S-1 1 dsa_s1.htm FORM S-1 dsa_s1.htm

As filed with the U.S. Securities and Exchange Commission on December 21, 2021.

Registration No. 333-

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM S-1

REGISTRATION STATEMENT

UNDER

THE SECURITIES ACT OF 1933

 

DEEP SPACE ACQUISITION CORP. I

(Exact name of registrant as specified in its charter)

 

Delaware

 

6770

 

86-2148394

(State or other jurisdiction of

incorporation or organization)

 

(Primary Standard Industrial

Classification Code Number)

 

(I.R.S. Employer

Identification Number)

 

16 Firebush Road

Levittown, Pennsylvania 19056

Telephone: (215) 943-1777

(Address, Including Zip Code, and Telephone Number, Including Area Code, of Registrant’s Principal Executive Offices)

 

Jose Ocasio-Christian, Chief Executive Officer

 

16 Firebush Road

Levittown, Pennsylvania 19056

Telephone: (215) 943-1777

(Name, Address, Including Zip Code, and Telephone Number, Including Area Code, of Agent For Service)

 

Copies to:

 

Barry I. Grossman, Esq.

Jonathan H. Deblinger, Esq.

Ellenoff Grossman & Schole LLP

1345 Avenue of the Americas

New York, NY 10105

Tel: (212) 370-1300

Derek J. Dostal, Esq.

Yan Zhang, Esq.

Davis Polk & Wardwell LLP

450 Lexington Avenue

New York, NY 10017

Telephone: (212) 450-4000

 

Approximate date of commencement of proposed sale to the public: As soon as practicable after the effective date of this registration statement.

 

If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933 check the following box. ☒

 

If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, please check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ☐

 

If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ☐

 

If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ☐

 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act. (Check one):

 

Large accelerated filer

Accelerated filer

Non-accelerated filer

Smaller reporting company

 

 

Emerging growth company

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 7(a)(2)(B) of the Securities Act. ☐

 

 
 

   

CALCULATION OF REGISTRATION FEE

 

Title of Each Class of Security Being Registered

 

Amount

Being

Registered

 

Proposed

Maximum

Offering Price

per Security(1)

 

 

Proposed

Maximum

Aggregate

Offering Price(1)

 

 

Amount of

Registration Fee

 

Units, each consisting of one share of Class A common stock, $0.0001 par value, one right to receive one-sixteenth of one share of Class A common stock and one half of one redeemable warrant(2)

 

24,150,000 Units

 

$ 10.00

 

 

$ 241,500,000

 

 

$ 22,287.05

 

Shares of Class A common stock included as part of the units(3)

 

24,150,000 Shares

 

 

 

 

 

 

 

 

(4)

Rights included as part of the units(3)

 

24,150,000 Rights

 

 

 

 

 

 

 

 

 

 

 

Shares of Class A common stock underlying the rights included in the units(3)

 

1,509,375 Shares

 

 

10.00

 

 

$ 15,093,750

 

 

 

1,399.19

 

Redeemable warrants included as part of the units(3)

 

12,075,000 Warrants

 

 

 

 

 

 

 

 

(4)

Shares of Class A common stock issuable upon exercise of redeemable warrants included as part of the units

 

12,075,000 Shares

 

$ 11.50

 

 

$ 138,862,500

 

 

$ 12,872.55

(5) 

Total

 

 

 

 

 

 

 

$ 395,456,250

 

 

$ 36,685.79

(6) 

 

(1)

Estimated solely for the purpose of calculating the registration fee pursuant to Rule 457(a) under the Securities Act of 1933, as amended (the “Securities Act”).

 

 

(2)

Includes 3,150,000 units, consisting of 3,150,000 shares of Class A common stock, 3,150,000 rights and 1,575,000 redeemable warrants, which may be issued upon exercise of a 45-day option granted to the underwriters to cover over-allotments, if any.

 

 

(3)

Pursuant to Rule 416(a) under the Securities Act, there are also being registered an indeterminable number of additional securities as may be issued to prevent dilution resulting from stock splits, stock dividends or similar transactions.

 

 

(4)

No fee pursuant to Rule 457(g) under the Securities Act.

 

 

(5)

Calculated pursuant to Rule 457(g) under the Securities Act, based on the exercise price of the warrants.

 

 

(6)

Paid herewith.

 

The Registrant hereby amends this Registration Statement on such date or dates as may be necessary to delay its effective date until the Registrant shall file a further amendment which specifically states that this Registration Statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933, as amended, or until the Registration Statement shall become effective on such date as the Securities and Exchange Commission, acting pursuant to said Section 8(a), may determine.

 

 

i

 

 

The information in this preliminary prospectus is not complete and may be changed. We may not sell these securities until the registration statement filed with the Securities and Exchange Commission is effective. This preliminary prospectus is not an offer to sell these securities and it is not soliciting an offer to buy these securities in any jurisdiction where the offer or sale is not permitted.

 

PRELIMINARY PROSPECTUS

SUBJECT TO COMPLETION, DATED DECEMBER 21, 2021

 


  

$210,000,000

Deep Space Acquisition Corp. I

21,000,000 Units

 

Deep Space Acquisition Corp. I is a blank check company whose business purpose is to effect a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or similar business combination with one or more businesses, which we refer to as our initial business combination. We have not selected any specific business combination target and we have not, nor has anyone on our behalf, engaged in any substantive discussions, directly or indirectly, with any business combination target with respect to an initial business combination with us.

 

This is an initial public offering of our securities. Each unit has an offering price of $10.00 and consists of one share of Class A common stock, one right and one half of one redeemable warrant. Each right entitles the holder thereof to receive one-sixteenth (1/16) of one share of Class A common stock upon the consummation of our initial business combination. As a result, you must have 16 rights in order to receive a share of Class A common stock at the closing of our initial business combination. Each whole warrant entitles the holder thereof to purchase one share of Class A common stock at a price of $11.50 per share, subject to adjustment as described herein. Only whole warrants are exercisable. No fractional warrants will be issued upon separation of the units and only whole warrants will trade. The warrants will become exercisable 30 days after the completion of our initial business combination, and will expire five years after the completion of our initial business combination or earlier upon redemption or our liquidation, as described herein. The underwriters have a 45-day option from the date of this prospectus to purchase up to 3,150,000 additional units to cover over-allotments, if any.

 

We will have 18 months from the closing of this offering to consummate an initial business combination. If we anticipate that we may not be able to consummate our initial business combination within 18 months from the consummation of this offering, we may, but are not obligated to, if requested by our sponsor or its affiliates, extend the period of time to consummate a business combination up to six times by an additional one month each time for a total of up to 24 months (the “Paid Extension Period”). In addition, we will be entitled to an automatic three-month extension (the “Automatic Extension Period”) if we have entered into a definitive agreement for an initial business combination during the 18-month period or Paid Extension Period, to complete a business combination, as described in more detail in this prospectus. In the case of the Paid Extension Period or Automatic Extension Period, public shareholders will not be offered the opportunity to vote on or redeem their shares if we choose to make any such paid extension or in connection with an automatic extension. If we are unable to complete our initial business combination within 18 months from the closing of this offering (as may be extended as described above), we will redeem 100% of the public shares at a per share price, payable in cash, equal to the aggregate amount then on deposit in the trust account, including interest earned on the funds held in the trust account (which interest shall be net of taxes payable and up to $100,000 of interest to pay dissolution expenses), divided by the number of then outstanding public shares, subject to applicable law and certain conditions as further described herein. In such event, the rights and warrants will expire and be worthless.

  

Our sponsor, Deep Space I Sponsor LLC has committed to purchase an aggregate of 6,485,500 warrants, each exercisable to purchase one share of Class A common stock at $11.50 per share, at a price of $1.00 per warrant, or $6,485,500 in the aggregate, in a private placement that will close simultaneously with the closing of this offering.

 

Our initial stockholders currently own an aggregate of 6,037,500 shares of Class B common stock (up to 787,500 shares of which are subject to forfeiture depending on the extent to which the underwriters’ over-allotment option is exercised), which will automatically convert into shares of Class A common stock concurrently with or immediately following the consummation of our initial business combination on a one-for-one basis, subject to the adjustments described herein.

 

Our sponsor has agreed that upon and subject to the completion of the initial business combination, 25% of the founder shares then held by the sponsor shall be considered to be newly unvested shares, one-half of which will vest only if the closing price of our Class A common stock the Nasdaq Global Market, or Nasdaq, equals or exceeds $12.50 for any 20 trading days within a 30 trading day period, on or after the first anniversary of the closing of the initial business combination but before the fifth anniversary; and one-half of which will vest only if the closing price of our Class A common stock on Nasdaq equals or exceeds $15.00 for any 20 trading days within a 30 trading day period, on or after the first anniversary of the closing of the initial business combination but before the fifth anniversary. Founder shares, if any, that remain unvested at the fifth anniversary of the closing of the initial business combination will be forfeited.

 

 

ii

 

 

Currently, there is no public market for our units, Class A common stock, rights or warrants. We have applied to list our units on Nasdaq, under the symbol “DPACU” on or promptly after the date of this prospectus. We expect the shares of Class A common stock, rights and warrants comprising the units to begin separate trading on the 52nd day following the date of this prospectus unless Nomura Securities International, Inc., the representative of the underwriters of this offering, inform us of its decision to allow earlier separate trading, subject to our satisfaction of certain conditions. Once the securities comprising the units begin separate trading, we expect that the Class A common stock, rights and warrants will be listed on Nasdaq under the symbols “DPAC,” “DPACR” and “DPACW,” respectively.

 

We are an “emerging growth company” under applicable federal securities laws and will be subject to reduced public company reporting requirements. Investing in our securities involves a high degree of risk. See “Risk Factors” beginning on page 26 for a discussion of information that should be considered in connection with an investment in our securities. Investors will not be entitled to protections normally afforded to investors in Rule 419 blank check offerings.

 

Neither the U.S. Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or determined if this prospectus is truthful or complete. Any representation to the contrary is a criminal offense.

 

 

 

Per Unit

 

 

Total

 

Public offering price

 

$ 10.00

 

 

$ 210,000,000

 

Underwriting discounts and commissions(1)

 

$ 0.575

 

 

$ 12,075,000

 

Proceeds, before expenses, to us

 

$ 9.425

 

 

$ 197,925,000

 

 

(1)

$0.15 per unit, or $3,150,000 in the aggregate, is payable upon the closing of this offering. Includes $0.425 per unit, or $8,925,000 in the aggregate payable to the underwriters for deferred underwriting commissions will be placed in a trust account located in the United States as described herein. If the underwriters’ over-allotment option is exercised, $0.575 per over-allotment unit, or up to an additional $1,811,250 in the aggregate if the underwriters’ over-allotment option is exercised in full, will be placed in a trust account located in the United States as described herein. The deferred commissions are to be released to the underwriters only on and concurrently with completion of an initial business combination. See also “Underwriting” for a description of compensation payable to the underwriters.

 

Of the proceeds we receive from this offering and the sale of the private placement warrants described in this prospectus, $210.0 million or $241.5 million if the underwriters’ over-allotment option is exercised in full ($10.00 per unit in either case), will be deposited into a trust account in the United States with Continental Stock Transfer & Trust Company acting as trustee, after deducting $3,150,000 in underwriting discounts and commissions payable upon the closing of this offering and an aggregate of $3,335,500 to pay fees and expenses in connection with the closing of this offering and for working capital following the closing of this offering.

 

The underwriters are offering the units for sale on a firm commitment basis. The underwriters expect to deliver the units to the purchasers on or about        , 2022.

 

Sole Bookrunning Manager

Nomura

        , 2022

 

 

iii

 

 

TABLE OF CONTENTS

 

SUMMARY

 

 

1

 

RISK FACTORS

 

 

40

 

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

 

 

79

 

USE OF PROCEEDS

 

 

80

 

DIVIDEND POLICY

 

 

83

 

DILUTION

 

 

84

 

CAPITALIZATION

 

 

86

 

MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

 

 

87

 

PROPOSED BUSINESS

 

 

92

 

MANAGEMENT

 

 

126

 

PRINCIPAL STOCKHOLDERS

 

 

139

 

CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS

 

 

141

 

DESCRIPTION OF SECURITIES

 

 

142

 

U.S. FEDERAL INCOME TAX CONSIDERATIONS

 

 

161

 

UNDERWRITING

 

 

170

 

LEGAL MATTERS

 

 

178

 

EXPERTS

 

 

178

 

WHERE YOU CAN FIND ADDITIONAL INFORMATION

 

 

178

 

INDEX TO FINANCIAL STATEMENTS

 

F-1

 

  

We are responsible for the information contained in this prospectus. We have not authorized anyone to provide you with different information, and we take no responsibility for any other information others may give to you. We are not, and the underwriters are not, making an offer to sell securities in any jurisdiction where the offer or sale is not permitted. You should not assume that the information contained in this prospectus is accurate as of any date other than the date on the front of this prospectus.

 

TRADEMARKS

 

This prospectus contains references to trademarks and service marks belonging to other entities. Solely for convenience, trademarks and trade names referred to in this prospectus may appear without the ® or TM symbols, but such references are not intended to indicate, in any way, that the applicable licensor will not assert, to the fullest extent under applicable law, its rights to these trademarks and trade names. We do not intend our use or display of other companies’ trade names, trademarks or service marks to imply a relationship with, or endorsement or sponsorship of us by, any other companies.

 

 

iv

 

     

SUMMARY

 

This summary only highlights the more detailed information appearing elsewhere in this prospectus. As this is a summary, it does not contain all of the information that you should consider in making an investment decision. You should read this entire prospectus carefully, including the information under “Risk Factors” and our financial statements and the related notes included elsewhere in this prospectus, before investing.

 

Unless otherwise stated in this prospectus or the context otherwise requires, references to:

 

 

·

“we,” “us,” “company” or “our company” are to Deep Space Acquisition Corp. I, a Delaware corporation;

 

 

 

 

·

“common stock” are to our Class A common stock and our Class B common stock;

 

 

 

 

·

“completion window” are to the period following the completion of this offering at the end of which, if we have not completed our initial business combination, we will redeem 100% of the public shares at a per share price, payable in cash, equal to the aggregate amount then on deposit in the trust account, including interest earned on the funds held in the trust account and not previously released to us to pay our taxes, if any (less up to $100,000 of interest to pay dissolution expenses), divided by the number of then outstanding public shares, subject to applicable law and certain conditions and as further described herein. The completion window ends 18 months from the closing of this offering, which may be extended up to six times by an additional one month each time for a total of 24 months (the “Paid Extension Period”). In addition, we will be entitled to an automatic three-month extension (the “Automatic Extension Period”) if we have entered into a definitive agreement for an initial business combination during the 18-month period or Paid Extension Period, to complete a business combination, as described in more detail in this prospectus;

 

 

 

 

·

“DGCL” refers to the Delaware General Corporation Law as the same may be amended from time to time;

 

 

 

 

·

“directors” are to our current directors and director nominees;

 

 

 

 

·

“FINRA” refers to the Financial Industry Regulatory Authority;

 

 

 

 

·

“founder shares” are to shares of Class B common stock initially purchased by our sponsor in a private placement prior to this offering and the shares of Class A common stock that will be issued upon the automatic conversion of the shares of Class B common stock at the time of our initial business combination as described herein;

 

 

 

 

·

“initial stockholders” are to holders of our founder shares prior to this offering;

 

 

 

 

·

“management” or our “management team” are to our executive officers and directors;

 

 

 

 

·

“private placement warrants” are to the warrants issued to our sponsor in a private placement simultaneously with the closing of this offering;

 

 

 

 

·

“public shares” are to shares of Class A common stock sold as part of the units in this offering (whether they are purchased in this offering or thereafter in the open market);

 

 

 

·

“public stockholders” are to the holders of our public shares, including our initial stockholders and management team to the extent our initial stockholders and/or members of our management team purchase public shares, provided that each initial stockholder’s and member of our management team’s status as a “public stockholder” will only exist with respect to such public shares;

 

 

 

 

·

“public warrants” are to our redeemable warrants sold as part of the units in this offering (whether they are purchased in this offering or thereafter in the open market);

 

 

 

 

·

“rights” refer to the rights which are being sold as part of the units in this offering;

 

 

 

 

·

“representative” is to Nomura Securities International, Inc., the representative of the underwriters of this offering;

 

 

 

 

·

“SEC” are to the U.S. Securities and Exchange Commission;

 

 

 

 

·

“SPAC” is to Special Purpose Acquisition Company; and

 

 

 

 

·

“sponsor” are to Deep Space I Sponsor LLC, a Delaware limited liability company.

  

Unless we tell you otherwise, the information in this prospectus assumes that the underwriters will not exercise their over-allotment option.

   

 
1
Table of Contents

   

OUR COMPANY

 

Deep Space Acquisition Corp. I (“DPAC”) is a newly incorporated blank check company formed as a Delaware corporation for the purpose of effecting a merger, capital stock exchange, asset acquisition, stock purchase, reorganization, or similar business combination with one or more businesses, which we refer to throughout this prospectus as our initial business combination. Our acquisition and value creation strategy will be to identify, acquire and, after our initial business combination, build a company that complements the experience of our management team and can benefit from their operational expertise.

 

We have not selected any specific business combination target and we have not, nor has anyone on our behalf, engaged in any substantive discussions, directly or indirectly, with any business combination target with respect to an initial business combination with us. We have no operating revenues and do not expect that DPAC will generate operating revenues until we consummate our initial business combination.

 

Our Approach

 

Our approach for the initial business combination is to enhance the target company’s operations by leveraging our networks and subject matter expertise in mergers and acquisitions (“M&A”), geopolitical and financial strategy, capital markets, and business leadership. While we will consider target companies in any sector, we will focus our attention on space technology, space-related applications, and the integration of space into terrestrial (Earth-based) market sectors that are poised to experience rapid growth. Examples of connections between space technology and these sectors include:

  

 

·

Communication Services – telecommunications technology and interfaces, laser communication, sensor technology and terrestrial support services;

 

·

Energy – power generation and distribution for nuclear, solar or other alternative energy sources;

 

·

Industrials – robotics, aerospace and defense, stratospheric vehicles, drones and drone support technology;

 

·

Information Technology – computing, virtual and augmented reality, artificial intelligence / machine learning, cyber security, data analytics and blockchain applications;

 

·

Materials – nanotechnology, extraction of natural resources from locations in space and superalloy development, processing and delivery.

 

Our focus is to consummate a business combination that is well-positioned for long-term growth in the public market. We believe there are attractive businesses within our target markets that would benefit from access to both public markets and the broader skills of our management team, Board of Directors (“Board”) and Special Advisors (“Advisors”). Collectively, this group has completed over $20 billion of M&A transactions in their respective careers. We are seeking a target company that can use the unique materials, hardware, software, and expertise involved in space-related activity to produce near-term revenue streams in terrestrial markets while maintaining a long-term focus on unlocking the value of space.

 

Following the initial business combination, our company may be engaged in businesses focused on Earth, space, or both. For example, the need for environmentally-friendly technology that can deliver power to both high-density and remote areas on Earth is at an all-time high, providing vast market opportunities. Space is no different, as governments and companies require access to energy systems that can power satellites, space stations, planetary rovers and excavation systems. Thus, a company that achieves a breakthrough in efficiently delivering energy in space may find multiple high-value markets on Earth. Similarly, in the digital world, augmented reality systems developed to guide astronauts in construction and maintenance of spacecraft are being applied to the rapidly expanding field of mixed-reality applications in the information technology sector. This technology presents opportunities for pursuing both business and consumer markets. Assessing the market as a whole, we see a wide variety of possibilities to take space-focused companies into their next stage of growth by looking beyond the space sector itself as it exists today.

   

We have a global perspective, providing an opportunity for any company in the United States and around the world to participate in U.S. financial markets and to connect with global consumers as a result of U.S. leadership in space investment. We do not intend to acquire companies that have speculative business plans or carry excessive leverage, but we may do so if the Board determines it is in the best interest of our stockholders.

 

 
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We are led by Mr. Jose Ocasio-Christian, a military veteran who is part of a U.S. minority demographic. Our sponsor adheres to the principle that people from all walks of life should be able to participate in the development of space and reap its economic benefits, and we have assembled a diverse management team, Board and Special Advisors to ensure that multiple perspectives are represented in the initial business combination.

 

Deep Space I Sponsor

 

Our sponsor has a mission to create positive effects both in space itself and in financial marketplaces on Earth. Its management team is drawn from Community in Space LLC, which was established by members of Caelus Partners, LLC (“Caelus Partners”) and Procure Holdings, LLC (“Procure Holdings”). Community in Space LLC is an advisory firm that analyzes, guides, and manifests strategic financial outcomes for space-related companies through the development and application of different financial vehicles. Deep Space Acquisition Corp. I is the first such vehicle supported by Community in Space LLC in order to address the lack of space-related portfolio development opportunities available to investors.

 

Caelus Partners is a strategic consulting firm focused on the intersection of space and finance, working with startups, investors, national governments, and other parties involved in space. Caelus Partners has been called upon to provide confidential advice to space agencies, investors and government officials in the defense and security sectors in the United States, Europe, the Middle East, and Asia. These engagements include development of investment models for private investors in space-related fields that include robotics, energy, synthetic materials, information technology and communications. Caelus Partners has also developed consortium models and hybrid investment/contracting models for the U.S. Department of Defense and other government agencies. Caelus Partners has experience in the transition from private to public company operations, having developed IPO and post-IPO strategies for multiple space-related companies, including formally and informally advising companies who are now publicly listed through special purpose acquisition companies, and one pending to list publicly in the future. Procure Holdings and its subsidiary ProcureAM, LLC have a track record of managing space-focused investments. ProcureAM, LLC is the sponsor of the world’s first pure-play space-focused exchange traded fund, the Procure Space ETF (NASDAQ: UFO).

   

Caelus Partners and Procure Holdings jointly researched space technology and opportunities for space-related special purpose acquisition company (“SPAC”) transactions for eight months prior to the establishment of our sponsor in April 2021. This proprietary correlative analysis addresses a target universe of more than 500 space-related companies from a financial, geopolitical, technical, and economic perspective. This analysis provides the opportunity to invest in a target space-related company that has a strong technological foundation, creates value by participating in markets on Earth and ultimately extends economic activity further into space. This analysis also informed the development of our acquisition process and the selection of a management team, Board and Advisors with the requisite skills to execute that process. Ultimately, our strategy is to analyze and minimize the risk associated with space industry assets for investors. As part of this strategy, we assess both short-term and long-term opportunities for the post-combination business to grow and become a suitable addition to multiple types of investment portfolios.

 

In addition to our management team’s experience, our sponsor has secured financial commitments from Carnegie Park Capital LLC, a firm whose team has invested in SPACs since 2008, including front-end SPAC IPOs, SPAC business combination transactions (“de-SPACs”), and in private investments in public equity (“PIPEs”). The team has also led or arranged investments in numerous sponsor groups including four sponsors whose SPACs announced business combinations in 2021. The financial and transactional experience of the Carnegie Park Capital team complements our management team’s operating and industry expertise to create a team capable of identifying attractive investments and executing deals in our target sectors. We believe our relationship with Carnegie Park Capital will further broaden our reach and network of deal contacts.

 

 
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OUR MANAGEMENT AND BOARD OF DIRECTORS

 

Our management team, Board of Directors, and Special Advisors will apply their operational and investment experience in the sectors we are focusing on to gain a competitive edge in identifying a target business with an operating model that can create strong value for our stockholders. Such companies may benefit from our extensive management and operational experience and relationships to further expand their operations and enhance growth prospects. We expect our target’s business reach to be global, reflecting the global impact of space technology and space-related applications.

 

Management Team

 

Our management team at Deep Space Acquisition Corp. I is led by our Chief Executive Officer, Mr. Jose Ocasio-Christian, our Chief Financial Officer, Ms. Linda Maxwell and our Chief Operating Officer and Chief Compliance Officer, Mr. Robert Tull. Our management team’s expertise spans the domains of space industry analysis and strategy (Mr. Jose Ocasio-Christian and Mr. Micah Walter-Range), mergers and acquisitions, including in sectors such as aerospace and defense (Ms. Linda Maxwell), and financial product development and management (Mr. Robert Tull and Mr. Andrew Chanin).

 

Jose Ocasio-Christian – Chief Executive Officer and Director

 

Mr. Ocasio-Christian is our Chief Executive Officer (“CEO”), the CEO of Community in Space LLC and the CEO of Caelus Partners, LLC. His expertise is in leadership, space, decision-making, and ensuring that the vision and mission of transactions are fulfilled. Caelus Partners is a strategic consulting firm focused on space and space-related activities associated with economic development, industrial base growth, and capital markets. In this role, he developed the business campaign plan called Community in Space — a project to address the commercialization of space globally and to develop the methodology through which a business community for space can grow with the global economy, thus bringing global economic and social stability to the space domain. The proprietary solutions resulting from this project are at the core of our investment thesis. Mr. Ocasio-Christian is also the architect for the International Space Hub, a model for how a community within a contiguous region can grow by acquiring foreign investment and intellectual property without compromising national interests. Mr. Ocasio-Christian understands the intricacies of investment in space companies, as well as the influence of location and jurisdiction on a company’s ability to create financial value, technological effects, and market growth.

 

Mr. Ocasio-Christian is also the Chairman of the Board for the nonprofit Caelus Foundation, whose mission is to increase the participation of individuals, space stakeholders, and non-space organizations in space and space-related activity. He participates as a key member of the Track II diplomatic discussions between the United States and China on space commercialization — reporting and communicating with key leaders in the U.S. government. This work relies heavily on his expertise in the complex relationship between the economic and geopolitical aspects of space.

 

Prior to Caelus Partners, Mr. Ocasio-Christian led multiple complex and diverse organizations to achieve success in volatile, uncertain, challenging, and ambiguous situations around the world in the classified and open-source environments within the U.S. military over the course of more than 22 years as a soldier and an officer. As an infantry officer that fought and served in forward deployed environments for over four years in the United States Army, Mr. Ocasio Christian’s unique experiences qualify him for the work he does today. Mr. Ocasio-Christian has provided vision and direction to strategic and operational teams to work across different cultures and to understand fragmented stakeholder motivations to arrive at optimal solutions, a critical skillset for executing a business combination. He has served in field units in combat as well as strategic headquarters around the world, including the Pentagon, where he has managed military budgets as large as $10.2 billion and strategies worth over $250 billion that impacted millions of individuals in the United States and its military, as well as the Middle East and Asia. He developed the intelligence, surveillance, and reconnaissance synchronization processes using space and ground technologies to recover a hostage during Operation Iraqi Freedom in 2004.

 

 
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Mr. Ocasio-Christian’s negotiation skills have been instrumental in creating positive outcomes numerous times throughout his career. He participated in the negotiation between Serbians and Albanians in local communities in Kosovo, and he was one of the architects of the economic program for Gnjilane. He had the unique opportunity to lead negotiations and establish organizational structures with the United Nations for elections in Kosovo and in Iraq. He was the architect of key campaigns in Afghanistan and participated directly in those campaigns in the provinces of Kabul, Kandahar, and Helmand. He was the supporting lead for the U.S. negotiation team for the Yongsan Relocation Plan / Land Partnership Plan in 2011–2012, which resulted in $2.5 billion in cost savings between the U.S. government and the Republic of Korea in the development of Camp Humphreys.

 

Mr. Ocasio-Christian strives to continue to excel in high-stakes, existential situations for companies and individuals in governed and ungoverned areas, where human survival and financial profits are required, as needed today in space. He holds a Master of Science in Joint Campaign Planning and Strategy from the National Defense University (Joint Advanced Warfighting School), where he is in the Hall of Fame as the Top Planner for the academic year 2006-2007 and holds a Bachelor of Science in Education and Bachelor of Arts in Mathematics from the University of Massachusetts.

  

Ms. Linda Maxwell – Chief Financial Officer

 

Ms. Maxwell is a consultant with MB Associates LLC, where she advises clients on improving operational performance and business development strategies, including organic growth initiatives to increase revenue and cost structure improvements to enhance margin profiles. She is currently on the Advisory Board for MIKEL Inc., an undersea defense and technology solutions provider for the U.S. Navy.

 

Previously, Ms. Maxwell was an investment banker focusing on mergers and acquisitions in the aerospace and defense industry, including space, with a combined twenty years of experience at Houlihan Lokey, Inc (“Houlihan Lokey”) and Jefferies Financial Group (“Jefferies”). During her tenure, she was instrumental in building both practices, utilizing her technical and financial background to expand the client base and execute transactions for both large private equity firms and private and public companies requiring specialized knowledge of space and the aerospace and defense industry.

 

Among the space-related transactions led by Ms. Maxwell were the 2020 sale of American Pacific Corporation, a company that manufactures chemicals for solid propellant rockets and booster motors that are used in space exploration and commercial satellite transportation, to private equity firm AE Industrial Partners, LP. In 2019, she co-led the sale of API Technologies, a manufacturer of electronic components for satellites, payloads, and launch vehicles. In 2018, Ms. Maxwell advised on the sale of TRYO Aerospace & Electronics group, a key component of which was RYMSA RF, a designer and manufacturer of antennas and passive components for satellites.

 

During her time at Houlihan Lokey and Jefferies, Ms. Maxwell represented many private and public companies in the sales process. Her clients included Boeing Company, Raytheon Technologies Corporation, Lockheed Martin Corporation, General Dynamics Corporation, Northrop Grumman Corporation, Eaton Corporation, and L-3Harris Technologies, Inc. (including their predecessor companies). The following is a representative sample of the completed transactions she advised on: The Boeing Company’s Sensors & Electronic Systems, Raytheon’s Optical Systems, Lockheed Martin Hanford Corporation, General Dynamics’ Propulsion Systems, Northrop Grumman’s Teldix, Eaton’s Navy Controls, Anaren, Inc., Globe Composite Solutions, LLC and Thinklogical LLC. She also represented many private equity firms and family offices such as H.I.G. Capital, J.F. Lehman & Company, Inverness Graham, Levine Leichtman Capital Partners, and Huntsman Family Investments in the sales of their portfolio companies.

  

 
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Prior to investment banking, Ms. Maxwell spent approximately 15 years with Hughes Aircraft Company, a predecessor company to Raytheon Technologies Corporation (“Raytheon”), where she held advancing levels of responsibility within the engineering, program management, and marketing organizations. Her last position at Raytheon was the Director of Business Development for all of Army Land Combat in the Washington DC office, interfacing with government officials (both uniformed and civilian) inside and outside the Pentagon. Before that position, she was based in El Segundo, California at the Electro-Optical Systems Division, as the System Engineering Manager for the Enhanced Thematic Mapper Plus (ETM+) sensor payload aboard the Landsat 7 spacecraft. Ms. Maxwell was on the engineering design team that developed one of the first electro-optical systems for rotary wing aircraft and the first electro-optical system with laser designation capability for the U.S. Army Special Forces. In addition, she was involved in the design and testing of the original HS-601 satellite bus which is now the foundation of Boeing Space Systems’ current product lines.

 

Ms. Maxwell graduated with both Bachelor of Science and Master of Science degrees in Mechanical Engineering from the Massachusetts Institute of Technology, and she holds an MBA from Harvard University.

 

Mr. Robert “Bob” Tull – Chief Operating Officer and Chief Compliance Officer

 

Mr. Tull is the Chief Operating Officer (“COO”) of our sponsor, and the President and COO of Procure Holdings, LLC and its subsidiaries. Procure Holdings offers the opportunity to design, develop, sponsor and launch ETFs as well as provide asset management, exchange traded product (ETP) consulting and IP through various subsidiaries. In April 2019, one of Procure Holdings’ subsidiaries launched the Procure Space ETF (NASDAQ: UFO), the world’s first pure-play space ETF.

 

Mr. Tull’s experience includes multiple major operational analyses for clients including central banks, asset managers, multiple national depositories in India, and several Pacific Rim governments seeking long-term investment capital from the U.S. markets. Mr. Tull’s employment in the capital markets includes serving as an outsourced COO for multiple domestic and international issuers. From 1999 to 2000, Mr. Tull managed a custody bank acquired by Deutsche Bank AG (“Deutsche Bank”) that held assets in excess of $1 trillion dollars, serving as COO for Bankers Trust Company’s global custody, benefit payments and master trust business units in Australia, Scotland, and New York. From 1996 to 2000, Mr. Tull managed the operations for Deutsche Bank’s first U.S. ETF business. Prior to Deutsche Bank, Mr. Tull worked at Morgan Stanley from 1982 to 1996 and oversaw the development of the company’s global custody, international stock loan, precious and base metals trading units, including unit risk management. He participated in the development of key technology software at Morgan Stanley, including TAPS I and TAPS II.

 

Mr. Tull’s diverse background in operations, trading, and capital markets provides experience with the compliance and controls that will assist the management team with meeting requirements before and throughout the de-SPAC process. His years of experience with external counsel, contract terms, and audit procedures will ensure the smooth operation of our sponsor and DPAC.

 

Mr. Tull attended Indiana University of Pennsylvania as a chemistry and physics major.

    

Mr. Andrew Chanin – Vice President and Director Nominee

 

Mr. Chanin is the Chief Executive Officer of Procure Holdings, LLC, which he founded with Mr. Robert Tull to develop a truly unique model and vision for the financial services industry. He has served as CEO and majority owner of numerous financial firms specializing in exchange traded products (ETPs), consulting, and intellectual property. As a result of his endeavors, Mr. Chanin is one of the youngest individuals to have rung the opening bell at both the NYSE and NASDAQ stock exchanges.

 

 
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Prior to establishing Procure Holdings, Mr. Chanin co-founded PureShares, LLC (“PureFunds”) in 2011. PureFunds achieved global prominence in the ETF industry for developing and sponsoring 10 different thematic ETFs in partnership with the International Securities Exchange (now NASDAQ). Under Mr. Chanin’s stewardship as CEO, PureFunds sponsored ETFs that presently have assets under management exceeding $4 billion in the United States. As a result, the company received numerous industry awards for its accomplishments.

 

In 2009, Mr. Chanin was recruited by Cohen Capital Group to build out the firm’s ETF trading capabilities. There, Mr. Chanin made markets in a variety of ETFs across various asset classes while helping to develop multiple global and international equity/ETF trading strategies for the company’s prop trading division.

 

Mr. Chanin began his ETP career in 2007 working for the specialist firm Kellogg Group on the floor of the American Stock Exchange. Mr. Chanin quickly worked his way up from clerk to Lead Market Maker for global and international equity ETFs helping the company transition from its core American Stock Exchange ETF specialist business to NYSE Arca ETF market making.

 

Mr. Chanin currently holds Series 7, 63, and 65 licenses. He earned his Bachelor of Science in Management from the A.B. Freeman School of Business at Tulane University.

 

Mr. Micah Walter-Range – Vice President

 

Mr. Walter-Range is the President of Caelus Partners, LLC. In addition to his role managing Caelus Partners’ operations globally, Mr. Walter-Range creates partnerships and frameworks that support the economic development needed on Earth to unlock value in space. These efforts span a wide variety of activities, such as supporting startup companies in search of financing, providing market entry strategies for leading aerospace firms and advising government policymakers in multiple nations on how to accelerate the growth of the commercial space economy. As the founder/co‑founder of two companies operating at the intersection of space and finance, Mr. Walter-Range understands the challenges that face technology‑oriented startups and is experienced in developing financial frameworks to enable long‑term sustainable development of the space industrial base.

 

In his previous role as Director of Research and Analysis at the nonprofit Space Foundation, Mr. Walter-Range led development of all research projects and publications. This included 12 editions of the Space Foundation’s annual flagship publication, The Space Report: The Authoritative Guide to Global Space Activity, which is used as a reference source by space agencies, policymakers, industry executives, and the media throughout the world. He has also authored papers on space-specific topics such as the impact of export controls on the U.S. space industrial base, and cross-sector subjects such as the role of space technology in aviation. He has been a member of the International Astronautical Federation’s Space Economy Committee since 2016.

 

Drawing on his knowledge of the space industry, Mr. Walter-Range partnered with S-Network Global Indexes to create the S-Network Space Index, which tracks a portfolio of publicly traded space companies from around the world. This index has been adopted as the underlying index for the Procure Space ETF, the world’s first pure-play space-focused exchange traded fund.

 

Mr. Walter-Range holds a Master of Arts in International Science and Technology Policy (with concentrations in space policy and security policy) from The George Washington University’s Elliott School of International Affairs and a Bachelor of Arts from Swarthmore College, where he double-majored in Astronomy and Political Science.

 

Board of Directors

 

Mr. Jose Ocasio-Christian, Chief Executive Officer and Director

 

Mr. Ocasio-Christian serves as a board member, and supplies space analysis and strategic capabilities to our Board of Directors. Following the consummation of this offering, an additional member of the management team will also participate on our Board of Directors, as Mr. Andrew Chanin is a director nominee, and will contribute his capital markets expertise to our Board of Directors. In addition to Mr. Ocasio-Christian and Mr. Chanin, our Board of Directors is comprised of individuals with a diverse set of space and non-space backgrounds. Their skill sets include leadership at a publicly traded space company that both executed acquisitions and was acquired (Mr. Timothy Hascall), leadership at a publicly traded multinational beverage company throughout multiple mergers (Mr. Timothy Wolf) and roles in government and the private sector associated with space-based imagery and intelligence (Mr. Keith Masback). The Board of Directors is expected to actively participate in our acquisition process, drawing on their history of capital market experience, M&A decision-making, and delivery of space-related services and technologies to a multitude of clients.

  

 
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Mr. Timothy M. Hascall, Director Nominee

 

Mr. Timothy Hascall will be our Chairman of the Board, providing guidance to the management team and leadership in decision making for execution of the business combination. In addition to his role as the Chairman, Mr. Hascall may assume a leadership role in the post business combination entity. In preparation for this role, Mr. Hascall will be deeply engaged in reviewing the due diligence process and corporate strategy development for the target company as we determine whether his services are required in an operational role or as a director of the new entity. His prior experience qualifies him to serve in most operational and corporate positions within a space company, and we believe many potential target companies would benefit from his extensive knowledge and operational expertise.

  

Until 2019, Mr. Hascall served as the Executive Vice President and Chief Operations Officer for Maxar Technologies, (NYSE:MAXR) (TSX:MAXR) (“Maxar”), a $2.4 billion company that serves government and commercial customers through satellite remote sensing, satellite and space robotic arm manufacturing, and geospatial analytics. Mr. Hascall led Maxar’s efforts to achieve integration and synergy targets across 20 locations worldwide, managing capital expenditure investment priorities, corporate procurement, facilities and real estate initiatives, and implementing Enterprise Shared Services across the company. He also led corporate Information Technology Services, Enterprise Risk Management, and Cyber Security processes.

 

Prior to the merger that created Maxar, Mr. Hascall was EVP, Chief Operations Officer and General Manager with P&L responsibility for the imagery business of DigitalGlobe (NYSE:DGI) and led the Commercial, International Defense, and U.S. Government business units. He was responsible for sales and customer experience, all aspects of satellite flight and ground operations, imagery product management, corporate information technology and cyber security. Mr. Hascall also led the company’s adoption of cloud storage and cloud computing technologies.

 

Prior to DigitalGlobe, Mr. Hascall held executive leadership positions with TriZetto Group, Inc. (NASDAQ:TZIX), an integrated health management enterprise software and services company, Equitant, a global finance and accounting business process outsourcing company, and was a partner at Accenture plc (NYSE:ACN), a global management and business consulting, technology and outsourcing firm.

 

Mr. Hascall served in the United States Marine Corps for 15 years as an intelligence and infantry officer, achieving the rank of Major. He holds a Bachelor of Science in Business Administration from the University of Nebraska.

 

Mr. Timothy V. Wolf, Director Nominee

 

Mr. Wolf is President of Wolf Interests, Inc., the investment entity that he established after he retired as Chief Integration Officer of MillerCoors Brewing Company in June 2010, following a $10 billion joint venture that he helped negotiate and effect (completed July 2008). Mr. Wolf was responsible for converging and integrating the two companies (SABMiller and Molson Coors) and ensuring delivery of $500 million in cost reduction synergies, which ultimately resulted in synergies of approximately $780 million.

 

 
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Prior to joining MillerCoors, Mr. Wolf was Chief Financial Officer of Coors Brewing Company (“Coors”) (1995 to 2005), and Global Chief Financial Officer of Molson Coors Brewing Company (2005 to 2008), whose merger he helped negotiate, close, and refinance. Mr. Wolf was instrumental in helping drive $180 million of synergies in less than three years, reducing the debt associated with refinancing and restructuring the Molson-Coors merger, well ahead of commitments to the Molson Coors board of directors. During the nearly 14 years that Mr. Wolf was CFO of these two companies, he built a broad variety of disciplines, capabilities, systems, talent, teams, credibility, and strong operating results that drove an increase of more than $10 billion in shareholder value, as of his move to MillerCoors in July 2008.

 

Focusing on cost reduction, cash generation, teaching, talent, and tools needed to achieve them, Mr. Wolf helped drive Coors Brewing Company’s $1.9 billion acquisition of Bass Brewery, subsequently achieving a four-year debt reduction plan in less than three years. The resulting financial strength of Coors paved the way for its $6 billion merger with Molson Breweries in 2005.

 

Before arriving at Coors, from 1989 to 1993, Mr. Wolf was Controller, Chief Accounting Officer for the Walt Disney Company, and Senior VP, Euro Disney, Marne-la-Vallée, France, where he ran all infrastructure and support groups for the $5 billion construction and opening of the park. Mr. Wolf also spent nearly 10 years, from 1980 to 1989, with PepsiCo in planning, finance, control, and strategy roles of increasing responsibility in its soft drinks and fast food businesses.

 

Mr. Wolf has been a member of the board of Xcel Energy, Inc. since 2007, serving on and Chairing its Audit Committee, and serving on its Operations, Nuclear, Environmental and Safety and Finance Committees. He serves on the boards of two Colorado-based startup businesses, Black Bear Energy Inc. (since 2017), and Cholaca (since 2018). He is also the Chair and primary angel investor in Colorado-based WAGGIT, a startup building and marketing a state-of-the-art canine wearable (since 2015).

 

Mr. Wolf holds an MBA in Finance and Marketing from the University of Chicago Graduate School of Business and a Bachelor of Arts in Economics from Harvard College.

 

Mr. Keith J. Masback, Director Nominee

 

Mr. Masback is the owner of Plum Run, LLC, which provides advisory and consulting services primarily to startups working in geospatial intelligence and related fields. He is also an early stage investor in companies engaged in remote sensing, geospatial information, data analytics, and data visualization. He is a member of the Federal Advisory Board of Orbital Insight and a member of multiple Advisory Boards, including: Hermeus Corporation, Anno.Ai, Slingshot Aerospace, Inc., Xplore, Ursa Space, Lunar Station Corporation, and Albedo Space Corp. He is also a strategic advisor to HySpecIQ, OmniSci, ICEYE, and Tomorrow.io. He has served as a member of the Intelligence Task Force of the Defense Science Board and the National Oceanic and Atmospheric Administration’s Advisory Committee on Commercial Remote Sensing. He is the immediate past Chair of the National Geospatial Advisory Committee (NGAC) and is currently a member of the NGAC’s Landsat Advisory Group, a Councilor and Fellow of the American Geographical Society and a member of the Board of Advisors of the Global Special Operations Forces Foundation.

 

Prior to founding Plum Run, LLC, Mr. Masback spent over a decade as the President and Chief Executive Officer of the United States Geospatial Intelligence Foundation (USGIF). Under his leadership, the organization more than doubled its organizational membership to over 250 member companies and organizations, quintupled its number of accredited academic programs, and increased total attendance at the annual GEOINT Symposium from 3,000 to 5,500.

 

Before joining USGIF, Mr. Masback spent over 20 years combined as an officer in the U.S. Army and as a government civilian employee, culminating as a member of the Defense Intelligence Senior Executive Service at the National Geospatial-Intelligence Agency (NGA). Mr. Masback held a variety of positions at NGA primarily focused on strategic planning and programming, including leading the community user requirements process to guide the development and acquisition of space-based imaging systems by the National Reconnaissance Office. Most recently, he served as the Director, Source Operations Group where he led a globally deployed 500-person organization responsible for 24/7/365 operation of the Nation’s space-based missile warning systems and imagery collection systems.

 

 
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Prior to his service at NGA, Mr. Masback was a senior executive civilian on the Army Staff, responsible for planning the future of Army Intelligence and serving as the Army’s first Director of Intelligence, Surveillance, and Reconnaissance Integration, which included responsibility for ensuring high-altitude airborne and space remote sensing assets were readily available to support the full range of Army operations.

 

Mr. Masback holds a Bachelor of Arts in Political Science from Gettysburg College. He completed the Postgraduate Intelligence Program at the National Intelligence University. He has also completed executive education at the Kellogg School, Northwestern University and the Elliott School of International Affairs, George Washington University. He is currently a Nonresident Advisor for the James Martin Center for Nonproliferation Studies at the Middlebury Institute of International Studies and a member of the Mapping Science Committee of the National Academies of Science, Engineering, and Medicine.

  

Special Advisors

 

Our Advisors provide deep operational expertise that further supports our ability to identify and drive value for our initial business combination through their experience in various industries, sourcing channels, and relationship networks. They are experienced in space investment (Mr. Dylan Taylor) and other financial operations, such as de-SPAC transactions (Mr. Edward Chen) and tax optimization (Mr. John Welde). They also bring a deep understanding of critical parts of the space industry, such as Earth Observation and space policy (Dr. Mariel Borowitz). Our Advisors are expected to actively support our acquisition process, helping the management team manifest a business combination that delivers on our mission.

 

Advisory Board members will not perform board or committee functions, nor will they have any voting or decision-making capacity on our behalf. They also will not be subject to the fiduciary requirements to which our board members are subject. We may adjust the composition of our team of Advisors as we source potential business combination targets or identify strategies for value creation in businesses that we may pursue or acquire.

 

Mr. Dylan Taylor

 

Mr. Taylor is Chairman & CEO of Voyager Space Holdings, a multinational space holding firm that acquires and integrates leading space exploration enterprises globally. Mr. Taylor has been cited by SpaceNews, the BBC, CNN, Pitchbook, CNBC and others as having played a seminal role in the growth of the private space industry. As an early stage investor in various emerging ventures, Mr. Taylor is widely considered one of the most active private space investors in the world. As a writer and columnist, he has written several widely read pieces on the future of the space industry for SpaceNews, ROOM, The Space Review, Apogeo Spatial and Space.com. As a speaker, Mr. Taylor has keynoted many of the major space conferences around the world and has appeared regularly on Bloomberg, Fox Business, and CNBC.

 

Mr. Taylor has been honored with numerous personal and professional accolades in recent years for his influence as a global leader and his commitment to creating a positive impact on the world. The World Economic Forum recognized Mr. Taylor as a Young Global Leader in 2011 and he was named a Henry Crown Fellow of the Aspen Institute in 2014. In 2020, Mr. Taylor was recognized by the Commercial Spaceflight Federation with their top honor for business and finance, following in the footsteps of 2019’s inaugural winner, the late Paul Allen.

 

Mr. Taylor earned an MBA in Finance and Strategy from the Booth School of Business at the University of Chicago and holds a Bachelor of Science in Engineering from the honors college at the University of Arizona, where he graduated Tau Beta Pi and in 2018 was named Alumnus of the Year.

   

 
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Mr. Edward “Ted” Chen

 

Mr. Chen is the Founder and Managing Partner of Carnegie Park Capital LLC, a firm whose team has invested in SPACs since 2008, including front-end SPAC IPOs, de‑SPACs, and in private investments in public equity PIPEs. The team has also led or arranged investments in numerous sponsor groups including four sponsors whose SPACs announced business combinations in 2021. Prior to this, Mr. Chen was a Portfolio Manager for eight years at Water Island Capital LLC, where he led investment portfolios of hard and soft catalyst event-driven equities across all sectors. The core investment strategy focused on generating alpha from securities undergoing corporate change or catalyst events, including spin-offs/split-offs, break-ups/asset sales, bankruptcies, activism, de-SPACs, and speculated M&A.

  

Mr. Chen was previously a Managing Director at Jefferies & Company, where he was responsible for conducting research due diligence of announced mergers and acquisitions, spin-offs, tenders and bankruptcy exits while managing a proprietary portfolio of event-driven investments. Prior to Jefferies, Mr. Chen was at Citigroup Global Markets where he was responsible for idea generation and due diligence on U.S. and Canadian merger arbitrage, hard-catalyst event opportunities (hostiles, tenders, etc.), SPACs, and relative value situations.

 

Mr. Chen earned an MBA in Finance from the MIT Sloan School of Management and a Bachelor of Science in Computer Science Engineering, with a Minor in Economics from the University of Pennsylvania.

  

Mr. John Welde

 

Mr. Welde has been a distinguished leader and top revenue generator on Wall Street for the past 30 years. As an institutional bond specialist, Mr. Welde was the number one revenue generator at PaineWebber, UBS Group AG, and Knight Capital Group, where he also served as Global Head of Structured Products. Mr. Welde founded Wall Street Sales Training, where he taught his sales process to revenue generators at Morgan Stanley, JP Morgan, and UBS Group AG. Mr. Welde is Principal of Tax Advantaged Platform, an advisory firm he founded to help business owners eliminate unnecessary taxes, mitigate risk, and protect assets.

 

Mr. Welde holds a Bachelor of Science in Business Administration from Villanova University.

 

Dr. Mariel Borowitz

 

Dr. Borowitz is an Associate Professor in the Sam Nunn School of International Affairs at the Georgia Institute of Technology. Her research focuses on international space policy issues. She has published extensively on international cooperation in satellite Earth observation and data sharing policies, and has examined satellite remote sensing trends across civil, military, and commercial sectors. Her book, “Open Space: The Global Effort for Open Access to Environmental Satellite Data,” was published by MIT Press in 2017. Dr. Borowitz has also conducted research on strategy and developments in space security and space situational awareness.

 

Dr. Borowitz was a policy analyst for the Science Mission Directorate at NASA Headquarters in Washington, DC, from 2016 to 2018. Prior to joining the faculty at Georgia Tech, Dr. Borowitz worked as a policy analyst at the Space Foundation and as a systems engineer at Raytheon.

 

Dr. Borowitz earned a Ph.D. in Public Policy at the University of Maryland and a Master of Arts in International Science and Technology Policy from the George Washington University. She has a Bachelor of Science in Aerospace Engineering from the Massachusetts Institute of Technology.

 

With respect to the foregoing experiences of our management team, past performance is not a guarantee (i) that we will be able to identify a suitable candidate for our initial business combination, or (ii) of success with respect to any business combination we may consummate. You should not rely on the historical record of our management team’s performance as indicative of our future performance.

 

 
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MARKET OPPORTUNITY

 

While we will consider target companies in any sector, we will focus our attention on space technology, space-related applications, and the integration of space into other market sectors (such as communication services, energy, industrials, information technology, and materials) that are poised to experience rapid growth and could benefit from the experiences of our management team, Board, and Advisors. We have a global perspective, providing an opportunity for any company in the United States or around the world to participate in U.S. financial markets and to connect with global consumers as a result of U.S. leadership in space investment.

 

Definitions

 

Space: The physical region beyond Earth’s atmosphere.

 

Space activity: We consider a company to conduct “space activity” if its business involves carrying out operations by means of hardware, software, or humans in space. For example, conducting an orbital launch, managing the data transmissions of a satellite, or conducting pharmaceutical research aboard a space station with the assistance of an astronaut all constitute types of space activity.

 

Space-related: This category of activity involves both companies that carry out space activities and those that are entirely dependent on space activities to function. An example of the latter type of company would be one that manufactures GPS navigation systems that are used entirely on Earth but depend on the GPS signal from satellites to determine a customer’s location and provide routing directions.

 

Terrestrial: A terrestrial activity, such as energy production or farming, is located within Earth’s atmosphere and does not rely on space activities to function. Although there are space-related businesses that seek to improve the output of terrestrial businesses, such as agricultural suppliers that use satellite imagery and precision navigation systems to support farmers, the core elements of a terrestrial business do not depend on space and could continue even if all space activity ceased.

 

Space economy: The aggregate value of commercial revenue and government spending attributable to space-related activities.

 

The Space-Related Market Today

 

As of 2019, the size of the global space economy was estimated at $424 billion, of which 79% was commercial revenue and 21% government spending according to The Space Report, published by the nonprofit Space Foundation. Multiple financial institutions have forecast continued growth for the global space economy, and much of the discussion has centered around how soon the “trillion dollar space economy” will emerge. For example, a 2020 research note from Morgan Stanley, Space: Investing in the Final Frontier, estimated a value of $1.1 trillion per year by 2040. The Morgan Stanley forecast emphasizes that most of the growth will come from satellite-delivered broadband internet. While we agree that this presents a major opportunity and our Advisors have expertise in spectrum management and policy, we have also identified other areas within the space industry that may become substantial engines for economic growth.

 

In a 2020 report, Preliminary Estimates of the U.S. Space Economy, 2012–2018, the U.S. Bureau of Economic Analysis assessed the gross output of the U.S. space economy in 2018 at $178 billion. The two largest sectors within the space economy were information and manufacturing, highlighting the advanced nature of the space industry’s software and hardware capabilities. Also in 2020, a survey conducted by the U.S. Department of Defense (“DoD”) to determine COVID-19 impacts to the space industrial base found more than 4,500 companies in the supply chain for space-related DoD contracts. A significant majority of these companies are privately held, and many could be considered as targets for a SPAC.

  

 
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Although the United States dominates the global space economy in terms of both government spending and private investment, there are thousands of space-related companies elsewhere in the world, generating hundreds of billions of dollars in revenue. While it is likely that our initial business combination will be with a U.S. company, we may also negotiate with viable international companies that wish to participate in the space industry and scale through the U.S. capital markets.

 

Space industry growth has been driven by new technologies, leading to the rapid evolution of space-related activities that include the operation of new satellites, development and successful operation of private launch vehicles, multiple space races between competing governments, increasing bandwidth and geographical coverage for communications systems, integration of location-based services in applications ranging from oil pipelines to consumer electronics (such as smartphones and watches), navigation support for self-driving vehicles, and many other activities in space and on Earth. It is unlikely that we will be driven by a technology that solely operates in space or is dependent on external variables that cannot reasonably be predicted (such as space mining, for which international policies and regulations may prove more challenging than the technical aspects of harvesting resources from other celestial bodies).

 

The value of space technology on Earth is clearly visible in one of the most integral aspects of everyday life: navigation and timing services. The U.S. military’s satellite-based Global Positioning System (GPS) has transformed the way people and businesses interact with each other and their surroundings in the years since it was enabled for civilian use in the 1980s. A 2019 report by nonprofit research institute RTI International estimated the cumulative private sector benefits of GPS at $1.4 trillion in the United States alone from 1984 through 2017. In the early years, only a few companies had the ability to take advantage of the GPS signal, but today the hardware is ubiquitous in the smartphones we carry and many other systems we interact with. This multi-sector value creation far surpasses the revenue earned by contractors building the GPS satellites for the government, reinforcing our intention to identify potential revenue streams beyond the limits of the traditional space sector.

  

The process of building space-related businesses that use a wide variety of technologies continues to this day, both in the United States and abroad. For example, the European Space Agency operates multiple Business Incubation Centres that have fostered more than 700 startups since 2003 and currently accept more than 180 startups per year. The recognized value of space-related applications has led to a vibrant early stage ecosystem of enterprising individuals seeking to build space-related companies. However, many of these companies lack the financial resources or the business expertise to expand their business from space-related activities into terrestrial markets that would benefit from their technology.

 

Today, the financial sector’s involvement with the emerging commercial space industry is nascent. Capital markets have yet to develop a suitable framework for assessing the financial impact of space-related events, whether they occur on Earth or in space. The entrance of Elon Musk, Richard Branson, and Jeff Bezos into the space launch vehicle market has brought attention to the fact that the space industry has tremendous economic potential in addition to supporting science and exploration. These billionaires are looking ahead to the industries that could be built on the transportation capacity of their companies, whether for providing ubiquitous satellite-based broadband internet or creating orbital manufacturing facilities. Further, the U.S. government’s reestablishment of the U.S. Space Command and the creation of the U.S. Space Force, as well as subsequent efforts by other countries to create similar organizations have created a demand for new space-related technology that supports national security and economic goals. This provides additional incentive for the financial sector to supply the capital that enables companies to grow and address emerging government demand.

     

 
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Our Approach to the Market

 

We believe that our team can provide significant benefits to our target business outside of capital. Our analysis of the intersections between space and other market sectors enables us to identify space-related companies that can thrive by adopting a multi-sector approach. The effective use of space-related technology can provide substantial advantages when applied to sectors such as communication services, energy, industrials, information technology, and materials. We believe that investing in such businesses represents an attractive and largely untapped economic opportunity for which our business combination can serve as the catalyst. This approach is designed to resonate with both institutional investors and with potential targets. From an investor standpoint, it offers the potential for the target company to participate and succeed in multiple high-growth market sectors. For the target company, it is an opportunity to gain support from our management team to build a deliberate strategy for growth and acquisitions to meet short-term and long-term objectives.

 

In addition to the avenues for growth in the private sector, we see multiple options for close partnership with government customers. Aside from space agencies with a long history of working with space companies, many of the government acquisition, contracting, and procurement institutions globally have begun incorporating space-related capabilities into their missions. As such, the market for sales to government entities are expected to be broadened, potentially allowing private companies to negotiate new approaches to government contracts that enable them to generate revenue in parallel with a commercial/consumer market approach. Deep Space Acquisition Corp. I is intended to provide a target company with both the talent and capital to thrive in the current environment of rapid change. These market dynamics create an ideal environment for us and add value to the differentiated advantages we bring to a potential target.

 

BUSINESS STRATEGY

 

Our Mission

 

Our management team believes there is an opportunity for investors to participate in the further expansion of the space market to encompass new technical and financial endeavors. A well-engineered initial business combination can result in a company that is able to navigate market developments both through private and public innovation to deliver new capabilities in space and create value in unexploited terrestrial markets. Through a business combination with a blank check company that delivers both a cash infusion and strategic guidance from the management team and the Board, our target may gain the necessary short-term and long-term financial sustainability strategy to compete effectively at a global level to meet its needs as a public company.

 

Over the course of their careers, the members of our management team have developed a broad network of contacts and corporate relationships around the world, reaching every part of the space-related industries relevant to the market opportunity we have identified. This network may provide our management team with a robust and consistent flow of acquisition opportunities which are proprietary or where a limited group of investors were invited to participate in the sale process. In addition, we anticipate that potential acquisition targets may be brought to our attention from various unaffiliated sources, including investment market participants, private equity funds, and large business enterprises seeking to divest assets.

 

Our competitive strengths include the following:

 

Strong Motivation to Fulfill our Purpose and our Vision by Prudent and Well Postured Decision-making. The team we have assembled to execute on an initial business combination, including our management, Advisors, underwriters, legal advisors, auditors, and accountants, have all expressed dedication to our vision and therefore understand the wider significance and impact of successfully fulfilling it. We believe that our unique perspective as a vision-driven company will enhance our attractiveness to potential target companies. We believe that target companies will see the value in working with us as they seek to become a public company. To these companies, we are a like-minded partner with a broad support network that enhances our marketability to them.

 

 
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Deep Experience of Advisors. We believe that our ability to leverage the experience of the Advisors, who comprise individuals with a blend of financial, policy, regulatory, and technical expertise in both the space industry and other market sectors, will provide us a distinct advantage in being able to source, evaluate, and consummate an attractive business combination.

 

Unique Strength of Relationships with Company Founders. Members of our management team, Board and Advisors have been co-founders, early stage investors, and board members of companies we may target.

 

Proprietary Sourcing Channels and Leading Industry Relationships. We believe that the connections and capabilities of our management team, in combination with those of our Advisors, provide us with a differentiated pipeline of acquisition opportunities that would be difficult for other participants in the market to replicate. We expect these sourcing capabilities will be further bolstered by the reputation and deep industry relationships of our management team and our Advisors.

 

Investing and Transaction Experience. We believe that our management’s track record of identifying and sourcing transactions — coupled with our Advisors’ deep expertise across corporate strategy, investing, and transaction execution — positions us well to appropriately evaluate potential business combinations and select one that will be well received by the public markets.

 

Execution and Structuring Capability. We believe that the combined expertise and reputation of our management and our Advisors will allow us to source and complete transactions that create an attractive investment thesis. These types of transactions are typically complex and require creativity, industry and government knowledge and expertise, rigorous due diligence, and extensive negotiations and documentation. We believe that by focusing our investment activities on these types of transactions, we are able to generate investment opportunities that have attractive risk/reward profiles based on their valuations and structural characteristics.

 

ACQUISITION CRITERIA

 

Our business strategy is to leverage our knowledge of the space industry and space-related market sectors to identify, evaluate and complete an initial combination with a business that we believe will be an attractive public company. We do not intend to limit our search to one segment of the space industry but will instead target a wide variety of companies, including businesses in the communication services, energy, industrials, information technology and materials sectors. Consistent with our business strategy, we have identified the following general criteria and guidelines that we believe are important in evaluating prospective target businesses. We will use these criteria and guidelines in assessing potential acquisition opportunities, but we may decide to enter into our initial business combination with a target that does not meet these criteria and guidelines. We intend to seek target companies that we believe:

 

 

have a strong, experienced management team, or have a platform to assemble an effective management team with a track record of driving growth and profitability. Where necessary, we may also look to complement and enhance the capabilities of the target business’s management team by recruiting additional talent through our network of contacts;

 

 

 

 

are scaling within their countries of origin but have opportunities for international operations and international trade;

 

 

 

 

have an interest in building or maintaining a company culture that is inclusive, diverse, and supportive of different approaches to technology development, fiscal growth, and human resources;

 

 

 

 

have the potential to grow through the acquisition of additional assets and intellectual property;

 

 

 

 

have a defensible market position, with demonstrated advantages when compared to their competitors and create barriers to entry against new competitors;

 

 
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are at an inflection point, such as requiring additional management expertise to drive improved financial performance and will benefit from innovative operational techniques;

 

 

 

 

exhibit unrecognized value or other favorable characteristics positioned to generate desirable return on capital, and need the capital injection to further accelerate the growth;

 

 

 

 

would benefit uniquely from leveraging the collective capabilities of our management, Board and Advisors to tangibly improve the operations and market position of the target;

 

 

 

 

can benefit from being a publicly traded company, are prepared to be a publicly traded company, and can utilize access to broader capital markets; and

 

 

 

 

will offer attractive risk-adjusted returns for our stockholders, potential upside from growth in the target markets, and an improved capital structure that will be weighed against any identified downside risks.

 

These criteria are not intended to be exhaustive. Any evaluation relating to the merits of a particular initial business combination may be based, to the extent relevant, on these general guidelines as well as other considerations, factors and criteria that our management may deem relevant. In the event that we decide to enter into our initial business combination with a target business that does not meet the above criteria and guidelines, we will disclose that the target business does not meet the above criteria in our stockholder communications related to our initial business combination, which, as discussed in this prospectus, would be in the form of proxy solicitation materials or tender offer documents that we would file with the SEC.

 

ACQUISITION PROCESS

 

In evaluating a prospective target business, we expect to conduct a due diligence review that will encompass, as applicable and among other things, meetings with incumbent management and employees, document reviews, code reviews, security audits, interviews of customers and suppliers, inspection of facilities and a review of financial and other information about the target and its industry.

 

Each of our directors and officers will directly or indirectly own founder shares and/or private placement warrants following this offering and, accordingly, may have a conflict of interest in determining whether a particular target business is an appropriate business with which to effectuate our initial business combination. Further, such officers and directors may have a conflict of interest with respect to evaluating a particular business combination if the retention or resignation of any such officers and directors was included by a target business as a condition to any agreement with respect to our initial business combination.

 

Certain of our officers and directors presently have, and any of them in the future may have additional, fiduciary or contractual obligations to another entity pursuant to which such officer or director is or will be required to present a business combination opportunity to such entity subject to his or her fiduciary duties. Subject to his or her fiduciary duties under Delaware law, none of the members of our management team who are also employed by our sponsor or its affiliates have any obligation to present us with any opportunity for a potential business combination of which they become aware. If any of our officers or directors becomes aware of a business combination opportunity that falls within the line of business of any entity to which he or she has pre-existing fiduciary or contractual obligations, he or she may be required to present such business combination opportunity to such entity prior to presenting such business combination opportunity to us, subject to his or her fiduciary duties under Delaware law and any other applicable fiduciary duties. Our amended and restated certificate of incorporation will provide that we renounce our interest in any corporate opportunity offered to any director or officer unless such opportunity is expressly offered to such person solely in his or her capacity as a director or officer of the company and it is an opportunity that we are able to compete on a reasonable basis. For more information, see the section entitled “Management — Conflicts of Interest.”

 

We are not prohibited from pursuing an initial business combination with a company that is affiliated with our sponsor, directors or officers, or making the acquisition through a joint venture or other form of shared ownership with our sponsor, directors or officers. In the event we seek to complete an initial business combination with a target that is affiliated with our sponsor, directors or officers, we, or a committee of independent and disinterested directors, would obtain an opinion from an independent investment banking firm that is a member of FINRA or from an independent accounting firm that such an initial business combination is fair to our company from a financial point of view. We are not required to obtain such an opinion in any other context.

  

 
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INITIAL BUSINESS COMBINATION

 

Nasdaq rules require that we must complete one or more business combinations having an aggregate fair market value of at least 80% of the value of the assets held in the trust account (excluding the deferred underwriting commissions and taxes payable on the interest earned on the trust account). We refer to this as the 80% of net assets test. If our board of directors is not able to independently determine the fair market value of the target business or businesses, we will obtain an opinion from an independent investment banking firm that is a member of FINRA or from an independent accounting firm, with respect to the satisfaction of such criteria. While we consider it unlikely that our board will not be able to make an independent determination of the fair market value of a target business or businesses, it may be unable to do so if the board is less familiar or experienced with the target company’s business, there is a significant amount of uncertainty as to the value of the company’s assets or prospects, including if such company is at an early stage of development, operations or growth, or if the anticipated transaction involves a complex financial analysis or other specialized skills and the board determines that outside expertise would be helpful or necessary in conducting such analysis. Since any opinion, if obtained, would merely state that the fair market value of the target business meets the 80% of assets threshold, unless such opinion includes material information regarding the valuation of a target business or the consideration to be provided, it is not anticipated that copies of such opinion would be distributed to our stockholders. However, if required under applicable law, any proxy statement that we deliver to stockholders and file with the SEC in connection with a proposed transaction will include such opinion. We do not currently intend to purchase multiple businesses in unrelated industries in conjunction with our initial business combination, although there is no assurance that will be the case.

 

We anticipate structuring our initial business combination so that the post-transaction company in which our public stockholders own shares will own or acquire 100% of the equity interests or assets of the target business or businesses. We may, however, structure our initial business combination such that the post-transaction company owns or acquires less than 100% of such interests or assets of the target business in order to meet certain objectives of the target management team or stockholders or for other reasons, but we will only complete such business combination if the post-transaction company owns or acquires 50% or more of the outstanding voting securities of the target or otherwise acquires a controlling interest in the target sufficient for it not to be required to register as an investment company under the Investment Company Act of 1940, as amended, or the Investment Company Act. Even if the post-transaction company owns or acquires 50% or more of the voting securities of the target, our stockholders prior to the business combination may collectively own a minority interest in the post-transaction company, depending on valuations ascribed to the target and us in the business combination transaction. For example, we could pursue a transaction in which we issue a substantial number of new shares in exchange for all of the outstanding capital stock of a target. In this case, we would acquire a 100% controlling interest in the target. However, as a result of the issuance of a substantial number of new shares, our stockholders immediately prior to our initial business combination could own less than a majority of our outstanding shares subsequent to our initial business combination. If less than 100% of the equity interests or assets of a target business or businesses are owned or acquired by the post-transaction company, the portion of such business or businesses that is owned or acquired is what will be taken into account for purposes of the 80% of net assets test described above. If the business combination involves more than one target business, the 80% of net assets test will be based on the aggregate value of all of the target businesses.

 

We may need to obtain additional financing to complete our initial business combination, either because the transaction requires more cash than is available from the proceeds held in our trust account or because we become obligated to redeem a significant number of our public shares upon completion of the business combination, in which case we may issue additional securities or incur debt in connection with such business combination. There are no prohibitions on our ability to issue securities or incur debt in connection with our initial business combination. We are not currently a party to any arrangement or understanding with any third party with respect to raising any additional funds through the sale of securities, the incurrence of debt or otherwise.

 

Prior to the date of this prospectus, we will file a Registration Statement on Form 8-A with the SEC to voluntarily register our securities under Section 12 of the Securities Exchange Act of 1934, as amended, or the Exchange Act. As a result, we will be subject to the rules and regulations promulgated under the Exchange Act. We have no current intention of filing a Form 15 to suspend our reporting or other obligations under the Exchange Act prior or subsequent to the consummation of our initial business combination.

 

Ability to Extend Time to Complete Business Combination

 

If we anticipate that we may not be able to consummate our initial business combination within 18 months from the consummation of this offering, we may, but are not obligated to, if requested by our sponsor or its affiliates, extend the period of time to consummate a business combination up to six times by an additional one month each time for a total of up to 24 months (the “Paid Extension Period”). In addition, we will be entitled to an automatic three-month extension (the “Automatic Extension Period”) if we have entered into a definitive agreement for an initial business combination during the 18-month period or Paid Extension Period, to complete a business combination. In the case of the Paid Extension Period or Automatic Extension Period, public shareholders will not be offered the opportunity to vote on or redeem their shares if we choose to make any such paid extension or in connection with an automatic extension. Pursuant to the terms of our amended and restated certificate of incorporation and the trust agreement entered into between us and Continental Stock Transfer & Trust Company on the date of this prospectus, in order to avail ourselves of the Paid Extension Period to consummate our initial business combination, our sponsor or its affiliates or designees, upon five days advance notice prior to the applicable deadline, must deposit into the trust account for each month extension $693,000, or $796,950 if the underwriters’ over-allotment option is exercised in full ($0.033 per unit in either case), on or prior to the date of the applicable deadline. Any such payments would be made in the form of a loan. The sponsor or its affiliates or designees will receive a non-interest bearing, unsecured promissory note equal to the amount of any such deposit that will not be repaid in the event that we are unable to close a business combination unless there are funds available outside the trust account to do so. Such notes would either be paid upon consummation of our initial business combination, or, at the lender’s discretion, converted upon consummation of our business combination into additional warrants at a price of $1.00 per warrant. In the event that we receive notice from our sponsor or its affiliates five days prior to the applicable deadline of its wish for us to effect an extension, we intend to issue a press release announcing such intention at least three days prior to the applicable deadline. In addition, we intend to issue a press release the day after the applicable deadline announcing whether or not the funds had been timely deposited. Our sponsor and its affiliates or designees are not obligated to fund the trust account to extend the time for us to complete our initial business combination. For the avoidance of doubt, no amounts need to be deposited into the trust account for the Automatic Extension Period. Our public stockholders will not be entitled to vote or redeem their shares in connection with any such paid extension or an automatic extension. As a result, we may conduct such an extension even though a majority of our public stockholders do not support such an extension and will not be able to redeem their shares in connection therewith.

 

 
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CORPORATE INFORMATION

 

Our executive offices are located at 16 Firebush Road, Levittown, Pennsylvania 19056, and our telephone number is +1 (215) 943-1777. We intend to maintain a corporate website at www.dsoneacq.com and open an additional office following the consummation of this offering.

 

We are an “emerging growth company,” as defined in Section 2(a) of the Securities Act of 1933, as amended (the “Securities Act”), as modified by the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”). As such, we are eligible to take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not “emerging growth companies” including, but not limited to, not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act of 2002, or the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements, and exemptions from the requirements of holding a non-binding advisory vote on executive compensation and stockholder approval of any golden parachute payments not previously approved. If some investors find our securities less attractive as a result, there may be a less active trading market for our securities and the prices of our securities may be more volatile.

 

In addition, Section 107 of the JOBS Act also provides that an “emerging growth company” can take advantage of the extended transition period provided in Section 7(a)(2)(B) of the Securities Act for complying with new or revised accounting standards. In other words, an “emerging growth company” can delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. We intend to take advantage of the benefits of this extended transition period.

 

We will remain an emerging growth company until the earlier of (1) the last day of the fiscal year (a) following the fifth anniversary of the completion of this offering, (b) in which we have total annual gross revenue of at least $1.07 billion, or (c) in which we are deemed to be a large accelerated filer, which means the market value of our Class A common stock that is held by non-affiliates exceeds $700 million as of the last business day of the most recently completed second fiscal quarter, and (2) the date on which we have issued more than $1.0 billion in non-convertible debt securities during the prior three-year period. References herein to “emerging growth company” will have the meaning associated with it in the JOBS Act.

 

Additionally, we are a “smaller reporting company” as defined in Item 10(f)(1) of Regulation S-K. Smaller reporting companies may take advantage of certain reduced disclosure obligations, including, among other things, providing only two years of audited financial statements. We will remain a smaller reporting company until the last day of the fiscal year in which (1) the market value of our common stock held by non-affiliates equals or exceeds $250 million as of the prior June 30th, or (2) our annual revenues equaled or exceeded $100 million during such completed fiscal year and the market value of our common stock held by non-affiliates equals to or exceeds $700 million as of the last business day of the most recently completed second fiscal quarter.

 

 
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THE OFFERING

 

In making your decision on whether to invest in our securities, you should take into account not only the backgrounds of the members of our management team, but also the special risks we face as a blank check company and the fact that this offering is not being conducted in compliance with Rule 419 promulgated under the Securities Act. You will not be entitled to protections normally afforded to investors in Rule 419 blank check offerings. You should carefully consider these and the other risks set forth in the section below entitled “Risk Factors” in this prospectus. 

Securities offered

21,000,000 units (or 24,150,000 units if the underwriters’ over-allotment option is exercised in full), at $10.00 per unit, each unit consisting of:

 

 

 

·

one share of Class A common stock; and

 

 

 

 

·

one half of one redeemable warrant; and

 

 

 

 

·

one right to receive one sixteenth (1/16) of one share common stock.

 

 

 

Nasdaq symbols

Units: “DPACU”

 

 

 

 

Class A common stock: “DPAC”

 

 

 

 

Warrants: “DPACW”

 

 

 

 

Rights: “DPACR”

 

 

 

Trading commencement and separation of shares of Class A common stock and warrants

 

The units are expected to begin trading on or promptly after the date of this prospectus. The shares of Class A common stock, rights and warrants comprising the units will begin separate trading on the 52nd day following the date of this prospectus unless the representative informs us of its decision to allow earlier separate trading, subject to our having filed the Current Report on Form 8-K described below and having issued a press release announcing when such separate trading will begin. Once the shares of Class A common stock, rights and warrants commence separate trading, holders will have the option to continue to hold units or separate their units into the component securities. Holders will need to have their brokers contact our transfer agent in order to separate the units into shares of Class A common stock, rights and warrants. No fractional warrants will be issued upon separation of the units and only whole warrants will trade. Accordingly, unless you purchase at least two units, you will not be able to receive or trade a whole warrant.

  

 
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Separate trading of the Class A common stock and warrants is prohibited until we have filed a Current Report on Form 8-K

 

In no event will the Class A common stock, rights and warrants be traded separately until we have filed with the SEC a Current Report on Form 8-K which includes an audited balance sheet reflecting our receipt of the gross proceeds at the closing of this offering. We will file the Current Report on Form 8-K promptly after the closing of this offering, which closing is anticipated to take place three business days from the date of this prospectus. If the underwriters’ over-allotment option is exercised following the initial filing of such Current Report on Form 8-K, a second or amended Current Report on Form 8-K will be filed to provide updated financial information to reflect the exercise of the underwriters’ over-allotment option.

 

 

Units:

 

 

 

Number outstanding before this offering

0

 

 

Number outstanding after this offering

21,000,000(1)

 

 

Common stock:

 

 

 

Number outstanding before this offering

6,037,500 (2)(3)

 

 

Number outstanding after this offering

26,250,000(1)(3)(4)

 

 

Rights:

 

 

 

Number outstanding before this offering

0

 

 

Number outstanding after this offering

21,000,000 (1)

 

 

Warrants:

 

 

 

Number of private placement warrants to be sold in a private placement simultaneously with this offering

6,485,500 (1)

 

 

Number of warrants to be outstanding after this offering and the private placement

16,985,500 (1)

 

 

Exercisability

Each whole warrant offered in this offering is exercisable to purchase one share of Class A common stock, subject to adjustments as provided herein. Only whole warrants are exercisable. No fractional warrants will be issued upon separation of the units and only whole warrants will trade.

 

 

 

We structured each unit to contain one half of one warrant, with each whole warrant exercisable for one share of Class A common stock in order to reduce the dilutive effect of the warrants upon completion of a business combination as compared to units that each contain a whole warrant to purchase one whole share, thus making us, we believe, a more attractive business combination partner for target businesses.

    

 
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Exercise price

 

$11.50 per share, subject to adjustments as described herein. In addition, if (x) we issue additional shares of Class A common stock or equity-linked securities for capital raising purposes in connection with the closing of our initial business combination at an issue price or effective issue price of less than $9.20 per share of Class A common stock (with such issue price or effective issue price to be determined in good faith by our board of directors and, in the case of any such issuance to our initial stockholders or their affiliates, without taking into account any founder shares held by our initial stockholders or such affiliates, as applicable, prior to such issuance) (the “Newly Issued Price”), (y) the aggregate gross proceeds from such issuances represent more than 60% of the total equity proceeds, and interest thereon, available for the funding of our initial business combination on the date of the consummation of our initial business combination (net of redemptions), and (z) the volume weighted average trading price of our Class A common stock during the 20 trading day period starting on the trading day after the day on which we consummate our initial business combination (such price, the “Market Value”) is below $9.20 per share, the exercise price of the warrants will be adjusted (to the nearest cent) to be equal to 115% of the higher of the Market Value and the Newly Issued Price, the $18.00 per share redemption trigger price described adjacent to “Redemption of warrants when the price per share of Class A common stock equals or exceeds $18.00” will be adjusted (to the nearest cent) to be equal to 180% of the higher of the Market Value and the Newly Issued Price.

 

(1)

Assumes no exercise of the underwriters’ over-allotment option and the forfeiture of 787,500 founder shares by our initial stockholders for no consideration.

(2)

Includes up to 787,500 founder shares that will be forfeited by our initial stockholders depending on the extent to which the underwriters’ over-allotment option is exercised.

(3)

Founder shares are currently classified as shares of Class B common stock, which shares will automatically convert into shares of Class A common stock concurrently with or immediately following the consummation of our initial business combination on a one-for-one basis, subject to adjustment as described below adjacent to the caption “Founder shares conversion and anti-dilution rights.”

(4)

Includes 21,000,000 public shares and 5,250,000 founder shares. 

   

 
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Exercise period

 

The warrants will become exercisable 30 days after the completion of our initial business combination; provided that we have an effective registration statement under the Securities Act covering the shares of Class A common stock issuable upon exercise of the warrants and a current prospectus relating to them is available and such shares are registered, qualified or exempt from registration under the securities, or blue sky, laws of the state of residence of the holder (or we permit holders to exercise their warrants on a cashless basis under the circumstances specified in the warrant agreement). If and when the warrants become redeemable by us, we may exercise our redemption right even if we are unable to register or qualify the underlying securities for sale under all applicable state securities laws.

 

 

 

We are registering the shares of Class A common stock issuable upon exercise of the warrants in the registration statement of which this prospectus forms a part because the warrants will become exercisable 30 days after the completion of our initial business combination, which may be within one year of this offering. However, because the warrants will be exercisable until their expiration date of up to five years after the completion of our initial business combination, in order to comply with the requirements of Section 10(a)(3) of the Securities Act following the consummation of our initial business combination, we have agreed that as soon as practicable, but in no event later than 15 business days after the closing of our initial business combination, we will use our best efforts to file with the SEC a post-effective amendment to the registration statement of which this prospectus forms a part or a new registration statement covering the shares of Class A common stock issuable upon exercise of the warrants and to maintain a current prospectus relating to those shares of Class A common stock until the warrants expire or are redeemed, as specified in the warrant agreement. If a registration statement covering the shares of the Class A common stock issuable upon exercise of the warrants is not effective by the 60th business day after the closing of our initial business combination, warrant holders may, until such time as there is an effective registration statement and during any period when we will have failed to maintain an effective registration statement, exercise warrants on a “cashless basis” in accordance with Section 3(a)(9) of the Securities Act or another exemption. Notwithstanding the above, if our shares of Class A common stock are at the time of any exercise of a warrant not listed on a national securities exchange such that they satisfy the definition of a “covered security” under Section 18(b)(1) of the Securities Act, we may, at our option, require holders of public warrants who exercise their warrants to do so on a “cashless basis” in accordance with Section 3(a)(9) of the Securities Act and, in the event we so elect, we will not be required to file or maintain in effect a registration statement, and in the event we do not so elect, we will use our best efforts to register or qualify the shares under applicable blue sky laws to the extent an exemption is not available.

 

 

 

 

The warrants will expire at 5:00 p.m., New York City time, five years after the completion of our initial business combination or earlier upon redemption or liquidation. On the exercise of any warrant, the warrant exercise price will be paid directly to us and not placed in the trust account.

 

Redemption of warrants when the price per share of Class A common stock equals or exceeds $18.00

Once the warrants become exercisable, we may redeem the outstanding warrants for cash:

 

·

in whole and not in part;

 

 

 

 

·

at a price of $0.01 per warrant;

 

 

 

 

·

upon a minimum of 30 days’ prior written notice of redemption, which we refer to as the 30-day redemption period; and

 

 

 

 

·

if, and only if, the closing price of our Class A common stock equals or exceeds $18.00 per share (subject to adjustments as described under the heading “Description of Securities — Warrants — Public Stockholders’ Warrants — Anti-Dilution Adjustments”) for any 20 trading days within a 30-trading day period ending on the third trading day prior to the date on which we send the notice of redemption to the warrant holders.

 

 
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We will not redeem the warrants as described above unless an effective registration statement under the Securities Act covering the shares of Class A common stock issuable upon exercise of the warrants is effective and a current prospectus relating to those shares of Class A common stock is available throughout the 30-day redemption period. If and when the warrants become redeemable by us, we may exercise our redemption right even if we are unable to register or qualify the underlying securities for sale under all applicable state securities laws.

 

If we call the warrants for redemption as described above, our management will have the option to require all holders that wish to exercise warrants to do so on a “cashless basis.” In determining whether to require all holders to exercise their warrants on a “cashless basis,” our management will consider, among other factors, our cash position, the number of warrants that are outstanding and the dilutive effect on our stockholders of issuing the maximum number of shares of Class A common stock issuable upon the exercise of our warrants. In such event, each holder would pay the exercise price by surrendering the warrants for that number of shares of Class A common stock equal to the quotient obtained by dividing (x) the product of the number of shares of Class A common stock underlying the warrants, multiplied by the difference between the exercise price of the warrants and the “fair market value” (defined below) by (y) the fair market value. The “fair market value” shall mean the average last reported sale price of the Class A common stock for the 10 trading days ending on the third trading day prior to the date on which the notice of redemption is sent to the holders of warrants.

 

 

Rights

Each holder of a right will receive one-sixteenth (1/16) of a share of Class A common stock upon consummation of our initial business combination. In the event we will not be the survivor upon completion of our initial business combination, each holder of a right will be required to affirmatively convert his, her or its rights in order to receive the one-sixteenth (1/16) share underlying each right (without paying any additional consideration) upon consummation of the business combination. If we are unable to complete an initial business combination within the required time period and we liquidate the funds held in the trust account, holders of rights will not receive any of such funds for their rights, and the rights will expire worthless. No fractional shares will be issued upon conversion of any rights. As a result, you must have 16 rights in order to receive a share of Class A common stock at the closing of our initial business combination.

 

 
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Founder shares

 

On June 1, 2021 our sponsor subscribed for an aggregate 7,762,500 founder shares for a total subscription price of $25,000, or approximately $0.003 per share. Such shares were fully paid, and the cash amount of the subscription price therefor was received on June 8, 2021. Subsequently, our sponsor forfeited 1,725,000 founder shares in December 2021 for no consideration. As a result, our sponsor currently holds 6,037,500 founder shares. Prior to the initial investment in the Company of $25,000 by the sponsor, the Company had no assets, tangible or intangible. The per share price of the founder shares was determined by dividing the amount of cash contributed to the Company by the number of founder shares issued. The number of founder shares outstanding was determined based on the expectation that the total size of this offering would be a maximum of 24,150,000 units if the underwriters’ over-allotment option is exercised in full, and therefore that such founder shares would represent 20% of the outstanding shares after this offering. Up to 787,500 of the founder shares will be forfeited depending on the extent to which the underwriters’ over-allotment option is not exercised.

 

 

 

 

The founder shares are identical to the shares of Class A common stock included in the units being sold in this offering, except that:

 

 

 

 

the founder shares are subject to certain transfer restrictions, as described in more detail below;

 

 

 

 

the founder shares are entitled to registration rights;

 

 

 

 

our initial stockholders, sponsor, officers and directors have entered into a letter agreement with us, pursuant to which they have agreed to (i) waive their redemption rights with respect to any founder shares and public shares they hold in connection with the completion of our initial business combination, (ii) waive their redemption rights with respect to any founder shares and public shares they hold in connection with a stockholder vote to approve an amendment to our amended and restated certificate of incorporation to modify the substance or timing of our obligation to provide for the redemption of our public shares in connection with an initial business combination or to redeem 100% of our public shares if we have not consummated an initial business combination within the completion window or with respect to any other material provisions relating to stockholders’ rights or pre-initial business combination activity and (iii) waive their rights to liquidating distributions from the trust account with respect to any founder shares they hold if we fail to complete our initial business combination within the completion window (although they will be entitled to liquidating distributions from the trust account with respect to any public shares they hold if we fail to complete our initial business combination within the prescribed time frame). If we submit our initial business combination to our public stockholders for a vote, our initial stockholders have agreed to vote their founder shares and any public shares purchased during or after this offering in favor of our initial business combination. As a result, in addition to our initial stockholders’ founder shares, we would need 7,875,001, or 37.5%, of the 21,000,000 public shares sold in this offering to be voted in favor of an initial business combination in order to have our initial business combination approved (assuming all outstanding shares are voted and the over-allotment option is not exercised) or 1,312,501, or 6.25%, of the 21,000,000 public shares (assuming the minimum number of shares are voted and the over-allotment option is not exercised);

 

 
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pursuant to the letter agreement, our sponsor has agreed that upon and subject to the completion of the initial business combination, 25% of the founder shares then held by the sponsor shall be considered to be newly unvested shares, one-half of which (or 12.5% of the shares then held by the sponsor) will vest only if the closing price of our Class A common stock on Nasdaq equals or exceeds $12.50 for any 20 trading days within a 30 trading day period (the “First Share Price Level”) on or after the first anniversary of the closing of the initial business combination but before the fifth anniversary; and one-half of which (or 12.5% of the shares then held by the sponsor) will vest only if the closing price of our Class A common stock on Nasdaq equals or exceeds $15.00 for any 20 trading days within a 30 trading day period (the “Second Share Price Level), on or after the first anniversary of the closing of the initial business combination but before the fifth anniversary. Our sponsor has agreed, subject to exceptions, not to transfer any unvested founder shares prior to the date such securities become vested. Founder shares, if any, that remain unvested at the fifth anniversary of the closing of the initial business combination will be forfeited; and

 

 

 

the founder shares are automatically convertible into our Class A common stock concurrently with or immediately following the consummation of our initial business combination on a one-for-one basis, subject to adjustment pursuant to certain anti-dilution rights, as described below adjacent to the caption “Founder shares conversion and anti-dilution rights.”

 

Transfer restrictions on founder shares

 

Our initial stockholders have agreed not to transfer, assign or sell any of their founder shares until the earlier to occur of: (i) one year after the completion of our initial business combination and (ii) the date on which we complete a liquidation, merger, capital stock exchange or other similar transaction after our initial business combination that results in all of our stockholders having the right to exchange their Class A common stock for cash, securities or other property; except to certain permitted transferees and under certain circumstances as described herein under “Principal Stockholders — Transfers of Founder Shares and Private Placement Warrants.” Any permitted transferees will be subject to the same restrictions and other agreements of our initial stockholders with respect to any founder shares. We refer to such transfer restrictions throughout this prospectus as the lock-up. Notwithstanding the foregoing, if the closing price of our Class A common stock equals or exceeds $12.00 per share (subject to adjustments as described under the heading “Description of Securities — Warrants — Public Stockholders’ Warrants — Anti-dilution Adjustments”) for any 20 trading days within any 30-trading day period commencing at least 150 days after our initial business combination, the founder shares will be released from the lock-up. In addition, our sponsor has agreed, subject to exceptions, not to transfer any unvested founder shares prior to the date such securities become vested.

 

 
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Founder shares conversion and anti- dilution rights

 

The founder shares will automatically convert into shares of Class A common stock concurrently with or immediately following the consummation of our initial business combination on a one-for-one basis, subject to adjustment for stock splits, stock dividends, reorganizations, recapitalizations and the like, and subject to further adjustment as provided herein. In the case that additional shares of Class A common stock or equity-linked securities are issued or deemed issued in connection with our initial business combination, the number of shares of Class A common stock issuable upon conversion of all founder shares will equal, in the aggregate, on an as-converted basis, 20% of the total number of shares of Class A common stock outstanding after such conversion (after giving effect to any redemptions of shares of Class A common stock by public stockholders), including the total number of shares of Class A common stock issued, or deemed issued or issuable upon conversion or exercise of any equity-linked securities or rights issued or deemed issued, by the Company in connection with or in relation to the consummation of the initial business combination, excluding any shares of Class A common stock or equity-linked securities or rights exercisable for or convertible into shares of Class A common stock issued, or to be issued, to any seller in the initial business combination and any private placement warrants issued to our sponsor, officers or directors upon conversion of working capital loans, provided that such conversion of founder shares will never occur on a less than one-for-one basis.

 

 

Election of Directors; Voting rights

 

Prior to the consummation of our initial business combination, only holders of our Class B common stock will have the right to vote on the election of directors. Holders of the Class A common stock will not be entitled to vote on the election of directors during such time. These provisions of our amended and restated certificate of incorporation may only be amended if approved by a majority of at least 90% of our outstanding common stock. With respect to any other matter submitted to a vote of our stockholders, including any vote in connection with our initial business combination, except as required by applicable law or stock exchange rule, holders of our Class A common stock and holders of our Class B common stock will vote together as a single class with each share entitling the holder to one vote.

  

 
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Private placement warrants

 

Our sponsor has committed, pursuant to a written agreement, to purchase an aggregate of 6,485,500 private placement warrants, each exercisable to purchase one share of Class A common stock at $11.50 per share, at a price of $1.00 per warrant, or $6,485,500 in the aggregate, in a private placement that will close simultaneously with the closing of this offering. A portion of the purchase price of the private placement warrants will be added to the proceeds from this offering to be held in the trust account such that at the time of closing of this offering $210.0 million (or $241.5 million if the underwriters exercise their over-allotment option in full) will be held in the trust account. The private placement warrants will be identical to the warrants sold as part of the units being sold in this offering except that the private placement warrants (i) will not be redeemable by us, (ii) may not, subject to certain limited exceptions, be transferred, assigned or sold by the holders (and the shares of Class A common stock issuable upon exercise of these warrants may not be transferred, assigned or sold by the holders) until 30 days after the completion of our initial business combination, (iii) may be exercised by the holders on a cashless basis and (iv) will be entitled to registration rights. If we do not complete our initial business combination within the completion window, the private placement warrants will expire worthless.

 

 

Transfer restrictions on private placement warrants

 

Subject to certain limited exceptions, the private placement warrants will not be transferable, assignable or salable (and the shares of Class A common stock issuable upon exercise of the private placement warrants will not be transferable assignable or salable) until 30 days after the completion of our initial business combination, except as described herein under “Principal Stockholders — Transfers of Founder Shares and Private Placement Warrants.”

 

 

Cashless exercise of private placement warrants

 

If holders of private placement warrants elect to exercise them on a cashless basis, they would pay the exercise price by surrendering their warrants for that number of shares of Class A common stock equal to the quotient obtained by dividing (x) the product of the number of shares of Class A common stock underlying the warrants, multiplied by the excess of the “fair market value” (defined below) over the exercise price of the warrants by (y) the fair market value. The “fair market value” shall mean the average reported closing price of the Class A common stock for the 10 trading days ending on the third trading day prior to the date on which the notice of warrant exercise is sent to the warrant agent. The reason that we have agreed that these warrants will be exercisable on a cashless basis is because it is not known at this time whether their holders will be affiliated with us following a business combination. If they remain affiliated with us, their ability to sell our securities in the open market will be significantly limited.

 

 

Proceeds to be held in trust account

 

Nasdaq rules provide that at least 90% of the gross proceeds from this offering and the sale of the private placement warrants be deposited in a trust account. Of the proceeds we will receive from this offering and the sale of the private placement warrants described in this prospectus, $210.0 million, or $241.5 million if the underwriters exercise their over-allotment option in full ($10.00 per unit in either case), will be deposited into a segregated trust account located in the United States, with Continental Stock Transfer & Trust Company acting as trustee, after deducting $3,150,000 in underwriting discounts and commissions payable upon the closing of this offering and an aggregate of $3,335,500 to pay fees and expenses in connection with the closing of this offering and for working capital following the closing of this offering. The proceeds to be placed in the trust account include $8,925,000 (or $10,736,250 if the underwriters’ over-allotment option is exercised in full) in deferred underwriting commissions. 

 

 
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Except with respect to interest earned on the funds held in the trust account that may be released to us to pay our taxes, the proceeds from this offering and the sale of the private placement warrants will not be released from the trust account until the earliest of (i) the completion of our initial business combination, (ii) the redemption of our public shares if we are unable to complete our initial business combination within the completion window, subject to applicable law, and (iii) the redemption of our public shares properly submitted in connection with a stockholder vote to amend our amended and restated certificate of incorporation to modify the substance or timing of our obligation to provide for the redemption of our public shares in connection with an initial business combination or to redeem 100% of our public shares if we have not consummated an initial business combination within the completion window or with respect to any other material provisions relating to stockholders’ rights or pre-initial business combination activity. The proceeds deposited in the trust account could become subject to the claims of our creditors, if any, which could have priority over the claims of our public stockholders.

  

Anticipated expenses and funding sources

 

Unless and until we complete our initial business combination, no proceeds held in the trust account will be available for our use, except the withdrawal of interest to pay our taxes and/or to redeem our public shares in connection with an amendment to our amended and restated certificate of incorporation, as described above. The proceeds held in the trust account will be invested only in U.S. government treasury obligations with a maturity of 185 days or less or in money market funds meeting certain conditions under Rule 2a-7 under the Investment Company Act which invest only in direct U.S. government treasury obligations. We estimate the interest earned on the trust account will be approximately $42,000 per year, assuming an interest rate of 0.02% per year; however we can provide no assurances regarding this amount. Unless and until we complete our initial business combination, we may pay our expenses only from such interest withdrawn from the trust account and:

 

the net proceeds of this offering and the sale of the private placement warrants not held in the trust account, which initially will be approximately $2,497,500 in working capital after the payment of approximately $838,000 in expenses relating to this offering; and

 

 
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any loans or additional investments from our sponsor, members of our management team or their affiliates or other third parties, although they are under no obligation to advance funds or invest in us, and provided that any such loans will not have any claim on the proceeds held in the trust account unless such proceeds are released to us upon completion of our initial business combination. Up to $1,500,000 of such loans may be convertible into private placement warrants, at a price of $1.00 per warrant, at the option of the lender.

   

Ability to extend time to complete business combination

If we anticipate that we may not be able to consummate our initial business combination within 18 months from the consummation of this offering, we may, but are not obligated to, if requested by our sponsor or its affiliates, extend the period of time to consummate a business combination up to six times by an additional one month each time for a total of up to 24 months (the “Paid Extension Period”). In addition, we will be entitled to an automatic three-month extension (the “Automatic Extension Period”) if we have entered into a definitive agreement for an initial business combination during the 18-month period or Paid Extension Period, to complete a business combination. In the case of the Paid Extension Period or Automatic Extension Period, public shareholders will not be offered the opportunity to vote on or redeem their shares if we choose to make any such paid extension or in connection with an automatic extension. Pursuant to the terms of our amended and restated certificate of incorporation and the trust agreement entered into between us and Continental Stock Transfer & Trust Company on the date of this prospectus, in order to avail ourselves of the Paid Extension Period to consummate our initial business combination, our sponsor or its affiliates or designees, upon five days advance notice prior to the applicable deadline, must deposit into the trust account for each month extension $693,000, or $796,950 if the underwriters’ over-allotment option is exercised in full ($0.033 per unit in either case), on or prior to the date of the applicable deadline. Any such payments would be made in the form of a loan. The sponsor or its affiliates or designees will receive a non-interest bearing, unsecured promissory note equal to the amount of any such deposit that will not be repaid in the event that we are unable to close a business combination unless there are funds available outside the trust account to do so. Such notes would either be paid upon consummation of our initial business combination, or, at the lender’s discretion, converted upon consummation of our business combination into additional warrants at a price of $1.00 per warrant. In the event that we receive notice from our sponsor or its affiliates five days prior to the applicable deadline of its wish for us to effect an extension, we intend to issue a press release announcing such intention at least three days prior to the applicable deadline. In addition, we intend to issue a press release the day after the applicable deadline announcing whether or not the funds had been timely deposited. Our sponsor and its affiliates or designees are not obligated to fund the trust account to extend the time for us to complete our initial business combination. For the avoidance of doubt, no amounts need to be deposited into the trust account for the Automatic Extension Period. Our public stockholders will not be entitled to vote or redeem their shares in connection with any such paid extension or an automatic extension. As a result, we may conduct such an extension even though a majority of our public stockholders do not support such an extension and will not be able to redeem their shares in connection therewith.

 

 

Conditions to completing our initial business combination

 

Nasdaq rules require that we must consummate an initial business combination with one or more operating businesses or assets with a fair market value equal to at least 80% of the net assets held in the trust account (net of amounts disbursed to management for working capital purposes, if permitted, and excluding the amount of any deferred underwriting commissions). Our board of directors will make the determination as to the fair market value of our initial business combination. If our board of directors is not able to independently determine the fair market value of our initial business combination, we will obtain an opinion from an independent investment banking firm which is a member of FINRA or a valuation or appraisal firm. While we consider it unlikely that our board of directors will not be able to make an independent determination of the fair market value of our initial business combination, it may be unable to do so if it is less familiar or experienced with the business of a particular target or if there is a significant amount of uncertainty as to the value of the target’s assets or prospects. We will complete our initial business combination only if the post-transaction company in which our public stockholders own shares will own or acquire 50% or more of the outstanding voting securities of the target or is otherwise not required to register as an investment company under the Investment Company Act. Even if the post-transaction company owns or acquires 50% or more of the voting securities of the target, our stockholders prior to our initial business combination may collectively own a minority interest in the post business combination company, depending on valuations ascribed to the target and us in the business combination transaction. For example, we could pursue a transaction in which we issue a substantial number of new shares in exchange for all of the outstanding capital stock or shares of a target. In this case, we would acquire a 100% controlling interest in the target. However, as a result of the issuance of a substantial number of new shares, our stockholders immediately prior to our initial business combination could own less than a majority of our issued and outstanding shares subsequent to our initial business combination. If less than 100% of the equity interests or assets of a target business or businesses are owned or acquired by the post-transaction company, the portion of such business or businesses that is owned or acquired is what will be taken into account for purposes of the 80% of net assets test described above, provided that in the event that the business combination involves more than one target business, the 80% of net assets test will be based on the aggregate value of all of the target businesses and we will treat the target businesses together as our initial business combination for purposes of a seeking stockholder approval or conducting a tender offer, as applicable.

 

 
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Permitted purchases of public shares, rights and public warrants by our affiliates

 

If we seek stockholder approval of our initial business combination and we do not conduct redemptions in connection with our initial business combination pursuant to the tender offer rules, our sponsor, initial stockholders, directors, executive officers, advisors or their affiliates may purchase public shares, rights or public warrants in privately negotiated transactions or in the open market either prior to or following the completion of our initial business combination. There is no limit on the number of securities our initial stockholders, directors, officers, advisors or their affiliates may purchase in such transactions, subject to compliance with applicable law and Nasdaq rules. However, they have no current commitments, plans or intentions to engage in such transactions and have not formulated any terms or conditions for any such transactions. None of the funds held in the trust account will be used to purchase public shares, rights or public warrants in such transactions. If they engage in such transactions, they will be restricted from making any such purchases when they are in possession of any material nonpublic information not disclosed to the seller or if such purchases are prohibited by Regulation M under the Exchange Act. We do not currently anticipate that such purchases, if any, would constitute a tender offer subject to the tender offer rules under the Exchange Act or a going-private transaction subject to the going-private rules under the Exchange Act; however, if the purchasers determine at the time of any such purchases that the purchases are subject to such rules, the purchasers will comply with such rules. We expect any such purchases will be reported pursuant to Section 13 and Section 16 of the Exchange Act to the extent such purchasers are subject to such reporting requirements. See “Proposed Business — Permitted purchases of our securities” for a description of how our sponsor, initial stockholders, directors, executive officers, advisors or any of their affiliates will select which stockholders to purchase securities from in any private transaction.

 

 

 

The purpose of any such purchases of shares could be to vote such shares in favor of the business combination and thereby increase the likelihood of obtaining stockholder approval of the business combination or to satisfy a closing condition in an agreement with a target that requires us to have a minimum net worth or a certain amount of cash at the closing of our initial business combination, where it appears that such requirement would otherwise not be met. The purpose of any such purchases of rights or public warrants could be to reduce the number of public warrants outstanding or to vote such warrants on any matters submitted to the rights holders or warrant holders for approval in connection with our initial business combination. Any such purchases of our securities may result in the completion of our initial business combination that may not otherwise have been possible. In addition, if such purchases are made, the public “float” of our Class A common stock, rights or warrants may be reduced and the number of beneficial holders of our securities may be reduced, which may make it difficult to maintain or obtain the quotation, listing or trading of our securities on a national securities exchange.

   

 
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Redemption rights for public stockholders upon completion of our initial business combination

 

We will provide our public stockholders with the opportunity to redeem all or a portion of their public shares upon the completion of our initial business combination at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the trust account calculated as of two business days prior to the consummation of our initial business combination, including interest earned on the funds held in the trust account (which interest shall be net of taxes payable), divided by the number of then outstanding public shares, subject to the limitations and on the conditions described herein. The amount in the trust account is initially anticipated to be $10.00 per public share. The per share amount we will distribute to investors who properly redeem their shares will not be reduced by the deferred underwriting commissions we will pay to the underwriters. There will be no redemption rights upon the completion of our initial business combination with respect to our warrants. Our initial stockholders, sponsor, officers and directors have entered into a letter agreement with us, pursuant to which they have agreed to waive their redemption rights with respect to any founder shares they hold and any public shares they may acquire during or after this offering in connection with the completion of our initial business combination.

 

 

Manner of conducting redemptions

 

We will provide our public stockholders with the opportunity to redeem all or a portion of their public shares upon the completion of our initial business combination either (i) in connection with a stockholder meeting called to approve the business combination or (ii) without a stockholder vote by means of a tender offer. The decision as to whether we will seek stockholder approval of a proposed business combination or conduct a tender offer will be made by us, solely in our discretion, and will be based on a variety of factors such as the timing of the transaction and whether the terms of the transaction would require us to seek stockholder approval under applicable law or stock exchange listing requirement. Asset acquisitions and share purchases would not typically require stockholder approval while direct mergers with our company where we do not survive and any transactions where we issue more than 20% of our outstanding Class A common stock or seek to amend our amended and restated certificate of incorporation would require stockholder approval. So long as we obtain and maintain a listing for our securities on Nasdaq we will be required to comply with Nasdaq’s stockholder approval rules.

 

 

 

The requirement that we provide our public stockholders with the opportunity to redeem their public shares by one of the two methods listed above will be contained in provisions of our amended and restated certificate of incorporation and will apply whether or not we maintain our registration under the Exchange Act or our listing on Nasdaq. Such provisions may be amended if approved by holders of a majority of our common stock entitled to vote thereon.

    

 

If we provide our public stockholders with the opportunity to redeem their public shares in connection with a stockholder meeting, we will:

 

 

 

·

 

conduct the redemptions in conjunction with a proxy solicitation pursuant to Regulation 14A of the Exchange Act, which regulates the solicitation of proxies, and not pursuant to the tender offer rules, and

 

 

 

 

·

file proxy materials with the SEC.

  

 
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If we seek stockholder approval, unless otherwise required by applicable law, regulation or stock exchange rules, we will complete our initial business combination only if a majority of the outstanding shares of common stock voted are voted in favor of the initial business combination. A quorum for such meeting will consist of the holders present in person or by proxy of shares of outstanding capital stock of the Company representing a majority of the voting power of all outstanding shares of capital stock of the Company entitled to vote at such meeting. Our initial stockholders will count towards this quorum and, pursuant to the letter agreement, our sponsor, officers and directors have agreed to vote any founder shares they hold and any public shares purchased during or after this offering (including in open market and privately-negotiated transactions) in favor of our initial business combination. For purposes of seeking approval of the majority of our outstanding shares of common stock voted, which, unless another voting threshold is required to approve the initial business combination by applicable law, regulation or stock exchange rules, will be the required approval, non-votes will have no effect on the approval of our initial business combination once a quorum is obtained. As a result, in addition to our initial stockholders’ founder shares, we would need 7,875,001, or 37.5%, of the 21,000,000 public shares sold in this offering to be voted in favor of an initial business combination in order to have our initial business combination approved (assuming all outstanding shares are voted and the over-allotment option is not exercised) or 1,312,501, or 6.25%, of the 21,000,000 public shares (assuming the minimum number of shares are voted and the over-allotment option is not exercised). These quorums and voting thresholds, and the voting agreements of our initial stockholders, may make it more likely that we will consummate our initial business combination. Each public stockholder may elect to redeem its public shares irrespective of whether they vote for or against the proposed transaction or whether they were a stockholder on the record date for the stockholder meeting held to approve the proposed transaction.

 

 

If a stockholder vote is not required and we do not decide to hold a stockholder vote for business or other legal reasons, we will:

 

 

 

·

conduct the redemptions pursuant to Rule 13e-4 and Regulation 14E of the Exchange Act, which regulate issuer tender offers, and

 

 

 

 

·

file tender offer documents with the SEC prior to completing our initial business combination which contain substantially the same financial and other information about our initial business combination and the redemption rights as is required under Regulation 14A of the Exchange Act, which regulates the solicitation of proxies.

 

 
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In the event we conduct redemptions pursuant to the tender offer rules, our offer to redeem will remain open for at least 20 business days, in accordance with Rule 14e-1(a) under the Exchange Act, and we will not be permitted to complete our initial business combination until the expiration of the tender offer period. In addition, the tender offer will be conditioned on public stockholders not tendering more than the number of public shares we are permitted to redeem. If public stockholders tender more shares than we have offered to purchase, we will withdraw the tender offer and not complete such initial business combination.

 

 

 

Upon the public announcement of our initial business combination, if we elect to conduct redemptions pursuant to the tender offer rules, we or our sponsor will terminate any plan established in accordance with Rule 10b5-1 to purchase shares of our Class A common stock in the open market, in order to comply with Rule 14e-5 under the Exchange Act.

 

 

 

We intend to require our public stockholders seeking to exercise their redemption rights, whether they are record holders or hold their shares in “street name,” to, at the holder’s option, either deliver their stock certificates to our transfer agent or deliver their shares to our transfer agent electronically using The Depository Trust Company’s DWAC (Deposit/Withdrawal At Custodian) system, prior to the date set forth in the proxy materials or tender offer documents, as applicable. In the case of proxy materials, this date may be up to two business days prior to the date on which the vote on the proposal to approve the initial business combination is to be held. In addition, if we conduct redemptions in connection with a stockholder vote, we intend to require a public stockholder seeking redemption of its public shares to also submit a written request for redemption to our transfer agent two business days prior to the vote in which the name of the beneficial owner of such shares is included. The proxy materials or tender offer documents, as applicable, that we will furnish to holders of our public shares in connection with our initial business combination will indicate whether we are requiring public stockholders to satisfy such delivery requirements. We believe that this will allow our transfer agent to efficiently process any redemptions without the need for further communication or action from the redeeming public stockholders, which could delay redemptions and result in additional administrative cost. If the proposed initial business combination is not approved and we continue to search for a target company, we will promptly return any certificates or shares delivered by public stockholders who elected to redeem their shares.

   

 
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Our amended and restated certificate of incorporation will provide that in no event will we redeem our public shares in an amount that would cause our net tangible assets to be less than $5,000,001. In addition, our proposed initial business combination may impose a minimum cash requirement for: (i) cash consideration to be paid to the target or its owners, (ii) cash for working capital or other general corporate purposes or (iii) the retention of cash to satisfy other conditions. In the event the aggregate cash consideration we would be required to pay for all shares of Class A common stock that are validly submitted for redemption plus any amount required to satisfy cash conditions pursuant to the terms of the proposed initial business combination exceed the aggregate amount of cash available to us, we will not complete the initial business combination or redeem any shares in connection with such initial business combination, and all shares of Class A common stock submitted for redemption will be returned to the holders thereof. We may, however, raise funds through the issuance of equity-linked securities or through loans, advances or other indebtedness in connection with our initial business combination, including pursuant to forward purchase agreements or backstop arrangements we may enter into following consummation of this offering, in order to, among other reasons, satisfy such net tangible assets or minimum cash requirements.

 

 

Limitation on redemption rights of stockholders holding more than

15% of the shares sold in this offering if we hold stockholder vote

 

Notwithstanding the foregoing redemption rights, if we seek stockholder approval of our initial business combination and we do not conduct redemptions in connection with our initial business combination pursuant to the tender offer rules, our amended and restated certificate of incorporation provides that a public stockholder, together with any affiliate of such stockholder or any other person with whom such stockholder is acting in concert or as a “group” (as defined under Section 13 of the Exchange Act), will be restricted from redeeming its shares with respect to more than an aggregate of 15% of the shares sold in this offering, without our prior consent. We believe the restriction described above will discourage stockholders from accumulating large blocks of shares, and subsequent attempts by such holders to use their ability to redeem their shares as a means to force us or our management to purchase their shares at a significant premium to the then-current market price or on other undesirable terms. Absent this provision, a public stockholder holding more than an aggregate of 15% of the shares sold in this offering could threaten to exercise its redemption rights against a business combination if such holder’s shares are not purchased by us, our sponsor or our management at a premium to the then-current market price or on other undesirable terms. By limiting our stockholders’ ability to redeem to no more than 15% of the shares sold in this offering, we believe we will limit the ability of a small group of stockholders to unreasonably attempt to block our ability to complete our initial business combination, particularly in connection with a business combination with a target that requires as a closing condition that we have a minimum net worth or a certain amount of cash. However, we would not be restricting our stockholders’ ability to vote all of their shares (including all shares held by those stockholders that hold more than 15% of the shares sold in this offering) for or against our initial business combination.

  

 
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Release of funds in trust account on closing of our initial business combination

 

On the completion of our initial business combination, the funds held in the trust account will be used to pay amounts due to any public stockholders who exercise their redemption rights as described above under “Redemption rights for public stockholders upon completion of our initial business combination,” to pay the underwriters their deferred underwriting commissions, to pay all or a portion of the consideration payable to the target or owners of the target of our initial business combination and to pay other expenses associated with our initial business combination. If our initial business combination is paid for using equity or debt securities, or not all of the funds released from the trust account are used for payment of the consideration in connection with our initial business combination or used for redemption of our public shares, we may apply the balance of the cash released to us from the trust account for general corporate purposes, including for maintenance or expansion of operations of post-transaction businesses, the payment of principal or interest due on indebtedness incurred in completing our initial business combination, to fund the purchase of other companies or for working capital.

 

 

Redemption of public shares and distribution and liquidation if no initial business combination

 

Our amended and restated certificate of incorporation provides that we will have until the end of the completion window to complete our initial business combination. If we are unable to complete our initial business combination within the completion window, we will: (i) cease all operations except for the purpose of winding up, (ii) as promptly as reasonably possible but not more than ten business days thereafter, redeem the public shares, at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the trust account, including interest earned on the funds held in the trust account (which interest shall be net of taxes payable and up to $100,000 of interest to pay dissolution expenses), divided by the number of then outstanding public shares, which redemption will completely extinguish public stockholders’ rights as stockholders (including the right to receive further liquidating distributions, if any), and (iii) as promptly as reasonably possible following such redemption, subject to the approval of our remaining stockholders and our board of directors, liquidate and dissolve, subject, in each case, to our obligations under Delaware law to provide for claims of creditors and the requirements of other applicable law. There will be no redemption rights or liquidating distributions with respect to our rights or warrants, which will expire worthless if we fail to complete our initial business combination within the applicable time period.

 

 

 

Our initial stockholders have entered into a letter agreement with us, pursuant to which they have waived their rights to liquidating distributions from the trust account with respect to their founder shares if we fail to complete our initial business combination within the completion window. However, if our initial stockholders or management team acquire public shares in or after this offering, they will be entitled to liquidating distributions from the trust account with respect to such public shares if we fail to complete our initial business combination within the allotted time frame.

 

 

 

The underwriters have agreed to waive their rights to their deferred underwriting commission held in the trust account in the event we do not complete our initial business combination within the completion window and, in such event, such amounts will be included with the funds held in the trust account that will be available to fund the redemption of our public shares.

  

 
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Our sponsor, executive officers, directors and director nominees have agreed, pursuant to a written agreement with us, that they will not propose any amendment to our amended and restated certificate of incorporation to modify the substance or timing of our obligation to provide for the redemption of our public shares in connection with an initial business combination or to redeem 100% of our public shares if we do not complete our initial business combination within the completion window or with respect to any other material provisions relating to stockholders’ rights or pre-initial business combination activity, unless we provide our public stockholders with the opportunity to redeem their Class A common stock upon approval of any such amendment at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the trust account, including interest earned on the funds held in the trust account (which interest shall be net of taxes payable), divided by the number of then outstanding public shares, subject to the limitations described above under “Limitations on redemptions.” For example, our board of directors may propose such an amendment if it determines that additional time is necessary to complete our initial business combination. In such event, we will conduct a proxy solicitation and distribute proxy materials pursuant to Regulation 14A of the Exchange Act seeking stockholder approval of such proposal, and in connection therewith, provide our public stockholders with the redemption rights described above upon stockholder approval of such amendment.

  

Limited payments to insiders

 

There will be no finder’s fees, reimbursement, consulting fee, monies in respect of any payment of a loan or other compensation paid by us to our sponsor, officers or directors, or any affiliate of our sponsor or officers prior to, or in connection with any services rendered in order to effectuate, the consummation of our initial business combination (regardless of the type of transaction that it is). However, the following payments will be made to our sponsor, officers or directors, or our or their affiliates, and, if made prior to our initial business combination will be made from funds held outside the trust account.

 

 

 

·

Repayment of up to an aggregate of $300,000 in loans made to us by our sponsor to cover offering-related and organizational expenses;

 

 

 

 

·

Payment of up to $10,000 per month for administrative and other services;

 

 

 

 

·

Subject to approval by our audit committee, payments for advisory or consulting services that may be provided to us by members of our board in connection with our initial business combination;

   

 

·

Reimbursement for any out-of-pocket expenses related to identifying, investigating, negotiating and completing an initial business combination; and

 

 

 

 

·

Repayment of loans which may be made by our sponsor or an affiliate of our sponsor or certain of our officers and directors to finance transaction costs in connection with an intended initial business combination. Up to $1,500,000 of such loans may be convertible into warrants of the post-business combination entity at a price of $1.00 per warrant at the option of the lender. The warrants would be identical to the private placement warrants. Except for the foregoing, the terms of such loans, if any, have not been determined and no written agreements exist with respect to such loans.

 

 

 

Audit Committee

 

We will establish and maintain an audit committee. Among its responsibilities, the audit committee will review on a quarterly basis all payments that were made to our sponsor, officers, or directors, or our or their affiliates and monitor compliance with the other terms relating to this offering. If any noncompliance is identified, then the audit committee will be charged with the responsibility to promptly take all action necessary to rectify such noncompliance or otherwise to cause compliance with the terms of this offering. For more information, see the section entitled “Management — Committees of the Board of Directors — Audit Committee.”

  

 
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SUMMARY FINANCIAL DATA

 

The following table summarizes the relevant financial data for our business and should be read with our financial statements, which are included in this prospectus. We have not had any significant operations to date, so only balance sheet data is presented.

 

 

 

September 30, 2021

 

 

 

Actual

 

 

As Adjusted

 

Balance Sheet Data:

 

 

 

 

 

 

Working (deficiency) capital (1)

 

$ (186,652 )

 

$ 2,503,482

 

Total assets (2)

 

 

232,884

 

 

 

212,490,232

 

Total liabilities (3)

 

 

226,902

 

 

8,925,000

 

Value of Class A common shares subject to possible redemption (4)

 

 

 

 

210,000,000

 

Stockholders’ equity (5)

 

 

5,982

 

 

 

(6,421,518 )

  

(1)

The “as adjusted” calculation includes $2,497,500 in cash held outside the trust account, plus $5,982 of actual shareholder’s equity as of September 30, 2021.

 

 

(2)

The “as adjusted” calculation includes $210,000,000 cash held in trust from the proceeds of this offering and the sale of the private units, plus $,497,500 of cash held outside the trust account, plus $,982 of actual stockholders’ equity as of 30, 2021

 

 

(3)

The “as adjusted” calculation equals $8,925,000 of deferred underwriting commissions, assuming the underwriters’ over-allotment option is not exercised.

 

 

(4)

The “as adjusted” calculation equals the “as adjusted” total assets, less the “as adjusted” total liabilities, less the stockholders’ equity.

 

 

(5)

Excludes 24,150,000 public shares which are subject to redemption in connection with our initial business combination. The “as adjusted” calculation equals the “as adjusted” total assets, less the “as adjusted” total liabilities, less the value of common stock that may be redeemed in connection with our initial business combination (initially $10.00 per share).

 

 
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RISKS

 

Summary of Risk Factors

 

An investment in our securities involves a high degree of risk. The occurrence of one or more of the events or circumstances described in the section titled “Risk Factors,” alone or in combination with other events or circumstances, may materially adversely affect our business, financial condition, and operating results. In that event, the trading price of our securities could decline, and you could lose all or part of your investment. Such risks include, but are not limited to:

 

 

·

We are a blank check company with no operating history and no revenues, and you have no basis on which to evaluate our ability to achieve our business objective.

 

 

 

 

·

Our public stockholders may not be afforded an opportunity to vote on our proposed initial business combination, which means we may complete our initial business combination even though a majority of our public stockholders do not support such a combination.

 

 

 

 

·

Your only opportunity to effect your investment decision regarding a potential business combination may be limited to the exercise of your right to redeem your shares from us for cash.

 

 

 

 

·

If we seek stockholder approval of our initial business combination, our initial stockholders and management team have agreed to vote in favor of such initial business combination, regardless of how our public stockholders vote.

 

 

 

 

·

The ability of our public stockholders to redeem their shares for cash may make our financial condition unattractive to potential business combination targets, which may make it difficult for us to enter into a business combination with a target.

 

 

 

 

·

The ability of our public stockholders to exercise redemption rights with respect to a large number of our shares may not allow us to complete the most desirable business combination or optimize our capital structure.

 

 

 

 

·

The requirement that we complete our initial business combination within the completion window may give potential target businesses leverage over us in negotiating a business combination and may limit the time we have in which to conduct due diligence on potential business combination targets, in particular as we approach our dissolution deadline, which could undermine our ability to complete our initial business combination on terms that would produce value for our stockholders.

 

 
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·

The coronavirus, or COVID-19, pandemic, including the efforts to mitigate its impact, has and may continue to have a material adverse effect on our search for a business combination, as well as any target business with which we ultimately consummate a business combination. The appearance of new variants of COVID-19 may continue to introduce additional obstacles as governments and industries grapple with the socioeconomic impacts while seeking a return to pre-COVID stability.

 

 

 

 

·

If we seek stockholder approval of our initial business combination, our sponsor, directors, officers, advisors or their affiliates may elect to purchase shares, rights or warrants from public stockholders, which may influence a vote on a proposed business combination and reduce the public “float” of our securities.

 

 

 

 

·

If a stockholder fails to receive notice of our offer to redeem our public shares in connection with our initial business combination or fails to comply with the procedures for submitting or tendering its shares, such shares may not be redeemed.

 

 

 

 

·

The securities in which we invest the funds held in the trust account could bear a negative rate of interest, which could reduce the value of the assets held in trust such that the per-share redemption amount received by public stockholders may be less than $10.00 per share.

 

 

 

 

·

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

 

 

 

 

·

Nasdaq may delist our securities from trading on its exchange, which could limit investors’ ability to make transactions in our securities and subject us to additional trading restrictions.

 

 

 

 

·

You will not be entitled to protections normally afforded to investors of many other blank check companies.

 

 

 

 

·

Because of our limited resources and the significant competition for business combination opportunities, it may be more difficult for us to complete our initial business combination. If we have not completed our initial business combination within the required time period, our public stockholders may receive only approximately $10.00 per share, or less in certain circumstances, on our redemption of their shares, and our rights and warrants will expire worthless.

 

 

 

 

·

If the net proceeds of this offering and the sale of the private placement warrants not being held in the trust account are insufficient to allow us to operate for at least the 18 months following the closing of this offering, it could limit the amount of cash available to fund our search for a target business or businesses and complete our initial business combination, and we will depend on loans from our sponsor or management team to fund our search and to complete our initial business combination.

 

 

 

 

·

Past performance by our management team and their affiliates, including investments and transactions in which they have participated and businesses with which they have been associated, may not be indicative of future performance of an investment in the Company.

 

 

 

 

·

Unlike some other similarly structured special purpose acquisition companies, our initial stockholders will receive additional shares of Class A common stock if we issue certain shares to consummate an initial business combination.

 

 
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RISK FACTORS

  

Risks Relating to our Search for, and Consummation of or Inability to Consummate, a Business Combination

 

Our stockholders may not be afforded an opportunity to vote on our proposed initial business combination, and even if we hold a vote, holders of our founder shares will participate in such vote, which means we may complete our initial business combination even though a majority of our public stockholders do not support such a combination.

 

We may choose not to hold a stockholder vote to approve our initial business combination if the business combination would not require stockholder approval under applicable law or stock exchange listing requirement. Except for as required by applicable law or stock exchange requirement, the decision as to whether we will seek stockholder approval of a proposed business combination or will allow stockholders to sell their shares to us in a tender offer will be made by us, solely in our discretion, and will be based on a variety of factors, such as the timing of the transaction and whether the terms of the transaction would otherwise require us to seek stockholder approval. Even if we seek stockholder approval, the holders of our founder shares will participate in the vote on such approval. Accordingly, we may complete our initial business combination even if a majority of our public stockholders do not approve of the business combination we complete. Please see the section entitled “Proposed Business — Stockholders May Not Have the Ability to Approve Our Initial Business Combination” for additional information.

 

If we seek stockholder approval of our initial business combination, our initial stockholders and management team have agreed to vote in favor of such initial business combination, regardless of how our public stockholders vote.

 

Our initial stockholders will own 20% of our outstanding common stock immediately following the completion of this offering. Our initial stockholders and management team also may from time to time purchase Class A common stock prior to our initial business combination. Our amended and restated certificate of incorporation provides that, if we seek stockholder approval of an initial business combination, unless otherwise required by applicable law, regulation or stock exchange rules, such initial business combination will be approved if we receive the affirmative vote of a majority of the shares voted at such meeting, including the founder shares. As a result, in addition to our initial stockholders’ founder shares, we would need 7,875,001, or 37.5%, of the 21,000,000 public shares sold in this offering to be voted in favor of an initial business combination in order to have our initial business combination approved (assuming all outstanding shares are voted and the over-allotment option is not exercised) or 1,312,501, or 6.25%, of the 21,000,000 public shares (assuming the minimum number of shares are voted and the over-allotment option is not exercised). Accordingly, if we seek stockholder approval of our initial business combination, the agreement by our initial stockholders and management team to vote in favor of our initial business combination will increase the likelihood that we will receive the requisite stockholder approval for such initial business combination.

 

Your only opportunity to affect the investment decision regarding a potential business combination may be limited to the exercise of your right to redeem your shares from us for cash.

 

At the time of your investment in us, you will not be provided with an opportunity to evaluate the specific merits or risks of our initial business combination. Since our board of directors may complete a business combination without seeking stockholder approval, public stockholders may not have the right or opportunity to vote on the business combination, unless we seek such stockholder vote. Accordingly, your only opportunity to affect the investment decision regarding our initial business combination may be limited to exercising your redemption rights within the period of time (which will be at least 20 business days) set forth in our tender offer documents mailed to our public stockholders in which we describe our initial business combination.

 

 
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The ability of our public stockholders to redeem their shares for cash may make our financial condition unattractive to potential business combination targets, which may make it difficult for us to enter into a business combination with a target.

 

We may seek to enter into a business combination transaction agreement with minimum cash requirement for (i) cash consideration to be paid to the target or its owners, (ii) cash for working capital or other general corporate purposes or (iii) the retention of cash to satisfy other conditions. If too many public stockholders exercise their redemption rights, we would not be able to meet such closing condition and, as a result, would not be able to proceed with the business combination. Furthermore, in no event will we redeem our public shares in an amount that would cause our net tangible assets to be less than $5,000,001. Consequently, if accepting all properly submitted redemption requests would cause our net tangible assets to be less than $5,000,001 or make us unable to satisfy a minimum cash condition as described above, we would not proceed with such redemption and the related business combination and may instead search for an alternate business combination. Prospective targets will be aware of these risks and, thus, may be reluctant to enter into a business combination transaction with us.

 

The ability of our public stockholders to exercise redemption rights with respect to a large number of our shares may not allow us to complete the most desirable business combination or optimize our capital structure.

 

At the time we enter into an agreement for our initial business combination, we will not know how many stockholders may exercise their redemption rights, and therefore will need to structure the transaction based on our expectations as to the number of shares that will be submitted for redemption. If our initial business combination agreement requires us to use a portion of the cash in the trust account to pay the purchase price, or requires us to have a minimum amount of cash at closing, we will need to reserve a portion of the cash in the trust account to meet such requirements, or arrange for third party financing. In addition, if a larger number of shares is submitted for redemption than we initially expected, we may need to restructure the transaction to reserve a greater portion of the cash in the trust account or arrange for third party financing. Raising additional third-party financing may involve dilutive equity issuances or the incurrence of indebtedness at higher than desirable levels. Furthermore, this dilution would increase to the extent that the anti-dilution provision of the Class B common stock results in the issuance of shares of Class A common stock on a greater than one-to-one basis upon conversion of the shares of Class B common stock at the time of our initial business combination. In addition, the amount of the deferred underwriting commissions payable to the representative of the underwriters will not be adjusted for any shares that are redeemed in connection with an initial business combination. The per share amount we will distribute to stockholders who properly exercise their redemption rights will not be reduced by the deferred underwriting commission and after such redemptions, the amount held in trust will continue to reflect our obligation to pay the entire deferred underwriting commissions. The above considerations may limit our ability to complete the most desirable business combination available to us or optimize our capital structure.

   

The ability of our public stockholders to exercise redemption rights with respect to a large number of our shares could increase the probability that our initial business combination would be unsuccessful and that you would have to wait for liquidation in order to redeem your shares.

 

If our initial business combination agreement requires us to use a portion of the cash in the trust account to pay the purchase price, or requires us to have a minimum amount of cash at closing, the probability that our initial business combination would be unsuccessful is increased. If our initial business combination is unsuccessful, you would not receive your pro rata portion of the trust account until we liquidate the trust account. If you are in need of immediate liquidity, you could attempt to sell your shares in the open market; however, at such time our shares may trade at a discount to the pro rata amount per share in the trust account. In either situation, you may suffer a material loss on your investment or lose the benefit of funds expected in connection with your exercise of redemption rights until we liquidate or you are able to sell your shares in the open market.

 

 
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The requirement that we complete our initial business combination within the completion window may give potential target businesses leverage over us in negotiating a business combination and may limit the time we have in which to conduct due diligence on potential business combination targets, in particular as we approach our dissolution deadline, which could undermine our ability to complete our initial business combination on terms that would produce value for our stockholders.

 

Any potential target business with which we enter into negotiations concerning a business combination will be aware that we must complete our initial business combination within the completion window. Consequently, such target business may obtain leverage over us in negotiating a business combination, knowing that if we do not complete our initial business combination with that particular target business, we may be unable to complete our initial business combination with any target business. This risk will increase as we get closer to the timeframe described above. In addition, we may have limited time to conduct due diligence and may enter into our initial business combination on terms that we would have rejected upon a more comprehensive investigation.

 

Unlike many other blank check companies, we may extend the time to complete an initial business combination by up to six months for paid extension. In addition, we will be entitled to an automatic extension of three months if we have entered into a definitive agreement for an initial business combination during the 18-month period or Paid Extension Period without a shareholder vote or your ability to redeem your shares.

 

We will have until 18 months from the closing of this offering to consummate an initial business combination. However, unlike many other similarly structured blank check companies, if we anticipate that we may not be able to consummate our initial business combination within 18 months from the consummation of this offering, we may, but are not obligated to, if requested by our sponsor or its affiliates, extend the period of time to consummate a business combination up to six times by an additional one month each time for a total of up to 24 months (the “Paid Extension Period”). In addition, we will be entitled to an automatic three-month extension  (the “Automatic Extension Period”) if we have entered into a definitive agreement for an initial business combination during the 18-month period or Paid Extension Period, to complete a business combination; provided that, pursuant to the terms of our amended and restated certificate of incorporation and the trust agreement to be entered into between us and Continental Stock Transfer & Trust Agent on the date of this prospectus, in order to avail ourselves of the Paid Extension Period to consummate our initial business combination, our sponsor or its affiliates or designees, upon five days’ advance notice prior to the applicable deadline, must deposit into the trust account $693,000, or $796,950, if the underwriters’ overallotment option is exercised in full ($0.033 per unit in either case), on or prior to the date of the applicable deadline. Public shareholders will not be offered the opportunity to vote on or redeem their shares in connection with any such paid extension or an automatic extension.

 

The coronavirus, or COVID-19, pandemic, including the efforts to mitigate its impact, has and may continue to have a material adverse effect on our search for a business combination, as well as any target business with which we ultimately consummate a business combination.

 

The COVID-19 pandemic, including efforts to combat it, has and may continue to adversely affect our search for a business combination. In addition, the outbreak of COVID-19 has resulted in a widespread health crisis that has and may continue to adversely affect the economies and financial markets worldwide. As such, the business of any potential target business with which we may consummate a business combination could be materially and adversely affected.

 

In response to the pandemic, public health authorities and local, national, and international governments have implemented measures that may directly or indirectly impact our ability to search for and acquire any target business, including measures such as voluntary or mandatory quarantines, restrictions on travel and orders to limit the activities of non-essential workforce personnel. We may be unable to complete a business combination if concerns relating to COVID-19 continue to restrict travel, limit the ability to have meetings with potential investors or the target company’s personnel, vendors and services providers are unavailable to negotiate and consummate a transaction in a timely manner.

 

The extent to which COVID-19 impacts our search for a target business will depend on future developments, which are highly uncertain and cannot be predicted, including new information which may emerge concerning the severity of the COVID-19 pandemic and the actions to contain COVID-19 or treat its impact, among others. If the disruptions posed by COVID-19 or other matters of global concern continue for an extended period, it could have a material adverse effect on our ability to complete a business combination, or the operations of a target business with which we ultimately complete a business combination. In addition, our ability to consummate a transaction may be dependent on the ability to raise equity and debt financing, which may be impacted by COVID-19 and other events, including as a result of increased market volatility or decreased market liquidity in third-party financing being unavailable on terms acceptable to us or at all.

 

We may not be able to complete our initial business combination within the completion window, in which case we would cease all operations except for the purpose of winding up and we would redeem our public shares and liquidate.

 

We may not be able to find a suitable target business and complete our initial business combination within the completion window. Our ability to complete our initial business combination may be negatively impacted by general market conditions, volatility in the capital and debt markets and the other risks described herein. If we have not completed our initial business combination within such period, we will: (i) cease all operations except for the purpose of winding up, (ii) as promptly as reasonably possible but not more than ten business days thereafter, redeem the public shares, at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the trust account, including interest earned on the funds held in the trust account (which interest shall be net of taxes payable and up to $100,000 of interest to pay dissolution expenses), divided by the number of then outstanding public shares, which redemption will completely extinguish public stockholders’ rights as stockholders (including the right to receive further liquidating distributions, if any), and (iii) as promptly as reasonably possible following such redemption, subject to the approval of our remaining stockholders and our board of directors, liquidate and dissolve, subject in each case, to our obligations under Delaware law to provide for claims of creditors and the requirements of other applicable law.

 

 
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If we seek stockholder approval of our initial business combination, our sponsor, initial stockholders, directors, executive officers, advisors, and their affiliates may elect to purchase public shares, rights or public warrants from public stockholders, which may influence a vote on a proposed business combination and reduce the public “float” of our Class A common stock.

 

If we seek stockholder approval of our initial business combination and we do not conduct redemptions in connection with our initial business combination pursuant to the tender offer rules, our sponsor, initial stockholders, directors, executive officers, advisors or their affiliates may purchase public shares, rights or public warrants in privately negotiated transactions or in the open market either prior to or following the completion of our initial business combination, although they are under no obligation to do so. There is no limit on the number of shares our initial stockholders, directors, officers, advisors, or their affiliates may purchase in such transactions, subject to compliance with applicable law and Nasdaq rules. However, other than as expressly stated herein, they have no current commitments, plans or intentions to engage in such transactions and have not formulated any terms or conditions for any such transactions. None of the funds in the trust account will be used to purchase public shares, rights or public warrants in such transactions. Such purchases may include a contractual acknowledgment that such stockholder, although still the record holder of our shares, is no longer the beneficial owner thereof and therefore agrees not to exercise its redemption rights.

 

In the event that our sponsor, initial stockholders, directors, executive officers, advisors or their affiliates purchase shares in privately negotiated transactions from public stockholders who have already elected to exercise their redemption rights, such selling stockholders would be required to revoke their prior elections to redeem their shares. The purpose of any such purchases of shares could be to vote such shares in favor of the business combination and thereby increase the likelihood of obtaining stockholder approval of the business combination or to satisfy a closing condition in an agreement with a target that requires us to have a minimum net worth or a certain amount of cash at the closing of our initial business combination, where it appears that such requirement would otherwise not be met. The purpose of any such purchases of rights or public warrants could be to reduce the number of rights or public warrants outstanding or to vote such warrants on any matters submitted to the right holders or warrant holders for approval in connection with our initial business combination. Any such purchases of our securities may result in the completion of our initial business combination that may not otherwise have been possible. We expect any such purchases will be reported pursuant to Section 13 and Section 16 of the Exchange Act to the extent such purchasers are subject to such reporting requirements. See “Proposed Business — Permitted Purchases of Our Securities” for a description of how our sponsor, directors, executive officers, advisors or any of their affiliates will select which stockholders to purchase securities from in any private transaction.

 

In addition, if such purchases are made, the public “float” of our Class A common stock, rights or public warrants and the number of beneficial holders of our securities may be reduced, possibly making it difficult to obtain or maintain the quotation, listing or trading of our securities on a national securities exchange.

 

 
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If a stockholder fails to receive notice of our offer to redeem our public shares in connection with our initial business combination, or fails to comply with the procedures for tendering its shares, such shares may not be redeemed.

 

We will comply with the proxy rules or tender offer rules, as applicable, when conducting redemptions in connection with our initial business combination. Despite our compliance with these rules, if a stockholder fails to receive our proxy materials or tender offer documents, as applicable, such stockholder may not become aware of the opportunity to redeem its shares. In addition, proxy materials or tender offer documents, as applicable, that we will furnish to holders of our public shares in connection with our initial business combination will describe the various procedures that must be complied with in order to validly tender or submit public shares for redemption. For example, we intend to require our public stockholders seeking to exercise their redemption rights, whether they are record holders or hold their shares in “street name,” to, at the holder’s option, either deliver their stock certificates to our transfer agent, or to deliver their shares to our transfer agent electronically prior to the date set forth in the proxy materials or tender offer documents, as applicable. In the case of proxy materials, this date may be up to two business days prior to the vote on the proposal to approve the initial business combination. In addition, if we conduct redemptions in connection with a stockholder vote, we intend to require a public stockholder seeking redemption of its public shares to also submit a written request for redemption to our transfer agent two business days prior to the vote in which the name of the beneficial owner of such shares is included. In the event that a stockholder fails to comply with these or any other procedures disclosed in the proxy or tender offer materials, as applicable, its shares may not be redeemed. See the section of this prospectus entitled “Proposed Business — Submitting Stock Certificates in Connection with Redemption Rights.”

 

You will not be entitled to protections normally afforded to investors of many other blank check companies.

 

Since the net proceeds of this offering and the sale of the private placement warrants are intended to be used to complete an initial business combination with a target business that has not been selected, we may be deemed to be a “blank check” company under the United States securities laws. However, since our securities will be listed on a national securities exchange, we are exempt from rules promulgated by the SEC to protect investors in blank check companies, such as Rule 419. Accordingly, investors will not be afforded the benefits or protections of those rules. Among other things, this means our units will be immediately tradable and we will have a longer period of time to complete our initial business combination than do companies subject to Rule 419. Moreover, if this offering were subject to Rule 419, that rule would prohibit the release of any interest earned on funds held in the trust account to us unless and until the funds in the trust account were released to us in connection with our completion of an initial business combination. For a more detailed comparison of our offering to offerings that comply with Rule 419, please see “Proposed Business — Comparison of This Offering to Those of Blank Check Companies Subject to Rule 419.”

 

If we seek stockholder approval of our initial business combination and we do not conduct redemptions pursuant to the tender offer rules, and if you or a “group” of stockholders are deemed to hold in excess of 15% of our Class A common stock, you will lose the ability to redeem all such shares in excess of 15% of our Class A common stock.

 

If we seek stockholder approval of our initial business combination and we do not conduct redemptions in connection with our initial business combination pursuant to the tender offer rules, our amended and restated certificate of incorporation provides that a public stockholder, together with any affiliate of such stockholder or any other person with whom such stockholder is acting in concert or as a “group” (as defined under Section 13 of the Exchange Act), will be restricted from seeking redemption rights with respect to more than an aggregate of 15% of the shares sold in this offering without our prior consent, which we refer to as the “Excess Shares.” However, we would not be restricting our stockholders’ ability to vote all of their shares (including Excess Shares) for or against our initial business combination. Your inability to redeem the Excess Shares will reduce your influence over our ability to complete our initial business combination and you could suffer a material loss on your investment in us if you sell Excess Shares in open market transactions. Additionally, you will not receive redemption distributions with respect to the Excess Shares if we complete our initial business combination. And as a result, you will continue to hold that number of shares exceeding 15% and, in order to dispose of such shares, would be required to sell your shares in open market transactions, potentially at a loss.

 

 
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Because of our limited resources and the significant competition for business combination opportunities, it may be more difficult for us to complete our initial business combination. If we are unable to complete our initial business combination, our public stockholders may receive only their pro rata portion of the funds in the trust account that are available for distribution to public stockholders, and our rights and warrants will expire worthless.

 

We expect to encounter competition from other entities having a business objective similar to ours, including private investors (which may be individuals or investment partnerships), other blank check companies and other entities, domestic and international, competing for the types of businesses we intend to acquire. Many of these individuals and entities are well-established and have extensive experience in identifying and effecting, directly or indirectly, acquisitions of companies operating in or providing services to various industries. Many of these competitors possess similar or greater technical, human and other resources to ours or more local industry knowledge than we do and our financial resources will be relatively limited when contrasted with those of many of these competitors. While we believe there are numerous target businesses we could potentially acquire with the net proceeds of this offering and the sale of the private placement warrants, our ability to compete with respect to the acquisition of certain target businesses that are sizable will be limited by our available financial resources. This inherent competitive limitation gives others an advantage in pursuing the acquisition of certain target businesses. Furthermore, we are obligated to offer holders of our public shares the right to redeem their shares for cash at the time of our initial business combination in conjunction with a stockholder vote or via a tender offer. Target companies will be aware that this may reduce the resources available to us for our initial business combination. Any of these obligations may place us at a competitive disadvantage in successfully negotiating a business combination. If we are unable to complete our initial business combination, our public stockholders may receive only their pro rata portion of the funds in the trust account that are available for distribution to public stockholders, and our rights and warrants will expire worthless.

   

If the net proceeds of this offering not being held in the trust account are insufficient to allow us to operate for at least the 18 months following the closing of the offering, it could limit the amount available to fund our search for a target business or businesses and complete our initial business combination, and we will depend on loans from our sponsor or management team to fund our search and to complete our initial business combination.

 

Of the net proceeds of this offering, only $2,497,500 will be available to us initially outside the trust account to fund our working capital requirements. We believe that, upon closing of this offering, the funds available to us outside of the trust account will be sufficient to allow us to operate for at least the 18 months following such closing; however, we cannot assure you that our estimate is accurate. Of the funds available to us, we could use a portion of the funds available to us to pay fees to consultants to assist us with our search for a target business. We could also use a portion of the funds as a down payment or to fund a “no-shop” provision (a provision in letters of intent or merger agreements designed to keep target businesses from “shopping” around for transactions with other companies or investors on terms more favorable to such target businesses) with respect to a particular proposed business combination, although we do not have any current intention to do so. If we have entered into a letter of intent or merger agreement where we paid for the right to receive exclusivity from a target business and were subsequently required to forfeit such funds (whether as a result of our breach or otherwise), we might not have sufficient funds to continue searching for, or conduct due diligence with respect to, a target business.

  

In the event that our offering expenses exceed our estimate of $838,000, we may fund such excess with funds not to be held in the trust account. In such case, the amount of funds we intend to be held outside the trust account would decrease by a corresponding amount. Conversely, in the event that the offering expenses are less than our estimate of $838,000, the amount of funds we intend to be held outside the trust account would increase by a corresponding amount. The amount held in the trust account will not be impacted as a result of such increase or decrease. If we are required to seek additional capital, we would need to borrow funds from our sponsor, management team or other third parties to operate or may be forced to liquidate. Neither our sponsor, members of our management team nor any of their affiliates is under any obligation to advance funds to us in such circumstances. Any such advances would be repaid only from funds held outside the trust account or from funds released to us upon completion of our initial business combination. Up to $1,500,000 of such loans may be convertible into warrants of the post-business combination entity at a price of $1.00 per warrant at the option of the lender. The warrants would be identical to the private placement warrants. Prior to the completion of our initial business combination, we do not expect to seek loans from parties other than our sponsor or an affiliate of our sponsor as we do not believe third parties will be willing to loan such funds and provide a waiver against any and all rights to seek access to funds in our trust account. If we are unable to complete our initial business combination because we do not have sufficient funds available to us, we will be forced to cease operations and liquidate the trust account. Consequently, our public stockholders may only receive an estimated $10.00 per share, or possibly less, on our redemption of our public shares, and our rights and warrants will expire worthless.

 

 
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If third parties bring claims against us, the proceeds held in the trust account could be reduced and the per-share redemption amount received by stockholders may be less than $10.00 per share.

 

Our placing of funds in the trust account may not protect those funds from third party claims against us. Although we will seek to have all vendors, service providers, prospective target businesses and other entities (except for our Independent Registered Public Accounting Firm) with which we do business execute agreements with us waiving any right, title, interest or claim of any kind in or to any monies held in the trust account for the benefit of our public stockholders, such parties may not execute such agreements, or even if they execute such agreements they may not be prevented from bringing claims against the trust account, including, but not limited to, fraudulent inducement, breach of fiduciary responsibility or other similar claims, as well as claims challenging the enforceability of the waiver, in each case in order to gain advantage with respect to a claim against our assets, including the funds held in the trust account. If any third party refuses to execute an agreement waiving such claims to the monies held in the trust account, our management will consider whether competitive alternatives are reasonably available to us and will only enter into an agreement with such third party if management believes that such third party’s engagement would be in the best interests of the Company under the circumstances. The underwriters of this offering as well as our registered independent public accounting firm will not execute agreements with us waiving such claims to the monies held in the trust account.

 

Examples of possible instances where we may engage a third party that refuses to execute a waiver include the engagement of a third party consultant whose particular expertise or skills are believed by management to be significantly superior to those of other consultants that would agree to execute a waiver or in cases where management is unable to find a service provider willing to execute a waiver. In addition, there is no guarantee that such entities will agree to waive any claims they may have in the future as a result of, or arising out of, any negotiations, contracts or agreements with us and will not seek recourse against the trust account for any reason. Upon redemption of our public shares, if we are unable to complete our initial business combination within the prescribed timeframe, or upon the exercise of a redemption right in connection with our initial business combination, we will be required to provide for payment of claims of creditors that were not waived that may be brought against us within the 10 years following redemption. Accordingly, the per-share redemption amount received by public stockholders could be less than the $10.00 per public share initially held in the trust account, due to claims of such creditors. Pursuant to the letter agreement the form of which is filed as an exhibit to the registration statement of which this prospectus forms a part, our sponsor has agreed that it will be liable to us if and to the extent any claims by a third party for services rendered or products sold to us, or a prospective target business with which we have entered into a written letter of intent, confidentiality or other similar agreement or business combination agreement, reduce the amount of funds in the trust account to below the lesser of (i) $10.00 per public share and (ii) the actual amount per public share held in the trust account as of the date of the liquidation of the trust account, if less than $10.00 per public share due to reductions in the value of the trust assets, less taxes payable, provided that such liability will not apply to any claims by a third party or prospective target business who executed a waiver of any and all rights to the monies held in the trust account (whether or not such waiver is enforceable) nor will it apply to any claims under our indemnity of the underwriters of this offering against certain liabilities, including liabilities under the Securities Act. However, we have not asked our sponsor to reserve for such indemnification obligations, nor have we independently verified whether our sponsor has sufficient funds to satisfy its indemnity obligations and we believe that our sponsor’s only assets are securities of our company. Therefore, we cannot assure you that our sponsor would be able to satisfy those obligations. As a result, if any such claims were successfully made against the trust account, the funds available for our initial business combination and redemptions could be reduced to less than $10.00 per public share. In such event, we may not be able to complete our initial business combination, and you would receive such lesser amount per share in connection with any redemption of your public shares. None of our officers or directors will indemnify us for claims by third parties including, without limitation, claims by vendors and prospective target businesses.

   

 
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Our directors may decide not to enforce the indemnification obligations of our sponsor, resulting in a reduction in the amount of funds in the trust account available for distribution to our public stockholders.

 

In the event that the proceeds in the trust account are reduced below the lesser of (i) $10.00 per share and (ii) the actual amount per public share held in the trust account as of the date of the liquidation of the trust account if less than $10.00 per public share due to reductions in the value of the trust assets, in each case less taxes payable, and our sponsor asserts that it is unable to satisfy its obligations or that it has no indemnification obligations related to a particular claim, our independent directors would determine whether to take legal action against our sponsor to enforce its indemnification obligations. While we currently expect that our independent directors would take legal action on our behalf against our sponsor to enforce its indemnification obligations to us, it is possible that our independent directors in exercising their business judgment and subject to their fiduciary duties may choose not to do so in any particular instance. If our independent directors choose not to enforce these indemnification obligations, the amount of funds in the trust account available for distribution to our public stockholders may be reduced below $10.00 per share.

 

If, after we distribute the proceeds in the trust account to our public stockholders, we file a bankruptcy petition or an involuntary bankruptcy petition is filed against us that is not dismissed, a bankruptcy court may seek to recover such proceeds, and the members of our board of directors may be viewed as having breached their fiduciary duties to our creditors, thereby exposing the members of our board of directors and us to claims of punitive damages.

 

If, after we distribute the proceeds in the trust account to our public stockholders, we file a bankruptcy petition or an involuntary bankruptcy petition is filed against us that is not dismissed, any distributions received by stockholders could be viewed under applicable debtor/creditor and/or bankruptcy laws as either a “preferential transfer” or a “fraudulent conveyance.” As a result, a bankruptcy court could seek to recover some or all amounts received by our stockholders. In addition, our board of directors may be viewed as having breached its fiduciary duty to our creditors and/or having acted in bad faith, by paying public stockholders from the trust account prior to addressing the claims of creditors, thereby exposing itself and us to claims of punitive damages.

 

If, before distributing the proceeds in the trust account to our public stockholders, we file a bankruptcy petition or an involuntary bankruptcy petition is filed against us that is not dismissed, the claims of creditors in such proceeding may have priority over the claims of our stockholders and the per-share amount that would otherwise be received by our stockholders in connection with our liquidation may be reduced.

 

If, before distributing the proceeds in the trust account to our public stockholders, we file a bankruptcy petition or an involuntary bankruptcy petition is filed against us that is not dismissed, the proceeds held in the trust account could be subject to applicable bankruptcy law, and may be included in our bankruptcy estate and subject to the claims of third parties with priority over the claims of our stockholders. To the extent any bankruptcy claims deplete the trust account, the per-share amount that would otherwise be received by our stockholders in connection with our liquidation may be reduced.

 

 
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If we are deemed to be an investment company under the Investment Company Act, we may be required to institute burdensome compliance requirements and our activities may be restricted, which may make it difficult for us to complete our initial business combination.

 

If we are deemed to be an investment company under the Investment Company Act, our activities may be restricted, including:

  

 

·

restrictions on the nature of our investments; and

 

 

 

 

·

restrictions on the issuance of securities,

   

each of which may make it difficult for us to complete our initial business combination. In addition, we may have imposed upon us burdensome requirements, including:

   

 

·

registration as an investment company with the SEC;

 

 

 

 

·

adoption of a specific form of corporate structure; and

 

 

 

 

·

reporting, record keeping, voting, proxy and disclosure requirements and other rules and regulations that we are not subject to.

   

In order not to be regulated as an investment company under the Investment Company Act, unless we can qualify for an exemption, we must ensure that we are engaged primarily in a business other than investing, reinvesting or trading of securities and that our activities do not include investing, reinvesting, owning, holding or trading “investment securities” constituting more than 40% of our assets (exclusive of U.S. government securities and cash items) on an unconsolidated basis. Our business will be to identify and complete a business combination and thereafter to operate the post-transaction business or assets for the long term. We do not plan to buy businesses or assets with a view to resale or profit from their resale. We do not plan to buy unrelated businesses or assets or to be a passive investor.

 

We do not believe that our anticipated principal activities will deem us to be an “investment company” under the Investment Company Act. To this end, the proceeds held in the trust account may only be invested in United States “government securities” within the meaning of Section 2(a)(16) of the Investment Company Act having a maturity of 185 days or less or in money market funds meeting certain conditions under Rule 2a-7 promulgated under the Investment Company Act which invest only in direct U.S. government treasury obligations. Pursuant to the trust agreement, the trustee is not permitted to invest in other securities or assets. By restricting the investment of the proceeds to these instruments, and by having a business plan targeted at acquiring and growing businesses for the long term (rather than on buying and selling businesses in the manner of a merchant bank or private equity fund), we intend to avoid being deemed an “investment company” within the meaning of the Investment Company Act. This offering is not intended for persons who are seeking a return on investments in government securities or investment securities. The trust account is intended as a holding place for funds pending the earliest to occur of either: (i) the completion of our initial business combination; (ii) the redemption of any public shares properly tendered in connection with a stockholder vote to amend our amended and restated certificate of incorporation to modify the substance or timing of our obligation to provide for the redemption of our public shares in connection with an initial business combination or to redeem 100% of our public shares if we do not complete our initial business combination within the completion window; and (iii) absent an initial business combination within the completion window or with respect to any other material provisions relating to stockholders’ rights or pre-initial business combination activity, our return of the funds held in the trust account to our public stockholders as part of our redemption of the public shares. If we do not invest the proceeds as discussed above, we may be deemed to be subject to the Investment Company Act. If we were deemed an “investment company” within the meaning of the Investment Company Act, compliance with these additional regulatory burdens would require additional expenses for which we have not allotted funds and may hinder our ability to complete a business combination. If we are unable to complete our initial business combination, our public stockholders may only receive their pro rata portion of the funds in the trust account that are available for distribution to public stockholders, and our rights and warrants will expire worthless.

 

 
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Changes in laws or regulations, or a failure to comply with any laws and regulations, may adversely affect our business, including our ability to negotiate and complete our initial business combination, and results of operations.

 

We are subject to laws and regulations enacted by national, regional, and local governments. In particular, we will be required to comply with certain SEC and other legal requirements. Compliance with, and monitoring of, applicable laws and regulations may be difficult, time consuming and costly. Those laws and regulations and their interpretation and application may also change from time to time and those changes could have a material adverse effect on our business, investments, and results of operations. In addition, a failure to comply with applicable laws or regulations, as interpreted and applied, could have a material adverse effect on our business, including our ability to negotiate and complete our initial business combination, and results of operations.

 

Our stockholders may be held liable for claims by third parties against us to the extent of distributions received by them upon redemption of their shares.

 

Under the DGCL, stockholders may be held liable for claims by third parties against a corporation to the extent of distributions received by them in a dissolution. The pro rata portion of our trust account distributed to our public stockholders upon the redemption of our public shares in the event we do not complete our initial business combination within the completion window may be considered a liquidating distribution under Delaware law. If a corporation complies with certain procedures set forth in Section 280 of the DGCL intended to ensure that it makes reasonable provision for all claims against it, including a 60-day notice period during which any third-party claims can be brought against the corporation, a 90-day period during which the corporation may reject any claims brought, and an additional 150-day waiting period before any liquidating distributions are made to stockholders, any liability of stockholders with respect to a liquidating distribution is limited to the lesser of such stockholder’s pro rata share of the claim or the amount distributed to the stockholder, and any liability of the stockholder would be barred after the third anniversary of the dissolution. However, it is our intention to redeem our public shares as soon as reasonably possible following the completion window in the event we do not complete our initial business combination and, therefore, we do not intend to comply with the foregoing procedures.

 

Because we will not be complying with Section 280, Section 281(b) of the DGCL requires us to adopt a plan, based on facts known to us at such time that will provide for our payment of all existing and pending claims or claims that may be potentially brought against us within the 10 years following our dissolution. However, because we are a blank check company, rather than an operating company, and our operations will be limited to searching for prospective target businesses to acquire, the only likely claims to arise would be from our vendors (such as lawyers, investment bankers, etc.) or prospective target businesses. If our plan of distribution complies with Section 281(b) of the DGCL, any liability of stockholders with respect to a liquidating distribution is limited to the lesser of such stockholder’s pro rata share of the claim or the amount distributed to the stockholder, and any liability of the stockholder would likely be barred after the third anniversary of the dissolution. We cannot assure you that we will properly assess all claims that may be potentially brought against us. As such, our stockholders could potentially be liable for any claims to the extent of distributions received by them (but no more) and any liability of our stockholders may extend beyond the third anniversary of such date. Furthermore, if the pro rata portion of our trust account distributed to our public stockholders upon the redemption of our public shares in the event we do not complete our initial business combination within the completion window is not considered a liquidating distribution under Delaware law and such redemption distribution is deemed to be unlawful (potentially due to the imposition of legal proceedings that a party may bring or due to other circumstances that are currently unknown), then pursuant to Section 174 of the DGCL, the statute of limitations for claims of creditors could then be six years after the unlawful redemption distribution, instead of three years, as in the case of a liquidating distribution.

 

 
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We may not hold an annual meeting of stockholders until after the consummation of our initial business combination, which could delay the opportunity for our stockholders to elect directors.

 

In accordance with Nasdaq’s corporate governance requirements, we are not required to hold an annual meeting until no later than one year after our first fiscal year end following our listing on Nasdaq. Under Section 211(b) of the DGCL, we are, however, required to hold an annual meeting of stockholders for the purposes of electing directors in accordance with our bylaws unless such election is made by written consent in lieu of such a meeting. We may not hold an annual meeting of stockholders to elect new directors prior to the consummation of our initial business combination, and thus we may not be in compliance with Section 211(b) of the DGCL, which requires an annual meeting. Therefore, if our stockholders want us to hold an annual meeting prior to the consummation of our initial business combination, they may attempt to force us to hold one by submitting an application to the Delaware Court of Chancery in accordance with Section 211(c) of the DGCL.

  

Because we are neither limited to evaluating a target business in a particular industry sector nor have we selected any specific target businesses with which to pursue our initial business combination, you will be unable to ascertain the merits or risks of any particular target business’s operations.

 

Our efforts to identify a prospective initial business combination target will not be limited to a particular industry, sector, or geographic region. Our amended and restated certificate of incorporation prohibits us from effectuating a business combination with another blank check company or similar company with nominal operations. Because we have not yet selected any specific target business with respect to a business combination, there is no basis to evaluate the possible merits or risks of any particular target business’s operations, results of operations, cash flows, liquidity, financial condition or prospects. To the extent we complete our initial business combination, we may be affected by numerous risks inherent in the business operations with which we combine. For example, if we combine with a financially unstable business or an entity lacking an established record of sales or earnings, we may be affected by the risks inherent in the business and operations of a financially unstable or a development stage entity. Although our officers and directors will endeavor to evaluate the risks inherent in a particular target business, we cannot assure you that we will properly ascertain or assess all of the significant risk factors or that we will have adequate time to complete due diligence. Furthermore, some of these risks may be outside of our control and leave us with no ability to control or reduce the chances that those risks will adversely impact a target business. We also cannot assure you that an investment in our units will ultimately prove to be more favorable to investors than a direct investment, if such opportunity were available, in a business combination target. Accordingly, any stockholders or warrant holders who choose to remain stockholders or warrant holders following the business combination could suffer a reduction in the value of their securities. Such stockholders or warrant holders are unlikely to have a remedy for such reduction in value unless they are able to successfully claim that the reduction was due to the breach by our officers or directors of a duty of care or other fiduciary duty owed to them, or if they are able to successfully bring a private claim under securities laws that the proxy materials or tender offer documents, as applicable, relating to the business combination contained an actionable material misstatement or material omission.

 

Our initial stockholders will control the election of our board of directors until consummation of our initial business combination and will hold a substantial interest in us. As a result, they will elect all of our directors prior to the consummation of our initial business combination and may exert a substantial influence on actions requiring a stockholder vote, potentially in a manner that you do not support.

 

Upon the closing of this offering, our initial stockholders will own 20% of our outstanding common stock (assuming they do not purchase any units in this offering). In addition, the founder shares, all of which are held by our initial stockholders, will entitle the holders to elect all of our directors prior to the consummation of our initial business combination. Holders of our public shares will have no right to vote on the election of directors during such time. These provisions of our amended and restated certificate of incorporation may only be amended by a majority of at least 90% of our common stock of our outstanding common stock. As a result, you will not have any influence over the election of directors prior to our initial business combination.

 

 
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Neither our initial stockholders nor, to our knowledge, any of our officers or directors, have any current intention to purchase additional securities, other than as disclosed in this prospectus. Factors that would be considered in making such additional purchases would include consideration of the current trading price of our Class A common stock. In addition, as a result of their substantial ownership in our company, our initial stockholders may exert a substantial influence on other actions requiring a stockholder vote, potentially in a manner that you do not support, including amendments to our amended and restated certificate of incorporation and approval of major corporate transactions. If our initial stockholders purchase any additional shares of common stock in the aftermarket or in privately negotiated transactions, this would increase their influence over these actions. Accordingly, our initial stockholders will exert significant influence over actions requiring a stockholder vote. Please see “Proposed Business—Permitted purchases of our securities.”

 

Although we have identified general criteria and guidelines that we believe are important in evaluating prospective target businesses, we may enter into our initial business combination with a target that does not meet such criteria and guidelines, and as a result, the target business with which we enter into our initial business combination may not have attributes entirely consistent with our general criteria and guidelines.

 

Although we have identified general criteria and guidelines for evaluating prospective target businesses, it is possible that a target business with which we enter into our initial business combination will not have all of these positive attributes. If we complete our initial business combination with a target that does not meet some or all of these guidelines, such combination may not be as successful as a combination with a business that does meet all of our general criteria and guidelines. In addition, if we announce a prospective business combination with a target that does not meet our general criteria and guidelines, a greater number of stockholders may exercise their redemption rights, which may make it difficult for us to meet any closing condition with a target business that requires us to have a minimum net worth or a certain amount of cash. In addition, if stockholder approval of the transaction is required by law, or we decide to obtain stockholder approval for business or other legal reasons, it may be more difficult for us to attain stockholder approval of our initial business combination if the target business does not meet our general criteria and guidelines. If we are unable to complete our initial business combination, our public stockholders may only receive their pro rata portion of the funds in the trust account that are available for distribution to public stockholders, and our rights and warrants will expire worthless.

 

We may seek business combination opportunities with a financially unstable business or an entity lacking an established record of revenue, cash flow or earnings, which could subject us to volatile revenues, cash flows or earnings or difficulty in retaining key personnel.

 

To the extent we complete our initial business combination with an early stage company, a financially unstable business or an entity lacking an established record of revenues or earnings, we may be affected by numerous risks inherent in the operations of the business with which we combine. These risks include, but are not limited to, investing in a business without a proven business model or with limited historic financial data, volatile revenues or earnings, intense competition, and difficulties in obtaining and retaining key personnel. Some of these risks may be outside of our control and leave us with no ability to control or reduce the chances that those risks will adversely impact a target business.

 

We are not required to obtain an opinion from an independent investment banking firm or from a valuation or appraisal firm, and consequently, you may have no assurance from an independent source that the price we are paying for the business is fair to our stockholders from a financial point of view.

 

Unless we complete our initial business combination with an affiliated entity or our board of directors cannot independently determine the fair market value of the target business or businesses (including with the assistance of financial advisors), we are not required to obtain an opinion from an independent investment banking firm which is a member of FINRA or from a valuation or appraisal firm that the price we are paying is fair to our stockholders from a financial point of view. If no opinion is obtained, our stockholders will be relying on the judgment of our board of directors, who will determine fair market value based on standards generally accepted by the financial community. Such standards used will be disclosed in our proxy materials or tender offer documents, as applicable, related to our initial business combination.

 

 
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Resources could be wasted in researching business combinations that are not completed, which could materially adversely affect subsequent attempts to locate and acquire or merge with another business. If we are unable to complete our initial business combination, our public stockholders may only receive their pro rata portion of the funds in the trust account that are available for distribution to public stockholders, and our rights and warrants will expire worthless.

 

We anticipate that the investigation of each specific target business and the negotiation, drafting and execution of relevant agreements, disclosure documents and other instruments will require substantial management time and attention and substantial costs for accountants, attorneys, and others. If we decide not to complete a specific initial business combination, the costs incurred up to that point for the proposed transaction likely would not be recoverable. Furthermore, if we reach an agreement relating to a specific target business, we may fail to complete our initial business combination for any number of reasons including those beyond our control. Any such event will result in a loss to us of the related costs incurred which could materially adversely affect subsequent attempts to locate and acquire or merge with another business. If we are unable to complete our initial business combination, our public stockholders may only receive their pro rata portion of the funds in the trust account that are available for distribution to public stockholders, and our rights and warrants will expire worthless.

    

We may issue notes or other debt securities, or otherwise incur substantial debt, to complete a business combination, which may adversely affect our leverage and financial condition and thus negatively impact the value of our stockholders’ investment in us.

 

Although we have no commitments as of the date of this prospectus to issue any notes or other debt securities, or to otherwise incur outstanding debt following this offering, we may choose to incur substantial debt to complete our initial business combination. We and our officers have agreed that we will not incur any indebtedness unless we have obtained from the lender a waiver of any right, title, interest or claim of any kind in or to the monies held in the trust account. As such, no issuance of debt will affect the per share amount available for redemption from the trust account. Nevertheless, the incurrence of debt could have a variety of negative effects, including:

  

 

·

default and foreclosure on our assets if our operating revenues after an initial business combination are insufficient to repay our debt obligations;

 

 

 

 

·

acceleration of our obligations to repay the indebtedness even if we make all principal and interest payments when due if we breach certain covenants that require the maintenance of certain financial ratios or reserves without a waiver or renegotiation of that covenant;

 

 

 

 

·

our immediate payment of all principal and accrued interest, if any, if the debt is payable on demand;

 

 

 

 

·

our inability to obtain necessary additional financing if the debt contains covenants restricting our ability to obtain such financing while the debt is outstanding;

 

 

 

 

·

our inability to pay dividends on our Class A common stock;

 

 

 

 

·

using a substantial portion of our cash flow to pay principal and interest on our debt, which will reduce the funds available for dividends on our Class A common stock if declared, expenses, capital expenditures, acquisitions and other general corporate purposes;

 

 

 

 

·

limitations on our flexibility in planning for and reacting to changes in our business and in the industry in which we operate;

 

 

 

 

·

increased vulnerability to adverse changes in general economic, industry and competitive conditions and adverse changes in government regulation; and

 

 

 

 

·

limitations on our ability to borrow additional amounts for expenses, capital expenditures, acquisitions, debt service requirements, execution of our strategy and other purposes and other disadvantages compared to our competitors who have less debt.

  

 
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We may only be able to complete one business combination with the proceeds of this offering and the sale of the private placement warrants, which will cause us to be solely dependent on a single business which may have a limited number of products or services. This lack of diversification may negatively impact our operations and profitability.

 

The net proceeds from this offering and the private placement of warrants will provide us with $201,075,000 (or $230,763,750 if the underwriters’ over-allotment option is exercised in full) that we may use to complete our initial business combination (after taking into account the $8,925,000, or $10,736,250 if the over-allotment option is exercised in full, of deferred underwriting commissions being held in the trust account).

 

We may effectuate our initial business combination with a single target business or multiple target businesses simultaneously or within a short period of time. However, we may not be able to effectuate our initial business combination with more than one target business because of various factors, including the existence of complex accounting issues and the requirement that we prepare and file pro forma financial statements with the SEC that present operating results and the financial condition of several target businesses as if they had been operated on a combined basis. By completing our initial business combination with only a single entity, our lack of diversification may subject us to numerous economic, competitive, and regulatory developments. Further, we would not be able to diversify our operations or benefit from the possible spreading of risks or offsetting of losses, unlike other entities which may have the resources to complete several business combinations in different industries or different areas of a single industry. Accordingly, the prospects for our success may be:

  

 

·

solely dependent upon the performance of a single business, property or asset, or

 

 

 

 

·

dependent upon the development or market acceptance of a single or limited number of products, processes or services.

    

This lack of diversification may subject us to numerous economic, competitive, and regulatory risks, any or all of which may have a substantial adverse impact upon the particular industry in which we may operate subsequent to our initial business combination.

    

We may attempt to simultaneously complete business combinations with multiple prospective targets, which may hinder our ability to complete our initial business combination and give rise to increased costs and risks that could negatively impact our operations and profitability.

  

If we determine to simultaneously acquire several businesses that are owned by different sellers, we will need for each of such sellers to agree that our purchase of its business is contingent on the simultaneous closings of the other business combinations, which may make it more difficult for us, and delay our ability, to complete our initial business combination. With multiple business combinations, we could also face additional risks, including additional burdens and costs with respect to possible multiple negotiations and due diligence investigations (if there are multiple sellers) and the additional risks associated with the subsequent assimilation of the operations and services or products of the acquired companies in a single operating business. If we are unable to adequately address these risks, it could negatively impact our profitability and results of operations.

 

 
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We may attempt to complete our initial business combination with a private company about which little information is available, which may result in a business combination with a company that is not as profitable as we suspected, if at all.

 

In pursuing our business combination strategy, we may seek to effectuate our initial business combination with a privately held company. Very little public information generally exists about private companies, and we could be required to make our decision on whether to pursue a potential initial business combination on the basis of limited information, which may result in a business combination with a company that is not as profitable as we suspected, if at all.

 

We do not have a specified maximum redemption threshold. The absence of such a redemption threshold may make it possible for us to complete our initial business combination with which a substantial majority of our stockholders or warrant holders do not agree.

 

Our amended and restated certificate of incorporation does not provide a specified maximum redemption threshold, except that in no event will we redeem our public shares in an amount that would cause our net tangible assets to be less than $5,000,001. In addition, our proposed initial business combination may impose a minimum cash requirement for: (i) cash consideration to be paid to the target or its owners, (ii) cash for working capital or other general corporate purposes or (iii) the retention of cash to satisfy other conditions. As a result, we may be able to complete our initial business combination even though a substantial majority of our public stockholders do not agree with the transaction and have redeemed their shares or, if we seek stockholder approval of our initial business combination and do not conduct redemptions in connection with our initial business combination pursuant to the tender offer rules, have entered into privately negotiated agreements to sell their shares to our sponsor, officers, directors, advisors or any of their affiliates. In the event the aggregate cash consideration we would be required to pay for all shares of Class A common stock that are validly submitted for redemption plus any amount required to satisfy cash conditions pursuant to the terms of the proposed business combination exceed the aggregate amount of cash available to us, we will not complete the business combination or redeem any shares in connection with such initial business combination, all shares of Class A common stock submitted for redemption will be returned to the holders thereof, and we instead may search for an alternate business combination.

 

In order to effectuate an initial business combination, special purpose acquisition companies have, in the recent past, amended various provisions of their charters and other governing instruments, including their warrant agreements. We cannot assure you that we will not seek to amend our amended and restated certificate of incorporation or governing instruments in a manner that will make it easier for us to complete our initial business combination that our stockholders may not support.

  

In order to effectuate a business combination, special purpose acquisition companies have, in the recent past, amended various provisions of their charters and governing instruments, including their warrant agreements. For example, special purpose acquisition companies have amended the definition of business combination, increased redemption thresholds and extended the time to consummate an initial business combination and, with respect to their warrants, amended their warrant agreements to require the warrants to be exchanged for cash and/or other securities. Amending our amended and restated certificate of incorporation will require the approval of holders of a majority of our common stock and amending our warrant agreement will require a vote of holders of a majority of the public warrants and, solely with respect to any amendment to the terms of the private placement warrants or any provision of the warrant agreement with respect to the private placement warrants, 50% of the number of the then outstanding private placement warrants. In addition, our amended and restated certificate of incorporation requires us to provide our public stockholders with the opportunity to redeem their public shares for cash if we propose an amendment to our amended and restated certificate of incorporation to modify the substance or timing of our obligation to provide for the redemption of our public shares in connection with an initial business combination or to redeem 100% of our public shares if we do not complete an initial business combination within the completion window or with respect to any other material provisions relating to stockholders’ rights or pre-initial business combination activity. To the extent any of such amendments would be deemed to fundamentally change the nature of the securities offered through this registration statement, we would register, or seek an exemption from registration for, the affected securities. We cannot assure you that we will not seek to amend our charter or governing instruments or extend the time to consummate an initial business combination in order to effectuate our initial business combination.

  

 
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The provisions of our amended and restated certificate of incorporation that relate to our pre-business combination activity (and corresponding provisions of the agreement governing the release of funds from our trust account) may be amended with the approval of holders of a majority of our common stock, which is a lower amendment threshold than that of some other special purpose acquisition companies. It may be easier for us, therefore, to amend our amended and restated certificate of incorporation to facilitate the completion of an initial business combination that some of our stockholders may not support.

 

Our amended and restated certificate of incorporation provides that any of its provisions related to pre-business combination activity (other than amendments relating to the appointment of directors, which require the approval by a majority of at least 90% of our outstanding common stock, and including the requirement to deposit proceeds of this offering and the private placement of warrants into the trust account and not release such amounts except in specified circumstances, and to provide redemption rights to public stockholders as described herein) may be amended if approved by holders of a majority of our common stock entitled to vote thereon and corresponding provisions of the trust agreement governing the release of funds from our trust account may be amended if approved by holders of a majority of our common stock entitled to vote thereon. In all other instances, our amended and restated certificate of incorporation may be amended by holders of a majority of our outstanding common stock entitled to vote thereon, subject to applicable provisions of the DGCL or applicable stock exchange rules. Prior to an initial business combination, we may not issue additional securities that can vote on amendments to our amended and restated certificate of incorporation or on our initial business combination or that would entitle holders thereof to receive funds from the trust account. Our initial stockholders, who will collectively beneficially own 20% of our common stock upon the closing of this offering (assuming they do not purchase any units in this offering), may participate in any vote to amend our amended and restated certificate of incorporation and/or trust agreement and will have the discretion to vote in any manner they choose. As a result, we may be able to amend the provisions of our amended and restated certificate of incorporation which govern our pre-business combination behavior more easily than some other special purpose acquisition companies, and this may increase our ability to complete a business combination with which you do not agree. Our stockholders may pursue remedies against us for any breach of our amended and restated certificate of incorporation.

 

Our sponsor, executive officers, directors, and director nominees have agreed, pursuant to written agreements with us, that they will not propose any amendment to our amended and restated certificate of incorporation to modify the substance or timing of our obligation to provide for the redemption of our public shares in connection with an initial business combination or to redeem 100% of our public shares if we do not complete our initial business combination within the completion window or with respect to any other material provisions relating to stockholders’ rights or pre-initial business combination activity, unless we provide our public stockholders with the opportunity to redeem their Class A common stock upon approval of any such amendment at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the trust account, including interest earned on the funds held in the trust account (which interest shall be net of taxes payable), divided by the number of then outstanding public shares. Our stockholders are not parties to, or third-party beneficiaries of, these agreements and, as a result, will not have the ability to pursue remedies against our sponsor, executive officers, directors, or director nominees for any breach of these agreements. As a result, in the event of a breach, our stockholders would need to pursue a stockholder derivative action, subject to applicable law.

 

 
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Certain agreements related to this offering may be amended without stockholder approval.

 

Each of the agreements related to this offering to which we are a party, other than the warrant agreement and the investment management trust agreement, may be amended without stockholder approval. Such agreements are: the underwriting agreement; the letter agreement among us and our initial stockholders, sponsor, officers and directors; the registration rights agreement among us and our initial stockholders; the private placement warrants purchase agreement between us and our sponsor; and the administrative services agreement among us, our sponsor and an affiliate of our sponsor. These agreements contain various provisions that our public stockholders might deem to be material. For example, our letter agreement and the underwriting agreement contain certain lock-up provisions with respect to the founder shares, private placement warrants, and other securities held by our initial stockholders, sponsor, officers and directors. Amendments to such agreements would require the consent of the applicable parties thereto and would need to be approved by our board of directors, which may do so for a variety of reasons, including to facilitate our initial business combination. While we do not expect our board of directors to approve any amendment to any of these agreements prior to our initial business combination, it may be possible that our board of directors, in exercising its business judgment and subject to its fiduciary duties, chooses to approve one or more amendments to any such agreement. Any amendment entered into in connection with the consummation of our initial business combination will be disclosed in our proxy materials or tender offer documents, as applicable, related to such initial business combination, and any other material amendment to any of our material agreements will be disclosed in a filing with the SEC. Any such amendments would not require approval from our stockholders, may result in the completion of our initial business combination that may not otherwise have been possible, and may have an adverse effect on the value of an investment in our securities. For example, amendments to the lock-up provision discussed above may result in our initial stockholders selling their securities earlier than they would otherwise be permitted, which may have an adverse effect on the price of our securities.

 

We may be unable to obtain additional financing to complete our initial business combination or to fund the operations and growth of a target business, which could compel us to restructure or abandon a particular business combination.

 

We have not selected any specific business combination target but intend to target businesses with enterprise values that are greater than we could acquire with the net proceeds of this offering and the sale of the private placement warrants. As a result, if the cash portion of the purchase price exceeds the amount available from the trust account, net of amounts needed to satisfy any redemption by public stockholders, we may be required to seek additional financing to complete such proposed initial business combination. We cannot assure you that such financing will be available on acceptable terms, if at all. To the extent that additional financing proves to be unavailable when needed to complete our initial business combination, we would be compelled to either restructure the transaction or abandon that particular business combination and seek an alternative target business candidate. Further, we may be required to obtain additional financing in connection with the closing of our initial business combination for general corporate purposes, including for maintenance or expansion of operations of the post-transaction businesses, the payment of principal or interest due on indebtedness incurred in completing our initial business combination, or to fund the purchase of other companies. If we are unable to complete our initial business combination, our public stockholders may only receive their pro rata portion of the funds in the trust account that are available for distribution to public stockholders, and our rights and warrants will expire worthless. In addition, even if we do not need additional financing to complete our initial business combination, we may require such financing to fund the operations or growth of the target business. The failure to secure additional financing could have a material adverse effect on the continued development or growth of the target business. None of our officers, directors or stockholders is required to provide any financing to us in connection with or after our initial business combination.

 

Our initial stockholders control a substantial interest in us and thus may exert a substantial influence on actions requiring a stockholder vote, potentially in a manner that you do not support.

 

Upon closing of this offering, our initial stockholders will own 20% of our issued and outstanding common stock (assuming they do not purchase any units in this offering). Accordingly, they may exert a substantial influence on actions requiring a stockholder vote, potentially in a manner that you do not support, including amendments to our amended and restated certificate of incorporation. If our initial stockholders purchase any units in this offering or if our initial stockholders purchase any additional Class A common stock in the aftermarket or in privately negotiated transactions, this would increase their control. Neither our initial stockholders nor, to our knowledge, any of our officers or directors, have any current intention to purchase additional securities, other than as disclosed in this prospectus. Factors that would be considered in making such additional purchases would include consideration of the current trading price of our Class A common stock. In addition, our board of directors, whose members were elected by our sponsor, is and will be divided into three classes, each of which will generally serve for a term for three years with only one class of directors being elected in each year. We may not hold an annual meeting of stockholders to elect new directors prior to the completion of our initial business combination, in which case all of the current directors will continue in office until at least the completion of the business combination. If there is an annual meeting, as a consequence of our “staggered” board of directors, only a minority of the board of directors will be considered for election and our initial stockholders, because of their ownership position, will have considerable influence regarding the outcome. Accordingly, our initial stockholders will continue to exert control at least until the completion of our initial business combination.

 

 
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Because we must furnish our stockholders with target business financial statements, we may lose the ability to complete an otherwise advantageous initial business combination with some prospective target businesses.

 

The federal proxy rules require that the proxy statement with respect to the vote on an initial business combination include historical and pro forma financial statement disclosure. We will include the same financial statement disclosure in connection with our tender offer documents, whether or not they are required under the tender offer rules. These financial statements may be required to be prepared in accordance with, or be reconciled to, accounting principles generally accepted in the United States of America (“GAAP”), or international financial reporting standards as issued by the International Accounting Standards Board (“IFRS”), depending on the circumstances and the historical financial statements may be required to be audited in accordance with the standards of the Public Company Accounting Oversight Board (United States) (“PCAOB”). These financial statement requirements may limit the pool of potential target businesses we may acquire because some targets may be unable to provide such financial statements in time for us to disclose such statements in accordance with federal proxy rules and complete our initial business combination within the prescribed time frame.

 

Compliance obligations under the Sarbanes-Oxley Act may make it more difficult for us to effectuate our initial business combination, require substantial financial and management resources, and increase the time and costs of completing an initial business combination.

 

Section 404 of the Sarbanes-Oxley Act requires that we evaluate and report on our system of internal controls beginning with our Annual Report on Form 10-K for the year ending December 31, 2022. Only in the event we are deemed to be a large accelerated filer or an accelerated filer, and no longer qualify as an emerging growth company, will we be required to comply with the independent registered public accounting firm attestation requirement on our internal control over financial reporting. Further, for as long as we remain an emerging growth company, we will not be required to comply with the independent registered public accounting firm attestation requirement on our internal control over financial reporting. The fact that we are a blank check company makes compliance with the requirements of the Sarbanes-Oxley Act particularly burdensome on us as compared to other public companies because a target business with which we seek to complete our initial business combination may not be in compliance with the provisions of the Sarbanes-Oxley Act regarding adequacy of its internal controls. The development of the internal control of any such entity to achieve compliance with the Sarbanes-Oxley Act may increase the time and costs necessary to complete any such business combination.

 

As the number of special purpose acquisition companies evaluating targets increases, attractive targets may become scarcer and there may be more competition for attractive targets. This could increase the cost of our initial business combination and could even result in our inability to find a target or to consummate an initial business combination.

 

In recent years, the number of special purpose acquisition companies that have been formed has increased substantially. Many potential targets for special purpose acquisition companies have already entered into an initial business combination, and there are still many companies preparing for an initial public offering. As a result, at times, fewer attractive targets may be available to consummate an initial business combination.

 

In addition, because there are more special purpose acquisition companies seeking to enter into an initial business combination with available targets, the competition for available targets with attractive fundamentals or business models may increase, which could cause targets companies to demand improved financial terms. Attractive deals could also become scarcer for other reasons, such as economic or industry sector downturns, geopolitical tensions, or increases in the cost of additional capital needed to close business combinations or operate targets post- business combination. This could increase the cost of, delay or otherwise complicate or frustrate our ability to find and consummate an initial business combination, and may result in our inability to consummate an initial business combination on terms favorable to our investors altogether.

 

 
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We may engage one or more of our underwriters or one of their respective affiliates to provide additional services to us after this offering, which may include acting as M&A advisor in connection with an initial business combination or as placement agent in connection with a related financing transaction. Our underwriters are entitled to receive deferred underwriting commissions that will be released from the trust account only upon a completion of an initial business combination. These financial incentives may cause them to have potential conflicts of interest in rendering any such additional services to us after this offering, including, for example, in connection with the sourcing and consummation of an initial business combination.

 

We may engage one or more of our underwriters or one of their respective affiliates to provide additional services to us after this offering, including, for example, identifying potential targets, providing M&A advisory services, acting as a placement agent in a private offering or arranging debt financing transactions. We may pay such underwriter or its affiliate fair and reasonable fees or other compensation that would be determined at that time in an arm’s length negotiation; provided that no agreement will be entered into with any of the underwriters or their respective affiliates and no fees or other compensation for such services will be paid to any of the underwriters or their respective affiliates prior to the date that is 60 days from the date of this prospectus, unless such payment would not be deemed underwriters’ compensation in connection with this offering. The underwriters are also entitled to receive deferred underwriting commissions that are conditioned on the completion of an initial business combination. The underwriters’ or their respective affiliates’ financial interests tied to the consummation of a business combination transaction may give rise to potential conflicts of interest in providing any such additional services to us, including potential conflicts of interest in connection with the sourcing and consummation of an initial business combination.

   

Risks Relating to the Post-Business Combination Company

 

Subsequent to our completion of our initial business combination, we may be required to take write-downs or write-offs, restructuring and impairment or other charges that could have a significant negative effect on our financial condition, results of operations and the price of our securities, which could cause you to lose some or all of your investment.

 

Even if we conduct extensive due diligence on a target business with which we combine, we cannot assure you that this diligence will identify all material issues that may be present with a particular target business, that it would be possible to uncover all material issues through a customary amount of due diligence, or that factors outside of the target business and outside of our control will not later arise. As a result of these factors, we may be forced to later write-down or write-off assets, restructure our operations, or incur impairment or other charges that could result in our reporting losses. Even if our due diligence successfully identifies certain risks, unexpected risks may arise and previously known risks may materialize in a manner not consistent with our preliminary risk analysis. Even though these charges may be non-cash items and not have an immediate impact on our liquidity, the fact that we report charges of this nature could contribute to negative market perceptions about us or our securities. In addition, charges of this nature may cause us to violate net worth or other covenants to which we may be subject as a result of assuming pre-existing debt held by a target business or by virtue of our obtaining debt financing to partially finance the initial business combination or thereafter. Accordingly, any stockholders or warrant holders who choose to remain stockholders or warrant holders following the business combination could suffer a reduction in the value of their securities. Such stockholders or warrant holders are unlikely to have a remedy for such reduction in value unless they are able to successfully claim that the reduction was due to the breach by our officers or directors of a duty of care or other fiduciary duty owed to them, or if they are able to successfully bring a private claim under securities laws that the proxy materials or tender offer documents, as applicable, relating to the business combination contained an actionable material misstatement or material omission.

 

 
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Our ability to successfully effect our initial business combination and to be successful thereafter will be dependent upon the efforts of our key personnel, some of whom may join us following our initial business combination. The loss of key personnel could negatively impact the operations and profitability of our post-combination business.

 

Our ability to successfully effect our initial business combination is dependent upon the efforts of our key personnel. The role of our key personnel in the target business, however, cannot presently be ascertained. Although some of our key personnel may remain with the target business in senior management or advisory positions following our initial business combination, it is likely that some or all of the management of the target business will remain in place. While we intend to closely scrutinize any individuals we engage after our initial business combination, we cannot assure you that our assessment of these individuals will prove to be correct. These individuals may be unfamiliar with the requirements of operating a company regulated by the SEC, which could cause us to have to expend time and resources helping them become familiar with such requirements.

 

Our key personnel may negotiate employment or consulting agreements with a target business in connection with a particular business combination, and a particular business combination may be conditioned on the retention or resignation of such key personnel. These agreements may provide for them to receive compensation following our initial business combination and as a result, may cause them to have conflicts of interest in determining whether a particular business combination is the most advantageous.

 

Our key personnel may be able to remain with our company after the completion of our initial business combination only if they are able to negotiate employment or consulting agreements in connection with the business combination. Such negotiations would take place simultaneously with the negotiation of the business combination and could provide for such individuals to receive compensation in the form of cash payments and/or our securities for services they would render to us after the completion of the business combination. Such negotiations also could make such key personnel’s retention or resignation a condition to any such agreement. The personal and financial interests of such individuals may influence their motivation in identifying and selecting a target business, subject to their fiduciary duties under Delaware law.

 

We may have a limited ability to assess the management of a prospective target business and, as a result, may effect our initial business combination with a target business whose management may not have the skills, qualifications or abilities to manage a public company.

 

When evaluating the desirability of effecting our initial business combination with a prospective target business, our ability to assess the target business’s management may be limited due to a lack of time, resources, or information. Our assessment of the capabilities of the target business’s management, therefore, may prove to be incorrect and such management may lack the skills, qualifications, or abilities we suspected. Should the target business’s management not possess the skills, qualifications, or abilities necessary to manage a public company, the operations and profitability of the post-combination business may be negatively impacted. Accordingly, any stockholders or warrant holders who choose to remain stockholders or warrant holders following the business combination could suffer a reduction in the value of their securities. Such stockholders or warrant holders are unlikely to have a remedy for such reduction in value unless they are able to successfully claim that the reduction was due to the breach by our officers or directors of a duty of care or other fiduciary duty owed to them, or if they are able to successfully bring a private claim under securities laws that the proxy solicitation or tender offer materials, as applicable, relating to the business combination contained an actionable material misstatement or material omission.

 

The officers and directors of an acquisition candidate may resign upon completion of our initial business combination. The loss of a business combination target’s key personnel could negatively impact the operations and profitability of our post-combination business.

 

The role of an acquisition candidate’s key personnel upon the completion of our initial business combination cannot be ascertained at this time. Although we contemplate that certain members of an acquisition candidate’s management team will remain associated with the acquisition candidate following our initial business combination, it is possible that members of the management of an acquisition candidate will not wish to remain in place.

 

 
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Our management may not be able to maintain control of a target business after our initial business combination. We cannot provide assurance that, upon loss of control of a target business, new management will possess the skills, qualifications, or abilities necessary to profitably operate such business.

 

We may structure our initial business combination so that the post-transaction company in which our public stockholders own shares will own less than 100% of the equity interests or assets of a target business, but we will only complete such business combination if the post-transaction company owns or acquires 50% or more of the outstanding voting securities of the target or otherwise acquires a controlling interest in the target sufficient for us not to be required to register as an investment company under the Investment Company Act. We will not consider any transaction that does not meet such criteria. Even if the post-transaction company owns 50% or more of the voting securities of the target, our stockholders prior to the business combination may collectively own a minority interest in the post business combination company, depending on valuations ascribed to the target and us in the business combination. For example, we could pursue a transaction in which we issue a substantial number of new shares of Class A common stock in exchange for all of the outstanding capital stock of a target. In this case, we would acquire a 100% interest in the target. However, as a result of the issuance of a substantial number of new shares of Class A common stock, our stockholders immediately prior to such transaction could own less than a majority of our outstanding Class A common stock subsequent to such transaction. In addition, other minority stockholders may subsequently combine their holdings resulting in a single person or group obtaining a larger share of the Company’s shares than we initially acquired. Accordingly, this may make it more likely that our management will not be able to maintain control of the target business.

 

Any technology that is taken to outer space is subject to manufacturing and launch delays, damage or destruction during pre-launch operations, launch failures and during the execution of the operation, the occurrence of which can materially and adversely affect the operations of our post business combination company.

 

Delays in the manufacturing of space technology, launch delays, damage or destruction during pre-launch operations, launch failures or incorrect orbital placement during execution of a space mission could have a material adverse effect on the business, financial condition and results of operations of our post business combination company. The loss of, or damage to, any technology due to a launch failure could result in significant delays in anticipated revenue to be generated by that technology. Any significant delay in the commencement of service of any piece of technology in space would delay or potentially permanently reduce the revenue anticipated to be generated by that technology. In addition, if the loss of any technology occurred, our post business combination company may not be able to accommodate affected customers with our other replacement solutions until a replacement technology is available, and our post business combination company may not have on hand, or be able to obtain in a timely manner, the necessary funds to cover the cost of any necessary technology replacement. Any launch delay, launch failure, underperformance, delay, or perceived delay could have a material adverse effect on our results of operations, business prospects and financial condition. If this failure occurs during the process of business combination and public offering, it may hinder the overall value of our stock price and our reputation and the reputation of our business combination target or post business combination company.

 

Space is a harsh and unpredictable environment where our products and service offerings are exposed to a wide and unique range of environmental risks, including, among others, coronal mass ejections, solar flares and other extreme space weather events and potential collision with space debris or another spacecraft, which could adversely affect the technology and spacecraft performance.

 

Space weather, including coronal mass ejections and solar flares have the potential to impact the performance and controllability of our technology on orbit, including completely disabling our communications or mechanical capabilities on orbit. Although we have some ability to actively maneuver our equipment to avoid potential collisions with space debris or other spacecraft, this ability is limited by, among other factors, uncertainties, and inaccuracies in the projected orbit location of and predicted conjunctions with debris objects tracked and cataloged by the U.S. government. Additionally, some space debris is too small to be tracked and therefore its orbital location is completely unknown; nevertheless, this debris is still large enough to potentially cause severe damage or a failure of our technologies in space should a collision occur. The failure of the technology in space may cause perceptions or direct degradation of performance, and ultimately impact our share price and certain space-related business combination targets, as well as our post business combination company.

 

 
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Risks Relating to Acquiring and Operating a Business in Foreign Countries

 

If we effect our initial business combination with a company located outside of the United States, we would be subject to a variety of additional risks that may adversely affect us.

 

If we pursue a target company with operations or opportunities outside of the United States for our initial business combination, we may face additional burdens in connection with investigating, agreeing to and completing such initial business combination, and if we effect such initial business combination, we would be subject to a variety of additional risks that may negatively impact our operations.

 

If we pursue a target a company with operations or opportunities outside of the United States for our initial business combination, we would be subject to risks associated with cross-border business combinations, including in connection with investigating, agreeing to and completing our initial business combination, conducting due diligence in a foreign jurisdiction, having such transaction approved by any local governments, regulators or agencies and changes in the purchase price based on fluctuations in foreign exchange rates.

 

If we effect our initial business combination with such a company, we would be subject to any special considerations or risks associated with companies operating in an international setting, including any of the following:

    

 

·

costs and difficulties inherent in managing cross-border business operations;

 

 

 

 

·

rules and regulations regarding currency redemption;

 

 

 

 

·

complex corporate withholding taxes on individuals;

 

 

 

 

·

laws governing the manner in which future business combinations may be effected;

 

 

 

 

·

exchange listing and/or delisting requirements;

 

 

 

 

·

tariffs and trade barriers;

 

 

 

 

·

regulations related to customs and import/export matters;

 

 

 

 

·

local or regional economic policies and market conditions;

 

 

 

 

·

unexpected changes in regulatory requirements;

 

 

 

 

·

challenges in managing and staffing international operations;

 

 

 

 

·

longer payment cycles;

 

 

 

 

·

tax issues, such as tax law changes and variations in tax laws as compared to the United States;

 

 

 

 

·

currency fluctuations and exchange controls;

 

 

 

 

·

rates of inflation;

 

 
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·

challenges in collecting accounts receivable;

 

 

 

 

·

cultural and language differences;

 

 

 

 

·

employment regulations;

 

 

 

 

·

underdeveloped or unpredictable legal or regulatory systems;

 

 

 

 

·

corruption;

 

 

 

 

·

protection of intellectual property;

 

 

 

 

·

social unrest, crime, strikes, riots and civil disturbances;

 

 

 

 

·

regime changes and political upheaval;

 

 

 

 

·

terrorist attacks and wars; and

 

 

 

 

·

deterioration of political relations with the United States.

   

We may not be able to adequately address these additional risks. If we were unable to do so, we may be unable to complete such initial business combination, or, if we complete such initial business combination, our operations might suffer, either of which may adversely impact our business, financial condition, and results of operations.

 

Risks Relating to Our Management Team

 

We may not have sufficient funds to satisfy indemnification claims of our directors and executive officers.

 

We have agreed to indemnify our officers and directors to the fullest extent permitted by law. However, our officers and directors have agreed to waive any right, title, interest or claim of any kind in or to any monies in the trust account and to not seek recourse against the trust account for any reason whatsoever. Accordingly, any indemnification provided will be able to be satisfied by us only if (i) we have sufficient funds outside of the trust account or (ii) we consummate an initial business combination. Our obligation to indemnify our officers and directors may discourage stockholders from bringing a lawsuit against our officers or directors for breach of their fiduciary duty. These provisions also may have the effect of reducing the likelihood of derivative litigation against our officers and directors, even though such an action, if successful, might otherwise benefit us and our stockholders. Furthermore, a stockholder’s investment may be adversely affected to the extent we pay the costs of settlement and damage awards against our officers and directors pursuant to these indemnification provisions.

 

 
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Past performance by our management team and their affiliates may not be indicative of future performance of an investment in us.

 

Information regarding performance by, or businesses associated with, our management team or businesses associated with them is presented for informational purposes only. Past performance by our management team is not a guarantee either (i) of success with respect to any business combination we may consummate or (ii) that we will be able to locate a suitable candidate for our initial business combination. You should not rely on the historical record of the performance of our management team’s or businesses associated with them as indicative of our future performance of an investment in us or the returns we will, or is likely to, generate going forward.

 

We may seek business combination opportunities in industries or sectors that may be outside of our management’s areas of expertise.

 

We will consider a business combination outside of our management’s areas of expertise if a business combination candidate is presented to us and we determine that such candidate offers an attractive business combination opportunity for our company. Although our management will endeavor to evaluate the risks inherent in any particular business combination candidate, we cannot assure you that we will adequately ascertain or assess all of the significant risk factors. We also cannot assure you that an investment in our units will not ultimately prove to be less favorable to investors in this offering than a direct investment, if an opportunity were available, in a business combination candidate. In the event we elect to pursue a business combination outside of the areas of our management’s expertise, our management’s expertise may not be directly applicable to its evaluation or operation, and the information contained in this prospectus regarding the areas of our management’s expertise would not be relevant to an understanding of the business that we elect to acquire. As a result, our management may not be able to ascertain or assess adequately all of the relevant risk factors. Accordingly, any stockholders who choose to remain stockholders following our initial business combination could suffer a reduction in the value of their shares. Such stockholders are unlikely to have a remedy for such reduction in value.

    

We are dependent upon our executive officers and directors and their loss could adversely affect our ability to operate.

 

Our operations are dependent upon a relatively small group of individuals and, in particular, our executive officers and directors. We believe that our success depends on the continued service of our officers and directors, at least until we have completed our initial business combination. In addition, our executive officers and directors are not required to commit any specified amount of time to our affairs and, accordingly, will have conflicts of interest in allocating their time among various business activities, including identifying potential business combinations and monitoring the related due diligence. We do not have an employment agreement with, or key-man insurance on the life of, any of our directors or executive officers. The unexpected loss of the services of one or more of our directors or executive officers could have a detrimental effect on us.

 

Our executive officers and directors will allocate their time to other businesses thereby causing conflicts of interest in their determination as to how much time to devote to our affairs. This conflict of interest could have a negative impact on our ability to complete our initial business combination.

 

Our executive officers and directors are not required to, and will not, commit their full time to our affairs, which may result in a conflict of interest in allocating their time between our operations and our search for a business combination and their other businesses. We do not intend to have any full-time employees prior to the completion of our initial business combination. Certain of our executive officers are engaged in several other business endeavors for which he may be entitled to substantial compensation, and our executive officers are not obligated to contribute any specific number of hours per week to our affairs. Our independent directors also serve as officers and board members for other entities. If our executive officers’ and directors’ other business affairs require them to devote substantial amounts of time to such affairs in excess of their current commitment levels, it could limit their ability to devote time to our affairs which may have a negative impact on our ability to complete our initial business combination. For a complete discussion of our executive officers’ and directors’ other business affairs, please see “Management — Officers, Directors and Director Nominees.”

 

 
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Members of our management team and board of directors have significant experience as founders, board members, officers, executives or employees of other companies. Certain of those persons have been, may be, or may become, involved in litigation, investigations or other proceedings, including related to those companies or otherwise. The defense or prosecution of these matters could be time-consuming and could divert our management’s attention, and may have an adverse effect on us, which may impede our ability to consummate an initial business combination.

 

During the course of their careers, members of our management team and board of directors have had significant experience as founders, board members, officers, executives or employees of other companies. As a result of their involvement and positions in these companies, certain of those persons have been, may be or may in the future become involved in litigation, investigations or other proceedings, including relating to the business affairs of such companies, transactions entered into by such companies, or otherwise. Individual members of our management team and board of directors also may become involved in litigation, investigations or other proceedings involving claims or allegations related to or as a result of their personal conduct, either in their capacity as a corporate officer or director or otherwise, and may be personally named in such actions and potentially subject to personal liability. Any such liability may or may not be covered by insurance and/or indemnification, depending on the facts and circumstances. The defense or prosecution of these matters could be time-consuming. Any litigation, investigations or other proceedings and the potential outcomes of such actions may divert the attention and resources of our management team and board of directors away from identifying and selecting a target business or businesses for our initial business combination and may negatively affect our reputation, which may impede our ability to complete an initial business combination.

 

Certain of our officers and directors presently have, and any of them in the future may have additional, fiduciary or contractual obligations to other entities and, accordingly, may have conflicts of interest in determining to which entity a particular business opportunity should be presented.

 

Following the completion of this offering and until we consummate our initial business combination, we intend to engage in the business of identifying and combining with one or more businesses. Certain of our officers and directors presently have, and any of them in the future may have, additional fiduciary or contractual obligations to other entities pursuant to which such officer or director is or will be required to present a business combination opportunity to such entity. Accordingly, they may have conflicts of interest in determining to which entity a particular business opportunity should be presented. These conflicts may not be resolved in our favor and a potential target business may be presented to another entity prior to its presentation to us. Our amended and restated certificate of incorporation will provide that we renounce our interest in any corporate opportunity offered to any director or officer unless such opportunity is expressly offered to such person solely in his or her capacity as a director or officer of the Company and such opportunity is one we are legally and contractually permitted to undertake and would otherwise be reasonable for us to pursue, and to the extent the director or officer is permitted to refer that opportunity to us without violating another legal obligation. In addition, our sponsor and our officers and directors may sponsor or form other special purpose acquisition companies similar to ours or may pursue other business or investment ventures during the period in which we are seeking an initial business combination. Any such companies, businesses or ventures may present additional conflicts of interest in pursuing an initial business combination. However, we do not believe that any such potential conflicts would materially affect our ability to complete our initial business combination.

 

For a complete discussion of our executive officers’ and directors’ business affiliations and the potential conflicts of interest that you should be aware of, please see “Management — Officers, Directors and Director Nominees,” “Management — Conflicts of Interest” and “Certain Relationships and Related Party Transactions.”

 

 
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Our executive officers, directors, security holders and their respective affiliates may have competitive pecuniary interests that conflict with our interests.

 

We have not adopted a policy that expressly prohibits our directors, executive officers, security holders or affiliates from having a direct or indirect pecuniary or financial interest in any investment to be acquired or disposed of by us or in any transaction to which we are a party or have an interest. In fact, we may enter into a business combination with a target business that is affiliated with our sponsor, our directors or executive officers, although we do not intend to do so. Nor do we have a policy that expressly prohibits any such persons from engaging for their own account in business activities of the types conducted by us. Accordingly, such persons or entities may have a conflict between their interests and ours.

  

The personal and financial interests of our directors and officers may influence their motivation in timely identifying and selecting a target business and completing a business combination. Consequently, our directors’ and officers’ discretion in identifying and selecting a suitable target business may result in a conflict of interest when determining whether the terms, conditions and timing of a particular business combination are appropriate and in our stockholders’ best interest. If this were the case, it would be a breach of their fiduciary duties to us as a matter of Delaware law and we or our stockholders might have a claim against such individuals for infringing on our stockholders’ rights. However, we might not ultimately be successful in any claim we may make against them for such reason.

 

We may engage in a business combination with one or more target businesses that have relationships with entities that may be affiliated with our sponsor, executive officers, directors, or existing holders which may raise potential conflicts of interest.

 

In light of the involvement of our sponsor, executive officers and directors with other entities, we may decide to acquire one or more businesses affiliated with our sponsor, executive officers, directors or existing holders. Our directors also serve as officers and board members for other entities, including, without limitation, those described under “Management — Conflicts of Interest.” Such entities may compete with us for business combination opportunities. Our sponsor, officers and directors are not currently aware of any specific opportunities for us to complete our initial business combination with any entities with which they are affiliated, and there have been no substantive discussions concerning a business combination with any such entity or entities. Although we will not be specifically focusing on, or targeting, any transaction with any affiliated entities, we would pursue such a transaction if we determined that such affiliated entity met our criteria for a business combination as set forth in “Proposed Business — Acquisition Criteria” and such transaction was approved by a majority of our independent and disinterested directors. Despite our agreement to obtain an opinion from an independent investment banking firm which is a member of FINRA or a valuation or appraisal firm regarding the fairness to our company from a financial point of view of a business combination with one or more domestic or international businesses affiliated with our sponsor, executive officers, directors or existing holders, potential conflicts of interest still may exist and, as a result, the terms of the business combination may not be as advantageous to our public stockholders as they would be absent any conflicts of interest.

 

Since our sponsor, executive officers and directors will lose their entire investment in us if our initial business combination is not completed (other than with respect to public shares they may acquire during or after this offering), a conflict of interest may arise in determining whether a particular business combination target is appropriate for our initial business combination.

 

On June 1, 2021, our sponsor subscribed to purchase an aggregate of 7,762,500 founder shares for a purchase price of $25,000, or approximately $0.003 per share. Subsequently, our sponsor forfeited 1,725,000 founder shares in December 2021 for no consideration. As a result, our sponsor currently holds 6,037,500 founder shares. Prior to the initial investment in the Company of $25,000 by the sponsor, the Company had no assets, tangible or intangible. Such shares are fully paid, and the cash amount of the subscription price therefor was received on June 8, 2021. The purchase price of the founder shares was determined by dividing the amount of cash contributed to the Company by the number of founder shares issued.

 

 
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The founder shares are identical to the shares of common stock included in the units being sold in this offering except that: (1) prior to our initial business combination, only holders of the founder shares have the right to vote on the appointment of directors and holders of a majority of our founder shares may remove a member of the board of directors for any reason; (2) the founder shares are subject to certain transfer restrictions contained in a letter agreement that our initial shareholders, directors and officers have entered into with us; (3) pursuant to such letter agreement, our initial shareholders, directors and officers have agreed to waive: (i) their redemption rights with respect to any founder shares and public shares held by them, as applicable, in connection with the completion of our initial business combination; (ii) their redemption rights with respect to any founder shares and public shares held by them in connection with a stockholder vote to amend our amended and restated certificate of incorporation to modify the substance or timing of our obligation to provide for the redemption of our public shares in connection with an initial business combination or to redeem 100% of our public shares if we have not consummated an initial business combination within the completion window or with respect to any other material provisions relating to stockholders’ rights or pre-initial business combination activity; and (iii) their rights to liquidating distributions from the trust account with respect to any founder shares they hold if we fail to complete our initial business combination within the completion window (although they will be entitled to liquidating distributions from the trust account with respect to any public shares they hold if we fail to complete our initial business combination within the prescribed time frame); (4) pursuant to the letter agreement, upon and subject to the completion of the initial business combination, 25% of the founder shares then held by the sponsor shall be considered to be newly unvested shares, one-half of which (or 25% of the shares then held by the sponsor) will vest only if the First Share Price Level is achieved on or after the first anniversary of the closing of the initial business combination but before the fifth anniversary; and one-half of which (or 25% of the shares then held by the sponsor) will vest only if the Second Share Price Level is achieved on or after the first anniversary of the closing of the initial business combination but before the fifth anniversary (founder shares, if any, that remain unvested at the fifth anniversary of the closing of the initial business combination will be forfeited); (5) the founder shares will automatically convert into shares of our Class A common stock at the time of our initial business combination, or earlier at the option of the holder, on a one-for-one basis, subject to adjustment pursuant to certain anti-dilution rights, as described in more detail below; and (6) the founder shares are entitled to registration rights. If we submit our initial business combination to our stockholders for a vote, our initial shareholders have agreed (and their permitted transferees will agree), pursuant to the terms of a letter agreement entered into with us, to vote their founder shares and any public shares held by them (including public shares purchased in open market and privately-negotiated transactions) in favor of our initial business combination. While we do not expect our board of directors to approve any amendment to or waiver of the letter agreement or registration rights agreement prior to our initial business combination, it may be possible that our board of directors, in exercising its business judgment and subject to its fiduciary duties, chooses to approve one or more amendments to or waivers of such agreements in connection with the consummation of our initial business combination. Any such amendments or waivers would not require approval from our stockholders, may result in the completion of our initial business combination that may not otherwise have been possible, and may have an adverse effect on the value of an investment in our securities.

 

The personal and financial interests of our executive officers and directors may influence their motivation in identifying and selecting a target business combination, completing an initial business combination, and influencing the operation of the business following the initial business combination. This risk may become more acute as the end of the completion window nears, which is the deadline for our completion of an initial business combination, and the vesting structure of our sponsor’s founder shares may lead to our sponsor selecting a target which is more likely to lead to satisfying the return hurdles even if it ends up being a riskier or less suitable target.

  

 
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The nominal purchase price paid by our sponsor for the founder shares may result in significant dilution to the implied value of your public shares upon the consummation of our initial business combination.

 

We are offering our units at an offering price of $10.00 per unit and the amount in our trust account is initially anticipated to be $10.00 per public share, implying an initial value of $10.00 per public share. However, prior to this offering, our sponsor paid a nominal aggregate purchase price of $25,000 for the founder shares, or approximately $0.004 per share. As a result, the value of your public shares may be significantly diluted upon the consummation of our initial business combination, when the founder shares are converted into public shares. For example, the following table shows the dilutive effect of the founder shares on the implied value of the public shares upon the consummation of our initial business combination, assuming that our equity value at that time is $201,075,000, which is the amount we would have for our initial business combination in the trust account after payment of $8,925,000 of deferred underwriting commissions, assuming the underwriters’ over-allotment option is not exercised, no interest is earned on the funds held in the trust account, and no public shares are redeemed in connection with our initial business combination, and without taking into account any other potential impacts on our valuation at such time, such as the trading price of our public shares, the business combination transaction costs, any equity issued or cash paid to the target’s sellers or other third parties, or the target’s business itself, including its assets, liabilities, management and prospects, as well as the value of our public warrants and private placement warrants. At such valuation, each of our shares of common stock would have an implied value of $7.66 per share upon consummation of our initial business combination, which would be an approximate 23.4% decrease as compared to the initial implied value per public share of $10.00 (the price per unit in this offering, assuming no value to the public warrants).

 

Public shares

 

 

21,000,000

 

Founder shares

 

 

5,250,000

 

 

 

 

 

 

Total shares

 

 

26,250,000

 

Total funds in trust available for initial business combination (less deferred underwriting commissions)

 

$ 201,075,000

 

Initial implied value per public share

 

$ 10.00

 

Implied value per share upon consummation of initial business combination

 

$ 7.66

 

   

The value of the founder shares following completion of our initial business combination is likely to be substantially higher than the nominal price paid for them, even if the trading price of our common stock at such time is substantially less than $10.00 per share.

 

Upon the closing of this offering, assuming no exercise of the underwriters’ over-allotment option, our sponsor will have invested in us an aggregate of $6,510,500, comprised of the $25,000 purchase price for the founder shares and the $6,485,500 purchase price for the private placement warrants. Assuming a trading price of $10.00 per share upon consummation of our initial business combination, the 5,250,000 founder shares would have an aggregate value of $52,500,000 (assuming no value is attributed to the private placement warrants). Even if the trading price of our common stock was as low as approximately $1.24 per share, and the private placement warrants were worthless, the value of the founder shares would be equal to the sponsor’s initial investment in us. As a result, our sponsor is likely to be able to recoup its investment in us and make a substantial profit on that investment, even if our public shares have lost significant value. Accordingly, our management team, which owns interests in our sponsor, may have an economic incentive that differs from that of the public stockholders to pursue and consummate an initial business combination rather than to liquidate and to return all of the cash in the trust to the public stockholders, even if that business combination were with a riskier or less-established target business. For the foregoing reasons, you should consider our management team’s financial incentive to complete an initial business combination when evaluating whether to redeem your shares prior to or in connection with the initial business combination.

 

 
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Risks Relating to our Securities

 

The securities in which we invest the funds held in the trust account could bear a negative rate of interest, which could reduce the value of the assets held in trust such that the per-share redemption amount received by public stockholders may be less than $10.00 per share.

 

The proceeds held in the trust account will be invested only in U.S. government treasury obligations with a maturity of 185 days or less or in money market funds meeting certain conditions under Rule 2a-7 under the Investment Company Act, which invest only in direct U.S. government treasury obligations. While short-term U.S. government treasury obligations currently yield a positive rate of interest, they have briefly yielded negative interest rates in recent years. Central banks in Europe and Japan pursued interest rates below zero in recent years, and the Open Market Committee of the Federal Reserve has not ruled out the possibility that it may in the future adopt similar policies in the United States. In the event that we are unable to complete our initial business combination or make certain amendments to our amended and restated certificate of incorporation, our public stockholders are entitled to receive their pro-rata share of the proceeds held in the trust account, plus any interest income, net of taxes payable and up to $100,000 of interest to pay dissolution expenses. Negative interest rates could reduce the value of the assets held in trust such that the per-share redemption amount received by public stockholders may be less than $10.00 per share.

 

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

 

Our public stockholders will be entitled to receive funds from the trust account only upon the earlier to occur of: (i) our completion of an initial business combination, and then only in connection with those shares of Class A common stock that such stockholder properly elected to redeem, subject to the limitations described herein, (ii) the redemption of any public shares properly tendered in connection with a stockholder vote to amend our amended and restated certificate of incorporation to modify the substance or timing of our obligation to provide for the redemption of our public shares in connection with an initial business combination or to redeem 100% of our public shares if we do not complete our initial business combination within the completion window or with respect to any other material provisions relating to stockholders’ rights or pre-initial business combination activity, and the redemption of our public shares if we are unable to complete an initial business combination within the completion window, subject to applicable law and as further described herein. In addition, if our plan to redeem our public shares if we are unable to complete an initial business combination within the completion window is not completed for any reason, compliance with Delaware law may require that we submit a plan of dissolution to our then-existing stockholders for approval prior to the distribution of the proceeds held in our trust account. In that case, public stockholders may be forced to wait beyond the completion window before they receive funds from our trust account. In no other circumstances will a public stockholder have any right or interest of any kind in the trust account. Holders of rights and warrants will not have any right to the proceeds held in the trust account with respect to the rights and warrants, respectively. Accordingly, to liquidate your investment, you may be forced to sell your public shares, rights or warrants, potentially at a loss.

  

Nasdaq may delist our securities from trading on its exchange, which could limit investors’ ability to make transactions in our securities and subject us to additional trading restrictions.

 

We have applied to list our units on Nasdaq on or promptly after the date of this prospectus and our Class A common stock, rights and warrants on or promptly after their date of separation. Although after giving effect to this offering we expect to meet, on a pro forma basis, the minimum initial listing standards set forth in the Nasdaq listing standards, we cannot assure you that our securities will be, or will continue to be, listed on the Nasdaq in the future or prior to our initial business combination. In order to continue listing our securities on the Nasdaq prior to our initial business combination, we must maintain certain financial, distribution and share price levels. Generally, we must maintain a minimum number of holders of our securities (generally 400 public holders). Additionally, in connection with our initial business combination, we will be required to demonstrate compliance with Nasdaq’s initial listing requirements, which are more rigorous than Nasdaq’s continued listing requirements, in order to continue to maintain the listing of our securities on Nasdaq. For instance, our share price would generally be required to be at least $4.00 per share and we would be required to have a minimum of 400 round lot holders of our securities. We cannot assure you that we will be able to meet those initial listing requirements at that time.

  

 
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If Nasdaq delists our securities from trading on its exchange and we are not able to list our securities on another national securities exchange, we expect our securities could be quoted on an over-the-counter market. If this were to occur, we could face significant material adverse consequences, including:

 

 

·

a limited availability of market quotations for our securities;

 

 

 

 

·

reduced liquidity for our securities;

 

 

 

 

·

a determination that our Class A common stock is a “penny stock” which will require brokers trading in our Class A common stock to adhere to more stringent rules and possibly result in a reduced level of trading activity in the secondary trading market for our securities;

 

 

 

 

·

a limited amount of news and analyst coverage; and

 

 

 

 

·

a decreased ability to issue additional securities or obtain additional financing in the future.

 

The National Securities Markets Improvement Act of 1996, which is a federal statute, prevents or preempts the states from regulating the sale of certain securities, which are referred to as “covered securities.” Because we expect that our units and eventually our Class A common stock, rights and warrants will be listed on Nasdaq, our units, Class A common stock, rights and warrants will qualify as covered securities under the statute. Although the states are preempted from regulating the sale of our securities, the federal statute does allow the states to investigate companies if there is a suspicion of fraud, and, if there is a finding of fraudulent activity, then the states can regulate or bar the sale of covered securities in a particular case. While we are not aware of a state having used these powers to prohibit or restrict the sale of securities issued by blank check companies, other than the State of Idaho, certain state securities regulators view blank check companies unfavorably and might use these powers, or threaten to use these powers, to hinder the sale of securities of blank check companies in their states. Further, if we were no longer listed on Nasdaq, our securities would not qualify as covered securities under the statute and we would be subject to regulation in each state in which we offer our securities.

 

You will not be permitted to exercise your warrants unless we register and qualify the underlying Class A common stock or certain exemptions are available.

 

If the issuance of the Class A common stock upon exercise of the warrants is not registered, qualified or exempt from registration or qualification under the Securities Act and applicable state securities laws, holders of warrants will not be entitled to exercise such warrants and such warrants may have no value and expire worthless. In such event, holders who acquired their warrants as part of a purchase of units will have paid the full unit purchase price solely for the Class A common stock included in the units.

 

We are registering the shares of Class A common stock issuable upon exercise of the warrants in the registration statement of which this prospectus forms a part because the warrants will become exercisable 30 days after the completion of our initial business combination, which may be within one year of this offering. However, because the warrants will be exercisable until their expiration date of up to five years after the completion of our initial business combination, in order to comply with the requirements of Section 10(a)(3) of the Securities Act following the consummation of our initial business combination,  we have agreed that, as soon as practicable, but in no event later than 15 business days, after the closing of our initial business combination, we will use our best efforts to file with the SEC a post-effective amendment to the registration statement of which this prospectus forms a part or a new registration statement covering the registration under the Securities Act of the Class A common stock issuable upon exercise of the warrants and thereafter will use our best efforts to cause the same to become effective within 60 business days following our initial business combination and to maintain a current prospectus relating to the Class A common stock issuable upon exercise of the warrants until the expiration of the warrants in accordance with the provisions of the warrant agreement. We cannot assure you that we will be able to do so if, for example, any facts or events arise which represent a fundamental change in the information set forth in the registration statement or prospectus, the financial statements contained or incorporated by reference therein are not current or correct or the SEC issues a stop order.

 

 
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If the shares of Class A common stock issuable upon exercise of the warrants are not registered under the Securities Act, under the terms of the warrant agreement, holders of warrants who seek to exercise their warrants will not be permitted to do so for cash and, instead, will be required to do so on a cashless basis in accordance with Section 3(a)(9) of the Securities Act or another exemption.

 

In no event will warrants be exercisable for cash or on a cashless basis, and we will not be obligated to issue any shares to holders seeking to exercise their warrants, unless the issuance of the shares upon such exercise is registered or qualified under the securities laws of the state of the exercising holder, or an exemption from registration or qualification is available.

 

If our shares of Class A common stock are at the time of any exercise of a warrant not listed on a national securities exchange such that they satisfy the definition of “covered securities” under Section 18(b)(1) of the Securities Act, we may, at our option, not permit holders of warrants who seek to exercise their warrants to do so for cash and, instead, require them to do so on a cashless basis in accordance with Section 3(a)(9) of the Securities Act; in the event we so elect, we will not be required to file or maintain in effect a registration statement or register or qualify the shares underlying the warrants under applicable state securities laws, and in the event we do not so elect, we will use our best efforts to register or qualify the shares underlying the warrants under applicable state securities laws to the extent an exemption is not available.

 

In no event will we be required to net cash settle any warrant, or issue securities (other than upon a cashless exercise as described above) or other compensation in exchange for the warrants in the event that we are unable to register or qualify the shares underlying the warrants under the Securities Act or applicable state securities laws.

  

You may only be able to exercise your public warrants on a “cashless basis” under certain circumstances, and if you do so, you will receive fewer shares of Class A common stock from such exercise than if you were to exercise such warrants for cash.

 

The warrant agreement provides that in the following circumstances holders of warrants who seek to exercise their warrants will not be permitted to do for cash and will, instead, be required to do so on a cashless basis in accordance with Section 3(a)(9) of the Securities Act: (i) if the shares of Class A common stock issuable upon exercise of the warrants are not registered under the Securities Act in accordance with the terms of the warrant agreement; if we have so elected and the shares of Class A common stock is at the time of any exercise of a warrant not listed on a national securities exchange such that they satisfy the definition of “covered securities” under Section 18(b)(1) of the Securities Act; and (iii) if we have so elected and we call the public warrants for redemption. If you exercise your public warrants on a cashless basis, you would pay the warrant exercise price by surrendering the warrants for that number of shares of Class A common stock equal to the quotient obtained by dividing (x) the product of the number of shares of Class A common stock underlying the warrants, multiplied by the excess of the “fair market value” of our shares of Class A common stock (as defined in the next sentence) over the exercise price of the warrants by (y) the fair market value. The “fair market value” is the average reported closing price of the shares of Class A common stock for the 10 trading days ending on the third trading day prior to the date on which the notice of exercise is received by the warrant agent or on which the notice of redemption is sent to the holders of warrants, as applicable. As a result, you would receive fewer shares of Class A common stock from such exercise than if you were to exercise such warrants for cash.

 

 
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The grant of registration rights to our initial stockholders and holders of our private placement warrants may make it more difficult to complete our initial business combination, and the future exercise of such rights may adversely affect the market price of our shares of Class A common stock.

 

Pursuant to an agreement to be entered into concurrently with the issuance and sale of the securities in this offering, our initial stockholders and their permitted transferees can demand that we register the shares of Class A common stock into which founder shares are convertible, holders of our private placement warrants and their permitted transferees can demand that we register the private placement warrants and the Class A common stock issuable upon exercise of the private placement warrants and holders of warrants that may be issued upon conversion of working capital loans may demand that we register such warrants or the Class A common stock issuable upon conversion of such warrants. The registration rights will be exercisable with respect to the founder shares and the private placement warrants and the Class A common stock issuable upon exercise of such private placement warrants. We will bear the cost of registering these securities. The registration and availability of such a significant number of securities for trading in the public market may have an adverse effect on the market price of our Class A common stock. In addition, the existence of the registration rights may make our initial business combination more costly or difficult to conclude. This is because the stockholders of the target business may increase the equity stake they seek in the combined entity or ask for more cash consideration to offset the negative impact on the market price of our Class A common stock that is expected when the shares of common stock owned by our initial stockholders, holders of our private placement warrants or holders of our working capital loans or their respective permitted transferees are registered.

 

We may issue our shares to investors in connection with our initial business combination at a price that is less than the prevailing market price of our shares at that time.

 

In connection with our initial business combination, we may issue shares to investors in private placement transactions (so-called PIPE transactions) at a price of $10.00 per share. The purpose of such issuances will be to enable us to provide sufficient liquidity to the post-business combination entity. The price of the shares we issue may therefore be less, and potentially significantly less, than the market price for our shares at such time.

 

We may issue additional shares of Class A common stock or shares of preferred stock to complete our initial business combination or under an employee incentive plan after completion of our initial business combination. We may also issue shares of Class A common stock upon the conversion of the founder shares at a ratio greater than one-to-one at the time of our initial business combination as a result of the anti-dilution provisions contained in our amended and restated certificate of incorporation. Any such issuances would dilute the interest of our stockholders and likely present other risks.

 

Our amended and restated certificate of incorporation authorizes the issuance of up to 250,000,000 shares of Class A common stock, par value $0.0001 per share, 10,000,000 shares of Class B common stock, par value $0.0001 per share, and 1,000,000 shares of preferred stock, par value $0.0001 per share. Immediately after this offering, there will be 229,000,000 and 4,750,000 (assuming in each case that the underwriters have not exercised their over-allotment option and the forfeiture of 787,500 shares of Class B common stock) authorized but unissued shares of Class A common stock and Class B common stock, respectively, available for issuance which amount does not take into account shares reserved for issuance upon exercise of outstanding warrants, rights or shares issuable upon conversion of the Class B common stock. The Class B common stock is automatically convertible into Class A common stock concurrently with or immediately following the consummation of our initial business combination, initially at a one-for-one ratio but subject to adjustment as set forth herein and in our amended and restated certificate of incorporation. Immediately after this offering, there will be no shares of preferred stock issued and outstanding.

 

 
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We may issue a substantial number of additional shares of Class A common stock or shares of preferred stock to complete our initial business combination or under an employee incentive plan after completion of our initial business combination. We may also issue shares of Class A common stock upon conversion of the Class B common stock at a ratio greater than one-to-one at the time of our initial business combination as a result of the anti-dilution provisions as set forth therein. However, our amended and restated certificate of incorporation provides, among other things, that prior to our initial business combination, we may not issue additional shares that would entitle the holders thereof to (i) receive funds from the trust account or (ii) vote as a class with our public shares (a) on any initial business combination or (b) to approve an amendment to our amended and restated certificate of incorporation to (x) extend the time we have to consummate a business combination beyond the completion window or (y) amend the foregoing provisions. These provisions of our amended and restated certificate of incorporation, like all provisions of our amended and restated certificate of incorporation, may be amended with a stockholder vote. The issuance of additional shares of common stock or shares of preferred stock:

  

 

·

may significantly dilute the equity interest of investors in this offering;

 

 

 

 

·

may subordinate the rights of holders of Class A common stock if shares of preferred stock are issued with rights senior to those afforded our Class A common stock;

 

 

 

 

·

could cause a change in control if a substantial number of shares of Class A common stock is issued, which may affect, among other things, our ability to use our net operating loss carry forwards, if any, and could result in the resignation or removal of our present officers and directors; and

 

 

 

 

·

may adversely affect prevailing market prices for our units, Class A common stock, rights and/or warrants.

   

Unlike some other similarly structured special purpose acquisition companies, our initial stockholders will receive additional shares of Class A common stock if we issue certain shares to consummate an initial business combination.

 

The founder shares will automatically convert into shares of Class A common stock concurrently with or immediately following the consummation of our initial business combination on a one-for-one basis, subject to adjustment for stock splits, stock dividends, reorganizations, recapitalizations and the like, and subject to further adjustment as provided herein. In the case that additional shares of Class A common stock or equity-linked securities are issued or deemed issued in connection with our initial business combination, the number of shares of Class A common stock issuable upon conversion of all founder shares will equal, in the aggregate, on an as-converted basis, 20% of the total number of shares of Class A common stock outstanding after such conversion (after giving effect to any redemptions of shares of Class A common stock by public stockholders), including the total number of shares of Class A common stock issued, or deemed issued or issuable upon conversion or exercise of any equity-linked securities or rights issued or deemed issued, by the Company in connection with or in relation to the consummation of the initial business combination, excluding any shares of Class A common stock or equity-linked securities or rights exercisable for or convertible into shares of Class A common stock issued, or to be issued, to any seller in the initial business combination and any private placement warrants issued to our sponsor, officers or directors upon conversion of working capital loans, provided that such conversion of founder shares will never occur on a less than one-for-one basis. This is different than some other similarly structured special purpose acquisition companies in which the initial stockholders will only be issued an aggregate of 20% of the total number of shares to be outstanding prior to our initial business combination.

 

 
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Our sponsor paid an aggregate of $25,000 to cover certain of our offering costs in exchange for 6,037,500 founder shares (following forfeiture for no cost of 1,725,000  founder shares), or approximately $0.004 per founder share and, accordingly, you will experience immediate and substantial dilution from the purchase of our shares of Class A common stock.

 

The difference between the public offering price per share (allocating all of the unit purchase price to the share of Class A common stock and none to the warrant included in the unit) and the pro forma net tangible book value per share of our Class A common stock after this offering constitutes the dilution to you and the other investors in this offering. Our initial stockholders acquired the founder shares at a nominal price, significantly contributing to this dilution. Upon closing of this offering, and assuming no value is ascribed to the warrants included in the units, you and the other public stockholders will incur an immediate and substantial dilution of approximately 110.4% or $10.39 per share, assuming no exercise of the underwriters’ over-allotment option), the difference between the pro forma net tangible book value per share after this offering of $(0.98) and the initial offering price of $9.41 per share (including the shares of common stock issuable upon conversion of rights). This dilution would increase to the extent that the anti-dilution provisions of the founder shares result in the issuance of shares of Class A common stock on a greater than one-to-one basis upon conversion of the founder shares at the time of our initial business combination and would become exacerbated to the extent that public stockholders seek redemptions from the trust for their public shares. In addition, because of the anti-dilution protection in the founder shares, any equity or equity-linked securities issued in connection with our initial business combination would be disproportionately dilutive to our Class A common stock.

 

We may amend the terms of the rights or warrants in a manner that may be adverse to holders with the approval by the holders of a majority of the then outstanding rights or public warrants, respectively. As a result, the exercise price of your warrants could be increased, the exercise period could be shortened and the number of shares of Class A common stock purchasable upon exercise of a right warrant could be decreased, all without your approval.

 

Our rights will be issued in registered form under a rights agreement, and our warrants will be issued in registered form under a warrant agreement, each between Continental Stock Transfer & Trust Company, as rights or warrant agent, as applicable, and us. Each of the rights and warrant agreement provides that the terms of the rights or warrants, as applicable, may be amended without the consent of any holder to cure any ambiguity or correct any defective provision, but requires the approval by the holders of at least 50% of the then outstanding rights or public warrants, as applicable, to make any change that adversely affects the interests of the registered holders of rights or public warrants as applicable. Accordingly, we may amend the terms of the rights or public warrants in a manner adverse to a holder if holders of a majority of the then outstanding rights or public warrants as applicable, approve of such amendment. Although our ability to amend the terms of the rights or public warrants with the consent of a majority of the then outstanding rights or public warrants as applicable, is unlimited, examples of such amendments could be amendments to, among other things, increase the exercise price of the warrants, convert the warrants into cash or stock (at a ratio different than initially provided), shorten the exercise period or decrease the number of shares of Class A common stock purchasable upon exercise of a warrant or receivable upon exercise of a right.

 

We may redeem your unexpired warrants prior to their exercise at a time that is disadvantageous to you, thereby making your warrants worthless.

 

We have the ability to redeem the outstanding public warrants at any time after they become exercisable and prior to their expiration, at a price of $0.01 per warrant, provided that the closing price of our Class A common stock equals or exceeds $18.00 per share (subject to adjustments as described under the heading “Description of Securities — Warrants — Public Stockholders’ Warrants — Anti-Dilution Adjustments”) for any 20 trading days within a 30 trading-day period ending on the third trading day prior to proper notice of such redemption and provided that certain other conditions are met. If and when the warrants become redeemable by us, we may exercise our redemption right even if we are unable to register or qualify the underlying securities for sale under all applicable state securities laws. As a result, we may redeem the warrants as set forth above even if the holders are otherwise unable to exercise the warrants. Redemption of the outstanding warrants could force you to (i) exercise your warrants and pay the exercise price therefor at a time when it may be disadvantageous for you to do so, (ii) sell your warrants at the then-current market price when you might otherwise wish to hold your warrants or (iii) accept the nominal redemption price which, at the time the outstanding warrants are called for redemption, we expect would be substantially less than the market value of your warrants. None of the private placement warrants will be redeemable by us.

 

 
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Our warrants and rights may have an adverse effect on the market price of our shares of Class A common stock and make it more difficult to effectuate our initial business combination.

 

We will be issuing rights that may result in the issuance of up to 1,312,500 shares of our Class A common stock (or up to 1,509,375 shares if the underwriters’ over-allotment option is exercised in full) and warrants to purchase 10,500,000 shares of our Class A common stock (or up to 12,075,000 shares of Class A common stock if the underwriters’ over-allotment option is exercised in full) as part of the units offered by this prospectus and, simultaneously with the closing of this offering, we will be issuing in a private placement an aggregate of 6,485,500 private placement warrants, each exercisable to purchase one share of Class A common stock at $11.50 per share. In addition, if our sponsor or an affiliate of our sponsor or certain of our officers and directors makes any working capital loans, such lender may convert those loans into up to an additional 1,500,000 private placement warrants, at the price of $1.00 per warrant. To the extent we issue common stock to effectuate a business transaction, the potential for the issuance of a substantial number of additional shares of Class A common stock upon exercise of these rights and warrants could make us a less attractive acquisition vehicle to a target business. Such rights and warrants, when exercised, will increase the number of issued and outstanding shares of Class A common stock and reduce the value of the Class A common stock issued to complete the business transaction. Therefore, our rights and warrants may make it more difficult to effectuate a business transaction or increase the cost of acquiring the target business.

   

Because each unit contains one half of one warrant and only a whole warrant may be exercised, the units may be worth less than units of other special purpose acquisition companies.

 

Each unit contains one half of one warrant. Pursuant to the warrant agreement, no fractional warrants will be issued upon separation of the units, and only whole units will trade. If, upon exercise of the warrants, a holder would be entitled to receive a fractional interest in a share, we will, upon exercise, round down to the nearest whole number the number of shares of Class A common stock to be issued to the warrant holder. This is different from other offerings similar to ours whose units include one common share and one warrant to purchase one whole share. We have established the components of the units in this way in order to reduce the dilutive effect of the warrants upon completion of a business combination since the warrants will be exercisable in the aggregate for one-half of the number of shares compared to units that each contain a whole warrant to purchase one share, thus making us, we believe, a more attractive merger partner for target businesses. Nevertheless, this unit structure may cause our units to be worth less than if it included a warrant to purchase one whole share.

 

Each of the public and private warrant agreements will designate the courts of the City of New York, County of New York, State of New York or the United States District Court for the Southern District of New York, and the rights agreement will designate the courts of the State of New York or the United States District Court for the Southern District of New York, as the sole and exclusive forum for certain types of actions and proceedings that may be initiated by holders of our warrants and rights, respectively, which could limit the ability of warrant holders or rights holders to obtain a favorable judicial forum for disputes with our company.

 

Our warrant agreement will provide that, subject to applicable law, (i) any action, proceeding or claim against us arising out of or relating in any way to the warrant agreement, including under the Securities Act, will be brought and enforced in the courts of the State of New York or the United States District Court for the Southern District of New York, and (ii) that we irrevocably submit to such jurisdiction, which jurisdiction shall be the exclusive forum for any such action, proceeding or claim. We will waive any objection to such exclusive jurisdiction and that such courts represent an inconvenient forum.

 

Notwithstanding the foregoing, these provisions of the warrant agreement and rights agreement will not apply to suits brought to enforce any liability or duty created by the Exchange Act or any other claim for which the federal district courts of the United States of America are the sole and exclusive forum. Any person or entity purchasing or otherwise acquiring any interest in any of our rights or warrants, as applicable shall be deemed to have notice of and to have consented to the forum provisions in our warrant agreement and rights agreement, as applicable. If any action, the subject matter of which is within the scope the forum provisions of the warrant agreement and rights agreement, as applicable, is filed in a court other than a court of the State of New York or the United States District Court for the Southern District of New York (a “foreign action”) in the name of any holder of our rights or warrants, as applicable, such holder shall be deemed to have consented to: (x) the personal jurisdiction of the state and federal courts located in the State of New York in connection with any action brought in any such court to enforce the forum provisions (an “enforcement action”), and (y) having service of process made upon such rights holder or warrant holder, as applicable in any such enforcement action by service upon such rights holder’s or warrant holder’s counsel in the foreign action as agent for such rights holder or warrant holder, as applicable.

 

 
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This choice-of-forum provision may limit a rights holder’s or warrant holder’s ability to bring a claim in a judicial forum that it finds favorable for disputes with our company, which may discourage such lawsuits. Alternatively, if a court were to find this provision of our warrant agreement or rights agreement inapplicable or unenforceable with respect to one or more of the specified types of actions or proceedings, we may incur additional costs associated with resolving such matters in other jurisdictions, which could materially and adversely affect our business, financial condition and results of operations and result in a diversion of the time and resources of our management and board of directors.

 

The determination of the offering price of our units, the size of this offering and terms of the units is more arbitrary than the pricing of securities and size of an offering of an operating company in a particular industry. You may have less assurance, therefore, that the offering price of our units properly reflects the value of such units than you would have in a typical offering of an operating company.

 

Prior to this offering there has been no public market for any of our securities. The public offering price of the units and the terms of the rights and warrants were negotiated between us and the underwriters. In determining the size of this offering, management held customary organizational meetings with representative of the underwriters, both prior to our inception and thereafter, with respect to the state of capital markets, generally, and the amount the underwriters believed they reasonably could raise on our behalf. Factors considered in determining the size of this offering, prices, and terms of the units, including the Class A common stock and warrants underlying the units, include:

  

 

·

the history and prospects of companies whose principal business is the acquisition of other companies;

 

 

 

 

·

prior offerings of those companies;

 

 

 

 

·

our prospects for acquiring an operating business at attractive values;

 

 

 

 

·

a review of debt to equity ratios in leveraged transactions;

 

 

 

 

·

our capital structure;

 

 

 

 

·

an assessment of our management and their experience in identifying operating companies;

 

 

 

 

·

general conditions of the securities markets at the time of this offering; and

 

 

 

 

·

other factors as were deemed relevant.

  

 
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Although these factors were considered, the determination of our offering size, price and terms of the units is more arbitrary than the pricing of securities of an operating company in a particular industry since we have no historical operations or financial results.

 

There is currently no market for our securities and a market for our securities may not develop, which would adversely affect the liquidity and price of our securities.

 

There is currently no market for our securities. Stockholders therefore have no access to information about prior market history on which to base their investment decision. Following this offering, the price of our securities may vary significantly due to one or more potential business combinations and general market or economic conditions. Furthermore, an active trading market for our securities may never develop or, if developed, it may not be sustained. You may be unable to sell your securities unless a market can be established and sustained.

 

General Risk Factors

 

We are a blank check company with no operating history and no revenues, and you have no basis on which to evaluate our ability to achieve our business objective.

 

We are a blank check company incorporated under the laws of the State of Delaware with no operating results, and we will not commence operations until obtaining funding through this offering. Because we lack an operating history, you have no basis upon which to evaluate our ability to achieve our business objective of completing our initial business combination. We have no plans, arrangements or understandings with any prospective target business concerning a business combination and may be unable to complete our initial business combination. If we fail to complete our initial business combination, we will never generate any operating revenues.

 

We are an emerging growth company and a smaller reporting company within the meaning of the Securities Act, and if we take advantage of certain exemptions from disclosure requirements available to emerging growth companies or smaller reporting companies, this could make our securities less attractive to investors and may make it more difficult to compare our performance with other public companies.

 

We are an “emerging growth company” within the meaning of the Securities Act, as modified by the JOBS Act, and we may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies including, but not limited to, not being required to comply with the auditor internal controls attestation requirements of Section 404 of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements, and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and stockholder approval of any golden parachute payments not previously approved. As a result, our stockholders may not have access to certain information they may deem important. We could be an emerging growth company for up to five years, although circumstances could cause us to lose that status earlier, including if the market value of our Class A common stock held by non-affiliates exceeds $700 million s of the last business day of the most recently completed second fiscal quarter, in which case we would no longer be an emerging growth company as of the following December 31. We cannot predict whether investors will find our securities less attractive because we will rely on these exemptions. If some investors find our securities less attractive as a result of our reliance on these exemptions, the trading prices of our securities may be lower than they otherwise would be, there may be a less active trading market for our securities and the trading prices of our securities may be more volatile.

 

Further, Section 102(b)(1) of the JOBS Act exempts emerging growth companies from being required to comply with new or revised financial accounting standards until private companies (that is, those that have not had a Securities Act registration statement declared effective or do not have a class of securities registered under the Exchange Act) are required to comply with the new or revised financial accounting standards. The JOBS Act provides that a company can elect to opt out of the extended transition period and comply with the requirements that apply to non-emerging growth companies but any such an election to opt out is irrevocable. We have elected not to opt out of such extended transition period which means that when a standard is issued or revised and it has different application dates for public or private companies, we, as an emerging growth company, can adopt the new or revised standard at the time private companies adopt the new or revised standard. This may make comparison of our financial statements with another public company which is neither an emerging growth company nor an emerging growth company which has opted out of using the extended transition period difficult or impossible because of the potential differences in accounting standards used.

 

 
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Additionally, we are a “smaller reporting company” as defined in Item 10(f)(1) of Regulation S-K. Smaller reporting companies may take advantage of certain reduced disclosure obligations, including, among other things, providing only two years of audited financial statements. We will remain a smaller reporting company until the last day of the fiscal year in which (1) the market value of our common stock held by non-affiliates equals or exceeds $250 million as of the prior June 30th, or (2) our annual revenues equaled or exceeded $100 million during such completed fiscal year and the market value of our common stock held by non-affiliates equals to or exceeds $700 million as of the last business day of the most recently completed second fiscal quarter. To the extent we take advantage of such reduced disclosure obligations, it may also make comparison of our financial statements with other public companies difficult or impossible.

 

Provisions in our amended and restated certificate of incorporation and Delaware law may inhibit a takeover of us, which could limit the price investors might be willing to pay in the future for our shares of Class A common stock and could entrench management.

 

Our amended and restated certificate of incorporation contains provisions that may discourage unsolicited takeover proposals that stockholders may consider to be in their best interests. These provisions include a staggered board of directors and the ability of the board of directors to designate the terms of and issue new series of preferred stock, which may make more difficult the removal of management and may discourage transactions that otherwise could involve payment of a premium over prevailing market prices for our securities.

 

We are also subject to anti-takeover provisions under Delaware law, which could delay or prevent a change of control. Together these provisions may make the removal of management more difficult and may discourage transactions that otherwise could involve payment of a premium over prevailing market prices for our securities.

   

Provisions in our amended and restated certificate of incorporation and Delaware law may have the effect of discouraging lawsuits against our directors and officers.

 

Our amended and restated certificate of incorporation will require, unless we consent in writing to the selection of an alternative forum, that (i) any derivative action or proceeding brought on our behalf, (ii) any action asserting a claim of breach of a fiduciary duty owed by any director, officer or other employee to us or our stockholders, (iii) any action asserting a claim against us, our directors, officers or employees arising pursuant to any provision of the DGCL or our amended and restated certificate of incorporation or bylaws, or (iv) any action asserting a claim against us, our directors, officers or employees governed by the internal affairs doctrine may be brought only in the Court of Chancery in the State of Delaware, except any claim (A) as to which the Court of Chancery of the State of Delaware determines that there is an indispensable party not subject to the jurisdiction of the Court of Chancery (and the indispensable party does not consent to the personal jurisdiction of the Court of Chancery within ten days following such determination), (B) which is vested in the exclusive jurisdiction of a court or forum other than the Court of Chancery, or (C) for which the Court of Chancery does not have subject matter jurisdiction. If an action is brought outside of Delaware, the stockholder bringing the suit will be deemed to have consented to service of process on such stockholder’s counsel. Although we believe this provision benefits us by providing increased consistency in the application of Delaware law in the types of lawsuits to which it applies, a court may determine that this provision is unenforceable, and to the extent it is enforceable, the provision may have the effect of discouraging lawsuits against our directors and officers, although our stockholders will not be deemed to have waived our compliance with federal securities laws and the rules and regulations thereunder.

 

 
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Notwithstanding the foregoing, our amended and restated certificate of incorporation will provide that the exclusive forum provision will not apply to suits brought to enforce a duty or liability created by the Exchange Act or any other claim for which the federal courts have exclusive jurisdiction. Section 27 of the Exchange Act creates exclusive federal jurisdiction over all suits brought to enforce any duty or liability created by the Exchange Act or the rules and regulations thereunder.

 

Additionally, unless we consent in writing to the selection of an alternative forum, the federal courts shall be the exclusive forum for the resolution of any complaint asserting a cause of action arising under the Securities Act against us or any of our directors, officers, other employees or agents. Section 22 of the Securities Act, however, created concurrent jurisdiction for federal and state courts over all suits brought to enforce any duty or liability created by the Securities Act or the rules and regulations thereunder. Accordingly, there is uncertainty as to whether a court would enforce these exclusive forum provisions, and the enforceability of similar choice of forum provisions in other companies’ charter documents has been challenged in legal proceedings. While the Delaware courts have determined that such exclusive forum provisions are facially valid, a stockholder may nevertheless seek to bring a claim in a venue other than those designated in the exclusive forum provisions, and there can be no assurance that such provisions will be enforced by a court in those other jurisdictions. Any person or entity purchasing or otherwise acquiring any interest in our securities shall be deemed to have notice of and consented to these provisions; however, we note that investors cannot waive compliance with the federal securities laws and the rules and regulations thereunder.

 

Although we believe this provision benefits us by providing increased consistency in the application of Delaware law in the types of lawsuits to which it applies, the provision may limit our stockholders’ ability to obtain a favorable judicial forum for disputes with us and may have the effect of discouraging lawsuits against our directors and officers.

 

Our initial business combination and our structure thereafter may not be tax-efficient to our stockholders and warrant holders. As a result of our business combination, our tax obligations may be more complex, burdensome, and uncertain.

 

Although we will attempt to structure our initial business combination in a tax-efficient manner, tax structuring considerations are complex, the relevant facts and law are uncertain and may change, and we may prioritize commercial and other considerations over tax considerations. For example, in connection with our initial business combination and subject to any requisite stockholder approval, we may structure our business combination in a manner that requires stockholders, rights holders and/or warrant holders to recognize gain or income for tax purposes, effect a business combination with a target company in another jurisdiction, or reincorporate in a different jurisdiction (including, but not limited to, the jurisdiction in which the target company or business is located). We do not intend to make any cash distributions to stockholders, rights holders or warrant holders to pay taxes in connection with our business combination or thereafter. Accordingly, a stockholder, rights holder or a warrant holder may need to satisfy any liability resulting from our initial business combination with cash from its own funds or by selling all or a portion of the shares received. In addition, stockholders, rights holders and warrant holders may also be subject to additional income, withholding or other taxes with respect to their ownership of us after our initial business combination.

 

In addition, we may effect a business combination with a target company that has business operations outside of the United States, and possibly, business operations in multiple jurisdictions. If we effect such a business combination, we could be subject to significant income, withholding and other tax obligations in a number of jurisdictions with respect to income, operations and subsidiaries related to those jurisdictions. Due to the complexity of tax obligations and filings in other jurisdictions, we may have a heightened risk related to audits or examinations by U.S. federal, state, local and non-U.S. taxing authorities. This additional complexity and risk could have an adverse effect on our after-tax profitability and financial condition.

 

Cyber incidents or attacks directed at us could result in information theft, data corruption, operational disruption and/or financial loss.

 

We depend on digital technologies, including information systems, infrastructure and cloud applications and services, including those of third parties with which we may deal. Sophisticated and deliberate attacks on, or security breaches in, our systems or infrastructure, or the systems or infrastructure of third parties or the cloud, could lead to corruption or misappropriation of our assets, proprietary information and sensitive or confidential data. As an early stage company without significant investments in data security protection, we may not be sufficiently protected against such occurrences. We may not have sufficient resources to adequately protect against, or to investigate and remediate any vulnerability to, cyber incidents. It is possible that any of these occurrences, or a combination of them, could have adverse consequences on our business and lead to financial loss.

 

 
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CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

 

Some of the statements contained in this prospectus may constitute “forward-looking statements” for purposes of the federal securities laws. Our forward-looking statements include, but are not limited to, statements regarding our or our management team’s expectations, hopes, beliefs, intentions, or strategies regarding the future. In addition, any statements that refer to projections, forecasts or other characterizations of future events or circumstances, including any underlying assumptions, are forward-looking statements. The words “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “intend,” “may,” “might,” “plan,” “possible,” “potential,” “predict,” “project,” “should,” “would” and similar expressions may identify forward-looking statements, but the absence of these words does not mean that a statement is not forward-looking. Forward-looking statements in this prospectus may include, for example, statements about:

  

 

·

our ability to select an appropriate target business or businesses;

 

 

 

 

·

our ability to complete our initial business combination;

 

 

 

 

·

our expectations around the performance of the prospective target business or businesses;

 

 

 

 

·

our success in retaining or recruiting, or changes required in, our officers, key employees or directors following our initial business combination;

 

 

 

 

·

our officers and directors allocating their time to other businesses and potentially having conflicts of interest with our business or in approving our initial business combination;

 

 

 

 

·

our potential ability to obtain additional financing to complete our initial business combination;

 

 

 

 

·

our pool of prospective target businesses;

 

 

 

 

·

our ability to consummate an initial business combination due to the uncertainty resulting from the recent COVID-19 pandemic;

 

 

 

 

·

the ability of our officers and directors to generate a number of potential business combination opportunities;

 

 

 

 

·

our public securities’ potential liquidity and trading;

 

 

 

 

·

the lack of a market for our securities;

 

 

 

 

·

the use of proceeds not held in the trust account or available to us from interest income on the trust account balance;

 

 

 

 

·

the trust account not being subject to claims of third parties; or

 

 

 

 

·

our financial performance following this offering.

   

The forward-looking statements contained in this prospectus are based on our current expectations and beliefs concerning future developments and their potential effects on us. There can be no assurance that future developments affecting us will be those that we have anticipated. These forward-looking statements involve a number of risks, uncertainties (some of which are beyond our control) or other assumptions that may cause actual results or performance to be materially different from those expressed or implied by these forward-looking statements. These risks and uncertainties include, but are not limited to, those factors described under the heading “Risk Factors.” Should one or more of these risks or uncertainties materialize, or should any of our assumptions prove incorrect, actual results may vary in material respects from those projected in these forward-looking statements. We undertake no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as may be required under applicable securities laws.

   

 
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USE OF PROCEEDS

 

We are offering 21,000,000 units at an offering price of $10.00 per unit. We estimate that the net proceeds of this offering together with the funds we will receive from the sale of the private placement warrants will be used as set forth in the following table.

 

 

 

Without Over-

allotment Option

 

 

Over-allotment

Option Exercised

 

Gross proceeds

 

 

 

 

 

 

Gross proceeds from units offered to public(1)

 

$ 210,000,000

 

 

$ 241,500,000

 

Gross proceeds from private placement warrants offered in the private placement

 

 

6,485,500

 

 

 

6,458,500

 

Total gross proceeds

 

$ 216,485,500

 

 

$ 247,985,500

 

Estimated offering expenses(2)

 

 

 

 

 

 

 

 

Underwriting commissions (1.5% of gross proceeds from units offered to public, excluding deferred portion)(3)

 

 

3,150,000

 

 

 

3,150,000

 

Legal fees and expenses

 

 

250,000

 

 

 

250,000

 

Transfer Agent

 

 

62,000

 

 

 

62,000

 

Printing and engraving expenses

 

 

15,300

 

 

 

15,300

 

Accounting fees and expenses

 

 

68,700

 

 

 

68,700

 

SEC/FINRA Expenses

 

 

105,000

 

 

 

105,000

 

Nasdaq listing and filing fees

 

 

75,000

 

 

 

75,000

 

Miscellaneous

 

 

262,000

 

 

 

262,000

 

Total offering expenses (other than underwriting commissions)

 

$ 838,000

 

 

$ 838,000

 

Proceeds after estimated offering expenses

 

$ 212,497,500

 

 

$ 243,997,500

 

Held in trust account(3)

 

$ 210,000,000

 

 

$ 241,500,000

 

% of public offering size

 

 

100 %

 

 

100 %

Not held in trust account

 

$ 2,497,500

 

 

$ 2,497,500

 

 

 
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The following table shows the use of the approximately $2,497,500 of net proceeds not held in the trust account.(4)

 

 

 

Amount

 

 

% of Total

 

Legal, accounting, due diligence, travel, and other expenses in connection with any business combination

 

$ 700,000

 

 

 

28 %

Legal and accounting fees related to regulatory reporting obligations

 

 

417,500

 

 

 

17 %

Nasdaq continued listing fees

 

 

75,000

 

 

 

2 %

Payment for office space, utilities, salaries or other cash compensation paid to consultants to our sponsor, administrative and support services

 

 

180,000

 

 

 

7 %

Directors and officers’ insurance (18 months)

 

 

865,000

 

 

 

35 %

Working capital and other expenses

 

 

260,000

 

 

 

11 %

Total

 

$ 2,497,500

 

 

 

100 %

 

(1)

Includes amounts payable to public stockholders who properly redeem their shares in connection with our successful completion of our initial business combination.

 

 

(2)

A portion of the offering expenses will be paid from the proceeds of loans from our sponsor of up to $300,000 as described in this prospectus. These loans will be repaid upon completion of this offering out of the $838,000 of offering proceeds that has been allocated for the payment of offering expenses other than underwriting commissions. In the event that offering expenses are less than set forth in this table, any such amounts will be used for post-closing working capital expenses.

 

 

(3)

The underwriters have agreed to defer underwriting commissions of 4.25% of the gross proceeds of the units sold in the base offering and 5.75% of the gross proceeds of the units sold pursuant to any overallotment. Upon and concurrently with the completion of our initial business combination, $8,925,000, which constitutes the underwriters’ deferred commissions (or $10,736,250 the underwriters’ over-allotment option is exercised in full) will be paid to the underwriters from the funds held in the trust account. See “Underwriting.” The remaining funds, less amounts released to the trustee to pay redeeming stockholders, will be released to us and can be used to pay all or a portion of the purchase price of the business or businesses with which our initial business combination occurs or for general corporate purposes, including payment of principal or interest on indebtedness incurred in connection with our initial business combination, to fund the purchases of other companies or for working capital. The underwriters will not be entitled to any interest accrued on the deferred underwriting discounts and commissions.

 

 

(4)

These expenses are estimates only. Our actual expenditures for some or all of these items may differ from the estimates set forth herein. For example, we may incur greater legal and accounting expenses than our current estimates in connection with negotiating and structuring our initial business combination based upon the level of complexity of such business combination. In the event we identify a business combination target in a specific industry subject to specific regulations, we may incur additional expenses associated with legal due diligence and the engagement of special legal counsel. In addition, our staffing needs may vary and as a result, we may engage a number of consultants to assist with legal and financial due diligence. We do not anticipate any change in our intended use of proceeds, other than fluctuations among the current categories of allocated expenses, which fluctuations, to the extent they exceed current estimates for any specific category of expenses, would not be available for our expenses. The amount in the table above does not include interest available to us from the trust account. The proceeds held in the trust account will be invested only in U.S. government treasury obligations with a maturity of 185 days or less or in money market funds meeting certain conditions under Rule 2a-7 under the Investment Company Act which invest only in direct U.S. government treasury obligations. We estimate the interest earned on the trust account will be approximately $42,000 per year, assuming an interest rate of 0.02% per year; however, we can provide no assurances regarding this amount.

  

 
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Nasdaq rules provide that at least 90% of the gross proceeds from this offering and the sale of the private placement warrants be deposited in a trust account. Of the $216,485,500 in gross proceeds we receive from this offering and the sale of the private placement warrants described in this prospectus, or $247,985,500 if the underwriters’ over-allotment option is exercised in full, $210.0 million ($10.00 per unit), or $241.5 million if the underwriters’ over-allotment option is exercised in full ($10.00 per unit), will be deposited into a trust account with Continental Stock Transfer & Trust Company acting as trustee, after deducting $3,150,000  in underwriting discounts and commissions payable upon the closing of this and an aggregate of approximately $3,335,500 to pay other fees and expenses in connection with the closing of this offering and for working capital following this offering. The proceeds held in the trust account will be invested only in U.S. government treasury bills with a maturity of 185 days or less or in money market funds meeting certain conditions under Rule 2a-7 under the Investment Company Act which invest only in direct U.S. government treasury obligations. We estimate the interest earned on the trust account will be approximately $42,000 per year, assuming an interest rate of 0.02% per year; however, we can provide no assurances regarding this amount.

 

We expect that the interest earned on the trust account will be sufficient to pay income taxes. We will not be permitted to withdraw any of the principal or interest held in the trust account, except for the withdrawal of interest to pay our taxes, until the earliest of (i) the completion of our initial business combination, (ii) the redemption of our public shares if we are unable to complete our initial business combination within the completion window, subject to applicable law, and (iii) the redemption of our public shares properly submitted in connection with a stockholder vote to approve an amendment to our amended and restated certificate of incorporation to modify the substance or timing of our obligation to provide for the redemption of our public shares in connection with an initial business combination or to redeem 100% of our public shares if we have not consummated our initial business combination within the completion window or with respect to any other material provisions relating to stockholders’ rights or pre-initial business combination activity.

 

The net proceeds held in the trust account may be used as consideration to pay the sellers of a target business with which we ultimately complete our initial business combination. If our initial business combination is paid for using equity or debt securities, or not all of the funds released from the trust account are used for payment of the consideration in connection with our initial business combination or used for redemption of our public shares, we may apply the balance of the cash released from the trust account for general corporate purposes, including for maintenance or expansion of operations of the post-transaction company, the payment of principal or interest due on indebtedness incurred in completing our initial business combination, to fund the purchase of other companies or for working capital. There is no limitation on our ability to raise funds through the issuance of equity-linked securities or through loans, advances or other indebtedness in connection with our initial business combination, including pursuant to forward purchase agreements or backstop arrangements we may enter into following consummation of this offering. However, our amended and restated certificate of incorporation provides that, following this offering and prior to the consummation of our initial business combination, we will be prohibited from issuing additional securities that would entitle the holders thereof to (i) receive funds from the trust account or (ii) vote as a class with our public shares (a) on any initial business combination or (b) to approve an amendment to our amended and restated certificate of incorporation to (x) extend the time we have to consummate a business combination beyond the completion window or (y) amend the foregoing provisions.

 

We believe that amounts not held in trust will be sufficient to pay the costs and expenses to which such proceeds are allocated. This belief is based on the fact that while we may begin preliminary due diligence of a target business in connection with an indication of interest, we intend to undertake in-depth due diligence, depending on the circumstances of the relevant prospective business combination, only after we have negotiated and signed a letter of intent or other preliminary agreement that addresses the terms of a business combination. However, if our estimate of the costs of undertaking in-depth due diligence and negotiating a business combination is less than the actual amount necessary to do so, we may be required to raise additional capital, the amount, availability and cost of which is currently unascertainable. If we are required to seek additional capital, we could seek such additional capital through loans or additional investments from our sponsor, members of our management team or any of their affiliates, but such persons are not under any obligation to advance funds to, or invest in, us.

 

 
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Subsequent to the closing of this offering, we will pay up to $10,000 per month for administrative and other services. Upon completion of our initial business combination or our liquidation, we will cease paying these monthly fees.

 

Prior to the closing of this offering, our sponsor has agreed to loan us up to $300,000 to be used for a portion of the expenses of this offering. These loans are non-interest bearing, unsecured and are due at the earlier of March 31, 2022 or the closing of this offering. The loan will be repaid upon the closing of this offering out of the $838,000 of offering proceeds that has been allocated to the payment of offering expenses.

 

In addition, in order to finance transaction costs in connection with an intended initial business combination, our sponsor or an affiliate of our sponsor or certain of our officers and directors may, but are not obligated to, loan us funds as may be required. If we complete our initial business combination, we would repay such loaned amounts. In the event that our initial business combination does not close, we may use a portion of the working capital held outside the trust account to repay such loaned amounts but no proceeds from our trust account would be used to repay such loaned amounts. Up to $1,500,000 of such loans may be convertible into warrants of the post business combination entity at a price of $1.00 per warrant at the option of the lender. The warrants would be identical to the private placement warrants. Except as set forth above, the terms of such loans, if any, have not been determined and no written agreements exist with respect to such loans. Prior to the completion of our initial business combination, we do not expect to seek loans from parties other than our sponsor or an affiliate of our sponsor as we do not believe third parties will be willing to loan such funds and provide a waiver against any and all rights to seek access to funds in our trust account.

  

DIVIDEND POLICY

 

We have not paid any cash dividends on our common stock to date and do not intend to pay cash dividends prior to the completion of our initial business combination. The payment of cash dividends in the future will be dependent upon our revenues and earnings, if any, capital requirements and general financial condition subsequent to completion of our initial business combination. The payment of any cash dividends subsequent to our initial business combination will be within the discretion of our board of directors at such time. If we incur any indebtedness in connection with our initial business combination, our ability to declare dividends may be limited by restrictive covenants we may agree to in connection therewith.

 

 
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DILUTION

 

The difference between the public offering price per share of Class A common stock, assuming no value is attributed to the warrants included in the units we are offering pursuant to this prospectus or the private placement warrants, and the pro forma net tangible book value per share of our Class A common stock after this offering constitutes the dilution to investors in this offering. Such calculation does not reflect any dilution associated with the sale and exercise of warrants, including the private placement warrants, which would cause the actual dilution to the public stockholders to be higher, particularly where a cashless exercise is utilized. Net tangible book value per share is determined by dividing our net tangible book value, which is our total tangible assets less total liabilities (including the value of shares of Class A common stock which may be redeemed for cash), by the number of shares of outstanding Class A common stock.

  

At September 30, 2021, our net tangible book value was a deficit of $186,652 or approximately $(0.03) per share. For purposes of the dilution calculation, in order to present the maximum estimated dilution as a result of this offering, we have assumed (i) the issuance of one-sixteenth of a share for each right outstanding, as such issuance will occur upon a business combination without the payment of additional consideration and (ii) the number of shares included in the units offered hereby will be deemed to be 22,312,500 (consisting of 21,000,000 shares included in the units we are offering by this prospectus and 1,312,500 shares for the outstanding rights), and the price per share in this offering will be deemed to be $9.41. After giving effect to the sale of 21,000,000 shares of Class A common stock included in the units we are offering by this prospectus (or 24,150,000 shares of Class A common stock if the underwriters’ over-allotment option is exercised in full), the rights included with those shares, the sale of the private placement warrants and the deduction of underwriting commissions and estimated expenses of this offering, our pro forma net tangible book value at September 30, 2021 would have been $(6,421,518) or $(0.98) per share (or $(8,232,768) or $(1.09) per share if the underwriters’ over-allotment option is exercised in full), representing an immediate decrease in net tangible book value (as decreased by the value of 21,000,000 shares of Class A common stock that may be redeemed for cash, or 24,150,000 shares of Class A common stock if the underwriters’ over-allotment option is exercised in full) of $(0.95) per share (or $(1.06) if the underwriters’ over-allotment option is exercised in full) to our initial stockholders as of the date of this prospectus. Total dilution to public stockholders from this offering will be $10.39 per share (or $10.50 if the underwriters’ over-allotment option is exercised in full).

 

The following table illustrates the dilution to the public stockholders on a per-share basis, assuming no value is attributed to the warrants included in the units or the private placement warrants:

  

 

 

Without Over-allotment

 

 

With Over-allotment

 

Public offering price

 

$ 9.41

 

 

$ 9.41

 

Net tangible book deficit before the Proposed Public Offering

 

$ (0.03 )

 

$ (0.03 )

Decrease attributable to public stockholders

 

$ (0.95 )

 

$ (1.06 )

Pro forma net tangible book value after the Proposed Public Offering and the sale of the private placement warrants

 

$ (0.98 )

 

$ (1.09 )

Dilution to public stockholders

 

$ 10.39

 

 

$ 10.50

 

Percentage of dilution to public stockholders

 

 

110.4 %

 

 

111.6 %

 

For purposes of presentation, we have reduced our pro forma net tangible book value after this offering (assuming no exercise of the underwriters’ over-allotment option) by $210,000,000 because holders of up to approximately 100% of our public shares may redeem their shares for a pro rata share of the aggregate amount then on deposit in the trust account at a per share redemption price equal to the amount in the trust account as set forth in our tender offer or proxy materials (initially anticipated to be the aggregate amount held in trust two business days prior to the commencement of our tender offer or stockholders meeting, including interest earned on the funds held in the trust account (which interest shall be net of taxes payable)), divided by the number of shares of Class A common stock sold in this offering.

 

The following table sets forth information with respect to our initial stockholders and the public stockholders:

 

 

 

Shares Purchased

 

 

Total Consideration

 

 

Average

Price per

 

 

 

Number

 

 

Percentage

 

 

Amount

 

 

Percentage

 

 

 Share

 

Initial Stockholders(1)

 

 

5,250,000

 

 

 

19.05

 

 

$ 25,000

 

 

 

0.01

 

 

$ 0.01

 

Public Stockholders (2)

 

 

22,312,500

 

 

 

80.95

 

 

 

210,000,000

 

 

 

99.99

 

 

$ 9.41

 

 

 

 

27,562500

 

 

 

100.00 %

 

$ 210,025,000

 

 

 

100.00 %

 

 

 

 

 

(1)

Assumes that 787,500 founder shares are forfeited after the closing of this offering in the event the underwriters do not exercise their over-allotment option.

(2)

Includes issuance of an additional 1,312,500 shares underlying the rights contained in the public shares

 

 
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The pro forma net tangible book value per share after the offering (assuming that the underwriters do not exercise their over-allotment option) is calculated as follows:

 

 

 

September 30, 2021

 

 

 

Without

Over-allotment

 

 

With

Over-allotment

 

Numerator:

 

 

 

 

 

 

Net tangible book deficit before the Proposed Public Offering

 

$ (186,652 )

 

$ (186,652 )

Net proceeds from the Proposed Public Offering and sale of the private placement warrants

 

 

212,497,500

 

 

 

243,997,500

 

Plus: Offering costs paid in advance, excluded from tangible book value before the Proposed Public Offering(1)

 

 

192,634

 

 

 

192,634

 

Less: Deferred underwriting commissions

 

 

(8,925,000 )

 

 

(10,736,250 )

Less: Proceeds held in trust subject to redemption

 

 

(210,000,000 )

 

 

(241,500,000 )

 

 

$ (6,421,518 )

 

$ (8,232,768 )

 

 

 

 

 

 

 

 

 

Denominator:

 

 

 

 

 

 

 

 

Class B common stock outstanding prior to the Proposed Public Offering

 

 

6,037,500

 

 

 

6,037,500

 

Class B common stock forfeited if over-allotment is not exercised

 

 

(787,500 )

 

 

 

Class A common stock included in the units offered(2)

 

 

22,312,500

 

 

 

25,659,375

 

Less: common stock subject to redemption(3)

 

 

(21,000,000 )

 

 

(24,150,000 )

 

 

 

6,562,500

 

 

 

7,546,875

 

            

(1)

Expenses applied against gross proceeds include offering expenses of $838,000 and underwriting commissions of $3,150,000 (excluding deferred underwriting fees). See “Use of Proceeds.”

 

 

(2)

Includes 1,312,500 shares for public rights included in the public units offered in the public offering (1,509,375 shares if the overallotment option is exercised fully).

 

 

(3)

If we seek stockholder approval of our initial business combination and we do not conduct redemptions in connection with our initial business combination pursuant to the tender offer rules, our sponsor, initial stockholders, directors, executive officers, advisors or their affiliates may purchase public shares or public warrants in privately negotiated transactions or in the open market either prior to or following the completion of our initial business combination. In the event of any such purchases of our shares prior to the completion of our initial business combination, the number of shares of Class A common stock subject to redemption will be reduced by the amount of any such purchases, increasing the pro forma net tangible book value per share.

   

 
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CAPITALIZATION

 

The following table sets forth our capitalization at September 30, 2021, and as adjusted to give effect to the filing of our amended and restated certificate of incorporation, the sale of our units in this offering and the sale of the private placement warrants and the application of the estimated net proceeds derived from the sale of such securities, assuming no exercise by the underwriters of their over-allotment option:

  

 

 

 September 30, 2021

 

 

 

Actual

 

 

As Adjusted

 

Notes payable to related party(1)

 

$ 2,000

 

 

$

 

Deferred underwriting commissions

 

 

 

 

 

8,925,000

 

Class A common stock, subject to redemption, 0 and 21,000,000 shares which are subject to possible redemption, actual and as adjusted, respectively

 

 

 

 

 

210,000,000

 

Preferred Stock, $0.0001 par value; 1,000,000 shares authorized; none issued and outstanding, actual and as adjusted, respectively

 

 

 

 

 

 

Class A common stock, $0.0001 par value, 250,000,000 shares authorized; 0 and 0 shares issued and outstanding, actual and as adjusted, respectively(2)

 

 

 

 

 

 

Class B common stock, $0.0001 par value, 10,000,000 shares authorized, 6,037,500 and 5,250,000 shares issued and outstanding, actual and as adjusted, respectively(3)

 

604

 

 

 

525

 

Additional paid-in capital

 

24,396

 

 

 

 

Accumulated deficit

 

 

(19,018 )

 

 

(6,422,043 )

Total stockholders’ equity/(deficit)

 

$ 5,982

 

 

$ (6,421,518 )

Total capitalization

 

$ 7,982

 

 

$ 212,503,482

 

   

(1)

Our sponsor may loan us up to $300,000 under unsecured promissory notes to be used for a portion of the expenses of this offering. The “as adjusted” information gives effect to the repayment of any loans made under this note out of the proceeds from this offering and the sale of the private placement warrants. As of September 30, 2021 and June 30, 2021, we have borrowed approximately $2,000 under the promissory note.

 

 

(2)

Upon the completion of our initial business combination, we will provide our public stockholders with the opportunity to redeem their public shares for cash at a per share price equal to the aggregate amount then on deposit in the trust account calculated as of two business days prior to the consummation of our initial business combination, including interest earned on the funds held in the trust account (which interest shall be net of taxes payable), divided by the number of then outstanding public shares.

 

 

(3)

Actual share amount is prior to any forfeiture of founder shares and as adjusted amount assumes no exercise of the underwriters’ over-allotment option and forfeiture of an aggregate of 787,500 founder shares.

 

 
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MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

 

Overview

 

We are a blank check company incorporated on April 16, 2021, as a Delaware corporation and 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. We have not selected any specific business combination target and we have not, nor has anyone on our behalf, engaged in any substantive discussions directly or indirectly, with any business combination target with respect to an initial business combination with us. We may pursue an initial business combination target in any industry or geographic region. We intend to focus our search for an initial business combination on companies that utilize space (meaning the physical region beyond Earth’s atmosphere) and generate value in one or more of the following market sectors: communication services, energy, industrials, information technology, and materials, though We may pursue an initial business combination target in any industry or geographic region. We intend to effectuate our initial business combination using cash from the proceeds of this offering and the private placement of the private placement warrants, the proceeds of the sale of our shares in connection with our initial business combination (pursuant to forward purchase agreements or backstop agreements we may enter into following the consummation of this offering or otherwise), shares issued to the owners of the target, debt issued to bank or other lenders or the owners of the target, or a combination of the foregoing.

 

The issuance of additional shares in connection with a business combination to the owners of the target or other investors:

 

 

·

may significantly dilute the equity interest of investors in this offering, which dilution would increase if the anti-dilution provisions in the Class B common stock resulted in the issuance of Class A common stock on a greater than one-to-one basis upon conversion of the Class B common stock;

 

 

 

 

·

may subordinate the rights of holders of Class A common stock if shares of preferred stock are issued with rights senior to those afforded our Class A common stock;

 

 

 

 

·

could cause a change in control if a substantial number of shares of our Class A common stock are issued, which may affect, among other things, our ability to use our net operating loss carry forwards, if any, and could result in the resignation or removal of our present officers and directors;

 

 

 

 

·

may have the effect of delaying or preventing a change of control of us by diluting the share ownership or voting rights of a person seeking to obtain control of us; and

 

 

 

 

·

may adversely affect prevailing market prices for our Class A common stock and/or warrants.

 

 

 

Similarly, if we issue debt securities or otherwise incur significant debt to bank or other lenders or the owners of a target, it could result in:

 

 

 

 

·

default and foreclosure on our assets if our operating revenues after an initial business combination are insufficient to repay our debt obligations;

 

 

 

 

·

acceleration of our obligations to repay the indebtedness even if we make all principal and interest payments when due if we breach certain covenants that require the maintenance of certain financial ratios or reserves without a waiver or renegotiation of that covenant;

 

 

 

 

·

our immediate payment of all principal and accrued interest, if any, if the debt is payable on demand;

 

 

 

 

·

our inability to obtain necessary additional financing if the debt contains covenants restricting our ability to obtain such financing while the debt is outstanding;

 

 

 

 

·

our inability to pay dividends on our Class A common stock;

 

 

 

 

·

using a substantial portion of our cash flow to pay principal and interest on our debt, which will reduce the funds available for dividends on our Class A common stock if declared, expenses, capital expenditures, acquisitions and other general corporate purposes;

 

 

 

 

·

limitations on our flexibility in planning for and reacting to changes in our business and in the industry in which we operate;

 

 

 

 

·

increased vulnerability to adverse changes in general economic, industry and competitive conditions and adverse changes in government regulation; and

 

 

 

 

·

limitations on our ability to borrow additional amounts for expenses, capital expenditures, acquisitions, debt service requirements, execution of our strategy and other purposes and other disadvantages compared to our competitors who have less debt.

     

 
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As indicated in the accompanying financial statements, at September 30, 2021, we had cash of $27,000, deferred offering costs of $139,134 and a working capital deficit of $186,652.  At June 30, 2021, we had cash of $27,000, deferred offering costs of $105,450, and a working capital deficit of $81,218. Further, we expect to incur significant costs in the pursuit of our initial business combination. We cannot assure you that our plans to raise capital or to complete our initial business combination will be successful.

 

Results of Operations and Known Trends or Future Events

 

We have neither engaged in any operations nor generated any revenues to date. Our only activities since inception have been organizational activities and those necessary to prepare for this offering. Following this offering, we will not generate any operating revenues until after completion of our initial business combination. We will generate non-operating income in the form of interest income on cash and cash equivalents after this offering. There has been no significant change in our financial or trading position and no material adverse change has occurred since the date of our audited financial statements. After this offering, we expect to incur increased expenses as a result of being a public company (for legal, financial reporting, accounting and auditing compliance), as well as for due diligence expenses. We expect our expenses to increase substantially after the closing of this offering.

 

Liquidity and Capital Resources

 

Our liquidity needs have been satisfied prior to the completion of this offering through a payment from our sponsor of $25,000 to cover certain offering costs in exchange for the issuance of the founder shares to our sponsor and up to $300,000 in loans available from our sponsor. As of September 30, 2021 and June 30, 2021, we had borrowed approximately $2,000 under the promissory note with our sponsor. As of September 30, 2021 and June 30, 2021, we had borrowed approximately $211,147 and $101,218 under advances from related party, respectively.

  

We estimate that the net proceeds from the sale of the units in this offering and the sale of the private placement warrants for an aggregate purchase price of $6,485,500, after deducting offering expenses of approximately $838,000 and underwriting commissions of $3,150,000 (excluding deferred underwriting commissions of $8,925,000, or $10,736,250 if the underwriters’ over-allotment option is exercised in full), will be $212,497,500 (or $243,997,500 if the underwriters’ over-allotment option is exercised in full). $210,000,000 (or $241,500,000 if the underwriters’ over-allotment option is exercised in full) will be held in the trust account, which includes the deferred underwriting commissions described above. The proceeds held in the trust account will be invested only in U.S. government treasury obligations with a maturity of 185 days or less or in money market funds meeting certain conditions under Rule 2a-7 under the Investment Company Act which invest only in direct U.S. government treasury obligations. The remaining $2,497,500 will not be held in the trust account. In the event that our offering expenses exceed our estimate of $838,000, we may fund such excess with funds not to be held in the trust account. In such case, the amount of funds we intend to be held outside the trust account would decrease by a corresponding amount. Conversely, in the event that the offering expenses are less than our estimate of $838,000, the amount of funds we intend to be held outside the trust account would increase by a corresponding amount.

 

 
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We intend to use substantially all of the funds held in the trust account, including any amounts representing interest earned on the trust account (excluding deferred underwriting commissions) to complete our initial business combination. We may withdraw interest to pay our taxes. We estimate our annual franchise tax obligations, based on the number of shares of our common stock authorized and outstanding after the completion of this offering, to be $200,000, which is the maximum amount of annual franchise taxes payable by us as a Delaware corporation per annum, which we may pay from funds from this offering held outside of the trust account or from interest earned on the funds held in the trust account and released to us for this purpose. Our annual income tax obligations will depend on the amount of interest and other income earned on the amounts held in the trust account. We expect the interest earned on the amount in the trust account will be sufficient to pay our income taxes. To the extent that our equity or debt is used, in whole or in part, as consideration to complete our initial business combination, the remaining proceeds held in the trust account will be used as working capital to finance the operations of the target business or businesses, make other acquisitions and pursue our growth strategies.

 

Prior to the completion of our initial business combination, we will have available to us the approximately $2,497,500 of proceeds held outside the trust account. We will use these funds to primarily identify and evaluate target businesses, perform business due diligence on prospective target businesses, travel to and from the offices, plants or similar locations of prospective target businesses or their representatives or owners, review corporate documents and material agreements of prospective target businesses, and structure, negotiate and complete a business combination and to pay our sponsor or an affiliate of our sponsor for administrative services.

 

We do not believe we will need to raise additional funds following this offering in order to meet the expenditures required for operating our business prior to our initial business combination. However, if our estimates of the costs of identifying a target business, undertaking in-depth due diligence and negotiating an initial business combination are less than the actual amount necessary to do so, we may have insufficient funds available to operate our business prior to our initial business combination. In order to fund working capital deficiencies or finance transaction costs in connection with an intended initial business combination, our sponsor or an affiliate of our sponsor or certain of our officers and directors may, but are not obligated to, loan us funds as may be required. If we complete our initial business combination, we would repay such loaned amounts. In the event that our initial business combination does not close, we may use a portion of the working capital held outside the trust account to repay such loaned amounts but no proceeds from our trust account would be used for such repayment. Up to $1,500,000 of such loans may be convertible into warrants of the post business combination entity at a price of $1.00 per warrant at the option of the lender. The warrants would be identical to the private placement warrants. The terms of such loans, if any, have not been determined and no written agreements exist with respect to such loans. Prior to the completion of our initial business combination, we do not expect to seek loans from parties other than our sponsor or an affiliate of our sponsor as we do not believe third parties will be willing to loan such funds and provide a waiver against any and all rights to seek access to funds in our trust account.

 

We expect our primary liquidity requirements during that period to include approximately $700,000 for legal, accounting, due diligence, travel, and other expenses in connection with any business combination, $417,500 for legal and accounting fees related to regulatory reporting obligations, $75,000 for Nasdaq and other regulatory fees, $180,000 for office space, utilities, salaries or other cash compensation paid to consultants to our sponsor, administrative and support services, $865,000 for directors’ and officers’ insurance and $260,000 for general working capital and other expenses.

 

These amounts are estimates and may differ materially from our actual expenses. In addition, we could use a portion of the funds not being placed in trust to pay commitment fees for financing, fees to consultants to assist us with our search for a target business or as a down payment or to fund a “no-shop” provision (a provision designed to keep target businesses from “shopping” around for transactions with other companies or investors on terms more favorable to such target businesses) with respect to a particular proposed business combination, although we do not have any current intention to do so. If we have entered into an agreement where we paid for the right to receive exclusivity from a target business, the amount that would be used as a down payment or to fund a “no-shop” provision would be determined based on the terms of the specific business combination and the amount of our available funds at the time. Our forfeiture of such funds (whether as a result of our breach or otherwise) could result in our not having sufficient funds to continue searching for, or conducting due diligence with respect to, prospective target businesses.

 

 
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Moreover, we may need to obtain additional financing to complete our initial business combination, either because the transaction requires more cash than is available from the proceeds held in our trust account or because we become obligated to redeem a significant number of our public shares upon completion of the business combination, in which case we may issue additional securities or incur debt in connection with such business combination. In addition, we intend to target businesses with enterprise values that are greater than we could acquire with the net proceeds of this offering and the sale of the private placement units, and, as a result, if the cash portion of the purchase price exceeds the amount available from the trust account, net of amounts needed to satisfy any redemptions by public stockholders, we may be required to seek additional financing to complete such proposed initial business combination. We may also obtain financing prior to the closing of our initial business combination to fund our working capital needs and transaction costs in connection with our search for and completion of our initial business combination. There is no limitation on our ability to raise funds through the issuance of equity or equity-linked securities or through loans, advances, or other indebtedness in connection with our initial business combination, including pursuant to forward purchase agreements or backstop agreements we may enter into following consummation of this offering. Subject to compliance with applicable securities laws, we would only complete such financing simultaneously with the completion of our initial business combination. If we are unable to complete our initial business combination because we do not have sufficient funds available to us, we will be forced to cease operations and liquidate the trust account. In addition, following our initial business combination, if cash on hand is insufficient, we may need to obtain additional financing in order to meet our obligations.

 

Controls and Procedures

 

We are not currently required to maintain an effective system of internal controls as defined by Section 404 of the Sarbanes-Oxley Act. We will be required to comply with the internal control requirements of the Sarbanes-Oxley Act for the fiscal year ending December 31, 2022. Only in the event that we are deemed to be a large accelerated filer or an accelerated filer and no longer an emerging growth company would we be required to comply with the independent registered public accounting firm attestation requirement. Further, for as long as we remain an emerging growth company as defined in the JOBS Act, we intend to take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies including, but not limited to, not being required to comply with the independent registered public accounting firm attestation requirement.

 

Prior to the closing of this offering, we have not completed an assessment, nor has our independent registered public accounting firm tested our systems, of internal controls. We expect to assess the internal controls of our target business or businesses prior to the completion of our initial business combination and, if necessary, to implement and test additional controls as we may determine are necessary in order to state that we maintain an effective system of internal controls. A target business may not be in compliance with the provisions of the Sarbanes-Oxley Act regarding the adequacy of internal controls. Many small and mid-sized target businesses we may consider for our initial business combination may have internal controls that need improvement in areas such as:

   

 

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staffing for financial, accounting and external reporting areas, including segregation of duties;

 

 

 

 

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reconciliation of accounts;

 

 

 

 

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proper recording of expenses and liabilities in the period to which they relate;

 

 

 

 

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evidence of internal review and approval of accounting transactions;

 

 

 

 

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documentation of processes, assumptions and conclusions underlying significant estimates; and

 

 

 

 

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documentation of accounting policies and procedures.

   

 
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Because it will take time, management involvement and perhaps outside resources to determine what internal control improvements are necessary for us to meet regulatory requirements and market expectations for our operation of a target business, we may incur significant expenses in meeting our public reporting responsibilities, particularly in the areas of designing, enhancing, or remediating internal and disclosure controls. Doing so effectively may also take longer than we expect, thus increasing our exposure to financial fraud or erroneous financing reporting.

 

Once our management’s report on internal controls is complete, we will retain our independent registered public accounting firm to audit and render an opinion on such report when required by Section 404 of the Sarbanes-Oxley Act. The independent registered public accounting firm may identify additional issues concerning a target business’s internal controls while performing their audit of internal control over financial reporting.

 

Quantitative and Qualitative Disclosures about Market Risk

 

The net proceeds of this offering and the sale of the private placement warrants held in the trust account will be invested in U.S. government treasury obligations with a maturity of 185 days or less or in money market funds meeting certain conditions under Rule 2a-7 under the Investment Company Act which invest only in direct U.S. government treasury obligations. Due to the short-term nature of these investments, we believe there will be no associated material exposure to interest rate risk.

   

Off-Balance Sheet Arrangements; Commitments and Contractual Obligations; Quarterly Results

 

As of September 30, 2021, we did not have any off-balance sheet arrangements as defined in Item 303(a)(4)(ii) of Regulation S-K and did not have any commitments or contractual obligations. No unaudited quarterly operating data is included in this prospectus as we have not conducted any operations to date.

 

JOBS Act

 

The JOBS Act contains provisions that, among other things, relax certain reporting requirements for qualifying public companies. We will qualify as an “emerging growth company” and under the JOBS Act will be allowed to comply with new or revised accounting pronouncements based on the effective date for private (not publicly traded) companies. We are electing to delay the adoption of new or revised accounting standards, and as a result, we may not comply with new or revised accounting standards on the relevant dates on which adoption of such standards is required for non-emerging growth companies. As a result, our financial statements may not be comparable to companies that comply with new or revised accounting pronouncements as of public company effective dates.

 

Additionally, we are in the process of evaluating the benefits of relying on the other reduced reporting requirements provided by the JOBS Act. Subject to certain conditions set forth in the JOBS Act, if, as an “emerging growth company,” we choose to rely on such exemptions we may not be required to, among other things, (i) provide an independent registered public accounting firm’s attestation report on our system of internal controls over financial reporting pursuant to Section 404, (ii) provide all of the compensation disclosure that may be required of non-emerging growth public companies under the Dodd-Frank Wall Street Reform and Consumer Protection Act, (iii) comply with any requirement that may be adopted by the PCAOB regarding mandatory audit firm rotation or a supplement to the independent registered public accounting firm’s report providing additional information about the audit and the financial statements (auditor discussion and analysis), and (iv) disclose certain executive compensation related items such as the correlation between executive compensation and performance and comparisons of the Chief Executive Officer’s compensation to median employee compensation. These exemptions will apply for a period of five years following the completion of this offering or until we are no longer an “emerging growth company,” whichever is earlier.

  

 
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PROPOSED BUSINESS

 

Our Company

 

Deep Space Acquisition Corp. I (“DPAC”) is a newly incorporated blank check company formed as a Delaware corporation for the purpose of effecting a merger, capital stock exchange, asset acquisition, stock purchase, reorganization, or similar business combination with one or more businesses, which we refer to throughout this prospectus as our initial business combination. Our acquisition and value creation strategy will be to identify, acquire and, after our initial business combination, build a company that complements the experience of our management team and can benefit from their operational expertise.

 

We have not selected any specific business combination target and we have not, nor has anyone on our behalf, engaged in any substantive discussions, directly or indirectly, with any business combination target with respect to an initial business combination with us. We have no operating revenues and do not expect that DPAC will generate operating revenues until we consummate our initial business combination.

 

Our Approach

 

Our approach for the initial business combination is to enhance the target company’s operations by leveraging our networks and subject matter expertise in mergers and acquisitions (“M&A”), geopolitical and financial strategy, capital markets, and business leadership. While we will consider target companies in any sector, we will focus our attention on space technology, space-related applications, and the integration of space into terrestrial (Earth-based) market sectors that are poised to experience rapid growth. Examples of connections between space technology and these sectors include:

 

 

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Communication Services – telecommunications technology and interfaces, laser communication, sensor technology and terrestrial support services;

 

 

 

 

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Energy – power generation and distribution for nuclear, solar or other alternative energy sources;

 

 

 

 

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Industrials – robotics, aerospace and defense, stratospheric vehicles, drones and drone support technology;

 

 

 

 

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Information Technology – computing, virtual and augmented reality, artificial intelligence / machine learning, cyber security, data analytics and blockchain applications;

 

 

 

 

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Materials – nanotechnology, extraction of natural resources from locations in space and superalloy development, processing and delivery.

   

Our focus is to consummate a business combination that is well-positioned for long-term growth in the public market. We believe there are attractive businesses within our target markets that would benefit from access to both public markets and the broader skills of our management team, Board of Directors (“Board”) and Special Advisors (“Advisors”). Collectively, this group has completed over $20 billion of M&A transactions in their respective careers. We are seeking a target company that can use the unique materials, hardware, software, and expertise involved in space-related activity to produce near-term revenue streams in terrestrial markets while maintaining a long-term focus on unlocking the value of space.

 

 
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Following the initial business combination, our company may be engaged in businesses focused on Earth, space, or both. For example, the need for environmentally-friendly technology that can deliver power to both high-density and remote areas on Earth is at an all-time high, providing vast market opportunities. Space is no different, as governments and companies require access to energy systems that can power satellites, space stations, planetary rovers and excavation systems. Thus, a company that achieves a breakthrough in efficiently delivering energy in space may find multiple high-value markets on Earth. Similarly, in the digital world, augmented reality systems developed to guide astronauts in construction and maintenance of spacecraft are being applied to the rapidly expanding field of mixed-reality applications in the information technology sector. This technology presents opportunities for pursuing both business and consumer markets. Assessing the market as a whole, we see a wide variety of possibilities to take space-focused companies into their next stage of growth by looking beyond the space sector itself as it exists today.

 

We have a global perspective, providing an opportunity for any company in the United States and around the world to participate in U.S. financial markets and to connect with global consumers as a result of U.S. leadership in space investment. We do not intend to acquire companies that have speculative business plans or carry excessive leverage, but we may do so if the Board determines it is in the best interest of our stockholders.

 

We are led by Mr. Jose Ocasio-Christian, a military veteran who is part of a U.S. minority demographic. Our sponsor adheres to the principle that people from all walks of life should be able to participate in the development of space and reap its economic benefits, and we have assembled a diverse management team, Board and Special Advisors to ensure that multiple perspectives are represented in the initial business combination.

 

Deep Space I Sponsor

 

Our sponsor has a mission to create positive effects both in space itself and in financial marketplaces on Earth. Its management team is drawn from Community in Space LLC, which was established by members of Caelus Partners and Procure Holdings.  Community in Space LLC is an advisory firm that analyzes, guides, and manifests strategic financial outcomes for space-related companies through the development and application of different financial vehicles. Deep Space Acquisition Corp. I is the first such vehicle supported by Community in Space LLC in order to address the lack of space-related portfolio development opportunities available to investors.

 

Caelus Partners is a strategic consulting firm focused on the intersection of space and finance, working with startups, investors, national governments, and other parties involved in space. Caelus Partners has been called upon to provide confidential advice to space agencies, investors and government officials in the defense and security sectors in the United States, Europe, the Middle East, and Asia. These engagements include development of investment models for private investors in space-related fields that include robotics, energy, synthetic materials, information technology and communications. Caelus Partners has also developed consortium models and hybrid investment/contracting models for the U.S. Department of Defense and other government agencies. Caelus Partners has experience in the transition from private to public company operations, having developed IPO and post-IPO strategies for multiple space-related companies, including formally and informally advising companies who are now publicly listed through special purpose acquisition companies, and one pending to list publicly in the future. Procure Holdings and its subsidiary ProcureAM, LLC have a track record of managing space-focused investments. ProcureAM, LLC is the sponsor of the world’s first pure-play space-focused exchange traded fund, the Procure Space ETF (NASDAQ: UFO).

 

Caelus Partners and Procure Holdings jointly researched space technology and opportunities for space-related SPAC transactions for eight months prior to the establishment of our sponsor in April 2021. This proprietary correlative analysis addresses a target universe of more than 500 space-related companies from a financial, geopolitical, technical, and economic perspective. This analysis provides the opportunity to invest in a target space-related company that has a strong technological foundation, creates value by participating in markets on Earth and ultimately extends economic activity further into space. This analysis also informed the development of our acquisition process and the selection of a management team, Board and Advisors with the requisite skills to execute that process. Ultimately, our strategy is to analyze and minimize the risk associated with space industry assets for investors. As part of this strategy, we assess both short-term and long-term opportunities for the post-combination business to grow and become a suitable addition to multiple types of investment portfolios.

 

 
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In addition to our management team’s experience, our sponsor has secured financial commitments from Carnegie Park Capital LLC, a firm whose team has invested in SPACs since 2008, including front-end SPAC IPOs, de-SPACs, and in PIPEs. The team has also led or arranged investments in numerous sponsor groups including four sponsors whose SPACs announced business combinations in 2021. The financial and transactional experience of the Carnegie Park Capital team complements our management team’s operating and industry expertise to create a team capable of identifying attractive investments and executing deals in our target sectors. We believe our relationship with Carnegie Park Capital will further broaden our reach and network of deal contacts.

 

OUR MANAGEMENT AND BOARD OF DIRECTORS

 

Our management team, Board of Directors, and Special Advisors will apply their operational and investment experience in the sectors we are focusing on to gain a competitive edge in identifying a target business with an operating model that can create strong value for our stockholders. Such companies may benefit from our extensive management and operational experience and relationships to further expand their operations and enhance growth prospects. We expect our target’s business reach to be global, reflecting the global impact of space technology and space-related applications.

 

Management Team

 

Our management team at Deep Space Acquisition Corp. I is led by our Chief Executive Officer, Mr. Jose Ocasio-Christian, our Chief Financial Officer, Ms. Linda Maxwell and our Chief Operating Officer and Chief Compliance Officer, Mr. Robert Tull. Our management team’s expertise spans the domains of space industry analysis and strategy (Mr. Jose Ocasio-Christian and Mr. Micah Walter-Range), mergers and acquisitions, including in sectors such as aerospace and defense (Ms. Linda Maxwell), and financial product development and management (Mr. Robert Tull and Mr. Andrew Chanin).

 

Jose Ocasio-Christian – Chief Executive Officer and Director

 

Mr. Ocasio-Christian is our CEO, the CEO of Community in Space LLC and the CEO of Caelus Partners, LLC. His expertise is in leadership, space, decision-making, and ensuring that the vision and mission of transactions are fulfilled. Caelus Partners is a strategic consulting firm focused on space and space-related activities associated with economic development, industrial base growth, and capital markets. In this role, he developed the business campaign plan called Community in Space — a project to address the commercialization of space globally and to develop the methodology through which a business community for space can grow with the global economy, thus bringing global economic and social stability to the space domain. The proprietary solutions resulting from this project are at the core of our investment thesis. Mr. Ocasio-Christian is also the architect for the International Space Hub, a model for how a community within a contiguous region can grow by acquiring foreign investment and intellectual property without compromising national interests. Mr. Ocasio-Christian understands the intricacies of investment in space companies, as well as the influence of location and jurisdiction on a company’s ability to create financial value, technological effects, and market growth.

 

Mr. Ocasio-Christian is also the Chairman of the Board for the nonprofit Caelus Foundation, whose mission is to increase the participation of individuals, space stakeholders, and non-space organizations in space and space-related activity. He participates as a key member of the Track II diplomatic discussions between the United States and China on space commercialization — reporting and communicating with key leaders in the U.S. government. This work relies heavily on his expertise in the complex relationship between the economic and geopolitical aspects of space.

  

 
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Prior to Caelus Partners, Mr. Ocasio-Christian led multiple complex and diverse organizations to achieve success in volatile, uncertain, challenging, and ambiguous situations around the world in the classified and open-source environments within the U.S. military over the course of more than 22 years as a soldier and an officer. As an infantry officer that fought and served in forward deployed environments for over four years in the United States Army, Mr. Ocasio Christian’s unique experiences qualify him for the work he does today. Mr. Ocasio-Christian has provided vision and direction to strategic and operational teams to work across different cultures and to understand fragmented stakeholder motivations to arrive at optimal solutions, a critical skillset for executing a business combination. He has served in field units in combat as well as strategic headquarters around the world, including the Pentagon, where he has managed military budgets as large as $10.2 billion and strategies worth over $250 billion that impacted millions of individuals in the United States and its military, as well as the Middle East and Asia. He developed the intelligence, surveillance, and reconnaissance synchronization processes using space and ground technologies to recover a hostage during Operation Iraqi Freedom in 2004.

 

Mr. Ocasio-Christian’s negotiation skills have been instrumental in creating positive outcomes numerous times throughout his career. He participated in the negotiation between Serbians and Albanians in local communities in Kosovo, and he was one of the architects of the economic program for Gnjilane. He had the unique opportunity to lead negotiations and establish organizational structures with the United Nations for elections in Kosovo and in Iraq. He was the architect of key campaigns in Afghanistan and participated directly in those campaigns in the provinces of Kabul, Kandahar, and Helmand. He was the supporting lead for the U.S. negotiation team for the Yongsan Relocation Plan / Land Partnership Plan in 2011–2012, which resulted in $2.5 billion in cost savings between the U.S. government and the Republic of Korea in the development of Camp Humphreys.

 

Mr. Ocasio-Christian strives to continue to excel in high-stakes, existential situations for companies and individuals in governed and ungoverned areas, where human survival and financial profits are required, as needed today in space. He holds a Master of Science in Joint Campaign Planning and Strategy from the National Defense University (Joint Advanced Warfighting School), where he is in the Hall of Fame as the Top Planner for the academic year 2006-2007 and holds a Bachelor of Science in Education and Bachelor of Arts in Mathematics from the University of Massachusetts.

 

Ms. Linda Maxwell – Chief Financial Officer

 

Ms. Maxwell is a consultant with MB Associates LLC, where she advises clients on improving operational performance and business development strategies, including organic growth initiatives to increase revenue and cost structure improvements to enhance margin profiles. She is currently on the Advisory Board for MIKEL Inc., an undersea defense and technology solutions provider for the U.S. Navy.

 

Previously, Ms. Maxwell was an investment banker focusing on mergers and acquisitions in the aerospace and defense industry, including space, with a combined twenty years of experience at Houlihan Lokey and Jefferies. During her tenure, she was instrumental in building both practices, utilizing her technical and financial background to expand the client base and execute transactions for both large private equity firms and private and public companies requiring specialized knowledge of space and the aerospace and defense industry.

  

Among the space-related transactions led by Ms. Maxwell were the 2020 sale of American Pacific Corporation, a company that manufactures chemicals for solid propellant rockets and booster motors that are used in space exploration and commercial satellite transportation, to private equity firm AE Industrial Partners, LP. In 2019, she co-led the sale of API Technologies, a manufacturer of electronic components for satellites, payloads, and launch vehicles. In 2018, Ms. Maxwell advised on the sale of TRYO Aerospace & Electronics group, a key component of which was RYMSA RF, a designer and manufacturer of antennas and passive components for satellites.

 

During her time at Houlihan Lokey and Jefferies, Ms. Maxwell represented many private and public companies in the sales process. Her clients included Boeing Company, Raytheon Technologies Corporation, Lockheed Martin Corporation, General Dynamics Corporation, Northrop Grumman Corporation, Eaton Corporation, and L-3Harris Technologies, Inc. (including their predecessor companies). The following is a representative sample of the completed transactions she advised on: The Boeing Company’s Sensors & Electronic Systems, Raytheon’s Optical Systems, Lockheed Martin Hanford Corporation, General Dynamics’ Propulsion Systems, Northrop Grumman’s Teldix, Eaton’s Navy Controls, Anaren, Inc., Globe Composite Solutions, LLC and Thinklogical LLC. She also represented many private equity firms and family offices such as H.I.G. Capital, J.F. Lehman & Company, Inverness Graham, Levine Leichtman Capital Partners, and Huntsman Family Investments in the sales of their portfolio companies.

 

 
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Prior to investment banking, Ms. Maxwell spent approximately 15 years with Hughes Aircraft Company, a predecessor company to Raytheon, where she held advancing levels of responsibility within the engineering, program management, and marketing organizations. Her last position at Raytheon was the Director of Business Development for all of Army Land Combat in the Washington DC office, interfacing with government officials (both uniformed and civilian) inside and outside the Pentagon. Before that position, she was based in El Segundo, California at the Electro-Optical Systems Division, as the System Engineering Manager for the Enhanced Thematic Mapper Plus (ETM+) sensor payload aboard the Landsat 7 spacecraft. Ms. Maxwell was on the engineering design team that developed one of the first electro-optical systems for rotary wing aircraft and the first electro-optical system with laser designation capability for the U.S. Army Special Forces. In addition, she was involved in the design and testing of the original HS-601 satellite bus which is now the foundation of Boeing Space Systems’ current product lines.

 

Ms. Maxwell graduated with both Bachelor of Science and Master of Science degrees in Mechanical Engineering from the Massachusetts Institute of Technology, and she holds an MBA from Harvard University.

 

Mr. Robert “Bob” Tull – Chief Operating Officer and Chief Compliance Officer

 

Mr. Tull is the COO of our sponsor, and the President and COO of Procure Holdings, LLC and its subsidiaries. Procure Holdings offers the opportunity to design, develop, sponsor and launch ETFs as well as provide asset management, exchange traded product (ETP) consulting and IP through various subsidiaries. In April 2019, one of Procure Holdings’ subsidiaries launched the Procure Space ETF (NASDAQ: UFO), the world’s first pure-play space ETF.

 

Mr. Tull’s experience includes multiple major operational analyses for clients including central banks, asset managers, multiple national depositories in India, and several Pacific Rim governments seeking long-term investment capital from the U.S. markets. Mr. Tull’s employment in the capital markets includes serving as an outsourced COO for multiple domestic and international issuers. From 1999 to 2000, Mr. Tull managed a custody bank acquired by Deutsche Bank that held assets in excess of $1 trillion dollars, serving as COO for Bankers Trust Company’s global custody, benefit payments and master trust business units in Australia, Scotland, and New York. From 1996 to 2000, Mr. Tull managed the operations for Deutsche Bank’s first U.S. ETF business. Prior to Deutsche Bank, Mr. Tull worked at Morgan Stanley from 1982 to 1996 and oversaw the development of the company’s global custody, international stock loan, precious and base metals trading units, including unit risk management. He participated in the development of key technology software at Morgan Stanley, including TAPS I and TAPS II.

 

Mr. Tull’s diverse background in operations, trading, and capital markets provides experience with the compliance and controls that will assist the management team with meeting requirements before and throughout the de-SPAC process. His years of experience with external counsel, contract terms, and audit procedures will ensure the smooth operation of our sponsor and DPAC.

 

Mr. Tull attended Indiana University of Pennsylvania as a chemistry and physics major.

 

Mr. Andrew Chanin – Vice President and Director Nominee

 

Mr. Chanin is the Chief Executive Officer of Procure Holdings, LLC, which he founded with Mr. Robert Tull to develop a truly unique model and vision for the financial services industry. He has served as CEO and majority owner of numerous financial firms specializing in exchange traded products (ETPs), consulting, and intellectual property. As a result of his endeavors, Mr. Chanin is one of the youngest individuals to have rung the opening bell at both the NYSE and NASDAQ stock exchanges.

 

Prior to establishing Procure Holdings, Mr. Chanin co-founded PureShares, LLC (“PureFunds”) in 2011. PureFunds achieved global prominence in the ETF industry for developing and sponsoring 10 different thematic ETFs in partnership with the International Securities Exchange (now NASDAQ). Under Mr. Chanin’s stewardship as CEO, PureFunds sponsored ETFs that presently have assets under management exceeding $4 billion in the United States. As a result, the company received numerous industry awards for its accomplishments.

 

 
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In 2009, Mr. Chanin was recruited by Cohen Capital Group to build out the firm’s ETF trading capabilities. There, Mr. Chanin made markets in a variety of ETFs across various asset classes while helping to develop multiple global and international equity/ETF trading strategies for the company’s prop trading division.

 

Mr. Chanin began his ETP career in 2007 working for the specialist firm Kellogg Group on the floor of the American Stock Exchange. Mr. Chanin quickly worked his way up from clerk to Lead Market Maker for global and international equity ETFs helping the company transition from its core American Stock Exchange ETF specialist business to NYSE Arca ETF market making.

 

Mr. Chanin currently holds Series 7, 63, and 65 licenses. He earned his Bachelor of Science in Management from the A.B. Freeman School of Business at Tulane University.

 

Mr. Micah Walter-Range – Vice President

 

Mr. Walter-Range is the President of Caelus Partners, LLC. In addition to his role managing Caelus Partners’ operations globally, Mr. Walter-Range creates partnerships and frameworks that support the economic development needed on Earth to unlock value in space. These efforts span a wide variety of activities, such as supporting startup companies in search of financing, providing market entry strategies for leading aerospace firms and advising government policymakers in multiple nations on how to accelerate the growth of the commercial space economy. As the founder/co‑founder of two companies operating at the intersection of space and finance, Mr. Walter-Range understands the challenges that face technology‑oriented startups and is experienced in developing financial frameworks to enable long‑term sustainable development of the space industrial base.

 

In his previous role as Director of Research and Analysis at the nonprofit Space Foundation, Mr. Walter-Range led development of all research projects and publications. This included 12 editions of the Space Foundation’s annual flagship publication, The Space Report: The Authoritative Guide to Global Space Activity, which is used as a reference source by space agencies, policymakers, industry executives, and the media throughout the world. He has also authored papers on space-specific topics such as the impact of export controls on the U.S. space industrial base, and cross-sector subjects such as the role of space technology in aviation. He has been a member of the International Astronautical Federation’s Space Economy Committee since 2016.

 

Drawing on his knowledge of the space industry, Mr. Walter-Range partnered with S-Network Global Indexes to create the S-Network Space Index, which tracks a portfolio of publicly traded space companies from around the world. This index has been adopted as the underlying index for the Procure Space ETF, the world’s first pure-play space-focused exchange traded fund.

 

Mr. Walter-Range holds a Master of Arts in International Science and Technology Policy (with concentrations in space policy and security policy) from The George Washington University’s Elliott School of International Affairs and a Bachelor of Arts from Swarthmore College, where he double-majored in Astronomy and Political Science.

 

Board of Directors

 

Mr. Jose Ocasio-Christian, Chief Executive Officer and Director

 

Mr. -Ocasio-Christian serves as a board member, and supplies space analysis and strategic capabilities to our Board of Directors. Following the consummation of this offering, an additional member of the management team will also participate on our Board of Directors, as Mr. Andrew Chanin is a director nominee, and will contribute his capital markets expertise to our Board of Directors. In addition to Mr. Ocasio-Christian and Mr. Chanin, our Board of Directors is comprised of individuals with a diverse set of space and non-space backgrounds. Their skill sets include leadership at a publicly traded space company that both executed acquisitions and was acquired (Mr. Timothy Hascall), leadership at a publicly traded multinational beverage company throughout multiple mergers (Mr. Timothy Wolf) and roles in government and the private sector associated with space-based imagery and intelligence (Mr. Keith Masback). The Board of Directors is expected to actively participate in our acquisition process, drawing on their history of capital market experience, M&A decision-making, and delivery of space-related services and technologies to a multitude of clients.

  

 
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Mr. Timothy M. Hascall – Director Nominee

 

Mr. Timothy Hascall will be our Chairman of the Board, providing guidance to the management team and leadership in decision making for execution of the business combination.  In addition to his role as the Chairman, Mr. Hascall may assume a leadership role in the post business combination entity. In preparation for this role, Mr. Hascall will be deeply engaged in reviewing the due diligence process and corporate strategy development for the target company as we determine whether his services are required in an operational role or as a director of the new entity. His prior experience qualifies him to serve in most operational and corporate positions within a space company, and we believe many potential target companies would benefit from his extensive knowledge and operational expertise.

  

Until 2019, Mr. Hascall served as the Executive Vice President and Chief Operations Officer for Maxar Technologies, (NYSE:MAXR) (TSX:MAXR) (“Maxar”), a $2.4 billion company that serves government and commercial customers through satellite remote sensing, satellite and space robotic arm manufacturing, and geospatial analytics. Mr. Hascall led Maxar’s efforts to achieve integration and synergy targets across 20 locations worldwide, managing capital expenditure investment priorities, corporate procurement, facilities and real estate initiatives, and implementing Enterprise Shared Services across the company. He also led corporate Information Technology Services, Enterprise Risk Management, and Cyber Security processes.

 

Prior to the merger that created Maxar, Mr. Hascall was EVP, Chief Operations Officer and General Manager with P&L responsibility for the imagery business of DigitalGlobe (NYSE:DGI) and led the Commercial, International Defense, and U.S. Government business units. He was responsible for sales and customer experience, all aspects of satellite flight and ground operations, imagery product management, corporate information technology and cyber security. Mr. Hascall also led the company’s adoption of cloud storage and cloud computing technologies.

 

Prior to DigitalGlobe, Mr. Hascall held executive leadership positions with TriZetto Group, Inc. (NASDAQ:TZIX), an integrated health management enterprise software and services company, Equitant, a global finance and accounting business process outsourcing company, and was a partner at Accenture plc (NYSE:ACN), a global management and business consulting, technology and outsourcing firm.

 

Mr. Hascall served in the United States Marine Corps for 15 years as an intelligence and infantry officer, achieving the rank of Major. He holds a Bachelor of Science in Business Administration from the University of Nebraska.

 

Mr. Timothy V. Wolf – Director Nominee

 

Mr. Wolf is President of Wolf Interests, Inc., the investment entity that he established after he retired as Chief Integration Officer of MillerCoors Brewing Company in June 2010, following a $10 billion joint venture that he helped negotiate and effect (completed July 2008). Mr. Wolf was responsible for converging and integrating the two companies (SABMiller and Molson Coors) and ensuring delivery of $500 million in cost reduction synergies, which ultimately resulted in synergies of approximately $780 million.

   

Prior to joining MillerCoors, Mr. Wolf was Chief Financial Officer of Coors (1995 to 2005), and Global Chief Financial Officer of Molson Coors Brewing Company (2005 to 2008), whose merger he helped negotiate, close, and refinance. Mr. Wolf was instrumental in helping drive $180 million of synergies in less than three years, reducing the debt associated with refinancing and restructuring the Molson-Coors merger, well ahead of commitments to the Molson Coors board of directors. During the nearly 14 years that Mr. Wolf was CFO of these two companies, he built a broad variety of disciplines, capabilities, systems, talent, teams, credibility, and strong operating results that drove an increase of more than $10 billion in shareholder value, as of his move to MillerCoors in July 2008.

 

 
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Focusing on cost reduction, cash generation, teaching, talent, and tools needed to achieve them, Mr. Wolf helped drive Coors Brewing Company’s $1.9 billion acquisition of Bass Brewery, subsequently achieving a four-year debt reduction plan in less than three years. The resulting financial strength of Coors paved the way for its $6 billion merger with Molson Breweries in 2005.

 

Before arriving at Coors, from 1989 to 1993, Mr. Wolf was Controller, Chief Accounting Officer for the Walt Disney Company, and Senior VP, Euro Disney, Marne-la-Vallée, France, where he ran all infrastructure and support groups for the $5 billion construction and opening of the park. Mr. Wolf also spent nearly 10 years, from 1980 to 1989, with PepsiCo in planning, finance, control, and strategy roles of increasing responsibility in its soft drinks and fast food businesses.

 

Mr. Wolf has been a member of the board of Xcel Energy, Inc. since 2007, serving on and Chairing its Audit Committee, and serving on its Operations, Nuclear, Environmental and Safety and Finance Committees. He serves on the boards of two Colorado-based startup businesses, Black Bear Energy Inc. (since 2017), and Cholaca (since 2018). He is also the Chair and primary angel investor in Colorado-based WAGGIT, a startup building and marketing a state-of-the-art canine wearable (since 2015).

 

Mr. Wolf holds an MBA in Finance and Marketing from the University of Chicago Graduate School of Business and a Bachelor of Arts in Economics from Harvard College.

 

Mr. Keith J. Masback – Director Nominee

 

Mr. Masback is the owner of Plum Run, LLC, which provides advisory and consulting services primarily to startups working in geospatial intelligence and related fields. He is also an early stage investor in companies engaged in remote sensing, geospatial information, data analytics, and data visualization. He is a member of the Federal Advisory Board of Orbital Insight and a member of multiple Advisory Boards, including: Hermeus Corporation, Anno.Ai, Slingshot Aerospace, Inc., Xplore, Ursa Space, Lunar Station Corporation, and Albedo Space Corp. He is also a strategic advisor to HySpecIQ, OmniSci, ICEYE, and Tomorrow.io. He has served as a member of the Intelligence Task Force of the Defense Science Board and the National Oceanic and Atmospheric Administration’s Advisory Committee on Commercial Remote Sensing. He is the immediate past Chair of the National Geospatial Advisory Committee (NGAC) and is currently a member of the NGAC’s Landsat Advisory Group, a Councilor and Fellow of the American Geographical Society and a member of the Board of Advisors of the Global Special Operations Forces Foundation.

 

Prior to founding Plum Run, LLC, Mr. Masback spent over a decade as the President and Chief Executive Officer of the United States Geospatial Intelligence Foundation (USGIF). Under his leadership, the organization more than doubled its organizational membership to over 250 member companies and organizations, quintupled its number of accredited academic programs, and increased total attendance at the annual GEOINT Symposium from 3,000 to 5,500.

 

Before joining USGIF, Mr. Masback spent over 20 years combined as an officer in the U.S. Army and as a government civilian employee, culminating as a member of the Defense Intelligence Senior Executive Service at the National Geospatial-Intelligence Agency (NGA). Mr. Masback held a variety of positions at NGA primarily focused on strategic planning and programming, including leading the community user requirements process to guide the development and acquisition of space-based imaging systems by the National Reconnaissance Office. Most recently, he served as the Director, Source Operations Group where he led a globally deployed 500-person organization responsible for 24/7/365 operation of the Nation’s space-based missile warning systems and imagery collection systems.

 

Prior to his service at NGA, Mr. Masback was a senior executive civilian on the Army Staff, responsible for planning the future of Army Intelligence and serving as the Army’s first Director of Intelligence, Surveillance, and Reconnaissance Integration, which included responsibility for ensuring high-altitude airborne and space remote sensing assets were readily available to support the full range of Army operations.

 

 
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Mr. Masback holds a Bachelor of Arts in Political Science from Gettysburg College. He completed the Postgraduate Intelligence Program at the National Intelligence University. He has also completed executive education at the Kellogg School, Northwestern University and the Elliott School of International Affairs, George Washington University. He is currently a Nonresident Advisor for the James Martin Center for Nonproliferation Studies at the Middlebury Institute of International Studies and a member of the Mapping Science Committee of the National Academies of Science, Engineering, and Medicine.

   

Special Advisors

 

Our Advisors provide deep operational expertise that further supports our ability to identify and drive value for our initial business combination through their experience in various industries, sourcing channels, and relationship networks. They are experienced in space investment (Mr. Dylan Taylor) and other financial operations, such as de-SPAC transactions (Mr. Edward Chen) and tax optimization (Mr. John Welde). They also bring a deep understanding of critical parts of the space industry, such as Earth Observation and space policy (Dr. Mariel Borowitz). Our Advisors are expected to actively support our acquisition process, helping the management team manifest a business combination that delivers on our mission.

 

Advisory Board members will not perform board or committee functions, nor will they have any voting or decision-making capacity on our behalf. They also will not be subject to the fiduciary requirements to which our board members are subject. We may adjust the composition of our team of Advisors as we source potential business combination targets or identify strategies for value creation in businesses that we may pursue or acquire.

 

Mr. Dylan Taylor

 

Mr. Taylor is Chairman & CEO of Voyager Space Holdings, a multinational space holding firm that acquires and integrates leading space exploration enterprises globally. Mr. Taylor has been cited by SpaceNews, the BBC, CNN, Pitchbook, CNBC and others as having played a seminal role in the growth of the private space industry. As an early stage investor in various emerging ventures, Mr. Taylor is widely considered one of the most active private space investors in the world. As a writer and columnist, he has written several widely read pieces on the future of the space industry for SpaceNews, ROOM, The Space Review, Apogeo Spatial and Space.com. As a speaker, Mr. Taylor has keynoted many of the major space conferences around the world and has appeared regularly on Bloomberg, Fox Business, and CNBC.

 

Mr. Taylor has been honored with numerous personal and professional accolades in recent years for his influence as a global leader and his commitment to creating a positive impact on the world. The World Economic Forum recognized Mr. Taylor as a Young Global Leader in 2011 and he was named a Henry Crown Fellow of the Aspen Institute in 2014. In 2020, Mr. Taylor was recognized by the Commercial Spaceflight Federation with their top honor for business and finance, following in the footsteps of 2019’s inaugural winner, the late Paul Allen.

 

Mr. Taylor earned an MBA in Finance and Strategy from the Booth School of Business at the University of Chicago and holds a Bachelor of Science in Engineering from the honors college at the University of Arizona, where he graduated Tau Beta Pi and in 2018 was named Alumnus of the Year.

 

Mr. Edward “Ted” Chen

    

Mr. Chen is the Founder and Managing Partner of Carnegie Park Capital LLC, a firm whose team has invested in SPACs since 2008, including front-end SPAC IPOs, de‑SPACs, and in PIPEs. The team has also led or arranged investments in numerous sponsor groups including four sponsors whose SPACs announced business combinations in 2021. Prior to this, Mr. Chen was a Portfolio Manager for eight years at Water Island Capital LLC, where he led investment portfolios of hard and soft catalyst event-driven equities across all sectors. The core investment strategy focused on generating alpha from securities undergoing corporate change or catalyst events, including spin-offs/split-offs, break-ups/asset sales, bankruptcies, activism, de-SPACs, and speculated M&A.

 

 
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Mr. Chen was previously a Managing Director at Jefferies & Company, where he was responsible for conducting research due diligence of announced mergers and acquisitions, spin-offs, tenders and bankruptcy exits while managing a proprietary portfolio of event-driven investments. Prior to Jefferies, Mr. Chen was at Citigroup Global Markets where he was responsible for idea generation and due diligence on U.S. and Canadian merger arbitrage, hard-catalyst event opportunities (hostiles, tenders, etc.), SPACs, and relative value situations.

 

Mr. Chen earned an MBA in Finance from the MIT Sloan School of Management and a Bachelor of Science in Computer Science Engineering, with a Minor in Economics from the University of Pennsylvania.

 

Mr. John Welde

 

Mr. Welde has been a distinguished leader and top revenue generator on Wall Street for the past 30 years. As an institutional bond specialist, Mr. Welde was the number one revenue generator at PaineWebber, UBS Group AG, and Knight Capital Group, where he also served as Global Head of Structured Products. Mr. Welde founded Wall Street Sales Training, where he taught his sales process to revenue generators at Morgan Stanley, JP Morgan, and UBS Group AG. Mr. Welde is Principal of Tax Advantaged Platform, an advisory firm he founded to help business owners eliminate unnecessary taxes, mitigate risk, and protect assets.

 

Mr. Welde holds a Bachelor of Science in Business Administration from Villanova University.

 

Dr. Mariel Borowitz

 

Dr. Borowitz is an Associate Professor in the Sam Nunn School of International Affairs at the Georgia Institute of Technology. Her research focuses on international space policy issues. She has published extensively on international cooperation in satellite Earth observation and data sharing policies, and has examined satellite remote sensing trends across civil, military, and commercial sectors. Her book, “Open Space: The Global Effort for Open Access to Environmental Satellite Data,” was published by MIT Press in 2017. Dr. Borowitz has also conducted research on strategy and developments in space security and space situational awareness.

 

Dr. Borowitz was a policy analyst for the Science Mission Directorate at NASA Headquarters in Washington, DC, from 2016 to 2018. Prior to joining the faculty at Georgia Tech, Dr. Borowitz worked as a policy analyst at the Space Foundation and as a systems engineer at Raytheon.

 

Dr. Borowitz earned a Ph.D. in Public Policy at the University of Maryland and a Master of Arts in International Science and Technology Policy from the George Washington University. She has a Bachelor of Science in Aerospace Engineering from the Massachusetts Institute of Technology.

 

With respect to the foregoing experiences of our management team, past performance is not a guarantee (i) that we will be able to identify a suitable candidate for our initial business combination, or (ii) of success with respect to any business combination we may consummate. You should not rely on the historical record of our management team’s performance as indicative of our future performance.

 

 
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MARKET OPPORTUNITY

 

While we will consider target companies in any sector, we will focus our attention on space technology, space-related applications, and the integration of space into other market sectors (such as communication services, energy, industrials, information technology, and materials) that are poised to experience rapid growth and could benefit from the experiences of our management team, Board, and Advisors. We have a global perspective, providing an opportunity for any company in the United States or around the world to participate in U.S. financial markets and to connect with global consumers as a result of U.S. leadership in space investment.

 

Definitions

 

Space: The physical region beyond Earth’s atmosphere.

 

Space activity: We consider a company to conduct “space activity” if its business involves carrying out operations by means of hardware, software, or humans in space. For example, conducting an orbital launch, managing the data transmissions of a satellite, or conducting pharmaceutical research aboard a space station with the assistance of an astronaut all constitute types of space activity.

 

Space-related: This category of activity involves both companies that carry out space activities and those that are entirely dependent on space activities to function. An example of the latter type of company would be one that manufactures GPS navigation systems that are used entirely on Earth but depend on the GPS signal from satellites to determine a customer’s location and provide routing directions.

 

Terrestrial: A terrestrial activity, such as energy production or farming, is located within Earth’s atmosphere and does not rely on space activities to function. Although there are space-related businesses that seek to improve the output of terrestrial businesses, such as agricultural suppliers that use satellite imagery and precision navigation systems to support farmers, the core elements of a terrestrial business do not depend on space and could continue even if all space activity ceased.

 

Space economy: The aggregate value of commercial revenue and government spending attributable to space-related activities.

 

The Space-Related Market Today

 

As of 2019, the size of the global space economy was estimated at $424 billion, of which 79% was commercial revenue and 21% government spending according to The Space Report, published by the nonprofit Space Foundation. Multiple financial institutions have forecast continued growth for the global space economy, and much of the discussion has centered around how soon the “trillion dollar space economy” will emerge. For example, a 2020 research note from Morgan Stanley, Space: Investing in the Final Frontier, estimated a value of $1.1 trillion per year by 2040. The Morgan Stanley forecast emphasizes that most of the growth will come from satellite-delivered broadband internet. While we agree that this presents a major opportunity and our Advisors have expertise in spectrum management and policy, we have also identified other areas within the space industry that may become substantial engines for economic growth.

 

In a 2020 report, Preliminary Estimates of the U.S. Space Economy, 2012–2018, the U.S. Bureau of Economic Analysis assessed the gross output of the U.S. space economy in 2018 at $178 billion. The two largest sectors within the space economy were information and manufacturing, highlighting the advanced nature of the space industry’s software and hardware capabilities. Also in 2020, a survey conducted by the U.S. Department of Defense (“DoD”) to determine COVID-19 impacts to the space industrial base found more than 4,500 companies in the supply chain for space-related DoD contracts. A significant majority of these companies are privately held, and many could be considered as targets for a SPAC.

 

Although the United States dominates the global space economy in terms of both government spending and private investment, there are thousands of space-related companies elsewhere in the world, generating hundreds of billions of dollars in revenue. While it is likely that our initial business combination will be with a U.S. company, we may also negotiate with viable international companies that wish to participate in the space industry and scale through the U.S. capital markets.

 

Space industry growth has been driven by new technologies, leading to the rapid evolution of space-related activities that include the operation of new satellites, development and successful operation of private launch vehicles, multiple space races between competing governments, increasing bandwidth and geographical coverage for communications systems, integration of location-based services in applications ranging from oil pipelines to consumer electronics (such as smartphones and watches), navigation support for self-driving vehicles, and many other activities in space and on Earth. It is unlikely that we will be driven by a technology that solely operates in space or is dependent on external variables that cannot reasonably be predicted (such as space mining, for which international policies and regulations may prove more challenging than the technical aspects of harvesting resources from other celestial bodies).

 

 
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The value of space technology on Earth is clearly visible in one of the most integral aspects of everyday life: navigation and timing services. The U.S. military’s satellite-based Global Positioning System (GPS) has transformed the way people and businesses interact with each other and their surroundings in the years since it was enabled for civilian use in the 1980s. A 2019 report by nonprofit research institute RTI International estimated the cumulative private sector benefits of GPS at $1.4 trillion in the United States alone from 1984 through 2017. In the early years, only a few companies had the ability to take advantage of the GPS signal, but today the hardware is ubiquitous in the smartphones we carry and many other systems we interact with. This multi-sector value creation far surpasses the revenue earned by contractors building the GPS satellites for the government, reinforcing our intention to identify potential revenue streams beyond the limits of the traditional space sector.

 

The process of building space-related businesses that use a wide variety of technologies continues to this day, both in the United States and abroad. For example, the European Space Agency operates multiple Business Incubation Centres that have fostered more than 700 startups since 2003 and currently accept more than 180 startups per year. The recognized value of space-related applications has led to a vibrant early stage ecosystem of enterprising individuals seeking to build space-related companies. However, many of these companies lack the financial resources or the business expertise to expand their business from space-related activities into terrestrial markets that would benefit from their technology.

 

Today, the financial sector’s involvement with the emerging commercial space industry is nascent. Capital markets have yet to develop a suitable framework for assessing the financial impact of space-related events, whether they occur on Earth or in space. The entrance of Elon Musk, Richard Branson, and Jeff Bezos into the space launch vehicle market has brought attention to the fact that the space industry has tremendous economic potential in addition to supporting science and exploration. These billionaires are looking ahead to the industries that could be built on the transportation capacity of their companies, whether for providing ubiquitous satellite-based broadband internet or creating orbital manufacturing facilities. Further, the U.S. government’s reestablishment of the U.S. Space Command and the creation of the U.S. Space Force, as well as subsequent efforts by other countries to create similar organizations have created a demand for new space-related technology that supports national security and economic goals. This provides additional incentive for the financial sector to supply the capital that enables companies to grow and address emerging government demand.

 

Our Approach to the Market

 

We believe that our team can provide significant benefits to our target business outside of capital. Our analysis of the intersections between space and other market sectors enables us to identify space-related companies that can thrive by adopting a multi-sector approach. The effective use of space-related technology can provide substantial advantages when applied to sectors such as communication services, energy, industrials, information technology, and materials. We believe that investing in such businesses represents an attractive and largely untapped economic opportunity for which our business combination can serve as the catalyst. This approach is designed to resonate with both institutional investors and with potential targets. From an investor standpoint, it offers the potential for the target company to participate and succeed in multiple high-growth market sectors. For the target company, it is an opportunity to gain support from our management team to build a deliberate strategy for growth and acquisitions to meet short-term and long-term objectives.

 

In addition to the avenues for growth in the private sector, we see multiple options for close partnership with government customers. Aside from space agencies with a long history of working with space companies, many of the government acquisition, contracting, and procurement institutions globally have begun incorporating space-related capabilities into their missions. As such, the market for sales to government entities are expected to be broadened, potentially allowing private companies to negotiate new approaches to government contracts that enable them to generate revenue in parallel with a commercial/consumer market approach. Deep Space Acquisition Corp. I is intended to provide a target company with both the talent and capital to thrive in the current environment of rapid change. These market dynamics create an ideal environment for us and add value to the differentiated advantages we bring to a potential target.

 

 
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BUSINESS STRATEGY

 

Our Mission

 

Our management team believes there is an opportunity for investors to participate in the further expansion of the space market to encompass new technical and financial endeavors. A well-engineered initial business combination can result in a company that is able to navigate market developments both through private and public innovation to deliver new capabilities in space and create value in unexploited terrestrial markets. Through a business combination with a blank check company that delivers both a cash infusion and strategic guidance from the management team and the Board, our target may gain the necessary short-term and long-term financial sustainability strategy to compete effectively at a global level to meet its needs as a public company.

 

Over the course of their careers, the members of our management team have developed a broad network of contacts and corporate relationships around the world, reaching every part of the space-related industries relevant to the market opportunity we have identified. This network may provide our management team with a robust and consistent flow of acquisition opportunities which are proprietary or where a limited group of investors were invited to participate in the sale process. In addition, we anticipate that potential acquisition targets may be brought to our attention from various unaffiliated sources, including investment market participants, private equity funds, and large business enterprises seeking to divest assets.

 

Our competitive strengths include the following:

 

Strong Motivation to Fulfill our Purpose and our Vision by Prudent and Well Postured Decision-making. The team we have assembled to execute on an initial business combination, including our management, Advisors, underwriters, legal advisors, auditors, and accountants, have all expressed dedication to our vision and therefore understand the wider significance and impact of successfully fulfilling it. We believe that our unique perspective as a vision-driven company will enhance our attractiveness to potential target companies. We believe that target companies will see the value in working with us as they seek to become a public company. To these companies, we are a like-minded partner with a broad support network that enhances our marketability to them.

 

Deep Experience of Advisors. We believe that our ability to leverage the experience of the Advisors, who comprise individuals with a blend of financial, policy, regulatory, and technical expertise in both the space industry and other market sectors, will provide us a distinct advantage in being able to source, evaluate, and consummate an attractive business combination.

 

Unique Strength of Relationships with Company Founders. Members of our management team, Board and Advisors have been co-founders, early stage investors, and board members of companies we may target.

 

Proprietary Sourcing Channels and Leading Industry Relationships. We believe that the connections and capabilities of our management team, in combination with those of our Advisors, provide us with a differentiated pipeline of acquisition opportunities that would be difficult for other participants in the market to replicate. We expect these sourcing capabilities will be further bolstered by the reputation and deep industry relationships of our management team and our Advisors.

 

Investing and Transaction Experience. We believe that our management’s track record of identifying and sourcing transactions — coupled with our Advisors’ deep expertise across corporate strategy, investing, and transaction execution — positions us well to appropriately evaluate potential business combinations and select one that will be well received by the public markets.

 

Execution and Structuring Capability. We believe that the combined expertise and reputation of our management and our Advisors will allow us to source and complete transactions that create an attractive investment thesis. These types of transactions are typically complex and require creativity, industry and government knowledge and expertise, rigorous due diligence, and extensive negotiations and documentation. We believe that by focusing our investment activities on these types of transactions, we are able to generate investment opportunities that have attractive risk/reward profiles based on their valuations and structural characteristics.

  

 
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ACQUISITION CRITERIA

 

Our business strategy is to leverage our knowledge of the space industry and space-related market sectors to identify, evaluate and complete an initial combination with a business that we believe will be an attractive public company. We do not intend to limit our search to one segment of the space industry but will instead target a wide variety of companies, including businesses in the communication services, energy, industrials, information technology and materials sectors. Consistent with our business strategy, we have identified the following general criteria and guidelines that we believe are important in evaluating prospective target businesses. We will use these criteria and guidelines in assessing potential acquisition opportunities, but we may decide to enter into our initial business combination with a target that does not meet these criteria and guidelines. We intend to seek target companies that we believe:

  

 

·

have a strong, experienced management team, or have a platform to assemble an effective management team with a track record of driving growth and profitability. Where necessary, we may also look to complement and enhance the capabilities of the target business’s management team by recruiting additional talent through our network of contacts;

 

 

 

 

·

are scaling within their countries of origin but have opportunities for international operations and international trade;

 

 

 

 

·

have an interest in building or maintaining a company culture that is inclusive, diverse, and supportive of different approaches to technology development, fiscal growth, and human resources;

 

 

 

 

·

have the potential to grow through the acquisition of additional assets and intellectual property;

 

 

 

 

·

have a defensible market position, with demonstrated advantages when compared to their competitors and create barriers to entry against new competitors;

 

 

 

 

·

are at an inflection point, such as requiring additional management expertise to drive improved financial performance and will benefit from innovative operational techniques;

 

 

 

 

·

exhibit unrecognized value or other favorable characteristics positioned to generate desirable return on capital, and need the capital injection to further accelerate the growth;

 

 

 

 

·

would benefit uniquely from leveraging the collective capabilities of our management, Board and Advisors to tangibly improve the operations and market position of the target;

 

 

 

 

·

can benefit from being a publicly traded company, are prepared to be a publicly traded company, and can utilize access to broader capital markets; and

 

 

 

 

·

will offer attractive risk-adjusted returns for our stockholders, potential upside from growth in the target markets, and an improved capital structure that will be weighed against any identified downside risks.

   

These criteria are not intended to be exhaustive. Any evaluation relating to the merits of a particular initial business combination may be based, to the extent relevant, on these general guidelines as well as other considerations, factors and criteria that our management may deem relevant. In the event that we decide to enter into our initial business combination with a target business that does not meet the above criteria and guidelines, we will disclose that the target business does not meet the above criteria in our stockholder communications related to our initial business combination, which, as discussed in this prospectus, would be in the form of proxy solicitation materials or tender offer documents that we would file with the SEC.

 

 
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ACQUISITION PROCESS

 

In evaluating a prospective target business, we expect to conduct a due diligence review that will encompass, as applicable and among other things, meetings with incumbent management and employees, document reviews, code reviews, security audits, interviews of customers and suppliers, inspection of facilities and a review of financial and other information about the target and its industry.

 

Each of our directors and officers will directly or indirectly own founder shares and/or private placement warrants following this offering and, accordingly, may have a conflict of interest in determining whether a particular target business is an appropriate business with which to effectuate our initial business combination. Further, such officers and directors may have a conflict of interest with respect to evaluating a particular business combination if the retention or resignation of any such officers and directors was included by a target business as a condition to any agreement with respect to our initial business combination.

 

Certain of our officers and directors presently have, and any of them in the future may have additional, fiduciary or contractual obligations to another entity pursuant to which such officer or director is or will be required to present a business combination opportunity to such entity subject to his or her fiduciary duties. Subject to his or her fiduciary duties under Delaware law, none of the members of our management team who are also employed by our sponsor or its affiliates have any obligation to present us with any opportunity for a potential business combination of which they become aware. If any of our officers or directors becomes aware of a business combination opportunity that falls within the line of business of any entity to which he or she has pre-existing fiduciary or contractual obligations, he or she may be required to present such business combination opportunity to such entity prior to presenting such business combination opportunity to us, subject to his or her fiduciary duties under Delaware law and any other applicable fiduciary duties. Our amended and restated certificate of incorporation will provide that we renounce our interest in any corporate opportunity offered to any director or officer unless such opportunity is expressly offered to such person solely in his or her capacity as a director or officer of the company and it is an opportunity that we are able to compete on a reasonable basis. For more information, see the section entitled “Management — Conflicts of Interest.”

 

We are not prohibited from pursuing an initial business combination with a company that is affiliated with our sponsor, directors or officers, or making the acquisition through a joint venture or other form of shared ownership with our sponsor, directors or officers. In the event we seek to complete an initial business combination with a target that is affiliated with our sponsor, directors or officers, we, or a committee of independent and disinterested directors, would obtain an opinion from an independent investment banking firm that is a member of FINRA or from an independent accounting firm that such an initial business combination is fair to our company from a financial point of view. We are not required to obtain such an opinion in any other context.

 

INITIAL BUSINESS COMBINATION

 

Nasdaq rules require that we must complete one or more business combinations having an aggregate fair market value of at least 80% of the value of the assets held in the trust account (excluding the deferred underwriting commissions and taxes payable on the interest earned on the trust account). We refer to this as the 80% of net assets test. If our board of directors is not able to independently determine the fair market value of the target business or businesses, we will obtain an opinion from an independent investment banking firm that is a member of FINRA or from an independent accounting firm, with respect to the satisfaction of such criteria. While we consider it unlikely that our board will not be able to make an independent determination of the fair market value of a target business or businesses, it may be unable to do so if the board is less familiar or experienced with the target company’s business, there is a significant amount of uncertainty as to the value of the company’s assets or prospects, including if such company is at an early stage of development, operations or growth, or if the anticipated transaction involves a complex financial analysis or other specialized skills and the board determines that outside expertise would be helpful or necessary in conducting such analysis. Since any opinion, if obtained, would merely state that the fair market value of the target business meets the 80% of assets threshold, unless such opinion includes material information regarding the valuation of a target business or the consideration to be provided, it is not anticipated that copies of such opinion would be distributed to our stockholders. However, if required under applicable law, any proxy statement that we deliver to stockholders and file with the SEC in connection with a proposed transaction will include such opinion. We do not currently intend to purchase multiple businesses in unrelated industries in conjunction with our initial business combination, although there is no assurance that will be the case.

 

 
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We anticipate structuring our initial business combination so that the post-transaction company in which our public stockholders own shares will own or acquire 100% of the equity interests or assets of the target business or businesses. We may, however, structure our initial business combination such that the post-transaction company owns or acquires less than 100% of such interests or assets of the target business in order to meet certain objectives of the target management team or stockholders or for other reasons, but we will only complete such business combination if the post-transaction company owns or acquires 50% or more of the outstanding voting securities of the target or otherwise acquires a controlling interest in the target sufficient for it not to be required to register as an investment company under the Investment Company Act of 1940, as amended, or the Investment Company Act. Even if the post-transaction company owns or acquires 50% or more of the voting securities of the target, our stockholders prior to the business combination may collectively own a minority interest in the post-transaction company, depending on valuations ascribed to the target and us in the business combination transaction. For example, we could pursue a transaction in which we issue a substantial number of new shares in exchange for all of the outstanding capital stock of a target. In this case, we would acquire a 100% controlling interest in the target. However, as a result of the issuance of a substantial number of new shares, our stockholders immediately prior to our initial business combination could own less than a majority of our outstanding shares subsequent to our initial business combination. If less than 100% of the equity interests or assets of a target business or businesses are owned or acquired by the post-transaction company, the portion of such business or businesses that is owned or acquired is what will be taken into account for purposes of the 80% of net assets test described above. If the business combination involves more than one target business, the 80% of net assets test will be based on the aggregate value of all of the target businesses.

 

We may need to obtain additional financing to complete our initial business combination, either because the transaction requires more cash than is available from the proceeds held in our trust account or because we become obligated to redeem a significant number of our public shares upon completion of the business combination, in which case we may issue additional securities or incur debt in connection with such business combination. There are no prohibitions on our ability to issue securities or incur debt in connection with our initial business combination. We are not currently a party to any arrangement or understanding with any third party with respect to raising any additional funds through the sale of securities, the incurrence of debt or otherwise.

 

Prior to the date of this prospectus, we will file a Registration Statement on Form 8-A with the SEC to voluntarily register our securities under Section 12 of the Securities Exchange Act of 1934, as amended, or the Exchange Act. As a result, we will be subject to the rules and regulations promulgated under the Exchange Act. We have no current intention of filing a Form 15 to suspend our reporting or other obligations under the Exchange Act prior or subsequent to the consummation of our initial business combination.

 

Ability to Extend Time to Complete Business Combination

 

If we anticipate that we may not be able to consummate our initial business combination within 18 months from the consummation of this offering, we may, but are not obligated to, if requested by our sponsor or its affiliates, extend the period of time to consummate a business combination up to six times by an additional one month each time for a total of up to 24 months (the “Paid Extension Period”). In addition, we will be entitled to an automatic three-month extension (the “Automatic Extension Period”) if we have entered into a definitive agreement for an initial business combination during the 18-month period or Paid Extension Period, to complete a business combination. In the case of the Paid Extension Period or Automatic Extension Period, public shareholders will not be offered the opportunity to vote on or redeem their shares if we choose to make any such paid extension or in connection with an automatic extension. Pursuant to the terms of our amended and restated certificate of incorporation and the trust agreement entered into between us and Continental Stock Transfer & Trust Company on the date of this prospectus, in order to avail ourselves of the Paid Extension Period to consummate our initial business combination, our sponsor or its affiliates or designees, upon five days advance notice prior to the applicable deadline, must deposit into the trust account for each month extension $693,000, or $796,950 if the underwriters’ over-allotment option is exercised in full ($0.033 per unit in either case), on or prior to the date of the applicable deadline. Any such payments would be made in the form of a loan. The sponsor or its affiliates or designees will receive a non-interest bearing, unsecured promissory note equal to the amount of any such deposit that will not be repaid in the event that we are unable to close a business combination unless there are funds available outside the trust account to do so. Such notes would either be paid upon consummation of our initial business combination, or, at the lender’s discretion, converted upon consummation of our business combination into additional warrants at a price of $1.00 per warrant. In the event that we receive notice from our sponsor or its affiliates five days prior to the applicable deadline of its wish for us to effect an extension, we intend to issue a press release announcing such intention at least three days prior to the applicable deadline. In addition, we intend to issue a press release the day after the applicable deadline announcing whether or not the funds had been timely deposited. Our sponsor and its affiliates or designees are not obligated to fund the trust account to extend the time for us to complete our initial business combination. For the avoidance of doubt, no amounts need to be deposited into the trust account for the Automatic Extension Period. Our public stockholders will not be entitled to vote or redeem their shares in connection with any such paid extension or an automatic extension. As a result, we may conduct such an extension even though a majority of our public stockholders do not support such an extension and will not be able to redeem their shares in connection therewith.

 

 
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Conflicts of Interest

 

We are not prohibited from pursuing an initial business combination with a company that is affiliated with our sponsor, executive officers or directors, or completing the business combination through a joint venture or other form of shared ownership with our sponsor, executive officers or directors. In the event we seek to complete an initial business combination with a target that is affiliated with our sponsor, executive officers or directors, we, or a committee of independent directors, would obtain an opinion from an independent investment banking firm which is a member of FINRA or a valuation or appraisal firm stating that such an initial business combination is fair to our company from a financial point of view.

 

Members of our management team and our independent directors will directly or indirectly own founder shares and/or private placement warrants following this offering and, accordingly, may have a conflict of interest in determining whether a particular target business is an appropriate business with which to effectuate our initial business combination. Further, certain of our officers and directors may have a conflict of interest with respect to evaluating a particular business combination if the retention or resignation of any such officers and directors was included by a target business as a condition to any agreement with respect to our initial business combination.

 

Certain of our officers and directors presently have, and any of them in the future may have additional, fiduciary or contractual obligations to another entity pursuant to which such officer or director is or will be required to present a business combination opportunity to such entity. Accordingly, if any of our officers or directors becomes aware of a business combination opportunity which is suitable for an entity to which he or she has then current fiduciary or contractual obligations, he or she will honor his or her fiduciary or contractual obligations to present such business combination opportunity to such other entity. Our amended and restated certificate of incorporation will provide that we renounce our interest in any corporate opportunity offered to any director or officer unless such opportunity is expressly offered to such person solely in his or her capacity as a director or officer of the Company and such opportunity is one we are legally and contractually permitted to undertake and would otherwise be reasonable for us to pursue, and to the extent the director or officer is permitted to refer that opportunity to us without violating another legal obligation. We do not believe, however, that the fiduciary duties or contractual obligations of our officers or directors will materially affect our ability to complete our initial business combination.

 

In addition, our sponsor and our officers and directors may sponsor or form other special purpose acquisition companies similar to ours or may pursue other business or investment ventures during the period in which we are seeking an initial business combination. Any such companies, businesses or investments may present additional conflicts of interest in pursuing an initial business combination. However, we do not believe that any such potential conflicts would materially affect our ability to complete our initial business combination.

 

 
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Financial Position

 

With funds available for a business combination initially in the amount of $201,075,000 (assuming no redemptions), after payment of $8,925,000 of deferred underwriting fees (or $230,763,750 (assuming no redemptions) after payment of $10,736,250 of deferred underwriting fees if the underwriters’ over-allotment option is exercised in full), we offer a target business a variety of options such as creating a liquidity event for its owners, providing capital for the potential growth and expansion of its operations or strengthening its balance sheet by reducing its debt ratio. Because we are able to complete our initial business combination using our cash, debt or equity securities, or a mixture of the foregoing, we have the flexibility to use the most efficient combination that will allow us to tailor the consideration to be paid to the target business to fit its needs and desires. However, we have not taken any steps to secure third-party financing and there can be no assurance it will be available to us.

 

Lack of Business Diversification

 

For an indefinite period of time after the completion of our initial business combination, the prospects for our success may depend entirely on the future performance of a single business. Unlike other entities that have the resources to complete business combinations with multiple entities in one or several industries, it is probable that we will not have the resources to diversify our operations and mitigate the risks of being in a single line of business. By completing our initial business combination with only a single entity, our lack of diversification may:

 

 

·

subject us to negative economic, competitive, and regulatory developments, any or all of which may have a substantial adverse impact on the particular industry in which we operate after our initial business combination, and

 

 

 

 

·

cause us to depend on the marketing and sale of a single product or limited number of products or services.

   

Limited Ability to Evaluate the Target’s Management Team

 

Although we intend to closely scrutinize the management of a prospective target business when evaluating the desirability of effecting our initial business combination with that business, our assessment of the target business’s management may not prove to be correct. In addition, the future management may not have the necessary skills, qualifications, or abilities to manage a public company. Furthermore, the future role of members of our management team, if any, in the target business cannot presently be stated with any certainty. The determination as to whether any of the members of our management team will remain with the combined company will be made at the time of our initial business combination. While it is possible that one or more of our directors will remain associated in some capacity with us following our initial business combination, it is unlikely that any of them will devote their full efforts to our affairs subsequent to our initial business combination. Moreover, we cannot assure you that members of our management team will have significant experience or knowledge relating to the operations of the particular target business.

 

We cannot assure you that any of our key personnel will remain in senior management or advisory positions with the combined company. The determination as to whether any of our key personnel will remain with the combined company will be made at the time of our initial business combination.

 

Following a business combination, we may seek to recruit additional managers to supplement the incumbent management of the target business. We cannot assure you that we will have the ability to recruit additional managers, or that additional managers will have the requisite skills, knowledge, or experience necessary to enhance the incumbent management.

 

 
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Stockholders May Not Have the Ability to Approve Our Initial Business Combination

 

We may conduct redemptions without a stockholder vote pursuant to the tender offer rules of the SEC subject to the provisions of our amended and restated certificate of incorporation. However, we will seek stockholder approval if it is required by law or applicable stock exchange rule, or we may decide to seek stockholder approval for business or other legal reasons.

 

Presented in the table below is a graphic explanation of the types of initial business combinations we may consider and whether stockholder approval is currently required under Delaware law for each such transaction.

 

TYPE OF TRANSACTION

 

WHETHER STOCKHOLDER

APPROVAL IS REQUIRED

 

Purchase of assets

 

No

 

Purchase of stock of target not involving a merger with the Company

 

No

 

Merger of target into a subsidiary of the Company

 

No

 

Merger of the Company with a target

 

Yes

 

 

Under Nasdaq’s listing rules, stockholder approval would be required for our initial business combination if, for example:

 

 

·

We issue shares of common stock that will be equal to or in excess of 20% of the number of our shares of common stock then outstanding (other than in a public offering);

 

 

 

 

·

Any of our directors, officers, or substantial stockholders (as defined by Nasdaq rules) has a 5% or greater interest earned on the trust account (or such persons collectively have a 10% or greater interest), directly or indirectly, in the target business or assets to be acquired or otherwise and the present or potential issuance of common stock could result in an increase in outstanding common stock or voting power of 5% or more; or

 

 

 

 

·

The issuance or potential issuance of common stock will result in our undergoing a change of control.

   

Permitted Purchases of Our Securities

 

If we seek stockholder approval of our initial business combination and we do not conduct redemptions in connection with our initial business combination pursuant to the tender offer rules, our sponsor, initial stockholders, directors, executive officers, advisors, or their affiliates may purchase public shares, rights or public warrants in privately negotiated transactions or in the open market either prior to or following the completion of our initial business combination. There is no limit on the number of shares, rights or warrants our initial stockholders, directors, officers, advisors, or their affiliates may purchase in such transactions, subject to compliance with applicable law and Nasdaq rules. However, they have no current commitments, plans or intentions to engage in such transactions and have not formulated any terms or conditions for any such transactions. None of the funds in the trust account will be used to purchase public shares, rights or public warrants in such transactions. If they engage in such transactions, they will be restricted from making any such purchases when they are in possession of any material non-public information not disclosed to the seller or if such purchases are prohibited by Regulation M under the Exchange Act.

 

 
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In the event that our sponsor, initial stockholders, directors, officers, advisors or their affiliates purchase shares in privately negotiated transactions from public stockholders who have already elected to exercise their redemption rights, such selling stockholders would be required to revoke their prior elections to redeem their shares. We do not currently anticipate that such purchases, if any, would constitute a tender offer subject to the tender offer rules under the Exchange Act or a going-private transaction subject to the going-private rules under the Exchange Act; however, if the purchasers determine at the time of any such purchases that the purchases are subject to such rules, the purchasers will comply with such rules.

 

The purpose of any such purchases of shares could be to (i) vote such shares in favor of the business combination and thereby increase the likelihood of obtaining stockholder approval of the business combination or (ii) to satisfy a closing condition in an agreement with a target that requires us to have a minimum net worth or a certain amount of cash at the closing of our initial business combination, where it appears that such requirement would otherwise not be met. The purpose of any such purchases of rights or public warrants could be to reduce the number of public warrants outstanding or to vote such warrants on any matters submitted to the rights holders or warrant holders for approval in connection with our initial business combination. Any such purchases of our securities may result in the completion of our initial business combination that may not otherwise have been possible.

 

In addition, if such purchases are made, the public “float” of our Class A common stock, rights or public warrants may be reduced and the number of beneficial holders of our securities may be reduced, which may make it difficult to maintain or obtain the quotation, listing or trading of our securities on a national securities exchange.

 

Our sponsor, initial stockholders, officers, directors and/or their affiliates anticipate that they may identify the stockholders with whom our initial stockholders, officers, directors or their affiliates may pursue privately negotiated purchases by either the stockholders contacting us directly or by our receipt of redemption requests submitted by stockholders (in the case of Class A common stock) following our mailing of proxy materials in connection with our initial business combination. To the extent that our sponsor, officers, directors, advisors or their affiliates enter into a private purchase, they would identify and contact only potential selling stockholders who have expressed their election to redeem their shares for a pro rata share of the trust account or vote against our initial business combination, whether or not such stockholder has already submitted a proxy with respect to our initial business combination but only if such shares have not already been voted at the stockholder meeting related to our initial business combination. Our sponsor, executive officers, directors, advisors or any of their affiliates will select which stockholders to purchase shares from based on a negotiated price and number of shares and any other factors that they may deem relevant, and will only purchase shares if such purchases comply with Regulation M under the Exchange Act and the other federal securities laws. Our sponsor, officers, directors and/or their affiliates will be restricted from making purchases of shares if the purchases would violate Section 9(a)(2) or Rule 10b-5 of the Exchange Act. We expect any such purchases will be reported pursuant to Section 13 and Section 16 of the Exchange Act to the extent such purchases are subject to such reporting requirements.

 

Redemption Rights for Public Stockholders upon Completion of Our Initial Business Combination

 

We will provide our public stockholders with the opportunity to redeem all or a portion of their shares of Class A common stock upon the completion of our initial business combination at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the trust account calculated as of two business days prior to the consummation of the initial business combination, including interest earned on the funds held in the trust account (which interest shall be net of taxes payable), divided by the number of then outstanding public shares, subject to the limitations and on the conditions described herein. The amount in the trust account is initially anticipated to be $10.00 per public share. The per share amount we will distribute to investors who properly redeem their shares will not be reduced by the deferred underwriting commissions we will pay to the underwriters. Our initial stockholders, sponsor, officers, and directors have entered into a letter agreement with us, pursuant to which they have agreed to waive their redemption rights with respect to any founder shares and public shares they may hold in connection with the completion of our initial business combination.

 

 
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Limitations on Redemptions

 

Our amended and restated certificate of incorporation will provide that in no event will we redeem our public shares in an amount that would cause our net tangible assets to be less than $5,000,001. In addition, our proposed initial business combination may impose a minimum cash requirement for: (i) cash consideration to be paid to the target or its owners, (ii) cash for working capital or other general corporate purposes or (iii) the retention of cash to satisfy other conditions. In the event the aggregate cash consideration we would be required to pay for all shares of Class A common stock that are validly submitted for redemption plus any amount required to satisfy cash conditions pursuant to the terms of the proposed initial business combination exceed the aggregate amount of cash available to us, we will not complete the initial business combination or redeem any shares in connection with such initial business combination, and all shares of Class A common stock submitted for redemption will be returned to the holders thereof. We may, however, raise funds through the issuance of equity-linked securities or through loans, advances, or other indebtedness in connection with our initial business combination, including pursuant to forward purchase agreements or backstop arrangements we may enter into following consummation of this offering, in order to, among other reasons, satisfy such net tangible assets or minimum cash requirements.

  

Manner of Conducting Redemptions

 

We will provide our public stockholders with the opportunity to redeem all or a portion of their public shares upon the completion of our initial business combination either (i) in connection with a stockholder meeting called to approve the initial business combination or (ii) without a stockholder vote by means of a tender offer. The decision as to whether we will seek stockholder approval of a proposed initial business combination or conduct a tender offer will be made by us, solely in our discretion, and will be based on a variety of factors such as the timing of the transaction and whether the terms of the transaction would require us to seek stockholder approval under applicable law or stock exchange listing requirements. Asset acquisitions and stock purchases would not typically require stockholder approval while direct mergers with our company where we do not survive and any transactions where we issue more than 20% of our outstanding common stock or seek to amend our amended and restated certificate of incorporation would require stockholder approval. So long as we obtain and maintain a listing for our securities on Nasdaq, we will be required to comply with Nasdaq’s stockholder approval rules.

 

The requirement that we provide our public stockholders with the opportunity to redeem their public shares by one of the two methods listed above will be contained in provisions of our amended and restated certificate of incorporation and will apply whether or not we maintain our registration under the Exchange Act or our listing on Nasdaq. Such provisions may be amended if approved by holders of a majority of our common stock entitled to vote thereon.

 

If we provide our public stockholders with the opportunity to redeem their public shares in connection with a stockholder meeting, we will:

  

 

·

conduct the redemptions in conjunction with a proxy solicitation pursuant to Regulation 14A of the Exchange Act, which regulates the solicitation of proxies, and not pursuant to the tender offer rules, and

 

 

 

 

·

file proxy materials with the SEC.

   

 
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If we seek stockholder approval, unless otherwise required by applicable law, regulation or stock exchange rules, we will complete our initial business combination only if a majority of the outstanding shares of common stock voted are voted in favor of the initial business combination. A quorum for such meeting will consist of the holders present in person or by proxy of shares of outstanding capital stock of the Company representing a majority of the voting power of all outstanding shares of capital stock of the Company entitled to vote at such meeting. Our initial stockholders will count towards this quorum and, pursuant to the letter agreement, our sponsor, officers and directors have agreed to vote any founder shares they hold and any public shares purchased during or after this offering (including in open market and privately-negotiated transactions) in favor of our initial business combination. For purposes of seeking approval of the majority of our outstanding shares of common stock voted, which, unless another voting threshold is required to approve the initial business combination by applicable law, regulation or stock exchange rules, will be the required approval, non-votes will have no effect on the approval of our initial business combination once a quorum is obtained. As a result, in addition to our initial stockholders’ founder shares, we would need 7,875,001, or 37.5%, of the 21,000,000 public shares sold in this offering to be voted in favor of an initial business combination in order to have our initial business combination approved (assuming all outstanding shares are voted and the over-allotment option is not exercised) or 1,312,501, or 6.25%, of the 21,000,000 public shares (assuming the minimum number of shares are voted and the over-allotment option is not exercised). These quorums and voting thresholds, and the voting agreements of our initial stockholders, may make it more likely that we will consummate our initial business combination. Each public stockholder may elect to redeem its public shares irrespective of whether they vote for or against the proposed transaction or whether they were a stockholder on the record date for the stockholder meeting held to approve the proposed transaction.

  

If a stockholder vote is not required and we do not decide to hold a stockholder vote for business or other legal reasons, we will:

  

 

·

conduct the redemptions pursuant to Rule 13e-4 and Regulation 14E of the Exchange Act, which regulate issuer tender offers, and

 

 

 

 

·

file tender offer documents with the SEC prior to completing our initial business combination, which contain substantially the same financial and other information about the initial business combination and the redemption rights as is required under Regulation 14A of the Exchange Act, which regulates the solicitation of proxies.

   

In the event we conduct redemptions pursuant to the tender offer rules, our offer to redeem will remain open for at least 20 business days, in accordance with Rule 14e-1(a) under the Exchange Act, and we will not be permitted to complete our initial business combination until the expiration of the tender offer period. In addition, the tender offer will be conditioned on public stockholders not tendering more than a specified number of public shares, which number will be based on the requirement that we may not redeem public shares in an amount that would cause our net tangible assets to be less than $5,000,001. If public stockholders tender more shares than we have offered to purchase, we will withdraw the tender offer and not complete the initial business combination.

 

Upon the public announcement of our initial business combination, if we elect to conduct redemptions pursuant to the tender offer rules, we or our sponsor will terminate any plan established in accordance with Rule 10b5-1 to purchase shares of our Class A common stock in the open market, in order to comply with Rule 14e-5 under the Exchange Act.

 

We intend to require our public stockholders seeking to exercise their redemption rights, whether they are record holders or hold their shares in “street name,” to, at the holder’s option, either deliver their stock certificates to our transfer agent or deliver their shares to our transfer agent electronically using The Depository Trust Company’s DWAC (Deposit/Withdrawal At Custodian) system, prior to the date set forth in the proxy materials or tender offer documents, as applicable. In the case of proxy materials, this date may be up to two business days prior to the date on which the vote on the proposal to approve the initial business combination is to be held. In addition, if we conduct redemptions in connection with a stockholder vote, we intend to require a public stockholder seeking redemption of its public shares to also submit a written request for redemption to our transfer agent two business days prior to the vote in which the name of the beneficial owner of such shares is included. The proxy materials or tender offer documents, as applicable, that we will furnish to holders of our public shares in connection with our initial business combination will indicate whether we are requiring public stockholders to satisfy such delivery requirements. We believe that this will allow our transfer agent to efficiently process any redemptions without the need for further communication or action from the redeeming public stockholders, which could delay redemptions and result in additional administrative cost. If the proposed initial business combination is not approved and we continue to search for a target company, we will promptly return any certificates or shares delivered by public stockholders who elected to redeem their shares.

 

 
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Our amended and restated certificate of incorporation will provide that in no event will we redeem our public shares in an amount that would cause our net tangible assets to be less than $5,000,001. In addition, our proposed initial business combination may impose a minimum cash requirement for: (i) cash consideration to be paid to the target or its owners, (ii) cash for working capital or other general corporate purposes or (iii) the retention of cash to satisfy other conditions. In the event the aggregate cash consideration we would be required to pay for all shares of Class A common stock that are validly submitted for redemption plus any amount required to satisfy cash conditions pursuant to the terms of the proposed initial business combination exceed the aggregate amount of cash available to us, we will not complete the initial business combination or redeem any shares in connection with such initial business combination, and all shares of Class A common stock submitted for redemption will be returned to the holders thereof. We may, however, raise funds through the issuance of equity-linked securities or through loans, advances, or other indebtedness in connection with our initial business combination, including pursuant to forward purchase agreements or backstop arrangements we may enter into following consummation of this offering, in order to, among other reasons, satisfy such net tangible assets or minimum cash requirements.

 

Limitation on Redemption Upon Completion of Our Initial Business Combination If We Seek Stockholder Approval

 

If we seek stockholder approval of our initial business combination and we do not conduct redemptions in connection with our initial business combination pursuant to the tender offer rules, our amended and restated certificate of incorporation provides that a public stockholder, together with any affiliate of such stockholder or any other person with whom such stockholder is acting in concert or as a “group” (as defined under Section 13 of the Exchange Act), will be restricted from seeking redemption rights with respect to more than an aggregate of 15% of the shares sold in this offering without our prior consent, which we refer to as the “Excess Shares.” We believe this restriction will discourage stockholders from accumulating large blocks of shares, and subsequent attempts by such holders to use their ability to exercise their redemption rights against a proposed business combination as a means to force us or our management to purchase their shares at a significant premium to the then-current market price or on other undesirable terms. Absent this provision, a public stockholder holding more than an aggregate of 15% of the shares sold in this offering could threaten to exercise its redemption rights if such holder’s shares are not purchased by us, our sponsor or our management at a premium to the then-current market price or on other undesirable terms. By limiting our stockholders’ ability to redeem no more than 15% of the shares sold in this offering without our prior consent, we believe we will limit the ability of a small group of stockholders to unreasonably attempt to block our ability to complete our initial business combination, particularly in connection with a business combination with a target that requires as a closing condition that we have a minimum net worth or a certain amount of cash.

 

However, we would not be restricting our stockholders’ ability to vote all of their shares (including Excess Shares) for or against our initial business combination.

 

Delivering Stock Certificates in Connection with the Exercise of Redemption Rights

 

As described above, we intend to require our public stockholders seeking to exercise their redemption rights, whether they are record holders or hold their shares in “street name,” to, at the holder’s option, either deliver their stock certificates to our transfer agent or deliver their shares to our transfer agent electronically using The Depository Trust Company’s DWAC (Deposit/Withdrawal At Custodian) system, prior to the date set forth in the proxy materials or tender offer documents, as applicable. In the case of proxy materials, this date may be up to two business days prior to the date on which the vote on the proposal to approve the initial business combination is to be held. In addition, if we conduct redemptions in connection with a stockholder vote, we intend to require a public stockholder seeking redemption of its public shares to also submit a written request for redemption to our transfer agent two business days prior to the vote in which the name of the beneficial owner of such shares is included. The proxy materials or tender offer documents, as applicable, that we will furnish to holders of our public shares in connection with our initial business combination will indicate whether we are requiring public stockholders to satisfy such delivery requirements. Accordingly, a public stockholder would have up to two business days prior to the vote on the initial business combination if we distribute proxy materials, or from the time we send out our tender offer materials until the close of the tender offer period, as applicable, to submit or tender its shares if it wishes to seek to exercise its redemption rights. In the event that a stockholder fails to comply with these or any other procedures disclosed in the proxy or tender offer materials, as applicable, its shares may not be redeemed. Given the relatively short exercise period, it is advisable for stockholders to use electronic delivery of their public shares.

 

 
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There is a nominal cost associated with the above-referenced process and the act of certificating the shares or delivering them through the DWAC system. The transfer agent will typically charge the broker submitting or tendering shares a fee of approximately $80.00 and it would be up to the broker whether or not to pass this cost on to the redeeming holder. However, this fee would be incurred regardless of whether or not we require holders seeking to exercise redemption rights to submit or tender their shares. The need to deliver shares is a requirement of exercising redemption rights regardless of the timing of when such delivery must be effectuated.

 

Any request to redeem such shares, once made, may be withdrawn at any time up to the date set forth in the proxy materials or tender offer documents, as applicable. Furthermore, if a holder of a public share delivered its certificate in connection with an election of redemption rights and subsequently decides prior to the applicable date not to elect to exercise such rights, such holder may simply request that the transfer agent return the certificate (physically or electronically). It is anticipated that the funds to be distributed to holders of our public shares electing to redeem their shares will be distributed promptly after the completion of our initial business combination.

 

If our initial business combination is not approved or completed for any reason, then our public stockholders who elected to exercise their redemption rights would not be entitled to redeem their shares for the applicable pro rata share of the trust account. In such case, we will promptly return any certificates delivered by public holders who elected to redeem their shares.

 

If our initial proposed initial business combination is not completed, we may continue to try to complete an initial business combination with a different target until the end of the completion window.

 

Redemption of Public Shares and Liquidation if No Initial Business Combination

 

Our amended and restated certificate of incorporation provides that we will have only until the end of the completion window to complete our initial business combination. If we are unable to complete our initial business combination within the completion window, we will: (i) cease all operations except for the purpose of winding up, (ii) as promptly as reasonably possible but not more than ten business days thereafter, redeem the public shares, at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the trust account, including interest earned on the funds held in the trust account (which interest shall be net of taxes payable and up to $100,000 of interest to pay dissolution expenses), divided by the number of then outstanding public shares, which redemption will completely extinguish public stockholders’ rights as stockholders (including the right to receive further liquidating distributions, if any), and (iii) as promptly as reasonably possible following such redemption, subject to the approval of our remaining stockholders and our board of directors, liquidate and dissolve, subject in each case to our obligations under Delaware law to provide for claims of creditors and the requirements of other applicable law. There will be no redemption rights or liquidating distributions with respect to our rights and warrants, which will expire worthless if we fail to complete our initial business combination within the completion window.

  

 
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Our initial stockholders, sponsor, officers, and directors have entered into a letter agreement with us, pursuant to which they have waived their rights to liquidating distributions from the trust account with respect to any founder shares they hold if we fail to complete our initial business combination within the completion window. However, if our initial stockholders, sponsor, or management team acquire public shares in or after this offering, they will be entitled to liquidating distributions from the trust account with respect to such public shares if we fail to complete our initial business combination within the allotted time period.

 

Our initial stockholders, sponsor, officers and directors have agreed, pursuant to a letter agreement with us, that they will not propose any amendment to our amended and restated certificate of incorporation to modify the substance or timing of our obligation to provide for the redemption of our public shares in connection with an initial business combination or to redeem 100% of our public shares if we do not complete our initial business combination within the completion window or with respect to any other material provisions relating to stockholders’ rights or pre-initial business combination activity, unless we provide our public stockholders with the opportunity to redeem their public shares upon approval of any such amendment at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the trust account, including interest earned on the funds held in the trust account (which interest shall be net of taxes payable), divided by the number of then outstanding public shares. However, we may not redeem our public shares in an amount that would cause our net tangible assets to be less than $5,000,001. If this optional redemption right is exercised with respect to an excessive number of public shares such that we cannot satisfy the net tangible asset requirement, we would not proceed with the amendment or the related redemption of our public shares at such time.

  

We expect that all costs and expenses associated with implementing our plan of dissolution, as well as payments to any creditors, will be funded from amounts remaining out of the $2,497,500 of proceeds held outside the trust account, although we cannot assure you that there will be sufficient funds for such purpose. However, if those funds are not sufficient to cover the costs and expenses associated with implementing our plan of dissolution, to the extent that there is any interest accrued in the trust account not required to pay taxes, we may request the trustee to release to us an additional amount of up to $100,000 of such accrued interest to pay those costs and expenses.

 

If we were to expend all of the net proceeds of this offering and the sale of the private placement warrants, other than the proceeds deposited in the trust account, and without taking into account interest, if any, earned on the trust account and any tax payments or expenses for the dissolution of the trust, the per-share redemption amount received by stockholders upon our dissolution would be approximately $10.00. The proceeds deposited in the trust account could, however, become subject to the claims of our creditors which would have higher priority than the claims of our public stockholders. We cannot assure you that the actual per-share redemption amount received by stockholders will not be substantially less than $10.00. Under Section 281(b) of the DGCL, our plan of dissolution must provide for all claims against us to be paid in full or make provision for payments to be made in full, as applicable, if there are sufficient assets. These claims must be paid or provided for before we make any distribution of our remaining assets to our stockholders. While we intend to pay such amounts, if any, we cannot assure you that we will have funds sufficient to pay or provide for all creditors’ claims.

 

Although we will seek to have all vendors, service providers (other than our independent registered public accounting firm), prospective target businesses and other entities with which we do business execute agreements with us waiving any right, title, interest or claim of any kind in or to any monies held in the trust account for the benefit of our public stockholders, there is no guarantee that they will execute such agreements or even if they execute such agreements that they would be prevented from bringing claims against the trust account including but not limited to fraudulent inducement, breach of fiduciary responsibility or other similar claims, as well as claims challenging the enforceability of the waiver, in each case in order to gain an advantage with respect to a claim against our assets, including the funds held in the trust account. If any third party refuses to execute an agreement waiving such claims to the monies held in the trust account, our management will consider whether competitive alternatives are reasonably available to us and will only enter into an agreement with such third party if management believes that such third party’s engagement would be in the best interests of the Company under the circumstances. Examples of possible instances where we may engage a third party that refuses to execute a waiver include the engagement of a third party consultant whose particular expertise or skills are believed by management to be significantly superior to those of other consultants that would agree to execute a waiver or in cases where management is unable to find a service provider willing to execute a waiver. The underwriters of this offering and our independent registered public accounting firm will not execute agreements with us waiving such claims to the monies held in the trust account. In addition, there is no guarantee that such entities will agree to waive any claims they may have in the future as a result of, or arising out of, any negotiations, contracts or agreements with us and will not seek recourse against the trust account for any reason. In order to protect the amounts held in the trust account, our sponsor has agreed that it will be liable to us if and to the extent any claims by a third party for services rendered or products sold to us, or a prospective target business with which we have entered into a written letter of intent, confidentiality or other similar agreement or business combination agreement, reduce the amount of funds in the trust account to below the lesser of (i) $10.00 per public share and (ii) the actual amount per public share held in the trust account as of the date of the liquidation of the trust account, if less than $10.00 per public share due to reductions in the value of the trust assets, less taxes payable, provided that such liability will not apply to any claims by a third party or prospective target business who executed a waiver of any and all rights to the monies held in the trust account (whether or not such waiver is enforceable) nor will it apply to any claims under our indemnity of the underwriters of this offering against certain liabilities, including liabilities under the Securities Act. However, we have not asked our sponsor to reserve for such indemnification obligations, nor have we independently verified whether our sponsor has sufficient funds to satisfy its indemnity obligations and we believe that our sponsor’s only assets are securities of our company. Therefore, we cannot assure you that our sponsor would be able to satisfy those obligations. As a result, if any such claims were successfully made against the trust account, the funds available for our initial business combination and redemptions could be reduced to less than $10.00 per public share. In such event, we may not be able to complete our initial business combination, and you would receive such lesser amount per share in connection with any redemption of your public shares. None of our officers or directors will indemnify us for claims by third parties including, without limitation, claims by vendors and prospective target businesses.

 

 
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In the event that the proceeds in the trust account are reduced below the lesser of (i) $10.00 per public share and (ii) the actual amount per public share held in the trust account as of the date of the liquidation of the trust account if less than $10.00 per share due to reductions in the value of the trust assets, in each case less taxes payable, and our sponsor asserts that it is unable to satisfy its indemnification obligations or that it has no indemnification obligations related to a particular claim, our independent directors would determine whether to take legal action against our sponsor to enforce its indemnification obligations. While we currently expect that our independent directors would take legal action on our behalf against our sponsor to enforce its indemnification obligations to us, it is possible that our independent directors in exercising their business judgment may choose not to do so in any particular instance. Accordingly, we cannot assure you that due to claims of creditors the actual value of the per-share redemption price will not be less than $10.00 per share.

 

We will seek to reduce the possibility that our sponsor will have to indemnify the trust account due to claims of creditors by endeavoring to have all vendors, service providers (other than our independent registered public accounting firm), prospective target businesses or other entities with which we do business execute agreements with us waiving any right, title, interest or claim of any kind in or to monies held in the trust account. Our sponsor will also not be liable as to any claims under our indemnity of the underwriters of this offering against certain liabilities, including liabilities under the Securities Act. We will have access to up to $2,497,500 from the proceeds of this offering with which to pay any such potential claims (including costs and expenses incurred in connection with our liquidation, currently estimated to be no more than approximately $100,000). In the event that we liquidate, and it is subsequently determined that the reserve for claims and liabilities is insufficient, stockholders who received funds from our trust account could be liable for claims made by creditors. In the event that our offering expenses exceed our estimate of $838,000, we may fund such excess with funds from the funds not to be held in the trust account. In such case, the amount of funds we intend to be held outside the trust account would decrease by a corresponding amount. Conversely, in the event that the offering expenses are less than our estimate of $838,000, the amount of funds we intend to be held outside the trust account would increase by a corresponding amount.

 

Under the DGCL, stockholders may be held liable for claims by third parties against a corporation to the extent of distributions received by them in a dissolution. The pro rata portion of our trust account distributed to our public stockholders upon the redemption of our public shares in the event we do not complete our initial business combination within the completion window may be considered a liquidating distribution under Delaware law. If the corporation complies with certain procedures set forth in Section 280 of the DGCL intended to ensure that it makes reasonable provision for all claims against it, including a 60-day notice period during which any third-party claims can be brought against the corporation, a 90-day period during which the corporation may reject any claims brought, and an additional 150-day waiting period before any liquidating distributions are made to stockholders, any liability of stockholders with respect to a liquidating distribution is limited to the lesser of such stockholder’s pro rata share of the claim or the amount distributed to the stockholder, and any liability of the stockholder would be barred after the third anniversary of the dissolution.

 

 
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Furthermore, if the pro rata portion of our trust account distributed to our public stockholders upon the redemption of our public shares in the event we do not complete our initial business combination within the completion window is not considered a liquidating distribution under Delaware law and such redemption distribution is deemed to be unlawful (potentially due to the imposition of legal proceedings that a party may bring or due to other circumstances that are currently unknown), then pursuant to Section 174 of the DGCL, the statute of limitations for claims of creditors could then be six years after the unlawful redemption distribution, instead of three years, as in the case of a liquidating distribution. If we are unable to complete our initial business combination within the completion window, we will: (i) cease all operations except for the purpose of winding up, (ii) as promptly as reasonably possible but not more than ten business days thereafter, redeem the public shares, at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the trust account including interest earned on the funds held in the trust account (which interest shall be net of taxes payable and up to $100,000 of interest to pay dissolution expenses), divided by the number of then outstanding public shares, which redemption will completely extinguish public stockholders’ rights as stockholders (including the right to receive further liquidating distributions, if any) and (iii) as promptly as reasonably possible following such redemption, subject to the approval of our remaining stockholders and our board of directors, dissolve and liquidate, subject in each case to our obligations under Delaware law to provide for claims of creditors and the requirements of other applicable law. Accordingly, it is our intention to redeem our public shares as soon as reasonably possible following the completion window and, therefore, we do not intend to comply with those procedures. As such, our stockholders could potentially be liable for any claims to the extent of distributions received by them (but no more) and any liability of our stockholders may extend well beyond the third anniversary of such date.

   

Because we will not be complying with Section 280, Section 281(b) of the DGCL requires us to adopt a plan, based on facts known to us at such time that will provide for our payment of all existing and pending claims or claims that may be potentially brought against us within the subsequent 10 years. However, because we are a blank check company, rather than an operating company, and our operations will be limited to searching for prospective target businesses to acquire, the only likely claims to arise would be from our vendors (such as lawyers, investment bankers, etc.) or prospective target businesses. As described above, pursuant to the obligation contained in our underwriting agreement, we will seek to have all vendors, service providers (other than our independent registered public accounting firm), prospective target businesses or other entities with which we do business execute agreements with us waiving any right, title, interest or claim of any kind in or to any monies held in the trust account. As a result of this obligation, the claims that could be made against us are significantly limited and the likelihood that any claim that would result in any liability extending to the trust account is remote. Further, our sponsor may be liable only to the extent necessary to ensure that the amounts in the trust account are not reduced below (i) $10.00 per public share or (ii) such lesser amount per public share held in the trust account as of the date of the liquidation of the trust account, due to reductions in value of the trust assets, in each case net of the amount of interest withdrawn to pay taxes and will not be liable as to any claims under our indemnity of the underwriters of this offering against certain liabilities, including liabilities under the Securities Act. In the event that an executed waiver is deemed to be unenforceable against a third party, our sponsor will not be responsible to the extent of any liability for such third-party claims.

 

If we file a bankruptcy petition or an involuntary bankruptcy petition is filed against us that is not dismissed, the proceeds held in the trust account could be subject to applicable bankruptcy law, and may be included in our bankruptcy estate and subject to the claims of third parties with priority over the claims of our stockholders. To the extent any bankruptcy claims deplete the trust account, we cannot assure you we will be able to return $10.00 per share to our public stockholders. Additionally, if we file a bankruptcy petition or an involuntary bankruptcy petition is filed against us that is not dismissed, any distributions received by stockholders could be viewed under applicable debtor/creditor and/or bankruptcy laws as either a “preferential transfer” or a “fraudulent conveyance.” As a result, a bankruptcy court could seek to recover some, or all amounts received by our stockholders. Furthermore, our board of directors may be viewed as having breached its fiduciary duty to our creditors and/or may have acted in bad faith, and thereby exposing itself and our company to claims of punitive damages, by paying public stockholders from the trust account prior to addressing the claims of creditors. We cannot assure you that claims will not be brought against us for these reasons.

 

 
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Our public stockholders will be entitled to receive funds from the trust account only (i) in the event of the redemption of our public shares if we do not complete our initial business combination within the completion window, (ii) in connection with a stockholder vote to amend our amended and restated certificate of incorporation to modify the substance or timing of our obligation to provide for the redemption of our public shares in connection with an initial business combination or to redeem 100% of our public shares if we do not complete our initial business combination within the completion window or with respect to any other material provisions relating to stockholders’ rights or pre-initial business combination activity or (iii) if they redeem their respective shares for cash upon the completion of our initial business combination. In no other circumstances will a stockholder have any right or interest of any kind to or in the trust account. In the event we seek stockholder approval in connection with our initial business combination, a stockholder’s voting in connection with the business combination alone will not result in a stockholder’s redeeming its shares to us for an applicable pro rata share of the trust account. Such stockholder must have also exercised its redemption rights described above. These provisions of our amended and restated certificate of incorporation, like all provisions of our amended and restated certificate of incorporation, may be amended with a stockholder vote.

    

Comparison of Redemption or Purchase Prices in Connection with Our Initial Business Combination and if We Fail to Complete Our Initial Business Combination.

 

The following table compares the redemptions and other permitted purchases of public shares that may take place in connection with the completion of our initial business combination and if we are unable to complete our initial business combination within the completion window.

    

 

Redemptions in Connection

with our Initial

Business Combination

 

Other Permitted Purchases of

Public Shares by

our Affiliates

 

Redemptions if we fail to

Complete an Initial

Business Combination

Calculation of redemption price

 

Redemptions at the time of our initial business combination may be made pursuant to a tender offer or in connection with a stockholder vote. The redemption price will be the same whether we conduct redemptions pursuant to a tender offer or in connection with a stockholder vote. In either case, our public stockholders may redeem their public shares for cash equal to the aggregate amount then on deposit in the trust account calculated as of two business days prior to the consummation of the initial business combination (which is initially anticipated to be $10.00 per share), including interest earned on the funds held in the trust account (which interest shall be net of taxes payable), divided by the number of then outstanding public shares, subject to the limitation that no redemptions will take place if all of the redemptions would cause our net tangible assets to be less than $5,000,001 .

 

If we seek stockholder approval of our initial business combination, our initial stockholders, directors, officers, advisors, or their affiliates may purchase shares, rights and warrants in privately negotiated transactions or in the open market either prior to or following completion of our initial business combination. There is no limit to the prices that our initial stockholders, directors, officers, advisors, or their affiliates may pay in these transactions. If they engage in such transactions, they will be restricted from making any such purchases when they are in possession of any material nonpublic information not disclosed to the seller or if such purchases are prohibited by Regulation M under the Exchange Act. We do not currently anticipate that such purchases, if any, would constitute a tender offer subject to the tender offer rules under the Exchange Act or a going-private transaction subject to the going-private rules under the Exchange Act; however, if the purchasers determine at the time of any such purchases that the purchases are subject to such rules, the purchasers will comply with such rules.

 

If we are unable to complete our initial business combination before the end of the completion window, we will redeem all public shares at a per-share price, payable in cash, equal to the aggregate amount, then on deposit in the trust account (which is initially anticipated to be $10.00 per share), including interest earned on the funds held in the trust account (which interest shall be net of taxes payable and up to $100,000 of interest to pay dissolution expenses) divided by the number of then outstanding public shares.

 

 

 

 

 

 

Impact to remaining stockholders

 

The redemptions in connection with our initial business combination will reduce the book value per share for our remaining stockholders, who will bear the burden of the deferred underwriting commissions and interest withdrawn in order to pay our taxes (to the extent not paid from amounts accrued as interest on the funds held in the trust account).

 

If the permitted purchases described above are made, there would be no impact to our remaining stockholders because the purchase price would not be paid by us.

 

The redemption of our public shares if we fail to complete our initial business combination will reduce the book value per share for the shares held by our initial stockholders, who will be our only remaining stockholders after such redemptions.

 

 
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