, we may experience an ownership change in the future as a result of subsequent shifts in our stock ownership (some of which shifts are outside of our control). As a result, our ability to use ICI’s pre-change federal NOLs and other tax attributes to offset future taxable income and taxes could be subject to limitations. For these reasons, we may be unable to use a material portion of ICI’s NOLs and other tax attributes, which could adversely affect our future net income and cash flows.
Unanticipated changes in effective tax rates or adverse outcomes resulting from examination of our income or other tax returns could adversely affect our financial condition and results of operations.
We are subject to income taxes in the United States, and our tax liabilities are subject to the allocation of expenses in differing jurisdictions. Our future effective tax rates could be subject to volatility or adversely affected by a number of factors, including:

changes in the valuation of our deferred tax assets and liabilities;

expected timing and amount of the release of any tax valuation allowances;

tax effects of stock-based compensation;

costs related to intercompany restructurings;

changes in tax laws, regulations or interpretations thereof; or

lower than anticipated future earnings in jurisdictions where we have lower statutory tax rates and higher than anticipated future earnings in jurisdictions where we have higher statutory tax rates.
In addition, we may be subject to audits of our income, sales and other transaction taxes by taxing authorities. Outcomes from these audits could have an adverse effect on our financial condition and results of operations.
Risks Related to ICI’s Intellectual Property, Information Technology and Cybersecurity
Unless the context otherwise requires, all references in this subsection to the “Company,” “we,” “us” or “our” refer to ICI prior to the consummation of the Business Combination and New ICI after the consummation of the Business Combination.
ICI is subject to cybersecurity risks to operational systems, security systems, infrastructure, firmware in its thermal infrared technology and customer data processed by ICI or third-party vendors or suppliers and any material failure, weakness, interruption, cyber event, incident or breach of security could prevent ICI from effectively operating its business.
ICI has experienced and expects to continue to experience actual and attempted cyberattacks of its IT networks, such as through phishing scams and ransomware. Although none of these actual or attempted
 
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cyber-attacks has had a material adverse impact on ICI’s operations or financial condition, it cannot guarantee that any such incidents will not have such an impact in the future. For example, ICI is at risk for interruptions, outages and breaches of: operational systems, including business, financial, accounting, product development, data processing or production processes, owned by ICI or its third-party vendors or suppliers; facility security systems, owned by ICI or its third-party vendors or suppliers; in-product technology owned by ICI or its third-party vendors or suppliers; the integrated software in its thermal infrared solutions; or customer data that it process or its third-party vendors or suppliers process on its behalf. Such cyber incidents could materially disrupt operational systems; result in loss of intellectual property, trade secrets or other proprietary or competitively sensitive information; compromise certain information of customers, employees, suppliers, or others; jeopardize the security of ICI’s facilities; or affect the performance of in-product technology and the integrated software in its thermal infrared solutions. A cyber incident could be caused by disasters, insiders (through inadvertence or with malicious intent) or malicious third parties (including nation-states or nation-state-supported actors) using sophisticated, targeted methods to circumvent firewalls, encryption and other security defenses, including hacking, fraud, trickery or other forms of deception.
The techniques used by cyber attackers change frequently and may be difficult to detect for long periods of time. Although ICI maintains information technology measures designed to protect ICI against intellectual property theft, data breaches and other cyber incidents, such measures will require updates and improvements, and it cannot guarantee that such measures will be adequate to detect, prevent or mitigate cyber incidents. The implementation, maintenance, segregation and improvement of these systems requires significant management time, support and cost. Moreover, there are inherent risks associated with developing, improving, expanding and updating current systems, including the disruption of ICI’s data management, procurement, production execution, finance, supply chain and sales and service processes. These risks may affect ICI’s ability to manage its data and inventory, procure parts or supplies or produce, sell, deliver and service its solutions, adequately protect its intellectual property or achieve and maintain compliance with, or realize available benefits under, applicable laws, regulations and contracts. ICI cannot be sure that the systems upon which it relies, including those of its third-party vendors or suppliers, will be effectively implemented, maintained or expanded as planned. If ICI does not successfully implement, maintain or expand these systems as planned, its operations may be disrupted, its ability to accurately and timely report its financial results could be impaired, and deficiencies may arise in its internal control over financial reporting, which may impact its ability to certify its financial results. Moreover, ICI’s proprietary information or intellectual property could be compromised or misappropriated and its reputation may be adversely affected. If these systems do not operate as ICI expects them to, it may be required to expend significant resources to make corrections or find alternative sources for performing these functions.
A significant cyber incident could impact production capability, harm ICI’s reputation, cause ICI to breach its contracts with other parties or subject ICI to regulatory actions or litigation, any of which could materially affect its business, prospects, financial condition and operating results. In addition, ICI’s insurance coverage for cyberattacks may not be sufficient to cover all the losses it may experience as a result of a cyber-incident. Any problems with ICI’s third-party cloud hosting providers, whether due to cyber security failures or other causes, could result in lengthy interruptions in its business.
ICI’s intellectual property applications may not issue or be registered, which may have a material adverse effect on its ability to prevent others from commercially exploiting products similar to ICI’s.
ICI cannot be certain that it is the first inventor of the subject matter to which it has filed any particular patent application, or if ICI is the first party to file such a patent application. If another party has filed a patent application to, or otherwise publicly disclosed, subject matter that ICI is seeking to protect in a given patent application, it may not be entitled to the protection sought by the patent application. ICI also cannot be certain whether the claims included in a patent application will ultimately be granted as an issued patent since the patent office of the jurisdiction in which a patent application is filed may rule that the subject matter ICI is seeking to patent is not novel or is obvious or otherwise non-inventive or rule that the patent application and/or claims of the patent application do not comply with one or more other requirements of the patent laws of the jurisdiction. Further, the scope of protection of issued patent claims is often difficult to determine. As a result, ICI cannot be certain that its issued patents will afford protection against
 
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competitors with similar technology. In addition, ICI’s competitors may design around its issued patents, which may adversely affect its business, prospects, financial condition and operating results.
Claims that ICI is infringing third-party intellectual property, whether successful or not, could subject ICI to costly and time-consuming litigation or expensive licenses, and adversely affect ICI’s business.
Any intellectual property and related contractual litigation, if it is initiated in the future by ICI or a third party, would result in substantial costs and diversion of management resources, either of which could materially and adversely affect ICI’s business, operating results and financial condition. Such claims may also divert management resources and attention away from other business efforts and force ICI to acquire intellectual property rights and licenses, which may involve substantial royalty or other payments that may not be acceptable to us. Further, a party making such a claim against us, if successful, could secure a judgment that requires ICI to pay substantial damages or such a party could obtain an injunction. An adverse determination also could invalidate ICI’s intellectual property rights and adversely affect its ability to offer its products to its customers and may require that it procures or develops substitute products that do not infringe, which could require significant effort and expense. Even if ICI obtains favorable outcomes in any such litigation, it may not be able to obtain adequate remedies, or may have incurred costs that threaten its financial stability. Assertions of ICI’s attempts to enforce its rights against third parties could also lead these third parties to assert their own intellectual property or other rights against ICI or seek invalidation or a narrowed scope of its rights, in whole or in part. Any of these events could adversely affect ICI’s business, operating results, financial condition and prospects.
Thermal infrared technology is a heavily populated intellectual property field, in which many companies, both within and outside of the industry, hold patents covering such products and other adjacent technologies. In addition to patents, companies in the thermal infrared technology industry typically rely on copyrights and trade secrets to protect their technology. As a result, there has been frequent litigation in the thermal infrared technology industry based on allegations of patent infringement, misappropriation or other violations of intellectual property rights. ICI has, and in the future may, receive inquiries from other intellectual property holders and it may become subject to claims that ICI infringes others’ intellectual property rights, particularly as its market presence increases, as its products expand to new use cases and geographies, and as it faces increasing competition. In addition, parties may claim that ICI’s name and the branding of its products infringe their trademark rights in certain territories. If such a claim were to prevail, ICI may have to change the names of and branding of its products in the affected territories which would be costly and could cause market confusion.
Interruption or failure of ICI’s information technology and communications systems could impact its ability to effectively provide its services.
ICI products include services and functionality that utilize data connectivity to monitor performance and timely capture opportunities to enhance performance and functionality. The availability and effectiveness of ICI’s services depend on the continued operation of information technology and communications systems. ICI’s systems will be vulnerable to damage or interruption from, among others, physical theft, fire, terrorist attacks, natural disasters, power loss, war, telecommunications failures, viruses, denial or degradation of service attacks, ransomware, social engineering schemes, insider theft or misuse or other attempts to harm its systems. ICI utilizes reputable third-party service providers or vendors for its data other than its source code, and these providers could also be vulnerable to harms similar to those that could damage its systems, including sabotage and intentional acts of vandalism causing potential disruptions. Some of ICI’s systems will not be fully redundant, and its disaster recovery planning cannot account for all eventualities. Any problems with ICI’s third-party cloud hosting providers could result in lengthy interruptions in its business. In addition, ICI’s product services and functionality are highly technical and complex technology which may contain errors or vulnerabilities that could result in interruptions in its business or the failure of its systems.
Under certain of ICI’s agreements, it is required to provide indemnification in the event ICI’s technology is alleged to infringe upon the intellectual property rights of third parties.
In certain of ICI’s agreements, ICI indemnifies its licensees, manufacturing partners and suppliers. ICI could incur significant expenses defending these partners if they are sued for patent infringement based on
 
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allegations related to ICI’s technology. In addition, if a partner were to lose a lawsuit and in turn seek indemnification from ICI, ICI could be subject to significant monetary liabilities. While such contracts typically give ICI multiple remedies for addressing instances of infringements, such remedies, such as product modification or the purchase of licenses, could be expensive and difficult to administer.
ICI employs third-party licensed software for use in its business, and the inability to maintain these licenses, errors in the software, or the terms of open-source licenses could result in increased costs or reduced service levels, which would adversely affect its business.
ICI’s business relies on certain third-party software obtained under licenses from other companies. ICI anticipates that it will continue to rely on such third-party software in the future. Although ICI believes that there are commercially reasonable alternatives to the third-party software its currently license, these alternatives may not always be available, or it may be difficult or costly to switch to an alternative. In addition, integration of new third-party software may require significant work and require substantial investment of ICI’s time and resources. ICI uses of additional or alternative third-party software would require ICI to enter into license agreements with third parties, which may not be available on commercially reasonable terms, or at all. Many of the risks associated with the use of third-party software cannot be eliminated, and these risks could negatively affect ICI’s business.
Some of the third-party software used by ICI is licensed under the terms of open-source software licenses. Companies that incorporate open-source software into their technologies have, from time to time, faced claims challenging the use of open-source software and/or compliance with open-source license terms. As a result, ICI could be subject to lawsuits by parties claiming ownership of what ICI believes to be open-source software or claiming noncompliance with open-source licensing terms. Some open-source software licenses require users who distribute such software to publicly disclose all or part of the source code to such software and/or make available any derivative works of the open-source code, which could include valuable proprietary code of the user, on unfavorable terms or at no cost. While ICI monitors the use of open-source software and attempt to ensure that open-source software is not used in a manner that would require ICI to disclose its internally developed source code or that would otherwise breach the terms of an open-source agreement, such use could inadvertently occur. The terms of many open-source software licenses have not been interpreted by U.S. courts, and there is a risk that such licenses could be construed in a manner that could impose unanticipated conditions or restrictions on ICI’s ability to sell its products. Any requirement to disclose ICI’s internally developed source code or pay damages for breach of contract could have a material adverse effect on its business, financial condition, and results of operations and could help its competitors develop services that are similar to or better than ICI’s.
ICI may not be able to adequately protect or enforce its intellectual property rights or prevent competitors or other unauthorized parties from copying or reverse engineering its technology.
ICI’s success depends in part on its ability to obtain patents and other intellectual property rights covering its technology and products, and to maintain adequate legal protection for its technology and products in the United States. ICI relies primarily on trade secret protections and, to a lesser extent, on patent, trademark and copyright laws, along with confidentiality procedures and contractual restrictions, to establish and protect its proprietary rights, all of which provide only limited protections.
ICI can make no assurances whether any of its pending patent applications will mature into issued patents, or that any of its pending trademark applications will be registered, in a manner that gives ICI any or adequate defensive protection or competitive advantages. ICI also does not know whether any patents issued to ICI or any trademarks registered by ICI will not be challenged, invalidated or circumvented. ICI’s portfolio of currently-issued patents and registered trademarks, and any patents that may be issued, any copyrights and trademarks that may be registered in the future, may not provide sufficiently broad protections to us, or may not prove to be enforceable in actions against alleged infringers. ICI cannot be certain that the actions it has undertaken to protect its technology and products will prevent unauthorized use of its technology or the reverse engineering of its products. Moreover, others may independently develop technologies and products that compete with ICI’s, or infringe its intellectual property.
ICI has filed for patents and trademarks in the United States, but such protections may not be available, and it may not have applied for protections in all jurisdictions in which it operates or sells its
 
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products. Though ICI may have obtained, or may in the future obtain, intellectual property and related proprietary rights in various jurisdictions, it may prove difficult to enforce its intellectual property rights in practice. Discovering and protecting against unauthorized use of ICI’s intellectual property, products and other proprietary rights is expensive and difficult. ICI intends to enforce its intellectual property rights. Competitors and other unauthorized parties may attempt to copy or reverse engineer ICI’s technology and other aspects of its solutions that it considers proprietary. Litigation may be necessary in the future to enforce or defend ICI’s intellectual property rights, to prevent unauthorized parties from copying or reverse engineering its products, to determine the validity and scope of the proprietary rights of others or to block the importation of infringing products into the United States or other markets. Failure to adequately protect ICI’s intellectual property rights could result in its competitors offering similar products, potentially resulting in the loss of some of its competitive advantage, market share and a decrease in its revenue, which would adversely affect its business, operating results, financial condition and prospects.
In addition to patented technology, ICI relies on its unpatented proprietary technology, copyrights, trade secrets, proprietary processes and know-how.
ICI relies on proprietary information (including, for example, trade secrets, know-how and confidential information) to protect intellectual property that may not be patentable or subject to copyright or trademark protection, or that it believes is best protected by means that do not require public disclosure. ICI may seek to protect this proprietary information by entering into confidentiality agreements, or consulting, services or employment agreements that contain non-disclosure and non-use provisions with its employees, consultants, contractors and third parties. ICI may fail, however, to enter into the necessary agreements, and even if properly executed and entered into, these agreements may be breached or may otherwise fail to prevent disclosure, third-party infringement or misappropriation of its proprietary information, may be limited as to their term and may not provide an adequate remedy in the event of unauthorized disclosure or use of proprietary information. Additionally, ICI has limited control over the protection of trade secrets used by its current or future manufacturing partners and suppliers and could lose future trade secret protection if any unauthorized disclosure of such information occurs. In addition, ICI’s proprietary information may otherwise become known or be independently developed by its competitors or other third parties. To the extent that ICI’s employees, consultants, contractors, advisors and other third parties use intellectual property owned by others in their work for us, disputes may arise as to the rights in related or resulting know-how and inventions. Costly and time-consuming litigation could be necessary to enforce and determine the scope of its proprietary rights, and failure to obtain or maintain protection for its proprietary information could adversely affect its competitive business position. Furthermore, laws regarding trade secret rights in certain markets where ICI operates may afford little or no protection to its trade secrets.
ICI also relies on security measures, both physical and electronic, to protect its proprietary information, but ICI cannot provide assurance that these security measures will not be breached or provide adequate protection for its property. There is a risk that third parties may obtain and improperly utilize ICI’s proprietary information to its competitive disadvantage.
Also, ICI may not be able to detect or prevent the unauthorized use of such information or take appropriate and timely steps to enforce its proprietary information.
ICI may be subject to damages resulting from claims that it or its employees have wrongfully used or disclosed alleged trade secrets of its employees’ former employers.
ICI may be subject to claims that it or its employees have inadvertently or otherwise used or disclosed trade secrets or other proprietary information of one or more of an employee’s former employers. Litigation may be necessary to defend ICI against these claims. If ICI fails in defending such claims, in addition to paying monetary damages, ICI may lose valuable intellectual property rights or personnel. A loss of key personnel or their work product could hamper or prevent ICI’s ability to commercialize its products, which could severely harm its business. Even if ICI is successful in defending against any such claims, litigation could result in substantial costs and demand on management resources.
Risks Related to ICI’s Regulatory Compliance
Unless the context otherwise requires, all references in this subsection to the “Company,” “we,” “us” or “our” refer to ICI prior to the consummation of the Business Combination and New ICI after the consummation of the Business Combination.
 
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If ICI fails to comply with the laws and regulations relating to the collection of sales tax and payment of income taxes in the various states in which it does business, ICI could be exposed to unexpected costs, expenses, penalties and fees as a result of its non-compliance, which could harm its business.
By engaging in business activities in the United States, ICI becomes subject to various state laws and regulations, including requirements to collect sales tax from its sales within those states, and the payment of income taxes on revenue generated from activities in those states. A successful assertion by one or more states that ICI was required to collect sales or other taxes or to pay income taxes where it did not could result in substantial tax liabilities, fees and expenses, including substantial interest and penalty charges, which could harm its business.
ICI’s U.S. government contracting activities are subject to government contracting regulations, including increasingly complex regulations on cybersecurity, and ICI’s failure to comply with such laws and regulations could harm its operating results and prospects.
ICI’s U.S. government contracting activities, like other government contractors, are subject to various audits, reviews and investigations (including private party “whistleblower” lawsuits) relating to ICI’s compliance with applicable federal and state laws and regulations. More routinely, the U.S. government may audit the costs ICI incurs on its U.S. government contracts, including allocated indirect costs. Such audits could result in adjustments to ICI’s contract costs. Any costs found to be improperly allocated to a specific contract will not be reimbursed, and such costs already reimbursed would need to be refunded. ICI has recorded contract revenues based upon costs it expects to realize after final audit. In a worst-case scenario, should ICI be charged with wrongdoing, ICI could be temporarily suspended or, in the event of a conviction, could be debarred for up to three years from receiving new government contracts or government-approved subcontracts. In addition, ICI could expend substantial amounts defending against such charges and in damages, fines and penalties if such charges were proven or were to result in negotiated settlements. Routine audits by U.S. government agencies of ICI’s various procurement and accounting systems have the potential to result in disapproval of the audited systems by the administrative contracting officer. Disapproval could significantly impact cash flow, as up to 10% may be withheld from payments.
Certain U.S. government contracting agencies have adopted rules and regulations requiring contractors to implement a set of cybersecurity measures to attain the safeguarding of contractor systems that process, store, or transmit certain information. Implementation and compliance with these cybersecurity requirements is complex and costly, and could result in unforeseen expenses, lower profitability and, in the case of non-compliance, penalties and damages, all of which could have an adverse effect on ICI’s business. The cybersecurity requirements also impact ICI’s supply base which could impact cost, schedule and performance on programs if suppliers do not meet the requirements and therefore, do not qualify to support the programs.
ICI is subject to U.S. anti-corruption and anti-money laundering laws. ICI can face criminal liability and other serious consequences for violations, which can harm its business.
ICI is subject to the U.S. Foreign Corrupt Practices Act, the U.S. domestic bribery statute contained in 18 U.S.C. § 201, the U.S. Travel Act, the Money Laundering Control Act 18 U.S.C. §§ 1956 and 1957, and other anti-bribery and anti-money laundering laws. Anti-corruption laws are interpreted broadly and prohibit companies and their employees, agents, contractors and other collaborators from authorizing, promising, offering or providing, directly or indirectly, improper payments or anything else of value to recipients in the public or private sector and failing to prevent bribery, and require that ICI keeps accurate books and records and maintain internal accounting controls designed to prevent any such actions. ICI can be held liable for the corrupt or other illegal activities of its employees, agents, contractors and other collaborators, even if it does not explicitly authorize or have actual knowledge of such activities. Any violations of the laws and regulations described above may result in substantial civil and criminal fines and penalties, imprisonment, the loss of export or import privileges, debarment, tax reassessments, breach of contract and fraud litigation, reputational harm and other consequences.
As ICI increases its international cross-border business and expands its operations abroad, ICI may continue to engage with business partners and third-party intermediaries to market its services and to obtain necessary permits, licenses and other regulatory approvals. In addition, ICI or its third-party
 
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intermediaries may have direct or indirect interactions with officials and employees of government agencies or state-owned or affiliated entities. ICI can be held liable for the corrupt or other illegal activities of these third-party intermediaries, its employees, representatives, contractors, partners and agents, even if ICI does not explicitly authorize such activities. ICI cannot assure you that all of its employees and agents will not take actions in violation of its policies and applicable law, for which ICI may be ultimately held responsible. As ICI increases its international business, its risks under these laws may increase.
Detecting, investigating and resolving actual or alleged violations of anti-corruption laws can require a significant diversion of time, resources and attention from management. In addition, noncompliance with anti-corruption or anti-bribery laws could subject ICI to whistleblower complaints, investigations, sanctions, settlements, prosecution, enforcement actions, fines, damages, other civil or criminal penalties, injunctions, suspension or debarment from contracting with certain persons, reputational harm, adverse media coverage and other collateral consequences. If any subpoenas are received or investigations are launched, or governmental or other sanctions are imposed, or if ICI does not prevail in any possible civil or criminal proceeding, its business, operating results and financial condition could be materially harmed.
ICI’s products are frequently used in applications that are subject to evolving regulations and standards.
ICI’s customers may use its products for regulated and standardized applications that require its products to comply with regulations and standards that are applicable to both its products and to those industries and applications, including functional safety and product reliability standards. New regulations and industry standards may be adopted that result in delays or cancellations of programs. If ICI decides not to pursue or fail to achieve these regulatory or industry certifications, ICI may lose existing or potential commercial opportunities or be exposed to legal liability from regulators.
ICI is subject to, and must remain in compliance with, numerous laws and governmental regulations concerning the manufacturing, use, distribution and sale of its products. Some of ICI’s customers also require that it complies with their own unique requirements relating to these matters.
ICI manufactures and sells products that contain components, which may contain materials or capabilities that are subject to government regulation in both the locations where it manufactures and assembles its products, as well as the locations where it sells its products. For example, ICI is subject to U.S. Department of Commerce regulations on its high-resolution cameras, which prevents it from selling certain products to certain potential foreign customers. Additionally, ICI is subject to U.S. Food and Drug Administration (“FDA”) regulations on certain biorisk products cleared by the FDA under Section 510(k) biorisk products it has sold in the past. Manufacturers are required to certify in product labeling and in reports to the FDA that their products comply with applicable performance standards as well as maintain manufacturing, testing, and distribution records for their products. Failure to comply with these requirements could result in enforcement action by the FDA, which could require ICI to cease distribution of such products, recall or remediate products already distributed to customers, or subject ICI to FDA enforcement.
Navigating these various regulatory regimes may be a complex process requiring continual monitoring of regulations and an ongoing compliance process to ensure that ICI and its suppliers are in compliance with existing regulations in each market where it operates. If there is an unanticipated new regulation that significantly impacts ICI uses and sourcing of various components or requires more expensive components, that regulation could materially adversely affect its business, results of operations and financial condition. If ICI is not currently in compliance with existing regulations, or it fails to adhere to new regulations or fail to continually monitor the updates, it may incur costs in remedying its non-compliance and it may disrupt its operations. In addition, current or proposed regulations may adversely impact the availability of supplies needed to manufacture ICI’s products. For example, the U.S. Senate has passed a bill to effectively ban all products from China’s Xinjiang province due to concerns that the goods were produced with forced labor, which, if enacted, is expected to have adverse impacts on global supply chains. In such circumstances, ICI may also be subject to litigation, lose customers, suffer negative publicity and its business, results of operations, and financial condition could be adversely affected.
Failures, or perceived failures, to comply with privacy, data protection, and information security requirements in the variety of jurisdictions in which ICI operates may adversely impact its business, and such legal requirements are evolving, uncertain and may require improvements in, or changes to, its policies and operations.
ICI’s current and potential future operations and sales subject ICI to laws and regulations addressing privacy and the collection, use, storage, disclosure, transfer and protection of a variety of types of data. For
 
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example, the European Commission has adopted the General Data Protection Regulation and California recently enacted the California Consumer Privacy Act of 2018, both of which provide for potentially material penalties for non-compliance. These regimes may, among other things, impose data security requirements, disclosure requirements, and restrictions on data collection, uses, and sharing that may impact ICI’s operations and the development of its business. While, generally, ICI does not have access to, collect, store, process, or share information collected by its customers using its products unless its customers choose to proactively provide such information to it, ICI’s products may evolve to address potential customer requirements or to add new features and functionality. Therefore, the full impact of these privacy regimes on ICI’s business is rapidly evolving across jurisdictions and remains uncertain at this time.
ICI is assessing the continually evolving privacy and data security regimes and measures it believes are appropriate in response. Since these data security regimes are evolving, uncertain and complex, ICI may need to update or enhance its compliance measures as its products, markets and customer demands further develop, and these updates or enhancements may require implementation costs. In addition, ICI may not be able to monitor and react to all developments in a timely manner. The compliance measures ICI does adopt may prove ineffective. Any failure, or perceived failure, by ICI to comply with current and future regulatory or customer-driven privacy, data protection, and information security requirements, or to prevent or mitigate security breaches, cyberattacks, or improper access to, use of, or disclosure of data, or any security issues or cyberattacks affecting us, could result in significant liability, costs (including the costs of mitigation and recovery), and a material loss of revenue resulting from the adverse impact on its reputation and brand, loss of proprietary information and data, disruption to its business and relationships, and diminished ability to retain or attract customers and business partners. Such events may result in governmental enforcement actions and prosecutions, private litigation, fines and penalties or adverse publicity, and could cause customers and business partners to lose trust in us, which could have an adverse effect on ICI’s reputation and business.
ICI is subject to governmental export and import controls and economic sanctions laws and regulations. ICI’s failures to comply with these laws and regulations could have an adverse effect on its business, prospects, financial condition and results of operations.
ICI’s products and solutions are subject to certain U.S. and foreign export controls, trade sanctions, and import laws and regulations, including the U.S. Export Administration Regulations, U.S. Customs regulations and various economic and trade sanctions regulations administered by the U.S. Treasury Department’s Office of Foreign Assets Controls. For example, exporting ICI’s thermal cameras, infrared cameras, or infrared sensors to certain countries may be restricted by the U.S. government’s thermal camera export restrictions and many fall under International Traffic in Arms Regulations (“ITAR”). U.S. export control laws and regulations and economic sanctions prohibit or restrict the shipment of certain products and services to countries, governments, and persons targeted by U.S. sanctions. Even though ICI takes precautions to prevent its productions and solutions from being provided to entities subject to these restrictions, its products could find their way to such prohibited entities. Any such provision could have negative consequences, including government investigations, penalties, or reputational harm. See “Information About ICI — Governmental Regulation.”
In addition, complying with export control and sanctions regulations for a particular sale may be time-consuming and create delays in the introduction of ICI’s products and solutions in some international markets, should ICI pursue such international expansion, and, in some cases, prevent the export of its software and services to some countries altogether. Exports of ICI’s products and technology must be made in compliance with these laws and regulations. If a license or approval is required from a government agency prior to sale, no exports may occur until the appropriate approvals are obtained. If ICI fails to comply with these laws and regulations, penalties could be imposed, including substantial monetary fines and/or denial of export privileges. In addition, in extreme cases responsible employees or managers can be held criminally liable for such violations.
Changes to trade policy, tariffs and import/export regulations may have a material adverse effect on ICI’s business, financial condition and results of operations.
Any new export or import restrictions, new legislation or shifting approaches in the enforcement or scope of existing regulations, or changes in global, political, regulatory and economic conditions affecting
 
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U.S. trade, manufacturing, development or investment, could result in additional restrictions on ICI’s ability to conduct business. In recent years, the U.S. has instituted or proposed changes in trade policies that include the negotiation or termination of trade agreements, the imposition of higher tariffs on imports into the U.S. (including from China, where ICI sources certain of its supplies), economic sanctions on individuals, corporations or countries, and other government regulations affecting trade between the U.S. and other countries where ICI conducts its business. A number of other nations have proposed or instituted similar measures directed at trade with the United States in response. As a result of these developments, there may be greater restrictions and economic disincentives on international trade that could adversely affect ICI’s business. As additional trade-related policies are instituted, ICI needs to modify its business operations to comply and adapt to such developments, which may be time-consuming and expensive.
Failing to comply with increasing environmental regulations, as well as the effects of potential environmental liabilities, could have a material adverse financial effect on ICI.
ICI, like other industry participants, are subject to various federal, state, local and international environmental laws and regulations. ICI may be subject to increasingly stringent environmental standards in the future, particularly as greenhouse gas (“GHG”) emissions and climate change regulations and initiatives increase. Future developments, administrative actions or liabilities relating to environmental and climate change matters could have a material adverse effect on ICI’s business, results of operations or financial condition.
ICI’s manufacturing operations, including former operations, could expose it to material environmental liabilities. Additionally, companies that ICI acquires may have environmental liabilities that might not be accurately assessed or brought to its attention at the time of the acquisition.
The U.S. Environmental Protection Agency (“EPA”) has focused on GHGs, maintaining GHGs threaten the public health and welfare of the American people. The EPA also maintains that GHG emissions from on-road vehicles contribute to that threat. The EPA’s endangerment finding covers emissions of six GHGs. The EPA’s continuing efforts to limit GHG emissions could adversely affect ICI’s manufacturing operations, increase prices for energy, fuel and transportation, require ICI to accommodate changes in parameters, such as the way parts are manufactured, and may, in some cases, require ICI to redesign certain of its products. This, or other federal or state regulations, could lead to increased costs, which ICI may not be able to recover from customers, delays in product shipments and loss of market share to competitors. Regulatory changes or failure by a business to meet applicable requirements could disrupt that business or force a closure or relocation of the business.
Regulations associated with climate change could adversely affect ICI’s business.
Legislative and regulatory measures currently under consideration or being implemented by government authorities to address climate change could require reductions in ICI GHG or other emissions, establish a carbon tax or increase fuel or energy taxes. These legal requirements, in addition to emission reduction efforts that ICI may voluntarily undertake, are expected to result in increased capital expenditures and compliance costs, and could result in higher costs required to operate and maintain ICI’s facilities, procure raw materials and energy, and may require ICI to acquire emission credits or carbon offsets. These costs and restrictions could harm ICI’s business and results of operations by increasing its expenses or requiring ICI to alter its operations and product design activities. The inconsistent international, regional and/or national requirements associated with climate change regulations also create economic and regulatory uncertainty.
General Risk Factors
Unless the context otherwise requires, all references in this subsection to the “Company,” “we,” “us” or “our” refer to ICI prior to the consummation of the Business Combination and New ICI after the consummation of the Business Combination.
If ICI was to lose the services of members of its senior management team, it may not be able to execute its business strategy.
ICI’s success depends in large part upon the continued service of key members of its senior management team. In particular, each of ICI’s Chief Executive Officer, Gary Strahan, President, Steve Winch, and Chief
 
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Financial Officer, Peter Baird, is critical to its overall management, as well as the continued development of its thermal infrared technology, its culture and its strategic direction. All of ICI’s executive officers are at will employees. The loss of any member of ICI’s senior management team could harm its business.
ICI’s future success depends, in part, on recruiting and retaining key personnel and, if ICI fails to do so, it may be more difficult for ICI to execute its business strategy. ICI is currently a small organization and will need to hire additional qualified personnel to effectively implement its strategic plan.
ICI’s success depends on its ability to attract, retain and motivate highly qualified management, technical, manufacturing, engineering and sales personnel. In particular, ICI’s success may depend on its ability to recruit and retain management personnel who are qualified to manage a public company. All of ICI’s employees are at-will employees. In addition, ICI’s ability to successfully execute on its strategic plan depends in part on its ability to continue to build its organization and hire qualified personnel, especially with engineering, sales, technical and manufacturing expertise. ICI may not be able to attract and retain qualified personnel on acceptable terms given the competition for such personnel. If ICI is unsuccessful in its recruitment efforts, it may adversely affect its business and its growth prospects.
Climate change may have a long-term impact on ICI’s business.
Climate change may have an increasingly adverse impact on ICI’s business and those of its customers, partners and suppliers. While ICI seeks to mitigate the risks associated with climate change on its operations, there are inherent climate-related risks globally. Some of ICI’s manufacturing facilities are located in regions that may be impacted by severe weather events, like hurricanes or unexpected cold snaps, the frequency and severity of which may increase as a result of climate change. These events could result in potential damage to ICI’s physical assets as well as disruptions in manufacturing activities. Moreover, some of ICI’s manufacturing facilities are in areas that could experience decreased access to water and reliable energy due to climate issues. Severe weather events may impair the ability of ICI’s employees to work effectively. Climate change, including the increasing frequency and intensity of extreme weather events, its impact on ICI’s supply chain and critical infrastructure worldwide and its potential to increase political instability in regions where ICI, its customers, partners and suppliers do business, may disrupt its business and may cause ICI to experience higher employee attrition and higher costs to maintain or resume operations. The effects of climate change also may impact ICI’s decisions to construct new facilities or maintain existing facilities in the areas most prone to physical risks, which could similarly increase its operating and material costs. ICI could also face indirect financial risks passed through the supply chain that could result in higher prices for its products and the resources needed to produce them.
ICI sells products to customers directly engaged in oil and gas exploration and production. Changes to regulations, social practices and preferences, energy generation and transportation technologies that may occur or be implemented to mitigate climate change could result in reduced demand for hydrocarbon products, which could result in a reduction in sales to these customers.
Investor sentiment towards climate change and sustainability could adversely affect ICI’s business.
Increased investor focus and activism related to climate change and sustainability may hinder ICI’s access to capital, as investors may reconsider their capital investment as a result of their assessment of its sustainability practices. ICI may face increasing pressure regarding its sustainability disclosures and practices. Additionally, members of the investment community may screen companies such as ICI for sustainability performance before investing in New ICI Common Stock. If ICI is unable to meet the sustainability standards set by these investors, or if it is unable meet any GHG reduction targets it communicates to the public, it may lose investors, the price of New ICI Common Stock may be negatively impacted and ICI’s reputation may be negatively affected.
ICI is currently operating in a period of economic uncertainty and capital markets disruption, which has been significantly impacted by geopolitical instability due to the ongoing military conflict between Russia and Ukraine. ICI’s business, financial condition and results of operations could be materially adversely affected by any negative impact on the global economy and capital markets resulting from the conflict in Ukraine or any other geopolitical tensions.
U.S. and global markets are experiencing volatility and disruption following the escalation of geopolitical tensions and the start of the military conflict between Russia and Ukraine. Although the length and impact
 
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of the ongoing military conflict is highly unpredictable, the conflict in Ukraine could lead to market disruptions, including significant volatility in commodity prices, credit and capital markets, as well as supply chain interruptions. ICI is continuing to monitor the situation in Ukraine and globally and assessing its potential impact on its business.
Additionally, the recent military conflict in Ukraine has led to sanctions and other penalties being levied by the United States, European Union and other countries against Russia. Additional potential sanctions and penalties have also been proposed and/or threatened. Russian military actions and the resulting sanctions could adversely affect the global economy and financial markets and lead to instability and lack of liquidity in capital markets, potentially making it more difficult for ICI to obtain additional funds.
It is impossible to predict the extent to which ICI’s operations, or those of its suppliers and manufacturers, will be impacted in the short and long term, or the ways in which the conflict may impact its business. The extent and duration of the military action, sanctions and resulting market disruptions are impossible to predict, but could be substantial. Any such disruptions may also magnify the impact of other risks described herein.
ICI’s business is subject to the risks of earthquakes, fire, floods and other natural catastrophic events, global pandemics, and interruptions by man-made problems, such as terrorism. Material disruptions of ICI’s business or information systems resulting from these events could adversely affect its operating results.
A significant natural disaster, such as an earthquake, fire, flood, hurricane or significant power outage or other similar events, such as infectious disease outbreaks or pandemic events, could have an adverse effect on ICI’s business and operating results. For example, in October 2022, ICI’s production facility in Beaumont, Texas was impacted by a flood that damaged certain of its inventory. In addition, natural disasters, acts of terrorism or war could cause disruptions in ICI’s manufacturing operations, ICI’s or its customers’ or channel partners’ businesses, its suppliers or the economy as a whole. ICI also relies on information technology systems to communicate among its workforce and with third parties. Any disruption to ICI’s communications, whether caused by a natural disaster or by man-made problems, such as power disruptions, could adversely affect its business. ICI does not have a formal disaster recovery plan or policy in place and does not currently require that its suppliers’ partners have such plans or policies in place. To the extent that any such disruptions result in delays or cancellations of orders or impede ICI’s suppliers’ ability to timely deliver product components, or the deployment of its products, its business, operating results and financial condition would be adversely affected.
Adverse conditions in ICI’s target markets or the global economy more generally could have adverse effects on its results of operations.
While ICI makes its strategic planning decisions based on the assumption that the markets it is targeting will grow, its business is dependent, in large part on, and directly affected by, business cycles and other factors affecting the industries ICI serves. ICI’s target markets are highly cyclical and depend on general economic conditions and other factors, including consumer spending and preferences, changes in interest rates and credit availability, consumer confidence, inflation, environmental impact, governmental incentives and regulatory requirements, political volatility, labor relations issues, trade agreements and other factors.
ICI has been and may in the future become involved in legal and regulatory proceedings and commercial or contractual disputes, which could have a material adverse effect on ICI’s profitability and consolidated financial position.
ICI has been and may in the future be, from time to time, involved in litigation, regulatory proceedings and commercial or contractual disputes and these matters may be significant. These matters may include, without limitation, disputes with ICI’s distributors, suppliers and customers, intellectual property claims, government investigations, class action lawsuits, personal injury claims, environmental issues, customs and value-added tax disputes and employment and tax issues. In addition, ICI has in the past and could face in the future a variety of labor and employment claims against us, which could include but is not limited to general discrimination, wage and hour, privacy, ERISA or disability claims. In such matters, government agencies or private parties may seek to recover from ICI large, indeterminate amounts in penalties or monetary damages (including, in some cases, treble or punitive damages) or seek to limit ICI’s operations in
 
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some way. These types of lawsuits could require significant management time and attention or could involve substantial legal liability, adverse regulatory outcomes, or substantial expenses to defend. Often these cases raise complex factual and legal issues and create risks and uncertainties.
ICI could be forced to expend significant resources in the defense of these lawsuits or future ones, and ICI may not prevail. No assurances can be given that any proceedings and claims will not have a material adverse impact on ICI’s operating results and consolidated financial position or that its available insurance will mitigate this impact.
Risks Related to SportsMap and the Business Combination
Unless the context otherwise requires, all references in this subsection to the “Company,” “we,” “us” or “our” refer to SportsMap prior to the consummation of the Business Combination.
The Sponsor, the SportsMap Initial Stockholders, the Insiders and SportsMap’s officers and directors have agreed to vote in favor of the Business Combination, regardless of how SportsMap’s public stockholders vote.
As of the date of this proxy statement, the Sponsor, the SportsMap Initial Stockholders, the Insiders and SportsMap’s officers and directors collectively own of record and are entitled to vote an aggregate of approximately 68.5% of the outstanding shares of SportsMap Common Stock (excluding warrants). Pursuant to the Sponsor Letter Agreement, they have agreed to vote all shares of SportsMap Common Stock beneficially owned by them in favor of each of the proposals at the Special Meeting, regardless of how public stockholders vote. Accordingly, the agreement by the Sponsor, the SportsMap Initial Stockholders, the Insiders and SportsMap’s officers and directors to vote in favor of each of the proposals at the Special Meeting will increase the likelihood that SportsMap will obtain the Required SportsMap Stockholder Approval.
SportsMap has not been successful to date, and may not be successful at all, in its efforts to obtain additional financing in connection with the Business Combination, which may adversely affect the likelihood of the consummation of the Business Combination or the financial condition of New ICI.