424B3 1 tm2135700-12_424b3.htm 424B3 tm2135700-12_424b3 - none - 87.406579s
 Filed Pursuant to Rule 424(b)(3)
 Registration No. 333-263723
PROXY STATEMENT FOR
EXTRAORDINARY GENERAL MEETING OF NORTH ATLANTIC ACQUISITION CORPORATION
PROSPECTUS FOR UP TO
162,001,250 SHARES OF COMMON STOCK,
19,776,667 WARRANTS AND SHARES OF COMMON STOCK
UNDERLYING WARRANTS OF NAAC HOLDCO, INC.
(AFTER THE DOMESTICATION MERGER DESCRIBED HEREIN)
The board of directors of North Atlantic Acquisition Corporation, a Cayman Islands exempted company (“NAAC”), has unanimously approved the Business Combination Agreement, dated as of December 16, 2021 (the “Business Combination Agreement”), by and among NAAC, Belgacom International Carrier Services SA/NV, a Belgian limited liability company (société anonyme) (“BICS”), Torino Holding Corp., a Delaware corporation (“TeleSign”), NAAC Holdco, Inc., a Delaware corporation (“New Holdco”), and North Atlantic Acquisition, LLC, a Delaware limited liability company and a direct wholly owned subsidiary of New Holdco (“New SPAC”), a copy of which is attached to this proxy statement/prospectus as Annex A. In connection with the transactions contemplated by the Business Combination Agreement (the “Business Combination”), New Holdco will be renamed “TeleSign, Inc.”
Pursuant to the Business Combination Agreement, the business combination will be effected in two steps: (a) subject to the approval and adoption of the Business Combination Agreement by the shareholders of NAAC, NAAC will merge with and into New SPAC (the “SPAC Merger”), with New SPAC surviving the SPAC Merger (the time at which the SPAC Merger becomes effective, the “SPAC Merger Effective Time”); and (b) immediately following the SPAC Merger Effective Time, BICS shall sell, transfer, assign and convey to New Holdco all of the issued and outstanding shares of common stock of TeleSign (the “Purchased Shares”), and New Holdco shall acquire such Purchased Shares from BICS.
At the SPAC Merger Effective Time, pursuant to the SPAC Merger, (a) each then-outstanding Class A ordinary share, par value $0.0001 per share, of NAAC (the “Class A Ordinary Shares”) will be canceled in exchange for consideration consisting of the right to receive one share of common stock, par value $0.0001 per share, of New Holdco (the “New Holdco Common Stock”); (b) each then-outstanding Class B ordinary share, par value $0.0001 per share, of NAAC (the “Class B Ordinary Shares”) will be canceled in exchange for consideration consisting of the right to receive one share of New Holdco Common Stock; (c) each then-outstanding warrant of NAAC (the “NAAC Warrants”) will be cancelled in exchange for consideration consisting of the right to receive one warrant to purchase one share of New Holdco Common Stock (the “New Holdco Warrants”), pursuant to that certain warrant agreement by and between NAAC and Continental Stock Transfer & Trust Company; and (d) each then-outstanding unit of NAAC, each consisting of one Class A Ordinary Share and one-third of one NAAC Warrant (the “NAAC Units”), will be canceled in exchange for consideration consisting of (i) the right to receive one share of New Holdco Common Stock and (ii) the right to receive one-third of one New Holdco Warrant.
Pursuant to the Business Combination Agreement, New Holdco shall acquire the Purchased Shares from BICS in exchange for (i) up to 115,512,500 shares of New Holdco Common Stock (such New Holdco Common Stock, the “Share Consideration”) and (ii) $1,000 (the “Cash Consideration”) (such transaction, the “Share Acquisition”). See the section of this proxy statement/prospectus entitled “The Business Combination” for further information on the consideration being paid to BICS.
Following the Business Combination, BICS will hold a majority interest in New Holdco. Therefore, New Holdco will be a “controlled company” under the Nasdaq listing rules. See section entitled “Risk Factors” for further information.
This proxy statement/prospectus covers up to 162,001,250 shares of New Holdco Common Stock and shares issuable upon exercise of the New Holdco Warrants issued to NAAC warrantholders, and 19,776,667 New Holdco Warrants. The number of shares of New Holdco Common Stock that this proxy statement/prospectus covers represents the maximum number of shares that may be issued to holders of shares of TeleSign Common Stock in connection with the Share Acquisition (as more fully described in this proxy statement/prospectus), together with the shares and warrants, respectively, issuable to the existing holders of Class A Ordinary Shares, Class B Ordinary Shares, NAAC Warrants, and NAAC Units in connection with the SPAC Merger.
The NAAC Units, Class A Ordinary Shares and NAAC Warrants are currently listed on Nasdaq under the symbols “NAACU,” “NAAC,” and “NAACW,” respectively. The parties anticipate that, following the Business Combination, the New Holdco Common Stock and New Holdco Warrants will be listed on Nasdaq under the symbols “TSGN” and “TSGNW,” respectively, and the NAAC Units, Class A Ordinary Shares, and NAAC Warrants will be cancelled in the SPAC Merger and as result will cease trading on Nasdaq and will be deregistered under the Securities Exchange Act of 1934, as amended, upon the consummation of the SPAC Merger.
This proxy statement/prospectus provides shareholders of NAAC with detailed information about the Business Combination and other matters to be considered at the extraordinary general meeting of NAAC. We encourage you to read this entire document, including the annexes and other documents referred to herein, carefully and in their entirety. You should also carefully consider the risk factors described in the section entitled “Risk Factors” beginning on page 19 of this proxy statement/prospectus.
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES REGULATORY AGENCY HAS APPROVED OR DISAPPROVED OF THE TRANSACTIONS DESCRIBED IN THIS PROXY STATEMENT/PROSPECTUS, PASSED UPON THE MERITS OR FAIRNESS OF THE BUSINESS COMBINATION OR RELATED TRANSACTIONS, OR PASSED UPON THE ADEQUACY OR ACCURACY OF THE DISCLOSURE IN THIS PROXY STATEMENT/PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY CONSTITUTES A CRIMINAL OFFENSE.
This proxy statement/prospectus is dated April 14, 2022, and
is first being mailed to NAAC’s shareholders on or about April 21, 2022.

 
NORTH ATLANTIC ACQUISITION CORPORATION
c/o McDermott Will & Emery LLP
One Vanderbilt Avenue
New York, New York 10017
Dear Shareholders of North Atlantic Acquisition Corporation:
You are cordially invited to attend the extraordinary general meeting of North Atlantic Acquisition Corporation, a Cayman Islands exempted company (“NAAC,” “our,” or “us”), which will be held in person on May 18, 2022, at 11:00 a.m., Eastern time, at the offices of McDermott Will & Emery LLP, located at One Vanderbilt Avenue, New York, New York 10017, or such other date, time, and place to which such meeting may be adjourned. In the interest of public health, and due to the impact of the ongoing COVID-19 pandemic, we are also planning for the meeting to be held virtually pursuant to the procedures described in the accompanying proxy statement/prospectus, but the physical location of the meeting will remain at the location specified above for the purposes of Cayman Islands law and our Amended and Restated Memorandum and Articles of Association (the “Existing Organizational Documents”).
At the extraordinary general meeting, NAAC will ask its shareholders to consider and vote upon two separate proposals to approve and adopt the Business Combination Agreement, dated as of December 16, 2021 as amended (the “Business Combination Agreement”), by and among NAAC, Belgacom International Carrier Services SA/NV, a Belgian limited liability company (société anonyme) (“BICS”), Torino Holding Corp., a Delaware corporation (“TeleSign”), NAAC Holdco, Inc., a Delaware corporation and wholly owned subsidiary of NAAC (“New Holdco”), and North Atlantic Acquisition, LLC, a Delaware limited liability company and a direct wholly owned subsidiary of New Holdco (“New SPAC”), which provides for a business combination between NAAC and TeleSign. Pursuant to the Business Combination Agreement, the business combination will be effected in two steps: (a) subject to the approval of the SPAC Merger (as defined below) and the Plan of Merger (as defined below) by special resolutions of the shareholders of NAAC, NAAC will merge with and into New SPAC (the “SPAC Merger”), with New SPAC surviving the SPAC Merger at the time at which the SPAC Merger becomes effective (the “SPAC Merger Effective Time”) (the “SPAC Merger Proposal”); and (b) immediately following the SPAC Merger Effective Time, New Holdco will purchase from BICS all of the outstanding shares of TeleSign Common Stock in exchange for (i) up to 115,512,500 shares of New Holdco Common Stock (such New Holdco Common Stock, the “Share Consideration”) and (ii) $1,000 (the “Cash Consideration”) (such transaction, the “Share Acquisition” and, together with the SPAC Merger and all other transactions contemplated by the Business Combination Agreement, the “Business Combination”) (the “Share Acquisition Proposal” and, together with the SPAC Merger Proposal, the “Business Combination Proposals”). A copy of the Business Combination Agreement is attached to the accompanying proxy statement/prospectus as Annex A.
At the SPAC Merger Effective Time, pursuant to the SPAC Merger, (a) each then-outstanding Class A ordinary share, par value $0.0001 per share, of NAAC (the “Class A Ordinary Shares”) will be canceled in exchange for consideration consisting of the right to receive one share of common stock, par value $0.0001 per share, of New Holdco (the “New Holdco Common Stock”); (b) each then-outstanding Class B ordinary share, par value $0.0001 per share, of NAAC (the “Class B Ordinary Shares”) will be canceled in exchange for consideration consisting of the right to receive one share of New Holdco Common Stock; (c) each then-outstanding warrant of NAAC (the “NAAC Warrants”) will be cancelled in exchange for consideration consisting of the right to receive one warrant to purchase one share of New Holdco Common Stock (the “New Holdco Warrants”), pursuant to that certain warrant agreement by and between NAAC and Continental Stock Transfer & Trust Company; and (d) each then-outstanding unit of NAAC, each consisting of one Class A Ordinary Share and one-third of one NAAC Warrant (the “NAAC Units”), will be canceled in exchange for consideration consisting of (i) the right to receive one share of New Holdco Common Stock and (ii) the right to receive one-third of one New Holdco Warrant.
Immediately following the SPAC Merger Effective Time, New Holdco will purchase from BICS all outstanding shares of TeleSign Common Stock in exchange for (i) the Share Consideration and (ii) the Cash Consideration. See the section entitled “The Business Combination” of the accompanying proxy statement/prospectus for further information on the consideration being paid to BICS.
 

 
In addition to the Business Combination Proposals, NAAC’s shareholders will also be asked to consider and vote upon (a) a proposal to approve by special resolution the adoption of the proposed certificate of incorporation (the “Proposed Certificate of Incorporation”) and the proposed bylaws (the “Proposed Bylaws”) of New Holdco (the “Organizational Documents Proposal”); (b) eight separate proposals to approve, on a non-binding advisory basis, by special resolution, material changes from the Existing Organizational Documents to the Proposed Certificate of Incorporation and the Proposed Bylaws of New Holdco (collectively, the “Advisory Organizational Documents Proposals”); (c) a proposal to approve by ordinary resolution, for purposes of complying with the applicable listing rules of The Nasdaq Capital Market, (i) the issuance of up to 115,512,500 shares of New Holdco Common Stock in connection with the Share Acquisition and (ii) the issuance and sale of 11,698,750 shares of New Holdco Common Stock in a private offering of securities to certain investors in connection with the PIPE Financing, which will occur substantially concurrently with, and is contingent upon, the consummation of the Share Acquisition (the “Nasdaq Proposal”); (d) a proposal to approve by ordinary resolution and adopt the NAAC Holdco, Inc. 2022 Restricted Stock Units and Performance Stock Units Incentive Plan and material terms thereunder, a copy of which is attached to the accompanying proxy statement/prospectus as Annex D (the “Incentive Plan Proposal”); and (e) a proposal to approve by ordinary resolution the adjournment of the extraordinary general meeting to a later date or dates, if necessary or appropriate, (i) to permit further solicitation and vote of proxies in the event that there are insufficient votes for, or otherwise in connection with, the approval of one or more proposals at the extraordinary general meeting, (ii) if there are insufficient holders of Ordinary Shares of NAAC represented (either in person or by proxy) to constitute a quorum necessary to conduct business at the extraordinary general meeting of NAAC or (iii) to allow reasonable time for the filing or mailing of any supplemental or amended disclosures that NAAC has determined, based on the advice of outside legal counsel, is reasonably likely to be required under applicable law and for such supplemental or amended disclosure to be disseminated and reviewed by NAAC shareholders prior to the extraordinary general meeting of NAAC (the “Adjournment Proposal” and, together with the Business Combination Proposals, the Organizational Documents Proposal, the Advisory Organizational Documents Proposals, the Nasdaq Proposal, and the Incentive Plan Proposal, the “Proposals”).
We may not consummate the Business Combination unless the Business Combination Proposals, the Organizational Documents Proposal, the Nasdaq Proposal, and the Incentive Plan Proposal (collectively, the “Condition Precedent Proposals”) are approved at the extraordinary general meeting. Each of the Condition Precedent Proposals is cross-conditioned on the approval of each of the other Condition Precedent Proposals. The Condition Precedent Proposals are not conditioned on the approval of the Advisory Organizational Documents Proposals and the Adjournment Proposal. The approval of each of the Share Acquisition Proposal, the Nasdaq Proposal, the Incentive Plan Proposal, and the Adjournment Proposal each require an ordinary resolution under Cayman Islands law, being the affirmative vote of the holders of a majority of the Ordinary Shares of NAAC represented in person or by proxy and entitled to vote thereon and who vote at the extraordinary general meeting of NAAC. Approval of each of the SPAC Merger Proposal, the Organizational Documents Proposal and the Advisory Organizational Documents Proposals requires a special resolution under Cayman Islands law, being the affirmative vote of the holders of at least two-thirds of the Ordinary Shares of NAAC represented in person or by proxy and entitled to vote thereon and who vote at the extraordinary general meeting of NAAC. Accordingly, a shareholder’s failure to vote in person, online or by proxy at the extraordinary general meeting will have no effect on the outcome of the vote on any of the Proposals. Abstentions and broker non-votes, while considered present for the purposes of establishing a quorum, will not count as votes cast at the extraordinary general meeting.
In connection with the Business Combination, certain related agreements have been, or will be, entered into on or prior to the consummation of the Business Combination, including: a Transaction Support Agreement, an Amended and Restated Registration Rights Agreement, PIPE subscription agreements, and a Stockholders Agreement.
Pursuant to the Existing Organizational Documents, a holder of Class A Ordinary Shares issued as part of the NAAC Units in the initial public offering (the “public shares,” and holders of such public shares, the “public shareholders”), other than NAAC’s officers or directors or shareholders that held Class B Ordinary Shares prior to the initial public offering (the “initial shareholders”), may request that NAAC redeem all or a portion of such public shares for cash if the Business Combination is consummated. Holders of NAAC Units must elect to separate the NAAC Units into the underlying Class A Ordinary Shares and
 

 
NAAC Warrants prior to exercising redemption rights with respect to the public shares. If public shareholders hold their NAAC Units in an account at a brokerage firm or bank, such public shareholders must notify their broker or bank that they elect to separate the NAAC Units into the underlying public shares and warrants, or if a holder holds NAAC Units registered in its own name, the holder must contact Continental Stock Transfer & Trust Company, NAAC’s transfer agent, directly and instruct it to do so. The redemption rights include the requirement that a holder must identify itself to NAAC in order to validly redeem its shares. Public shareholders (other than the initial shareholders) may elect to exercise their redemption rights with respect to their public shares even if they vote “FOR” the Business Combination Proposals. If the Business Combination is not consummated, the public shares will be returned to the respective holder, broker, or bank. If the Business Combination is consummated, and if a public shareholder properly exercises its redemption right with respect to all or a portion of the public shares that it holds and timely delivers its shares to Continental Stock Transfer & Trust Company, NAAC will redeem such public shares for a per-share price, payable in cash, equal to the pro-rata portion of the trust account established at the consummation of NAAC’s initial public offering, calculated as of two business days prior to the consummation of the Business Combination. For illustrative purposes, as of December 31, 2021, this would have amounted to approximately $10.00 per issued and outstanding public share. If a public shareholder exercises its redemption rights in full, then it will not own public shares or shares of New Holdco Common Stock following the redemption and will not participate in the future growth of New Holdco, if any, except to the extent that it continues to hold public warrants. See the subsection entitled “Extraordinary General Meeting — Redemption Rights” in the accompanying proxy statement/prospectus for a detailed description of the procedures to be followed if you wish to exercise your rights with respect to your public shares.
Notwithstanding the foregoing, a public shareholder, together with any affiliate of such public shareholder or any other person with whom such public shareholder is acting in concert or as a “group” ​(as defined in Section 13(d)(3) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)), will be restricted from redeeming its public shares with respect to more than an aggregate of 15% of the public shares. Accordingly, if a public shareholder, alone or acting in concert or as a group, seeks to redeem more than 15% of the public shares, then any such shares in excess of that 20% limit would not be redeemed for cash.
NAAC Sponsor LP, a Delaware limited partnership (the “Sponsor”), and NAAC’s officers and directors, have agreed to (a) vote all of their Class A Ordinary Shares and Class B Ordinary Shares in favor of the Business Combination and (b) waive their redemption rights with respect to their Class B Ordinary Shares and any public shares they own in connection with the consummation of the Business Combination. Such Class B Ordinary Shares will be excluded from the pro rata calculation used to determine the per-share redemption price applicable to public shares that are redeemed. As of the date of the accompanying proxy statement/prospectus, the initial shareholders own approximately 21.8% of the issued and outstanding Class A Ordinary Shares and Class B Ordinary Shares in the aggregate. No consideration was paid to the Sponsor or to any of NAAC’s officers and directors in exchange for their agreeing to vote all of the Class A and Class B Ordinary Shares in favor of the Business Combination, nor for their agreeing to waive their redemption rights with respect to the Class B Ordinary Shares and any public shares they own.
The Business Combination Agreement is subject to the satisfaction or waiver of certain other closing conditions as described in the accompanying proxy statement/prospectus, including but not limited to the condition that NAAC have cash on hand, after distribution of the Trust Account and deducting all amounts to be paid pursuant to the exercise of redemption rights, of at least $200 million after giving effect to the PIPE Financing. There can be no assurance that the parties to the Business Combination Agreement would waive any such provision of the Business Combination Agreement if the closing conditions are not met. In addition, in no event will NAAC redeem public shares in an amount that would cause NAAC’s net tangible assets (as determined in accordance with Rule 3a51-1(g)(1) of the Exchange Act) to be less than $5,000,001 after giving effect to the transactions contemplated by the Business Combination Agreement and the PIPE Financing unless the Class A Ordinary Shares otherwise do not constitute “penny stock” as such term is defined in Rule 3a51-1 of the Exchange Act.
NAAC is providing the accompanying proxy statement/prospectus and accompanying proxy card to its shareholders in connection with the solicitation of proxies to be voted at the extraordinary general meeting and at any adjournments of the extraordinary general meeting. Information about the extraordinary general
 

 
meeting, the Business Combination and other related business to be considered by NAAC’s shareholders at the extraordinary general meeting is included in the accompanying proxy statement/prospectus. Whether or not you plan to attend the extraordinary general meeting, all of NAAC’s shareholders are urged to read the accompanying proxy statement/prospectus, including the annexes and other documents referred to therein, carefully and in their entirety. In particular, you should carefully consider the matters discussed under “Risk Factors” beginning on page 19 of the accompanying proxy statement/prospectus.
After careful consideration, the boards of directors of NAAC and TeleSign have each unanimously approved the Business Combination Agreement and related transactions, the boards of directors of NAAC and New SPAC have each unanimously approved the SPAC Merger and the board of directors of NAAC has approved the other proposals described in the accompanying proxy statement/prospectus and determined that it is advisable to consummate the Business Combination. The board of directors of NAAC recommends that its shareholders vote “FOR” the approval of the Business Combination Agreement, “FOR” the issuance of New Holdco Common Stock to be issued in connection with the Share Acquisition and the PIPE Financing, and “FOR” the other Proposals described in the accompanying proxy statement/prospectus.
Your vote is very important, regardless of the number of Class A Ordinary Shares you own. To ensure your representation at the extraordinary general meeting, please complete, sign, date, and return the enclosed proxy card in the postage-paid envelope provided. If you hold your shares in “street name,” which means your shares are held of record by a broker, bank, or other nominee, you should follow the instructions provided by your broker, bank, or nominee to ensure that votes related to the shares you beneficially own are properly counted. Please submit your proxy promptly, whether or not you expect to attend the extraordinary general meeting.
If you sign, date, and return your proxy card without indicating how you wish to vote, your proxy will be voted FOR each of the Proposals presented at the extraordinary general meeting. If you fail to return your proxy card or fail to instruct your bank, broker, or other nominee how to vote, and do not attend the extraordinary general meeting virtually or in person, the effect will be, among other things, that your shares will not be counted for purposes of determining whether a quorum is present at the extraordinary general meeting and will not be voted. An abstention or broker non-vote will be counted towards the quorum requirement but will not count as a vote cast at the extraordinary general meeting. You can also attend the extraordinary general meeting virtually and vote online even if you have previously voted by submitting a proxy pursuant to any of the methods noted above. If you are a shareholder of record and you attend the extraordinary general meeting and wish to vote in person or online, you may withdraw your proxy and vote in person or online.
More information about NAAC, TeleSign, and the proposed transactions is included in the accompanying proxy statement/prospectus. NAAC urges you to read the accompanying proxy statement/prospectus, including the financial statements and annexes and other documents referred to therein, carefully and in their entirety.
TO EXERCISE YOUR REDEMPTION RIGHTS, YOU MUST DEMAND IN WRITING THAT YOUR PUBLIC SHARES BE REDEEMED FOR A PRO-RATA PORTION OF THE FUNDS HELD IN THE TRUST ACCOUNT AND TENDER YOUR SHARES TO NAAC’S TRANSFER AGENT AT LEAST TWO BUSINESS DAYS PRIOR TO THE VOTE AT THE EXTRAORDINARY GENERAL MEETING. IN ORDER TO EXERCISE YOUR REDEMPTION RIGHT, YOU NEED TO IDENTIFY YOURSELF AS A BENEFICIAL HOLDER. YOU MAY TENDER YOUR SHARES BY EITHER DELIVERING YOUR SHARE CERTIFICATE TO THE TRANSFER AGENT OR BY DELIVERING YOUR SHARES ELECTRONICALLY USING THE DEPOSITORY TRUST COMPANY’S DWAC (DEPOSIT WITHDRAWAL AT CUSTODIAN) SYSTEM. IF THE BUSINESS COMBINATION IS NOT COMPLETED, THEN THESE SHARES WILL BE RETURNED TO YOU OR YOUR ACCOUNT. IF YOU HOLD THE SHARES IN STREET NAME, YOU WILL NEED TO INSTRUCT THE ACCOUNT EXECUTIVE AT YOUR BANK OR BROKER TO WITHDRAW THE SHARES FROM YOUR ACCOUNT IN ORDER TO EXERCISE YOUR REDEMPTION RIGHTS.
 

 
On behalf of our board of directors, I thank you for your support and look forward to the successful completion of the Business Combination.
Sincerely,
/s/ Gary Quin
Gary Quin
Chief Executive Officer and Director
The accompanying proxy statement/prospectus is dated April 14, 2022 and is first being mailed to the shareholders of NAAC on or April 21, 2022.
NEITHER THE U.S. SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES REGULATORY AGENCY HAS APPROVED OR DISAPPROVED OF THE TRANSACTIONS DESCRIBED IN THE ACCOMPANYING PROXY STATEMENT/PROSPECTUS OR ANY OF THE SECURITIES TO BE ISSUED IN THE BUSINESS COMBINATION OR THE OTHER TRANSACTIONS DESCRIBED IN THE ACCOMPANYING PROXY STATEMENT/PROSPECTUS, PASSED UPON THE MERITS OR FAIRNESS OF THE BUSINESS COMBINATION OR RELATED TRANSACTIONS, OR PASSED UPON THE ADEQUACY OR ACCURACY OF THE DISCLOSURE IN THE ACCOMPANYING PROXY STATEMENT/PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY CONSTITUTES A CRIMINAL OFFENSE.
 

 
NORTH ATLANTIC ACQUISITION CORPORATION
c/o McDermott Will & Emery LLP
One Vanderbilt Avenue
New York, New York 10017
NOTICE OF EXTRAORDINARY GENERAL MEETING
OF NORTH ATLANTIC ACQUISITION CORPORATION
To Be Held On May 18, 2022
To the Shareholders of North Atlantic Acquisition Corporation:
NOTICE IS HEREBY GIVEN that an extraordinary general meeting (the “extraordinary general meeting”) of North Atlantic Acquisition Corporation, a Cayman Islands exempted company (“NAAC,” “we,” “our,” or “us”), will be held in person on May 18, 2022, at 11:00 a.m., Eastern time, at the offices of McDermott Will & Emery LLP, located at One Vanderbilt Avenue, New York, New York 10017, or such other date, time, and place to which such meeting may be adjourned. In the interest of public health, and due to the impact of the ongoing COVID-19 pandemic, we are also planning for the meeting to be held virtually pursuant to the procedures described in the accompanying proxy statement/prospectus, but the physical location of the meeting will remain at the location specified above for the purposes of Cayman Islands law and our Amended and Restated Memorandum and Articles of Association (the “Existing Organizational Documents”). At the extraordinary general meeting, NAAC shareholders will be asked to consider and vote upon the following proposals:

Proposal No. 1 — The Business Combination Proposals — To consider and vote upon two separate proposals to approve the Business Combination and approve and adopt the Business Combination Agreement, dated as of December 16, 2021 as amended (the “Business Combination Agreement”), by and among NAAC, TeleSign, BICS, New SPAC, and New Holdco, pursuant to which the business combination will be effected in two steps: (a) the proposal to approve and authorize by special resolution the merger of NAAC with and into New SPAC (the “SPAC Merger”), with New SPAC surviving the SPAC Merger at the time at which the SPAC Merger becomes effective (the “SPAC Merger Effective Time”) and the Plan of Merger required by the Companies Act (As Revised) of the Cayman Islands substantially in the form attached to the accompanying proxy statement/prospectus as Exhibit A to the Business Combination Agreement, a copy of which is attached as Annex A to this proxy statement/prospectus (the “SPAC Merger Proposal”); and (b) immediately following the SPAC Merger Effective Time, New Holdco will purchase from BICS all of the outstanding shares of TeleSign Common Stock in exchange for (i) the Share Consideration and (ii) the Cash Consideration (the “Share Acquisition” and, together with the SPAC Merger and all other transactions contemplated by the Business Combination Agreement, the “Business Combination”) (the “Share Acquisition Proposal” and, together with the SPAC Merger Proposal, the “Business Combination Proposals”) (Proposal No. 1). A copy of the Business Combination Agreement is attached to the accompanying proxy statement/prospectus as Annex A.

Proposal No. 2 — The Organizational Documents Proposal — To consider and vote upon a proposal to approve by special resolution the proposed certificate of incorporation (the “Proposed Certificate of Incorporation”) and the proposed bylaws (the “Proposed Bylaws” and, together with the Proposed Certificate of Incorporation, the “Proposed Organizational Documents”) of New Holdco, which, if approved, would take effect at the SPAC Merger Effective Time (such proposal, the “Organizational Documents Proposal”) (Proposal No. 2) which together will replace NAAC’s Amended and Restated Memorandum and Articles of Association, and will become effective upon the completion of the SPAC Merger in connection with the closing of the Business Combination. Copies of the Proposed Certificate of Incorporation and Proposed Bylaws are attached to the accompanying proxy statement/prospectus as Annex B and Annex C, respectively.

Proposal No. 3 — The Advisory Organizational Documents Proposals — To consider and vote upon eight separate proposals to approve, on a non-binding advisory basis, by special resolution, certain governance provisions in the Proposed Organizational Documents, which are being presented
 

 
separately in accordance with U.S. Securities and Exchange Commission guidance to give shareholders the opportunity to present their separate views on important corporate governance provisions (collectively, the “Advisory Organizational Documents Proposals”) (Proposal No. 3).

Proposal No. 4 — The Nasdaq Proposal — To consider and vote upon a proposal to approve by ordinary resolution, for purposes of complying with applicable listing rules of The Nasdaq Capital Market, (a) the issuance of up to 115,512,500 shares of New Holdco Common Stock in connection with the Share Acquisition, and (b) the issuance and sale of 11,698,750 shares of New Holdco Common Stock in the PIPE Financing, which will occur substantially concurrently with, and is contingent upon, the consummation of the Share Acquisition (the “Nasdaq Proposal”) (Proposal No. 4).

Proposal No. 5 — The Incentive Plan Proposal — To consider and vote upon a proposal to approve by ordinary resolution and adopt the NAAC Holdco, Inc. 2022 Restricted Stock Units and Performance Stock Units Incentive Plan (the “Incentive Plan”) and material terms thereunder (the “Incentive Plan Proposal”) (Proposal No. 5). A copy of the Incentive Plan is attached to the accompanying proxy statement/prospectus as Annex D.

Proposal No. 6 — The Adjournment Proposal — To consider and vote upon a proposal to approve by ordinary resolution the adjournment of the extraordinary general meeting to a later date or dates, if necessary or appropriate, (a) to the extent necessary to ensure that any required supplement or amendment to this proxy statement/prospectus is provided to NAAC shareholders or, if as of the time for which the extraordinary general meeting is scheduled, there are insufficient NAAC ordinary shares represented (either in the person or by proxy) to constitute a quorum necessary to conduct business at the extraordinary general meeting, or (b) in order to permit further solicitation and vote of proxies in the event that there are insufficient votes for, or otherwise in connection with, the approval of the Business Combination Proposals, the Organizational Documents Proposal, the Advisory Organizational Documents Proposals, the Nasdaq Proposal, or the Incentive Plan Proposal (the “Adjournment Proposal” and, together with the Business Combination Proposals, the Organizational Documents Proposal, the Advisory Organizational Documents Proposals, the Nasdaq Proposal, and the Incentive Plan Proposal, the “Proposals”) (Proposal No. 6).
Each of the Business Combination Proposals, the Organizational Documents Proposal, the Nasdaq Proposal, and the Incentive Plan Proposal (collectively, the “Condition Precedent Proposals”) is cross-conditioned on the approval and adoption of each of the other Condition Precedent Proposals.
Only holders of record of Class A ordinary shares, par value $0.0001 per share, of NAAC (the “Class A Ordinary Shares”) and Class B ordinary shares, par value $0.0001 per share, of NAAC (the “Class B Ordinary Shares”) at the close of business on April 13, 2022 are entitled to notice of the extraordinary general meeting and to vote at the extraordinary general meeting and any adjournments thereof.
NAAC is providing the accompanying proxy statement/prospectus and accompanying proxy card to its shareholders in connection with the solicitation of proxies to be voted at the extraordinary general meeting and at any adjournments of the extraordinary general meeting. Information about the extraordinary general meeting, the Business Combination, and other related business to be considered by NAAC’s shareholders at the extraordinary general meeting is included in the accompanying proxy statement/prospectus. Whether or not you plan to attend the extraordinary general meeting, all of NAAC’s shareholders are urged to read the accompanying proxy statement/prospectus, including the annexes and other documents referred to therein, carefully and in their entirety. In particular, you should carefully consider the matters discussed under “Risk Factors” beginning on page 19 of the accompanying proxy statement/prospectus.
Pursuant to the Existing Organizational Documents, a holder of Class A Ordinary Shares issued as part of the units sold in NAAC’s initial public offering (the “public shares,” and holders of such public shares, the “public shareholders”), other than officers, directors and shareholders of NAAC that held Class B Ordinary Shares prior to NAAC’s initial public offering (the “initial shareholders”), may request that NAAC redeem all or a portion of its public shares for cash if the Business Combination is consummated. As a holder of public shares, you will be entitled to receive cash for any public shares to be redeemed only if you:
 

 
(a)
hold public shares, or if you hold public shares through NAAC units sold in NAAC’s initial public offering (the “NAAC Units”), you elect to separate your NAAC Units into the underlying public shares and warrants prior to exercising your redemption rights with respect to the public shares;
(b)
submit a written request to Continental Stock Transfer & Trust Company, NAAC’s transfer agent, in which you (i) request that New Holdco redeem all or a portion of your public shares for cash and (ii) identify yourself as the beneficial holder of the public shares and provide your legal name, phone number, and address; and
(c)
deliver your public shares to Continental Stock Transfer & Trust Company, NAAC’s transfer agent, physically or electronically through The Depository Trust Company.
Holders must complete the procedures for electing to redeem their public shares in the manner described above prior to 5:00 p.m., Eastern time, on May 16, 2022 (two business days before the extraordinary general meeting) in order for their public shares to be redeemed.
Holders of NAAC Units must elect to separate the NAAC Units into the underlying Class A Ordinary Shares and warrants prior to exercising redemption rights with respect to the public shares. If public shareholders hold their NAAC Units in an account at a brokerage firm or bank, such public shareholders must notify their broker or bank that they elect to separate the NAAC Units into the underlying public shares and warrants, or if a holder holds NAAC Units registered in its own name, the holder must contact Continental Stock Transfer & Trust Company, NAAC’s transfer agent, directly and instruct it to do so. The redemption rights include the requirement that a holder must identify itself to NAAC in order to validly redeem its shares. Public shareholders (other than the initial shareholders) may elect to exercise their redemption rights with respect to their public shares even if they vote “FOR” the Business Combination Proposals. If the Business Combination is not consummated, the public shares will be returned to the respective holder, broker, or bank. If the Business Combination is consummated, and if a public shareholder properly exercises its redemption right with respect to all or a portion of the public shares that it holds and timely delivers its shares to Continental Stock Transfer & Trust Company, NAAC will redeem such public shares for a per-share price, payable in cash, equal to the pro-rata portion of the trust account established at the consummation of NAAC’s initial public offering, calculated as of two business days prior to the consummation of the Business Combination. For illustrative purposes, as of December 31, 2021, this would have amounted to approximately $10.00 per issued and outstanding public share. If a public shareholder exercises its redemption rights in full, then it will not own public shares or shares of New Holdco Common Stock following the redemption and will not participate in the future growth of New Holdco, if any, except to the extent that it continues to hold public warrants. See the subsection entitled “Extraordinary General Meeting — Redemption Rights” in the accompanying proxy statement/prospectus for a detailed description of the procedures to be followed if you wish to exercise your redemption rights with respect to your public shares.
The approval of each of the Share Acquisition Proposal, the Nasdaq Proposal, the Incentive Plan Proposal, and the Adjournment Proposal are being proposed as an ordinary resolution, being the affirmative vote of the holders of a majority of the Ordinary Shares of NAAC represented in person or by proxy and entitled to vote thereon and who vote at the extraordinary general meeting of NAAC. Approval of each of the SPAC Merger Proposal, the Advisory Organizational Documents Proposals and the Organizational Documents Proposal requires a special resolution under Cayman Islands law, being the affirmative vote of the holders of at least two-thirds of the Ordinary Shares of NAAC represented in person or by proxy and entitled to vote thereon and who vote at the extraordinary general meeting of NAAC. Accordingly, a shareholder’s failure to vote in person or by proxy at the extraordinary general meeting will have no effect on the outcome of the vote on any of the Proposals. Abstentions and broker non-votes, while considered present for the purposes of establishing a quorum, will not count as votes cast at the extraordinary general meeting.
YOUR VOTE IS VERY IMPORTANT, REGARDLESS OF THE NUMBER OF CLASS A ORDINARY SHARES YOU OWN. To ensure your representation at the extraordinary general meeting, please complete and return the enclosed proxy card or submit your proxy by following the instructions contained in the accompanying proxy statement/prospectus and on your proxy card. Please submit your proxy
 

 
promptly, whether or not you expect to attend the meeting. If you hold your shares in “street name,” you should instruct your broker, bank, or other nominee how to vote in accordance with the voting instruction form you received from your broker, bank, or other nominee.
After careful consideration, the board of directors of NAAC has unanimously approved the Business Combination Agreement and related transactions and the other Proposals described in the accompanying proxy statement/prospectus, and has determined that it is advisable to consummate the Business Combination. The board of directors of NAAC recommends that you vote “FOR” the Business Combination Proposals, “FOR” the Organizational Documents Proposal, “FOR” the Advisory Organizational Documents Proposals, “FOR” the Nasdaq Proposal, “FOR” the Incentive Plan Proposal, and “FOR” the Adjournment Proposal.
Your attention is directed to the proxy statement/prospectus accompanying this notice (including the annexes thereto) for a more complete description of the proposed Business Combination and related transactions and each of our Proposals. We encourage you to read the accompanying proxy statement/prospectus carefully. If you have any questions or need assistance voting your shares, please call our proxy solicitor, Morrow Sodali LLC at (800) 662-5200 (banks and brokers call collect at (203) 658-9400).
April 14, 2022
By Order of the Board of Directors
/s/ Gary Quin
Gary Quin
Chief Executive Officer and Director
 

 
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ADDITIONAL INFORMATION
This document, which forms part of a registration statement on Form S-4 filed with the U.S. Securities and Exchange Commission (the “SEC”) by NAAC Holdco, Inc. (“New Holdco”) (File No. 333-263723) (the “Registration Statement”), constitutes a prospectus of New Holdco under Section 5 of the Securities Act of 1933, as amended (the “Securities Act”), with respect to (a) the shares of common stock of New Holdco to be issued if the Business Combination described below is consummated, (b) the warrants to purchase shares of New Holdco Common Stock upon consummation of the Business Combination, and (c) the shares of New Holdco Common Stock underlying such warrants. This document also constitutes a notice of meeting and a proxy statement under Section 14(a) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), with respect to the extraordinary general meeting of North Atlantic Acquisition Corporation (“NAAC”) at which NAAC shareholders will be asked to consider and vote upon two separate proposals to approve the Business Combination by the approval and adoption of the Business Combination Agreement, among other matters.
You may request copies of this proxy statement/prospectus, without charge, by written or oral request to NAAC’s proxy solicitor at:
Morrow Sodali LLC
470 West Avenue
Stamford, Connecticut 06902
Telephone: (800) 662-5200
(bank and brokers call collect at (203) 658-9400)
Email: NAAC.info@investor.morrowsodali.com
To obtain timely delivery of requested materials, you must request the documents no later than five business days prior to the date of the extraordinary general meeting.
You may also obtain additional information about us from documents filed with the SEC by following the instructions in the section entitled “Where You Can Find Additional Information.”
 
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TRADEMARKS
This document contains references to trademarks, trade names and service marks belonging to other entities. Solely for convenience, trademarks, trade names and service marks referred to in this proxy statement/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.
CERTAIN DEFINED TERMS
Unless the context otherwise requires, references in this proxy statement/prospectus to:

“Acquisition Closing” are to the closing of the Share Acquisition;

“Acquisition Closing Date” are to the business day following the SPAC Merger Closing Date or such later date as the parties may agree in writing that is not more than two business days after the SPAC Merger Closing Date and no later than three business days after the date of the satisfaction or waiver of the conditions to the Acquisition Closing as set forth in the Business Combination Agreement;

“Affiliate” as defined in Rule 144 under the Securities Act;

“Ancillary Agreements” means the Subscription Agreements, the Proximus Non-Compete Agreement, the Stockholders Agreement, Transaction Support Agreement, A&R Registration Rights Agreement and all other agreements, certificates and instruments executed and delivered by NAAC, New Holdco, New SPAC, BICS or TeleSign in connection with the transactions contemplated by the Business Combination Agreement;

“Assumed NAAC Warrants” are to the warrants to purchase shares of New Holdco Common Stock into which the NAAC Warrants will convert at the SPAC Merger Effective Time;

“Available Cash” shall equal, as of the Closing, the amount of funds contained in the Trust Account (net of the NAAC shareholder redemption amount) plus the amount of PIPE Funds;

“BICS” are to Belgacom International Carrier Services SA/NV, a Belgian limited liability company (société anonyme) and subsidiary of Proximus;

“Business Combination” are to the SPAC Merger, the Share Acquisition, and all other transactions contemplated by the Business Combination Agreement;

“Business Combination Agreement” are to that certain Business Combination Agreement, dated as of December 16, 2021 as amended, by and among NAAC, TeleSign, BICS, New SPAC, and New Holdco;

“Class A Ordinary Shares” are to NAAC’s Class A ordinary shares, par value $0.0001 per share;

“Class B Ordinary Shares” are to NAAC’s Class B ordinary shares, par value $0.0001 per share;

“Code” are to the U.S. Internal Revenue Code of 1986, as amended;

“Company Disclosure Schedule” means TeleSign’s disclosure schedule delivered by TeleSign in connection with the Business Combination Agreement;

“Company Equity Value” means $1,300,000,000 minus the amount of Leakage, if any, occurring between October 1, 2021 (included) and the Closing Date (included) as set forth in the Leakage Certificate;

“Company Group Member” means TeleSign and each Company Subsidiary;

“Company Subsidiary” means each subsidiary of TeleSign.

“Company Transaction Expenses” means all fees and expenses incurred in connection with, or otherwise related to, the transactions contemplated by the Business Combination Agreement, the
 
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negotiation and preparation of the Business Combination Agreement and the other documents contemplated hereby and the performance and compliance with all agreements and conditions contained in the Business Combination Agreement and therein, including the fees, expenses and disbursements of legal counsel, auditors and accountants, due diligence expenses, advisory and consulting fees (including financial advisors) and expenses, and other third-party fees, in each case, of BICS, the Company Group Members or their respective Affiliates, and any transaction, change-in-control, retention or similar payments of TeleSign employees or service providers (together with the employer portion of any payroll or employment taxes). For the avoidance of doubt, the Parties expressly acknowledge and agree that fees and expenses set forth on Section 1.1(a) of the Company Disclosure Schedule shall constitute Company Transaction Expenses;

“DGCL” are to the Delaware General Corporation Law;

“Existing Organizational Documents” are to NAAC’s Amended and Restated Memorandum and Articles of Association, adopted and effective as of January 21, 2021;

“extraordinary general meeting” are to the extraordinary general meeting of NAAC that is the subject of this proxy statement/prospectus and any adjournments thereof;

“GAAP” are to generally accepted accounting principles in the United States;

“Governmental Authority” means any U.S. federal, state, county or local or non-U.S. government, governmental, regulatory, or administrative authority, agency, instrumentality or commission or any court tribunal, or judicial or arbitral body;

“HSR Act” are to the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended;

“Incentive Plan” are to the NAAC Holdco, Inc. 2022 Restricted Stock Units and Performance Stock Units Incentive Plan, a form of which is attached hereto as Annex D;

“Initial Business Combination” are to NAAC’s initial merger, amalgamation, share exchange, asset acquisition, share purchase, reorganization, or similar business combination with one or more businesses or entities after the Initial Public Offering;

“Initial Public Offering” or “IPO” are to NAAC’s initial public offering of NAAC Units, which closed on January 26, 2021;

“initial shareholders” are to the holders of the NAAC Founder Shares, which includes the Sponsor and NAAC’s independent directors;

“IRS” are to the U.S. Internal Revenue Service;

“Law” means any federal, national, state, county, municipal, provincial, local, foreign or multinational, statute, constitution, common law, ordinance, code, decree, order, judgment, rule, regulation, ruling or requirement issued, enacted, adopted, promulgated, implemented, or otherwise put into effect by or under the authority of any Governmental Authority;

“Leakage” means, except in the Ordinary Course and except for Permitted Leakage, (a) any dividend, interim dividend or distribution of profits, reserves, premiums or assets or any other distribution (whether in cash or in kind) declared, authorized, paid, made, agreed or obligated to be made by TeleSign or any TeleSign Subsidiary to or for the benefit of the stockholders of TeleSign or any Affiliate of the stockholders of TeleSign, (b) any management, service, license or other similar charges or fees or compensation; (including out of Ordinary Course directors’ fees and any monitoring fees) paid by TeleSign or any TeleSign Subsidiary to, on behalf of, or for the benefit of any stockholder(s) of TeleSign or any Affiliate of any stockholder(s) of TeleSign, (c) any return of capital (whether by reduction of capital or redemption or purchase of shares or otherwise) by TeleSign or any TeleSign Subsidiary or any amount payable on the repurchase, repayment, redemption, reduction or cancellation of any share capital, loan capital or other securities of TeleSign or any TeleSign Subsidiary (to the extent applicable, including both principal and interest elements), in each case, to or for the benefit of any stockholder(s) of TeleSign or any Affiliate of any stockholder(s) of TeleSign ,(d) any forgiveness, waiver or release by TeleSign or any Company Subsidiary of any amount or obligation owed or due to TeleSign or any Company Subsidiary from any stockholder(s)
 
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of TeleSign or any Affiliate of any stockholder(s) of TeleSign, (e) any payment of any costs, bonuses, compensation or other sums including transaction bonus, retention bonus, equity incentive or similar payment to any director, officer, employee or other natural person serving as a consultant of TeleSign or any Company Subsidiary by TeleSign or any Company Subsidiary, triggered by or upon, the execution of the Business Combination Agreement or the Ancillary Agreements or the consummation of the transactions contemplated by the Business Combination Agreement (including any applicable employer portion of all Taxes and/or social charges incurred or to be incurred in relation to such payments), (f) any assumption or discharge by TeleSign or any Company Subsidiary of any liability (including in relation to any recharging of costs of any kind) on behalf of or for the benefit of any stockholder(s) of TeleSign or any Affiliate of any stockholder(s) of TeleSign, (g) any guarantee (including via any encumbrance made, created or granted over the assets of TeleSign or any Company Subsidiary), indemnity or security provided by TeleSign or any Company Subsidiary in respect of the obligations or liabilities of any stockholder(s) of TeleSign or any Affiliate of any stockholder(s) of TeleSign (that is not released effective as of Closing), (h) any transfer or disposal or pledge of any asset to any stockholder(s) of TeleSign or any Affiliate of any stockholder(s) of TeleSign, (i) any acquisition of any asset from any stockholder(s) of TeleSign or any Affiliate of any stockholder(s) of TeleSign, (j) any payment by TeleSign or any Company Subsidiary of any Taxes imposed on any stockholder(s) of TeleSign or any Affiliate of any stockholder(s) of TeleSign (other than any Taxes for which TeleSign or any Company Subsidiary are directly liable to a taxing authority), or any agreement or obligation of TeleSign or any Company Subsidiary to make such payment, (k) any payment by TeleSign or any Company Subsidiary of any personal expenses or any gift or other gratuitous payment to or of any stockholder(s) of TeleSign or any Affiliate of any stockholder(s) of TeleSign, (l) any agreement or undertaking by TeleSign or any Company Subsidiary to do or give effect to any of the matters set forth in clauses(a) through (k) above, (m) any Tax paid, becoming payable by, or imposed on TeleSign or any Company Subsidiary, in each case as a result of any of the transactions or actions described in clauses (a) through (k) above, provided that each of the foregoing clauses (a) through (m) above shall be reduced by any Tax benefit realized or expected to be realized in respect of any Leakage by TeleSign or any Company Subsidiary;

“Leakage Certificate” means a certificate executed by BICS, at least three (3) Business Days and not more than five (5) Business Days before the Closing, BICS shall deliver the Leakage Certificate to NAAC such certificate with the persons responsible for its preparation, and shall promptly, and not more than one (1) Business Day following the date BICS delivers the Leakage Certificate to NAAC, provide any good faith and reasonable comments or questions in respect thereof to BICS in writing, and (ii) BICS shall, and shall cause TeleSign and its Subsidiaries to, reasonably cooperate with NAAC in good faith to respond to any questions and consider in good faith any comments regarding the Leakage Certificate delivered in accordance with the previous sentence. BICS shall revise such Leakage Certificate prior to the Closing to incorporate any changes that are reasonably appropriate in BICS’s sole and exclusive discretion in light of such comments. The Leakage Certificate, as it may be revised by BICS pursuant to the previous sentence, shall be valid and binding on all parties and for all purposes absent manifest error. The Leakage Certificate shall be used for the purpose of certifying that there has been no Leakage (or setting forth any such Leakage that has occurred, including the amount thereof,) during the period of time between October 1, 2021 (included) and the Closing (included);

“NAAC” are to North Atlantic Acquisition Corporation, a Cayman Islands exempted company;

“NAAC Board” are to the board of directors of NAAC;

“NAAC Founder Shares” are to the outstanding Class B Ordinary Shares;

“NAAC Preference Shares” are to NAAC’s preference shares, par value $0.0001 per share;

“NAAC Units” are to NAAC’s units sold in the IPO, each of which consists of one Class A Ordinary Share and one-third of one public warrant;

“NAAC Warrants” are to (a) prior to the SPAC Merger Closing, the public warrants and the private placement warrants, and (b) after the SPAC Merger Closing, the New Holdco Warrants that the public warrants and private placement warrants will convert into upon consummation of the SPAC Merger;
 
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“Nasdaq” are to The Nasdaq Stock Market LLC;

“New Holdco” are to NAAC Holdco, Inc., which will be renamed “TeleSign, Inc.” following the Business Combination;

“New Holdco Board” are to the board of directors of New Holdco;

“New Holdco Common Stock” are to the shares of common stock, par value $0.0001 per share, of New Holdco after the SPAC Merger;

“New Holdco Warrants” are to the warrants to purchase shares of New Holdco Common Stock;

“New SPAC” are to North Atlantic Acquisition, LLC, a Delaware limited liability company and a direct wholly owned subsidiary of New Holdco;

“New SPAC Common Stock” are to shares of common stock, par value $0.0001 per share, of New SPAC;

“NSIA” is the National Security and Investment Act 2021, as amended;

“NSIA Approval” means, if the parties to the Business Combination Agreement, acting reasonably, have agreed that a mandatory notification is required under the NSIA, and a notification has been filed with the Secretary of State for Business, Energy and Industrial Strategy (the “Secretary of State”), such notification shall have been accepted by the Secretary of State and:
a)
The Secretary of State shall have confirmed before the end of the NSIA review period that no further action will be taken in relation to the transactions contemplated by the Business Combination Agreement;
b)
If the Secretary of State shall have issued a call-in notice pursuant to the NSIA in relation to the Transactions, the Parties shall have received confirmation that the Secretary of State will take no further action under the NSIA in relation to the call-in notice and transactions contemplated by the Business Combination Agreement; or
c)
The Secretary of State shall have made a final order in relation to the transactions contemplated by the Business Combination Agreement (and, to the extent relevant, all conditions or obligations contained in such an order necessary for completion of the transactions contemplated by the Business Combination Agreement shall have been satisfied or complied with or any restriction preventing completion shall have been lifted or released);

“Ordinary Course” means, with respect to any Person, the ordinary course of business consistent with such Person’s past custom and practice; provided that actions taken (or omitted) in response to a condition or conditions arising from COVID-19 pandemic, including as a result of actions of governmental entities taken in connection with the pandemic shall be deemed ordinary course of business;

“Ordinary Shares” are to the Class A Ordinary Shares and the Class B Ordinary Shares;

“Other Approvals” means any filing or application that BICS determines is required under Antitrust Laws after consulting with NAAC and considering NAAC’s views in good faith;

“Permitted Leakage” means each and any of the following:
a)
any Leakage in relation to matters set forth in Section 1.1(b) of Company Disclosure Schedules;
b)
any Leakage which is on arm’s length terms as between TeleSign and/or Company Subsidiaries and BICS and/or any Affiliate thereof;
c)
any Leakage which has been specifically accrued or provided for in the interim financial information of TeleSign;
d)
Company Transaction Expenses;
 
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e)
waivers, deferrals and other similar adjustments relating to (traffic) reconciliation following delivery of invoices/services consistent with customary practices;
f)
any payments in respect of salaries, director’s fees, pension contributions, expenses or bonuses made to, or in respect of services provided by, employees, workers, directors, officers or consultants of TeleSign or any of the TeleSign Subsidiaries which are made (or to be made) by TeleSign or any of the TeleSign Subsidiaries in the ordinary course of business and in accordance with the terms of the related employment or service contract or other arraignment; as well as the accelerated vesting of employees’ existing long term bonuses as may be decided upon Closing; and
g)
any Leakage which is (i) expressly contemplated by any other provision of the Business Combination Agreement and contemplated restricting steps, or any Ancillary Agreement or (ii) NAAC has expressly approved in writing.

“Person” means an individual, corporation, partnership, limited partnership, limited liability company, syndicate, person (including, without limitation, a “person” as defined in Section 13(d)(3) of the Exchange Act), trust, association or entity or government, political subdivision, agency or instrumentality of a government;

“PFIC” are to Passive Foreign Investment Company;

“PIPE Financing” are to the private offering of securities of New Holdco to certain investors pursuant to separate subscription agreements in connection with the Share Acquisition;

“PIPE Funds” are to the proceeds from the PIPE Financing;

“PIPE Investors” are to investors in the PIPE Financing;

“PIPE Shares” are to the shares of New Holdco Common Stock that will be issued in the PIPE Financing;

“PRC National Security Approval” means , if BICS and NAAC, acting reasonably, have agreed that a mandatory filing is required under one or more of the PRC National Security Laws, and each such filing has been filed with the relevant Governmental Authorities pursuant to the Business Combination Agreement, that each such filing shall have been accepted by the relevant Governmental Authorities and, for each such filing, the relevant Governmental Authority with which the filing was made shall have either (a) cleared the Business Combination, either unconditionally or with conditions reasonably acceptable to BICS and NAAC, or (b) shall not, within the period allowed under the applicable PRC National Security Laws, have announced or notified BICS and NAAC of any decision to suspend or prohibit the Business Combination;

“PRC National Security Laws” means the Peoples Republic of China Foreign Investment Law, National Security Law and the Measures on Security Review of Foreign Investment;

“Private Placements” are to the sale by NAAC pursuant to subscription agreements with certain investors pursuant to which such investors, upon the terms and subject to the conditions set forth therein, have agreed to purchase PIPE Shares at a purchase price of $9.19 per share in a private placement or placements;

“private placement warrants” are to the warrants issued to the Sponsor in a private placement simultaneously with the closing of the IPO;

“Proximus” means Proximus SA de droit public/NV van publiek recht;

“Proximus Non-Compete Agreement” means the non-compete agreement entered into by TeleSign and Proximus SA/NV;

“public shareholders” are to the holders of NAAC’s public shares;

“public shares” are to the Class A Ordinary Shares sold as part of the NAAC Units in the IPO (whether they were purchased in the IPO or thereafter in the open market);

“public warrants” are to the warrants sold as part of the units in the IPO (whether they were purchased in the IPO or thereafter in the open market);
 
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“Share Acquisition” are to the merger on the Acquisition Closing Date of NAAC with and into New SPAC, with New SPAC surviving the merger as a wholly owned subsidiary of New Holdco;

“Share Acquisition Effective Time” are to the date and time at which the Share Acquisition becomes effective;

“SPAC Merger Closing” are to the closing of the SPAC Merger;

“SPAC Merger Closing Date” are to the date on which the SPAC Merger Closing occurs;

“Sponsor” are to NAAC Sponsor LP, a Delaware limited partnership;

“Tax” or “Taxes” means any and all taxes, withholding taxes, duties, levies or other assessments or charges, in each case in the nature of taxes imposed by any Governmental Authority, including any income, estimated, business, occupation, corporate, capital, gross receipts, transfer, stamp, registration, employment, payroll, unemployment, withholding, occupancy, escheat, license, severance, capital, production, ad valorem, excise, windfall profits, customs duties, real property, personal property, sales, use, turnover, value added and franchise taxes, whether disputed or not, together with all interest, penalties, and additions to tax or imposed with respect thereto;

“TeleSign” are to Torino Holding Corp., a Delaware corporation, or TeleSign, Inc., as appropriate;

“TeleSign Board” are to the board of directors of TeleSign;

“TeleSign Common Stock” are to the shares of TeleSign’s common stock, par value $0.0001 per share;

“Trust Account” are to the trust account that holds the proceeds (including interest not previously released to NAAC for working capital purposes) from the IPO and a concurrent private placement of private placement warrants to the Sponsor;

“TeleSign Outstanding Shares” are to the total number of shares of TeleSign Common Stock outstanding immediately prior to the Share Acquisition Effective Time; and

“Warrant Agreement” are to the Warrant Agreement, dated January 21, 2021, between NAAC and Continental Stock Transfer & Trust Company, as warrant agent.
Unless otherwise specified, the voting and economic interests of NAAC shareholders set forth in this proxy statement/prospectus (a) assume that (i) no public shareholders elect to have their public shares redeemed, (ii) there are no other issuances of equity interests of NAAC or TeleSign, (iii) none of NAAC’s initial shareholders or BICS purchase Class A Ordinary Shares in the open market, (iv) the aggregate NAAC Transaction Expenses and Company Transaction Expenses will be $50 million, (v) the Sponsor forfeits 948,750 NAAC Founder Shares in connection with the Business Combination (and no additional NAAC Founder Shares are subject to forfeiture as a result of NAAC shareholder redemption levels exceeding 50% or otherwise), and (vi) TeleSign’s valuation is not otherwise reduced by factors set forth in the Business Combination Agreement, and (b) do not take into account New Holdco Warrants that will remain outstanding following the Business Combination and may be exercised at a later date.
 
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CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
This proxy statement/prospectus includes forward-looking statements. NAAC based these forward- looking statements on its current expectations and projections about future events. All statements, other than statements of present or historical fact included in this proxy statement/prospectus, regarding the proposed Business Combination, NAAC’s ability to consummate the Business Combination, the benefits of the transaction, the post-combination company’s future financial performance following the Business Combination and the post-combination company’s strategy, expansion plans, future operations, future operating results, estimated revenues, losses, projected costs, prospects, plans and objectives of NAAC’s management are forward-looking statements. In some cases, you can identify forward-looking statements by terminology such as “may,”“should,”“could,”“would,”“expect,”“plan,”“anticipate,”“intend,”“believe,” “estimate,” “continue,” “project,” or the negative of such terms or other similar expressions. These forward- looking statements are subject to known and unknown risks, uncertainties and assumptions that may cause actual results, levels of activity, performance, or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by such forward-looking statements. Except as otherwise required by applicable law, NAAC disclaims any duty to update any forward- looking statements, all of which are expressly qualified by the statements in this section, to reflect events or circumstances after the date of this proxy statement/prospectus. NAAC cautions you that these forward- looking statements are subject to numerous risks and uncertainties, most of which are difficult to predict and many of which are beyond the control of NAAC.
In addition, NAAC cautions you that the forward-looking statements regarding NAAC and the post-combination company, which are included in this proxy statement/prospectus, are subject to the following factors:

the occurrence of any event, change or other circumstances that could delay the Business Combination or give rise to the termination of the Business Combination Agreement;

the outcome of any legal proceedings that have been or may be instituted against NAAC following announcement of the Business Combination;

the inability to complete the Business Combination due to the failure to obtain approval of the shareholders of NAAC, or satisfy the other conditions to closing in the Business Combination Agreement;

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

the risk that NAAC may not be able to consummate the PIPE Financing;

the risk that the proposed Business Combination disrupts current plans and operations of TeleSign or NAAC as a result of the announcement and consummation of the Business Combination;

NAAC’s ability to realize the anticipated benefits of the Business Combination, which may be affected by, among other things, competition and the ability of New Holdco to grow and manage growth profitably following the Business Combination;

costs related to the Business Combination;

New Holdco’s success in retaining or recruiting, or changes in, its officers, key employees or directors following the Business Combination;

the possibility of third-party claims against the Trust Account;

changes in applicable laws or regulations;

the possibility that COVID-19 may hinder NAAC’s ability to consummate the Business Combination;

the possibility that COVID-19 may adversely affect the results of operations, financial position, and cash flows of NAAC, TeleSign, or New Holdco;

technological changes;

data security breaches or other network outages; and
 
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the possibility that NAAC or New Holdco may be adversely affected by other economic, business, or competitive factors.
New Holdco does not as a matter of course make public projections as to future sales, earnings, or other results. However, the management of New Holdco has prepared the prospective financial information set forth below to present the expected result of the Business Combination on New Holdco’s future performance. The accompanying prospective financial information was not prepared with a view toward public disclosure or with a view toward complying with the guidelines established by the American Institute of Certified Public Accountants with respect to prospective financial information, but, in the view of the Company's management, was prepared on a reasonable basis, reflects the best currently available estimates and judgments, and presents, to the best of management's knowledge and belief, the expected course of action and the expected future financial performance of the Company. However, this information is not fact and should not be relied upon as being necessarily indicative of future results, and readers of this proxy statement/prospectus are cautioned not to place undue reliance on the prospective financial information.
Neither the New Holdco’s independent auditors, nor any other independent accountants, have compiled, examined, or performed any procedures with respect to the prospective financial information contained herein, nor have they expressed any opinion or any other form of assurance on such information or its achievability, and assume no responsibility for, and disclaim any association with, the prospective financial information.
Should one or more of the risks or uncertainties described in this proxy statement/prospectus, or should underlying assumptions prove incorrect, actual results and plans could differ materially from those expressed in any forward-looking statements. Additional information concerning these and other factors that may impact the operations and projections discussed herein can be found in the section entitled “Risk Factors” and in NAAC’s periodic filings with the SEC, including its Annual Report on Form 10-K for the fiscal year ended December 31, 2020 and subsequently filed Quarterly Reports on Form 10-Q. NAAC’s SEC filings are available publicly on the SEC’s website at www.sec.gov.
 
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SUMMARY TERM SHEET
This summary term sheet, together with the sections entitled “Questions and Answers About the Business Combination” and “Summary of the Proxy Statement/Prospectus,” summarizes certain information included in this proxy statement/prospectus, but does not include all of the information that is important to you. You should carefully read this entire proxy statement/prospectus, including the attached annexes, for a more complete understanding of the matters to be considered at the extraordinary general meeting.

NAAC is a blank check company incorporated on October 14, 2020 as a Cayman Islands exempted company for the purpose of effecting a merger, amalgamation, share exchange, asset acquisition, share purchase, reorganization, or similar business combination with one or more businesses or entities. For more information about NAAC, see the section entitled “Information About NAAC.” When you consider the NAAC Board’s recommendation of the Proposals (as defined below), you should keep in mind that NAAC’s directors and officers have interests in the Business Combination that are different from, or in addition to, the interests of NAAC shareholders generally. NAAC’s directors were aware of and considered these interests, among other matters, in evaluating the Business Combination, and in recommending to shareholders that they approve the Business Combination. Shareholders should take these interests into account in deciding whether to approve the Business Combination. See the subsection entitled “The Business Combination — Interests of the Sponsor and NAAC Directors and Officers in the Business Combination” for additional information. The NAAC Board was aware of and considered these interests, among other matters, in recommending that NAAC shareholders vote “FOR” each of the Proposals.

There are currently 37,950,000 Class A Ordinary Shares and 9,487,500 Class B Ordinary Shares issued and outstanding. In addition, there are currently 19,776,667 NAAC Warrants outstanding, consisting of 12,650,000 public warrants and 7,126,667 private placement warrants. Each whole NAAC Warrant entitles the holder to purchase one whole Class A Ordinary Share for $11.50 per share. The NAAC Warrants will become exercisable on the later of 30 days after the completion of an Initial Business Combination and 12 months from the closing of the Initial Public Offering, and will expire five years after the completion of an Initial Business Combination or earlier upon redemption or liquidation. Once the public warrants become exercisable, NAAC may redeem the outstanding public warrants, in whole and not in part, for cash in accordance with, and subject to the terms of, the Warrant Agreement. The private placement warrants, however, are non-redeemable so long as they are held by the Sponsor or its permitted transferees. For more information about the terms of the warrants, see the subsection entitled “Description of Securities — Warrants — Public Warrants.”

TeleSign, a Delaware corporation, is a digital identity and communications platform as a service (“CPaaS”) company that provides solutions for security, authentication, fraud detection, compliance and reputation scoring through its easy-to-integrate application programming interfaces. TeleSign’s products and services portfolio combines digital identity with global communications capabilities to help enterprises connect, protect and engage with their customers, while assisting those customers in securely engaging with their preferred digital platforms. For more information about TeleSign, see the sections entitled “Information About TeleSign” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations of TeleSign.”

On December 16, 2021, BICS, TeleSign, NAAC, New SPAC and New Holdco entered into the Business Combination Agreement. A copy of the Business Combination Agreement is attached to this proxy statement/prospectus as Annex A.

Pursuant to the Business Combination Agreement, and subject to the terms and conditions contained therein, the Business Combination will be effected in two steps: (a) on the SPAC Merger Closing Date, NAAC will merge with and into New SPAC, with New SPAC surviving the SPAC Merger as a publicly traded entity and wholly-owned subsidiary of New Holdco; and (b) immediately following the SPAC Merger, New Holdco and BICS will consummate the Share Acquisition (as defined below). For more information about the Business Combination Agreement and the Business Combination, see the section entitled “The Business Combination.”

In connection with the SPAC Merger, each then-outstanding Class A Ordinary Share, Class B Ordinary Share, NAAC Warrant, and NAAC Unit will be cancelled in exchange for consideration
 
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consisting of the right to receive New Holdco Common Stock and New Holdco Warrants, respectively. For more information about the Business Combination Agreement and the Business Combination, see the section entitled “The Business Combination.”

In connection with the Share Acquisition, it is anticipated that in exchange for all outstanding shares of TeleSign Common Stock, BICS will receive (i) the Share Consideration and (ii) the Cash Consideration. For more information about the Business Combination Agreement and the Business Combination, see the section entitled “The Business Combination.”

Unless lawfully waived by the parties to the Business Combination Agreement, the Acquisition Closing is subject to a number of conditions set forth in the Business Combination Agreement, including, among others, receipt of the requisite NAAC shareholder approval of the Business Combination Agreement, Available Cash of at least $200 million, the Business Combination as contemplated by this proxy statement/prospectus, and certain other proposals at the extraordinary general meeting. For more information about the closing conditions to the Business Combination, see the subsection entitled “The Business Combination — Conditions to Consummation of the Business Combination Agreement.”

The Business Combination Agreement may be terminated at any time prior to the consummation of the Business Combination upon agreement of the parties thereto, or for other reasons in specified circumstances. For more information about the termination rights under the Business Combination Agreement, see the subsection entitled “The Business Combination — Termination.”

The proposed Business Combination involves numerous risks. For more information about these risks, please see the section entitled “Risk Factors.”

Pursuant to the PIPE Financing, NAAC has agreed that New Holdco will issue and sell to certain investors, and those investors have agreed to buy from New Holdco, in connection with the Acquisition Closing, an aggregate of 11,698,750 shares of New Holdco Common Stock at a purchase price of $9.19 per share for an aggregate commitment of $107,500,000. Such New Holdco Common Stock would be valued at approximately $115,583,650, based on the closing price of the Class A Ordinary Shares of $9.88 per share on April 13, 2022.

Under the Existing Organizational Documents, in connection with the Business Combination, NAAC’s public shareholders may elect to have their public shares redeemed for cash at the applicable redemption price per share calculated in accordance with the Existing Organizational Documents. As of December 31, 2021, this would have amounted to $10.00 per share. If a holder exercises its redemption rights, then such holder will exchange its shares of New Holdco Common Stock received in exchange for its public shares for cash and will not own public shares or shares of New Holdco following the completion of the Business Combination and will not participate in the future growth of New Holdco, if any, except to the extent that they continue to hold public warrants. Such a holder will be entitled to receive cash for its shares of New Holdco Common Stock only if it properly demands redemption and delivers its shares (either physically or electronically) to NAAC’s transfer agent at least two business days prior to the extraordinary general meeting. For more information regarding these procedures, see the subsection entitled “Extraordinary General Meeting — Redemption Rights.”

It is anticipated that, upon completion of the Business Combination, the ownership of New Holdco will be as follows:

BICS will own 115,512,500 shares of New Holdco Common Stock, or approximately 66% of the issued and outstanding New Holdco Common Stock;

the public shareholders will own 37,950,000 shares of New Holdco Common Stock, or approximately 22% of the issued and outstanding New Holdco Common Stock;

the PIPE Investors will own 11,698,750 shares of New Holdco Common Stock, or approximately 7% of the issued and outstanding New Holdco Common Stock; and

the initial shareholders will own 8,538,750 shares of New Holdco Common Stock, or approximately 5% of the issued and outstanding New Holdco Common Stock (which, for the
 
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avoidance of doubt, does not include shares of New Holdco Common Stock that will be issued to certain initial shareholders in connection with the PIPE Financing, which shares are reflected in the preceding bullet).
The number of shares and the interests set forth above (a) assume that (i) no public shareholders elect to have their public shares redeemed, (ii) there are no other issuances of equity interests of NAAC or TeleSign, (iii) none of NAAC’s initial shareholders or BICS purchase Class A Ordinary Shares in the open market, (iv) the aggregate NAAC Transaction Expenses and Company Transaction Expenses will be $50 million, (v) the Sponsor forfeits 948,750 NAAC Founder Shares in connection with the Business Combination (and no additional NAAC Founder Shares are subject to forfeiture as a result of NAAC shareholder redemption levels exceeding 50% or otherwise), and (vi) TeleSign’s valuation is not otherwise reduced by factors set forth in the Business Combination Agreement, and (b) do not take into account New Holdco Warrants that will remain outstanding following the Business Combination and may be exercised at a later date. As a result of the Business Combination, the economic and voting interests of NAAC’s shareholders will decrease. If we assume the maximum redemptions scenario described under the section entitled “Unaudited Pro Forma Condensed Combined Financial Information,” i.e., 37,950,000 public shares are redeemed, and the assumptions set forth in the foregoing clauses (a)(ii) — (vi) and (b) remain true, except that, with respect to clause (v), the number of NAAC Founder Shares to be forfeited by the Sponsor shall be 1,897,500, and if we further assume that the parties to the Business Combination Agreement waive the minimum cash condition, the ownership of New Holdco upon completion of the Business Combination will be as follows:

BICS will own 116,461,250 shares of New Holdco Common Stock, or approximately 86% of the issued and outstanding New Holdco Common Stock;

the PIPE Investors will own 11,698,750 shares of New Holdco Common Stock, or approximately 9% of the issued and outstanding New Holdco Common Stock; and

the initial shareholders will own 7,590,000 shares of New Holdco Common Stock, or approximately 5% of the issued and outstanding New Holdco Common Stock (which, for the avoidance of doubt, does not include shares of New Holdco Common Stock that will be issued to certain initial shareholders in connection with the PIPE Financing, which shares are reflected in the preceding bullet).
The ownership percentages with respect to New Holdco set forth above do not take into account NAAC Warrants that will remain outstanding immediately following the Business Combination, but do include the NAAC Founder Shares, which will convert into New Holdco Common Stock upon the Share Acquisition. If the facts are different than these assumptions, the percentage ownership retained by NAAC’s existing shareholders in New Holdco following the Business Combination will be different. For example, if we assume that all outstanding 12,650,000 public warrants and 7,126,667 private placement warrants were exercisable and exercised following completion of the Business Combination and further assume that no public shareholders elect to have their public shares redeemed (and each other assumption set forth in the preceding paragraph remains the same), then the ownership of New Holdco would be as follows:

BICS will own 115,512,500 shares of New Holdco Common Stock, or approximately 60% of the issued and outstanding New Holdco Common Stock;

the public shareholders will own 50,600,000 shares of New Holdco Common Stock, or approximately 26% of the issued and outstanding New Holdco Common Stock;

the PIPE Investors will own 11,698,750 shares of New Holdco Common Stock, or approximately 6% of the issued and outstanding New Holdco Common Stock; and

the initial shareholders will own 15,665,417 shares of New Holdco Common Stock, or approximately 8% of the issued and outstanding New Holdco Common Stock (which, for the avoidance of doubt, does not include shares of New Holdco Common Stock that will be issued to certain initial shareholders in connection with the PIPE Financing, which shares are reflected in the preceding bullet).
The NAAC Warrants will become exercisable on the later of 30 days after the completion of an Initial Business Combination and 12 months from the closing of the Initial Public Offering, and will expire five years after the completion of an Initial Business Combination or earlier upon their redemption or liquidation.
 
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Please see the sections entitled “Summary of the Proxy Statement/Prospectus — Ownership of New Holdco After the Acquisition Closing” and “Unaudited Pro Forma Condensed Combined Financial Information” for further information.
The NAAC Board considered various factors in determining whether to approve the Business Combination Agreement and the Business Combination. For more information about the NAAC Board’s decision-making process, see the subsection entitled “The Business Combination — The NAAC Board’s Reasons for the Approval of the Business Combination.”
In addition to voting on the proposals to approve the SPAC Merger and the Plan of Merger by special resolution (the “SPAC Merger Proposal”) and to approve the Share Acquisition and approve and adopt the Business Combination Agreement and the Business Combination by ordinary resolution (the “Share Acquisition Proposal” and, together with the SPAC Merger Proposal, the “Business Combination Proposals”) at the extraordinary general meeting, NAAC’s shareholders will also be asked to vote on the approval of:

the proposed certificate of incorporation (the “Proposed Certificate of Incorporation”) and the proposed bylaws (the “Proposed Bylaws” and, together with the Proposed Certificate of Incorporation, the “Proposed Organizational Documents”) of New Holdco, the post-SPAC Merger company, which if approved, would take effect at the SPAC Merger Effective Time (the “Organizational Documents Proposal”);

on a non-binding, advisory basis, certain governance provisions in the Proposed Organizational Documents, which are being presented separately in accordance with the SEC guidance to give shareholders the opportunity to present their separate views on important corporate governance provisions, as eight separate proposals (collectively, the “Advisory Organizational Documents Proposals”);

for purposes of complying with applicable listing rules of Nasdaq, (a) the issuance of up to 115,512,500 shares of New Holdco Common Stock in connection with the Share Acquisition, and (b) the issuance and sale of 11,698,750 shares of New Holdco Common Stock in the PIPE Financing, which will occur substantially concurrently with, and is contingent upon, the consummation of the Share Acquisition (the “Nasdaq Proposal”);

the Incentive Plan and material terms thereunder (the “Incentive Plan Proposal”); and

the adjournment of the extraordinary general meeting to a later date or dates, if necessary or appropriate, to permit further solicitation and vote of proxies in the event that there are insufficient votes for, or otherwise in connection with, the approval of the Business Combination Proposals, the Organizational Documents Proposal, the Advisory Organizational Documents Proposals, the Nasdaq Proposal, or the Incentive Plan Proposal, (the “Adjournment Proposal” and, together with the Business Combination Proposals, the Organizational Documents Proposal, the Advisory Organizational Documents Proposals, the Nasdaq Proposal, and the Incentive Plan Proposal, the “Proposals”).
For more information, see the sections entitled “Proposal No. 1 — The Business Combination Proposals,” “Proposal No. 2 — The Organizational Documents Proposal,” “Proposal No. 3 — The Advisory Organizational Documents Proposals,” “Proposal No. 4 — The Nasdaq Proposal,” “Proposal No. 5 — The Incentive Plan Proposal,” “Proposal No. 6 — The Adjournment Proposal.”
 
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QUESTIONS AND ANSWERS ABOUT THE BUSINESS COMBINATION
The following questions and answers briefly address some commonly asked questions about the Proposals to be presented at the extraordinary general meeting, including the proposed Business Combination. The following questions and answers do not include all the information that is important to NAAC shareholders. We urge NAAC shareholders to carefully read this entire proxy statement/prospectus, including the annexes and other documents referred to herein.
Q:
Why am I receiving this proxy statement/prospectus?
A:
NAAC is sending this proxy statement/prospectus to its shareholders to help them decide how to vote their Ordinary Shares with respect to the matters to be considered at the extraordinary general meeting. NAAC shareholders are being asked to consider and vote upon, among other things, three separate proposals to: (a) approve and adopt the Business Combination Agreement, pursuant to which the Business Combination will be effected in two steps: (1) subject to approval by special resolution, NAAC will merge with and into New SPAC, with New SPAC surviving the SPAC Merger, and (2) subject to approval by ordinary resolution, New Holdco will purchase from BICS all TeleSign Outstanding Shares in exchange for (i) the Share Consideration and (ii) the Cash Consideration, and (b) approve the SPAC Merger, the Share Acquisition, and the other transactions contemplated by the Business Combination Agreement; and (c) approve, for purposes of complying with applicable listing rules of Nasdaq, (i) the issuance in connection with the Share Acquisition of up to an aggregate of 115,512,500 shares of New Holdco Common Stock to BICS in connection with the Share Acquisition and (ii) the issuance and sale to the PIPE Investors of 11,698,750 shares of New Holdco Common Stock in the PIPE Financing, which will occur substantially concurrently with, and is contingent upon, the consummation of the Share Acquisition. The Business Combination cannot be completed unless NAAC shareholders approve the Business Combination Proposals, the Organizational Documents Proposal, the Nasdaq Proposal, and the Incentive Plan Proposal (collectively, the “Condition Precedent Proposals”) at the extraordinary general meeting.
A copy of the Business Combination Agreement is attached to this proxy statement/prospectus as Annex A. This proxy statement/prospectus and its annexes include important information about the proposed Business Combination and the other matters to be acted upon at the extraordinary general meeting. You should read this proxy statement/prospectus and its annexes carefully and in their entirety.
The approval of each of the Share Acquisition Proposal, the Nasdaq Proposal, the Incentive Plan Proposal, and the Adjournment Proposal are being proposed as an ordinary resolution, being the affirmative vote under Cayman Islands law, being the affirmative vote of the holders of a majority of the ordinary shares of NAAC represented in person or by proxy and entitled to vote thereon and who vote at the extraordinary general meeting. The SPAC Merger Proposal, the Advisory Organizational Documents Proposals and the Organizational Documents Proposal require a special resolution under Cayman Islands law, being the affirmative vote of the holders of at least two-thirds of the ordinary shares of NAAC represented in person or by proxy and entitled to vote thereon and who vote at the extraordinary general meeting.
At the SPAC Merger Effective Time, pursuant to the SPAC Merger, (a) each then-outstanding Class A Ordinary Share will be canceled in exchange for consideration consisting of one share of New Holdco Common Stock; (b) each then-outstanding Class B Ordinary Share will be canceled in exchange for consideration consisting of one share of New Holdco Common Stock; (c) each then-outstanding NAAC Warrant will be cancelled in exchange for consideration consisting of one New Holdco Warrant pursuant to the Warrant Agreement; and (d) each then-outstanding NAAC Unit will be cancelled in exchange for consideration consisting of (i) the right to receive one share of New Holdco Common Stock and (ii) the right to receive one-third of one New Holdco Warrant.
Your vote is important. You are encouraged to submit your proxy as soon as possible after carefully reviewing this proxy statement/prospectus and its annexes.
Q:
What is being voted on at the extraordinary general meeting?
A:
NAAC shareholders will vote on the following proposals at the extraordinary general meeting.
 
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The Business Combination Proposals — To consider and vote upon two separate proposals to approve the SPAC Merger and the Plan of Merger by special resolution and to approve the Share Acquisition and adopt the Business Combination Agreement and the transactions contemplated thereby by ordinary resolution (Proposal No. 1).

The Organizational Documents Proposal — To consider and vote upon a proposal to approve by special resolution the Proposed Certificate of Incorporation and the Proposed Bylaws of New Holdco, which, if approved, would take effect at the SPAC Merger Effective Time (Proposal No. 2).

The Advisory Organizational Documents Proposals — To consider and vote upon eight separate proposals to approve, on a non-binding advisory basis, by special resolution, certain governance provisions in the Proposed Organizational Documents, which are being presented separately in accordance with SEC guidance to give shareholders the opportunity to present their separate views on important corporate governance provisions (Proposal No. 3).

The Nasdaq Proposal — To consider and vote upon a proposal to approve by ordinary resolution, for purposes of complying with applicable listing rules of Nasdaq, (a) the issuance of up to 115,512,500 shares of New Holdco Common Stock in connection with the Share Acquisition, and (b) the issuance and sale of 11,698,750 shares of New Holdco Common Stock in the PIPE Financing, which will occur substantially concurrently with, and is contingent upon, the consummation of the Share Acquisition (Proposal No. 4).

The Incentive Plan Proposal — To consider and vote upon a proposal to approve by ordinary resolution and adopt the Incentive Plan and material terms thereunder (Proposal No. 5).

The Adjournment Proposal — To consider and vote upon a proposal to approve by ordinary resolution the adjournment of the extraordinary general meeting to a later date or dates, if necessary or appropriate, to permit further solicitation and vote of proxies in the event that there are insufficient votes for, or otherwise in connection with, the approval of any of the other Proposals (Proposal No. 6).
Q:
Are the Proposals conditioned on one another?
A:
NAAC may not consummate the Business Combination unless the Condition Precedent Proposals are approved at the extraordinary general meeting. Each of the Condition Precedent Proposals is cross-conditioned on the approval and adoption of each of the other Condition Precedent Proposals.
Q:
What will happen in the Business Combination?
A:
On December 16, 2021, NAAC, BICS, TeleSign, New SPAC and New Holdco entered into the Business Combination Agreement. Pursuant to the Business Combination Agreement, and subject to the terms and conditions contained therein, the Business Combination will be effected in two steps: (a) on the SPAC Merger Closing Date, NAAC will merge with and into New SPAC, with New SPAC surviving the SPAC Merger, and (b) immediately following the SPAC Merger Effective Time, New Holdco and BICS will consummate the Share Acquisition, whereby New Holdco will purchase all outstanding shares of TeleSign Common Stock. For more information about the Business Combination Agreement and the Business Combination, see the section entitled “The Business Combination.”
Q:
Why is NAAC proposing the Business Combination?
A:
NAAC was formed for the purpose of effecting a merger, amalgamation, share exchange, asset acquisition, share purchase, reorganization, or similar business combination involving NAAC and one or more businesses or entities.
On January 26, 2021, NAAC completed the IPO of 37,950,000 NAAC Units, including 4,950,000 NAAC Units that were issued pursuant to the underwriter’s exercise of their over-allotment option in full, with each NAAC Unit consisting of one Class A Ordinary Share and one-third of one NAAC Warrant, where each whole NAAC Warrant is exercisable to purchase one Class A Ordinary Share at a price of $11.50 per share, generating gross proceeds to NAAC of $379,500,000. The underwriter was granted a 45-day option from the date of the final prospectus relating to the IPO to purchase up to
 
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4,950,000 additional units to cover over-allotments, if any, at $10.00 per unit, less underwriting discounts and commissions. The underwriter exercised the over-allotment option in full simultaneously with the IPO. Since the IPO, NAAC’s activity has been limited to the search for a prospective Initial Business Combination.
The NAAC Board considered a wide variety of factors in connection with its evaluation of the Business Combination, including its review of the results of the due diligence conducted by NAAC’s management and NAAC’s advisors. As a result, the NAAC Board concluded that a transaction with TeleSign would present the most attractive opportunity to maximize value for NAAC’s shareholders. Please see the subsection entitled “The Business Combination — The NAAC Board’s Reasons for the Approval of the Business Combination.”
Q:
What conditions must be satisfied to complete the Business Combination?
A:
There are a number of closing conditions in the Business Combination Agreement, including the approval by NAAC’s shareholders of the Condition Precedent Proposals. For a summary of the conditions that must be satisfied or waived prior to completion of the Business Combination, see the subsection entitled “The Business Combination — Conditions to Consummation of the Business Combination Agreement.”
Q:
How will New Holdco be managed and governed following the Business Combination?
A:
Immediately after the Acquisition Closing, the New Holdco Board will be managed by a board of eight directors, designated as follows:

the Chief Executive Officer of New Holdco;

two individuals designated by BICS in its sole discretion;

one individual designated by the Sponsor in its sole discretion;

one individual designated by one of the PIPE Investors in its sole discretion; and

three individuals who satisfy the requirements necessary for such individuals to be “independent” in accordance with the rules and regulations governing companies listed on Nasdaq, including Nasdaq Listing Rule 5605 regarding independence, and the SEC rules regarding audit committee independence, designated by BICS in its sole discretion.
For additional information, please see the section entitled “Management After the Business Combination.”
Q:
Will the Sponsor have the right to designate any board members following the Business Combination?
A:
At the closing of the Business Combination, New Holdco, BICS, the Sponsor and one of the PIPE Investors will enter into a stockholders agreement (the “Stockholders Agreement”), pursuant to which, among other things, for 36 months following the closing of the Business Combination, the board of directors of New Holdco shall consist of eight members, including the chief executive officer of New Holdco, five individuals designated by BICS in its sole discretion, three of which will be independent directors, one individual designated by the Sponsor in its sole discretion, and one individual designated by such PIPE Investor in its sole discretion, and that the parties thereto will not take any action to remove another party’s designee, and each party will be entitled to replace any vacancy arising in relation to a director previously designated by such party, for the periods of time specified for such party therein.
Q:
Will NAAC obtain new financing in connection with the Business Combination?
A:
The PIPE Investors have committed to purchase from New Holdco 11,698,750 shares of New Holdco Common Stock, for an aggregate purchase price of $107.5 million in the PIPE Financing.
 
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Q:
What equity stake will NAAC’s current shareholders and the holders of the NAAC Founder Shares hold in New Holdco following the consummation of the Business Combination?
A:
It is anticipated that, upon completion of the Business Combination, the ownership of New Holdco will be as follows:

BICS will own 115,512,500 shares of New Holdco Common Stock, or approximately 66% of the issued and outstanding New Holdco Common Stock;

the public shareholders will own 37,950,000 shares of New Holdco Common Stock, or approximately 22% of the issued and outstanding New Holdco Common Stock;

the PIPE Investors will own 11,698,750 shares of New Holdco Common Stock, or approximately 7% of the issued and outstanding New Holdco Common Stock; and

the initial shareholders will own 8,538,750 shares of New Holdco Common Stock, or approximately 5% of the issued and outstanding New Holdco Common Stock (which, for the avoidance of doubt, does not include shares of New Holdco Common Stock that will be issued to certain initial shareholders in connection with the PIPE Financing, which shares are reflected in the preceding bullet).
The number of shares and the interests set forth above (a) assume that (i) no public shareholders elect to have their public shares redeemed, (ii) there are no other issuances of equity interests of NAAC or TeleSign, (iii) none of NAAC’s initial shareholders or BICS purchase Class A Ordinary Shares in the open market, (iv) the aggregate NAAC Transaction Expenses and Company Transaction Expenses will be $50 million, (v) the Sponsor forfeits 948,750 NAAC Founder Shares in connection with the Business Combination (and no additional NAAC Founder Shares are subject to forfeiture as a result of NAAC shareholder redemption levels exceeding 50% or otherwise), and (vi) TeleSign’s valuation is not otherwise reduced by factors set forth in the Business Combination Agreement, and (b) do not take into account New Holdco Warrants that will remain outstanding following the Business Combination and may be exercised at a later date. As a result of the Business Combination, the economic and voting interests of NAAC’s shareholders will decrease. If we assume the maximum redemptions scenario described under the section entitled “Unaudited Pro Forma Condensed Combined Financial Information,” i.e., 37,950,000 public shares are redeemed, and the assumptions set forth in the foregoing clauses (a)(ii) — (vi) and (b) remain true, except that, with respect to clause (v), the number of NAAC Founder Shares to be forfeited by the Sponsor shall be 1,897,500, and if we further assume that the parties to the Business Combination Agreement waive the minimum cash condition, the ownership of New Holdco upon completion of the Business Combination will be as follows:

BICS will own 116,461,250 shares of New Holdco Common Stock, or approximately 86% of the issued and outstanding New Holdco Common Stock;

the PIPE Investors will own 11,698,750 shares of New Holdco Common Stock, or approximately 9% of the issued and outstanding New Holdco Common Stock; and

the initial shareholders will own 7,590,000 shares of New Holdco Common Stock, or approximately 5% of the issued and outstanding New Holdco Common Stock (which, for the avoidance of doubt, does not include shares of New Holdco Common Stock that will be issued to certain initial shareholders in connection with the PIPE Financing, which shares are reflected in the preceding bullet).
The ownership percentages with respect to New Holdco set forth above do not take into account NAAC Warrants that will remain outstanding immediately following the Business Combination, but do include the NAAC Founder Shares, which will convert into New Holdco Common Stock upon the Share Acquisition. If the facts are different than these assumptions, the percentage ownership retained by NAAC’s existing shareholders in New Holdco following the Business Combination will be different. For example, if we assume that all outstanding 12,650,000 public warrants and 7,126,667 private placement warrants were exercisable and exercised following completion of the Business Combination and further assume that no public shareholders elect to have their public shares redeemed (and each other assumption set forth in the preceding paragraph remains the same), then the ownership of New Holdco would be as follows:
 
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BICS will own 115,512,500 shares of New Holdco Common Stock, or approximately 60% of the issued and outstanding New Holdco Common Stock;

the public shareholders will own 50,600,000 shares of New Holdco Common Stock, or approximately 26% of the issued and outstanding New Holdco Common Stock;

the PIPE Investors will own 11,698,750 shares of New Holdco Common Stock, or approximately 6% of the issued and outstanding New Holdco Common Stock; and

the initial shareholders will own 15,665,417 shares of New Holdco Common Stock, or approximately 8% of the issued and outstanding New Holdco Common Stock (which, for the avoidance of doubt, does not include shares of New Holdco Common Stock that will be issued to certain initial shareholders in connection with the PIPE Financing, which shares are reflected in the preceding bullet).
The NAAC Warrants will become exercisable on the later of 30 days after the completion of an Initial Business Combination and 12 months from the closing of the Initial Public Offering and will expire five years after the completion of an Initial Business Combination or earlier upon their redemption or liquidation.
Please see the subsection and section entitled “Summary of the Proxy Statement/Prospectus — Ownership of New Holdco After the Acquisition Closing” and “Unaudited Pro Forma Condensed Combined Financial Information” for further information.
Q:
How will the SPAC Merger affect my Ordinary Shares, NAAC Warrants, and NAAC Units?
A:
At the SPAC Merger Effective Time, pursuant to the SPAC Merger, (a) each then-outstanding Class A Ordinary Share will be canceled in exchange for consideration consisting of one share of New Holdco Common Stock; (b) each then-outstanding Class B Ordinary Share will be canceled in exchange for consideration consisting of one share of New Holdco Common Stock; (c) each then-outstanding NAAC Warrant will be cancelled in exchange for consideration consisting of one New Holdco Warrant pursuant to the Warrant Agreement; and (d) each then-outstanding NAAC Unit will be cancelled in exchange for consideration consisting of (i) the right to receive one share of New Holdco Common Stock and (ii) the right to receive one-third of one New Holdco Warrant. For additional information about the SPAC Merger, please see the section entitled “The Business Combination” in this proxy statement/prospectus.
Q:
What are the U.S. federal income tax consequences of the SPAC Merger?
A:
As discussed more fully under “Material U.S. Federal Income Tax Considerations,” McDermott Will & Emery LLP has delivered an opinion to NAAC to the effect that, under the U.S. federal income tax laws in effect as of the date of such opinion, the SPAC Merger should be treated as a tax-deferred reorganization within the meaning of Section 368(a)(l)(F) of the U.S. Internal Revenue Code of 1986, as amended (the “Code”). Assuming that the SPAC Merger does so qualify, and subject to the discussion of the “passive foreign investment company” ​(“PFIC”) rules below, U.S. holders (as defined in “Material U.S. Federal Income Tax Considerations — U.S. Holders” below) generally will be subject to the rules of Section 367(b) of the Code (which are also summarized immediately below). Under the Section 367(b) rules, as a result of the SPAC Merger:

a U.S. holder that holds Class A Ordinary Shares that have a fair market value of less than $50,000 on the date of the SPAC Merger and that, on the date of the SPAC Merger owns (actually and constructively) less than 10% of the total combined voting power of all classes of our stock entitled to vote and less than 10% of the total value of all classes of our stock, generally will not recognize any gain or loss and will not be required to include any part of NAAC’s earnings in income;

a U.S. holder that holds Class A Ordinary Shares that have a fair market value of $50,000 or more and that, on the date of the SPAC Merger, owns (actually and constructively) less than 10% of the total combined voting power of all classes of our stock entitled to vote and less than 10% of the total value of all classes of our stock generally will recognize gain (but not loss) on the exchange of Class A Ordinary Shares for shares of New Holdco Common Stock pursuant to the SPAC Merger. As an
 
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alternative to recognizing gain, such U.S. holder may file an election to include in income as a deemed dividend the “all earnings and profits amount” ​(as defined in the Treasury Regulations under Section 367(b) of the Code) attributable to its Class A Ordinary Shares provided certain other requirements are satisfied; and

a U.S. holder that holds Class A Ordinary Shares that have a fair market value of $50,000 or more and that, on the date of the SPAC Merger, owns (actually or constructively) 10% or more of the total combined voting power of all classes of our stock entitled to vote or 10% or more of the total value of all classes of our stock generally will be required to include in income as a deemed dividend the “all earnings and profits amount” attributable to its Class A Ordinary Shares provided certain other requirements are satisfied. Any such U.S. holder that is a corporation may, under certain circumstances, effectively be exempt from taxation on a portion or all of the deemed dividend pursuant to Section 245A of the Code (commonly referred to as the participation exemption).
NAAC does not expect to have significant cumulative earnings and profits through the date of the SPAC Merger.
As discussed more fully under “Material U.S. Federal Income Tax Considerations — U.S. Holders — PFIC Considerations,” NAAC believes that it is likely classified as a PFIC for U.S. federal income tax purposes. Therefore, a U.S. holder of NAAC shares and warrants may, in certain circumstances, still recognize gain (but not loss) upon the exchange of its NAAC shares or warrants for New Holdco shares or warrants pursuant to the SPAC Merger under the PFIC rules of the Code equal to the excess, if any, of the fair market value of the New Holdco shares or public warrants received in the SPAC Merger over the U.S. holder’s adjusted tax basis in the corresponding NAAC shares or public warrants surrendered in exchange therefor. The tax on any such gain so recognized would be imposed at the rate applicable to ordinary income and an interest charge would apply. For a more complete discussion of the potential application of the PFIC rules to U.S. holders as a result of the SPAC Merger, see “Material U.S. Federal Income Tax Considerations — U.S. Holders — PFIC Considerations.”
NAAC does not expect the SPAC Merger to result in any material U.S. federal income tax consequences to non-U.S. holders (as defined in “Material U.S. Federal Income Tax Considerations — Non-U.S. Holders”). However, the SPAC Merger may cause non-U.S. holders to become subject to U.S. federal income withholding taxes on any dividends paid in respect of such non-U.S. holder’s New Holdco shares after the SPAC Merger.
The tax consequences of the SPAC Merger are complex and will depend on a holder’s particular circumstances. All holders are urged to consult their tax advisor on the tax consequences to them of the SPAC Merger, including the applicability and effect of U.S. federal, state, local and foreign income and other tax laws. For a more complete discussion of the U.S. federal income tax considerations of the SPAC Merger, see “Material U.S. Federal Income Tax Considerations.
Q:
Why is NAAC proposing the Nasdaq Proposal?
A:
NAAC is proposing the Nasdaq Proposal in order to comply with Nasdaq listing rules, which require shareholder approval of certain transactions that result in the issuance of 20% or more of a company’s outstanding voting power or shares of common stock outstanding before the issuance of stock or securities. In connection with the Share Acquisition, the Business Combination, and the PIPE Financing, New Holdco may issue up to an aggregate of 127,211,250 shares of New Holdco Common Stock to BICS and the PIPE Investors. Because NAAC may issue 20% or more of its outstanding voting power and outstanding Ordinary Shares in connection with the Share Acquisition and the PIPE Financing, NAAC is required to obtain its shareholders’ approval of such issuances pursuant to Nasdaq listing rules. See the section entitled “Proposal No. 4 — The Nasdaq Proposal” for additional information.
Q:
Did the NAAC Board obtain a third-party valuation or fairness opinion in determining whether or not to proceed with the Business Combination?
A:
No. The NAAC Board did not obtain a third-party valuation or fairness opinion in connection with its determination to approve the Business Combination. NAAC’s officers and directors have substantial experience in evaluating the operating and financial merits of companies from a wide range of industries
 
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and concluded that their experience and backgrounds, together with the experience and sector expertise of NAAC’s advisors and consultants, enabled them to make the necessary analyses and determinations regarding the Business Combination. In addition, NAAC’s officers, directors, and advisors have substantial experience with mergers and acquisitions. Accordingly, investors will be relying solely on the judgment of the NAAC Board in valuing TeleSign and assuming the risk that the NAAC Board may not have properly valued the business.
Q:
What happens if I sell my Class A Ordinary Shares before the extraordinary general meeting?
A:
The record date for the extraordinary general meeting is earlier than the date that the Business Combination is expected to be completed. If you transfer your Class A Ordinary Shares after the record date, but before the extraordinary general meeting, unless the transferee obtains from you a proxy to vote those shares, you will retain your right to vote at the extraordinary general meeting. However, you will not be able to seek redemption of your Class A Ordinary Shares because you will no longer be able to deliver them for cancellation upon consummation of the Business Combination in accordance with the provisions described in this proxy statement/prospectus. If you transfer your Class A Ordinary Shares prior to the record date, you will have no right to vote those shares at the extraordinary general meeting or seek redemption of those shares.
Q:
How has the announcement of the Business Combination affected the trading price of the NAAC Units, Class A Ordinary Shares, and public warrants?
A:
The closing price of the NAAC Units, Class A Ordinary Shares, and public warrants on November 29, 2021, the last trading day prior to the publication of articles speculating about the Business Combination, was $9.98, $9.75, $0.75, respectively. The closing price of the NAAC Units, Class A Ordinary Shares, and public warrants on December 15, 2021, the last trading day before announcement of the execution of the Business Combination Agreement, was $9.96, $9.75, $0.79, respectively. On April 13, 2022, the NAAC Units, Class A Ordinary Shares, and public warrants closed at $9.93, $9.88, and $0.27, respectively.
Q:
Following the Business Combination, will NAAC’s securities continue to trade on a stock exchange?
A:
The parties anticipate that, following the Business Combination, the New Holdco Common Stock and New Holdco Warrants will be listed on Nasdaq under the new symbols “TSGN” and “TSGNW,” respectively, and the NAAC Units, Class A Ordinary Shares, and NAAC Warrants will be cancelled in connection with the Business Combination and accordingly will cease trading on Nasdaq and be deregistered under the Exchange Act.
Q:
What vote is required to approve the Proposals presented at the extraordinary general meeting?
A:
The approval of each of the Share Acquisition Proposal, the Nasdaq Proposal, the Incentive Plan Proposal, and the Adjournment Proposal is being proposed as an ordinary resolution, being the affirmative vote under Cayman Islands law, being the affirmative vote of the holders of a majority of the ordinary shares of NAAC represented in person or by proxy and entitled to vote thereon and who vote at the extraordinary general meeting. Approval of each of the SPAC Merger Proposal, the Advisory Organizational Documents Proposals and the Organizational Documents Proposal requires a special resolution under Cayman Islands law, being the affirmative vote of the holders of at least two-thirds of the ordinary shares of NAAC represented in person or by proxy and entitled to vote thereon and who vote at the extraordinary general meeting. Accordingly, a shareholder’s failure to vote in person or by proxy at the extraordinary general meeting will have no effect on the outcome of the vote on any of the Proposals. Abstentions and broker non-votes, while considered present for the purposes of establishing a quorum, will not count as votes cast at the extraordinary general meeting.
Q:
May the Sponsor, NAAC’s directors, officers, advisors, or any of their respective Affiliates purchase public shares in connection with the Business Combination?
A:
In connection with the shareholder vote to approve the proposed Business Combination, the Sponsor, NAAC’s directors, officers, advisors, or any of their respective Affiliates may privately negotiate transactions to purchase public shares from shareholders who would have otherwise elected to have
 
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their shares redeemed in conjunction with the Business Combination for a per share pro rata portion of the Trust Account. There is no limit on the number of public shares the Sponsor and NAAC’s directors, officers, advisors, or any of their respective Affiliates may purchase in such transactions, subject to compliance with applicable law and the rules of Nasdaq. Any such privately negotiated purchases may be effected at purchase prices that are not higher than the per share pro rata portion of the Trust Account. However, the Sponsor and NAAC’s directors, officers, advisors, and their respective Affiliates 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 in such transactions. None of the Sponsor, or NAAC’s directors, officers, advisors, or any of their respective Affiliates will make any such purchases when they are in possession of any material non-public information not disclosed to the seller of such public shares or during a restricted period under Regulation M under the Exchange Act. Such a purchase could include a contractual acknowledgement that such shareholder, although still the record holder of such public shares, is no longer the beneficial owner thereof and therefore agrees not to exercise its redemption rights. Such purchased shares will not be voted in favor of the Business Combination. In the event that the Sponsor or NAAC’s directors, officers, advisors, or any of their respective Affiliates purchase public shares in privately negotiated transactions from public shareholders who have already elected to exercise their redemption rights, such selling shareholders would be required to revoke their prior elections to redeem their shares. For more information, see the subsection entitled “The Business Combination — Potential Purchases of Public Shares.”
Q:
How many votes do I have at the extraordinary general meeting?
A:
NAAC’s shareholders are entitled to one vote at the extraordinary general meeting for each Class A Ordinary Share or Class B Ordinary Share held of record as of April 13, 2022, the record date for the extraordinary general meeting. As of the close of business on the record date, there were 37,950,000 outstanding Class A Ordinary Shares, which are held by NAAC’s public shareholders, and 9,487,500 outstanding Class B Ordinary Shares, which are held by NAAC’s initial shareholders.
Q:
What constitutes a quorum at the extraordinary general meeting?
A
The presence, in person or by proxy, of the holders of a majority of the outstanding ordinary shares of NAAC, being individuals present in person or by proxy or if a corporation or other non-natural person by its duly authorized representative or proxy, entitled to vote constitutes a quorum at the NAAC extraordinary general meeting. In the absence of a quorum, the chairman of the meeting has the power to adjourn the extraordinary general meeting. As of the record date for the extraordinary general meeting, 23,718,750 Class A Ordinary Shares and Class B Ordinary Shares, in the aggregate, would be required to achieve a quorum. Abstentions and broker non-votes will count as present for the purposes of establishing a quorum with respect to each Proposal.
Q:
How will the Sponsor and NAAC’s directors and officers vote?
A:
The Sponsor and NAAC’s directors and officers have agreed to vote any Class A Ordinary Shares and Class B Ordinary Shares owned by them in favor of the Business Combination and the other Proposals. Currently, they own approximately 20.0% of NAAC’s issued and outstanding Class A Ordinary Shares and Class B Ordinary Shares, in the aggregate. Please see the subsection entitled “The Business Combination — Related Agreements — Transaction Support Agreement.”
Q:
What interests do the current officers and directors of NAAC have in the Business Combination?
A:
When you consider the NAAC Board’s recommendation of the Proposals, you should keep in mind that NAAC’s officers and directors have interests in the Business Combination that are different from, or in addition to, those of other shareholders generally. NAAC’s directors were aware of and considered these interests, among other matters, in evaluating the Business Combination, and in recommending to shareholders that they approve the Business Combination. Shareholders should take these interests into account in deciding whether to approve the Business Combination. See the subsection entitled “The Business Combination — Interests of the Sponsor and NAAC Directors and Officers in the Business Combination” for additional information. The NAAC Board was aware of and considered these interests,
 
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among other matters, in recommending that NAAC shareholders vote “FOR” each of the Proposals. These interests include, among other things:

the beneficial ownership of our initial shareholders of an aggregate of 9,487,500 NAAC Founder Shares and 7,126,667 private placement warrants, which shares and warrants would become worthless if NAAC does not complete a business combination within the applicable time period, as our initial shareholders have waived any redemption right with respect to such securities. Our initial shareholders paid an aggregate of $25,000, or approximately $0.003 per share, for the NAAC Founder Shares, and $10,690,000, or $1.50 per warrant, for the private placement warrants, and such shares and warrants, if unrestricted and freely tradeable, would be valued at approximately $93.7 million and $1.9 million, respectively, based on the closing price of the Class A Ordinary Shares of $9.88 per share and closing price of the warrants of $0.27 per warrant on Nasdaq on April 13, 2022, the most recent practicable date prior to the date of this proxy statement/prospectus.

the fact that the Sponsor and NAAC’s officers and directors have agreed not to redeem any shares held by them in connection with a shareholder vote to approve the Business Combination;

the fact that our initial shareholders, including the Sponsor, and our directors and officers, paid an aggregate of $10,690,000 for its 7,126,667 private placement warrants to purchase Class A Ordinary Shares and that such private placement warrants will expire worthless if a business combination is not consummated by January 26, 2023;

the fact that, following the Closing, the Sponsor would be entitled to the repayment of an outstanding working capital loan and advances that have been made to NAAC. The Sponsor agreed to loan to NAAC up to $1,500,000 to be used for a portion of the expenses of NAAC. These loans are non-interest bearing, unsecured and are due upon consummation of an initial business combination. As of December 31, 2021, NAAC owed $1,199,994 under the August 6, 2021 promissory note, and there were no other material working capital loans outstanding. If NAAC fails to complete an Initial Business Combination by January 26, 2023, NAAC may use a portion of the working capital held outside the Trust Account to repay the working capital loans, but no proceeds held in the Trust Account would be used to repay the working capital loans;

the fact that the Sponsor will benefit from the completion of a business combination and may be incentivized to complete an acquisition of a less favorable target company or on terms less favorable to shareholders rather than liquidate;

the fact that given the differential in the purchase price that the Sponsor paid for the NAAC Founder Shares as compared to the price of the NAAC Units sold in the IPO and up to 8,538,750 shares of New Holdco Common Stock that the Sponsor will receive upon conversion of the NAAC Founder Shares in connection with the Business Combination, the Sponsor and its Affiliates may earn a positive rate of return on their investment even if the New Holdco Common Stock trades below the price initially paid for the NAAC Units in the IPO and the public shareholders experience a negative rate of return following the completion of the Business Combination. As a result of the low initial purchase price, the Sponsor, its Affiliates and NAAC’s management team and advisors stand to earn a positive rate of return or profit on their investment, even if other shareholders, such as NAAC’s public shareholders, experience a negative rate of return because the post-business combination company subsequently declines in value. Thus, NAAC’s Sponsor, officers and directors and their respective Affiliates and associates may have more of an economic incentive for NAAC to, rather than liquidate if it fails to complete an Initial Business Combination by January 26, 2023, enter into an Initial Business Combination on potentially less favorable terms with a potentially less favorable, riskier, weaker-performing or financially unstable business, or an entity lacking an established record of revenues or earnings, than would be the case if such parties had paid the full offering price for their NAAC Founder Shares;

the fact that Patrick Doran, president and director of NAAC, may be deemed to have or share beneficial ownership of the NAAC Founder Shares held directly by the Sponsor by virtue of his ownership interest in the manager of the Sponsor;

the fact that up to an aggregate amount of $1,500,000 of any amounts outstanding under any working capital loans made by the Sponsor or any of its Affiliates to NAAC may be converted into NAAC Warrants to purchase Class A Ordinary Shares at a price of $1.50 per warrant at the option of the lender;
 
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if the Trust Account is liquidated, including in the event NAAC is unable to complete an Initial Business Combination within the required time period, the Sponsor has agreed to indemnify NAAC to ensure that the proceeds in the Trust Account are not reduced below $10.00 per public share, or such lesser amount per public share as is in the Trust Account on the liquidation date, by the claims of (a) any third party (other than NAAC’s independent registered public accounting firm) for services rendered or products sold to NAAC or (b) a prospective target business with which NAAC has entered into a letter of intent, confidentiality, or other similar agreement or business combination agreement, but only if such a third party or target business has not executed a waiver of all rights to seek access to the Trust Account. NAAC did not require the Sponsor to reserve funds for such indemnification obligations, nor did NAAC independently verify whether the Sponsor has sufficient funds to satisfy its indemnity obligations. NAAC believes that the Sponsor’s only assets are securities of NAAC. Therefore, NAAC believes it is unlikely that the Sponsor will be able to satisfy its indemnification obligations if it is required to do so;

if NAAC does not complete an Initial Business Combination by January 26, 2023, NAAC may use a portion of its working capital held outside the Trust Account to repay any working capital loans, but no proceeds held in the Trust Account would be used to repay any working capital loans. As of December 31, 2021, there was approximately $379.6 million in investments held in the Trust Account and approximately $1.5 million of cash held outside the Trust Account available for working capital purposes;

the fact that, in the event that NAAC completes an Initial Business Combination, Woodberry Management Services Ltd., a private investment firm of which Patrick Doran currently serves as the chief executive officer and founder, will be paid fees in the amount of approximately $1.7 million for corporate finance and consulting services provided to NAAC in connection with the Business Combination;

the fact that, in the event that NAAC completes an Initial Business Combination, the Sponsor and NAAC’s officers and directors will be reimbursed for any out-of-pocket expenses incurred in connection with activities on NAAC’s behalf, such as identifying potential target businesses and performing due diligence on suitable business combinations, though there have been no material out-of-pocket expenses subject to reimbursement to date and NAAC does not anticipate any such expenses prior to Closing;

the Sponsor will be a party to the Amended and Restated Registration Rights Agreement, which will come into effect at the closing of the Business Combination;

the fact that the Sponsor and NAAC’s officers and directors will lose their entire investment in NAAC if an Initial Business Combination is not completed within 24 months from the closing of the IPO (the “Combination Period”); and

the fact that Gary Quin will be appointed to the New Holdco Board following the Acquisition Closing and shall be entitled to receive compensation for serving on the New Holdco Board.
These financial interests of the Sponsor, NAAC’s officers and directors, and their respective Affiliates and associates may have influenced their motivation in identifying and selecting TeleSign as a business combination target, and their decision to approve the Transactions. In considering the recommendations of the NAAC Board to vote for the Proposals, NAAC public shareholders should consider these interests.
Q:
What happens if I vote against the Business Combination Proposals?
A:
If you vote against the Business Combination Proposals but the Business Combination Proposals still obtain the requisite approvals, then the Business Combination Proposals will be approved, and, assuming the satisfaction or waiver of the other conditions to the closing, the Business Combination will be consummated in accordance with the terms of the Business Combination Agreement.
If you vote against the Business Combination Proposals and under the Existing Organizational Documents, the Business Combination Proposals are not approved by the requisite approvals and NAAC does not otherwise consummate an alternative Initial Business Combination within the Combination Period, NAAC will be required to dissolve and liquidate the Trust Account by returning the then-remaining funds in such account to NAAC’s public shareholders.
 
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Q:
Do I have redemption rights?
A:
Pursuant to the Existing Organizational Documents, a holder of public ordinary shares of NAAC may request that NAAC redeem all or a portion of its public shares for a pro rata portion of the cash held in the Trust Account as of two business days prior to the consummation of the transactions contemplated by the Business Combination Proposal. (such rights, “redemption rights”).
Under the Existing Organizational Documents, the Business Combination may be consummated only if NAAC has at least $5,000,001 of net tangible assets after giving effect to all holders of public ordinary shares that properly demand redemption of their shares for cash.
NAAC’s Sponsor, officers and directors will not have redemption rights with respect to any ordinary shares of NAAC owned by them, directly or indirectly.
As a holder of public shares, you will be entitled to receive cash for any public shares to be redeemed only if you:

hold public shares or, if you hold public shares through NAAC Units, you elect to separate your NAAC Units into the underlying public shares and public warrants prior to exercising your redemption rights with respect to the public shares;

submit a written request to Continental Stock Transfer & Trust Company, NAAC’s transfer agent, in which you (i) request that New Holdco redeem all or a portion of your public shares for cash and (ii) identify yourself as the beneficial holder of the public shares and provide your legal name, phone number, and address; and

deliver your public shares to Continental Stock Transfer & Trust Company, NAAC’s transfer agent, physically or electronically through The Depository Trust Company (“DTC”).
Holders must complete the procedures for electing to redeem their public shares in the manner described above prior to 5:00 p.m., Eastern time, on May 16, 2022 (two business days before the extraordinary general meeting) in order for their shares to be redeemed.
Holders of NAAC Units must elect to separate the NAAC Units into the underlying Class A Ordinary Shares and public warrants prior to exercising redemption rights with respect to the public shares. If public shareholders hold their NAAC Units in an account at a brokerage firm or bank, such public shareholders must notify their broker or bank that they elect to separate the NAAC Units into the underlying public shares and public warrants, or if a holder holds NAAC Units registered in its own name, the holder must contact Continental Stock Transfer & Trust Company, NAAC’s transfer agent, directly and instruct it to do so. The redemption rights include the requirement that a holder must identify itself to NAAC in order to validly redeem its shares. Public shareholders (other than the initial shareholders) may elect to exercise their redemption rights with respect to their public shares even if they vote “FOR” the Business Combination Proposals. If the Business Combination is not consummated, the public shares will be returned to the respective holder, broker, or bank. If the Business Combination is consummated, and if a public shareholder properly exercises its redemption right with respect to all or a portion of the public shares that it holds and timely delivers its shares to Continental Stock Transfer & Trust Company, NAAC will redeem such public shares for a per-share price, payable in cash, equal to the pro rata portion of the Trust Account, calculated as of two business days prior to the consummation of the Business Combination. For illustrative purposes, as of December 31, 2021, this would have amounted to approximately $10.00 per issued and outstanding public share. If a public shareholder exercises its redemption rights in full, then it will not own public shares or shares of New Holdco Common Stock following the redemption and will not participate in the future growth of New Holdco, if any, except to the extent that it continues to hold public warrants. See the subsection entitled “Extraordinary General Meeting — Redemption Rights” for the procedures to be followed if you wish to exercise your redemption rights with respect to your public shares.
Q:
Will how I vote affect my ability to exercise redemption rights?
A:
No. You may exercise your redemption rights whether you vote your Class A Ordinary Shares for or against or abstain from voting on the Business Combination Proposals or any other Proposal described
 
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in this proxy statement/prospectus. As a result, the Business Combination can be approved by shareholders who will redeem their shares and no longer remain shareholders.
Q:
How do I exercise my redemption rights?
A:
In order to exercise your redemption rights, you must (a) if you hold your Class A Ordinary Shares through NAAC Units, elect to separate your NAAC Units into the underlying public shares and public warrants prior to exercising your redemption rights with respect to the public shares and (b) prior to 5:00 p.m., Eastern time, on May 16, 2022 (two business days before the extraordinary general meeting), tender your shares physically or electronically and submit a request in writing that NAAC redeem your public shares for cash to Continental Stock Transfer & Trust Company, NAAC’s transfer agent, at the following address:
Continental Stock Transfer & Trust Company
1 State Street, 30th Floor
New York, New York 10004-1561
Attention: Mark Zimkind
Email: mzimkind@continentalstock.com
Notwithstanding the foregoing, a public shareholder, together with any of his, her, or its Affiliates or any other person with whom it is acting in concert or as a “group” ​(as defined in Section 13(d)(3) of the Exchange Act), will be restricted from seeking redemption rights with respect to his, her, or its shares or, if part of such a group, the group’s shares, in excess of the 15% threshold. Accordingly, all public shares in excess of the 15% threshold beneficially owned by a public shareholder or group will not be redeemed for cash. In order to determine whether a shareholder is acting in concert or as a group with any other shareholder, NAAC will require each public shareholder seeking to exercise redemption rights to certify to NAAC whether such shareholder is acting in concert or as a group with any other shareholder. Shareholders seeking to exercise their redemption rights and opting to deliver physical certificates should allot sufficient time to obtain physical certificates from the transfer agent and time to effect delivery. It is NAAC’s understanding that shareholders should generally allot at least two weeks to obtain physical certificates from the transfer agent. However, NAAC does not have any control over this process and it may take longer than two weeks. Shareholders who hold their shares in street name will have to coordinate with their bank, broker, or other nominee to have the shares certificated or delivered electronically.
Holders of outstanding NAAC Units must separate the underlying public shares and public warrants prior to exercising redemption rights with respect to the public shares. If you hold NAAC Units registered in your own name, you must deliver the certificate for such units or deliver such units electronically to Continental Stock Transfer & Trust Company with written instructions to separate such units into public shares and public warrants. This must be completed far enough in advance to permit the mailing of the public share certificates or electronic delivery of the public shares back to you so that you may then exercise your redemption rights with respect to the public shares following the separation of such public shares from the NAAC Units.
If a broker, dealer, commercial bank, trust company, or other nominee holds your NAAC Units, you must instruct such nominee to separate your NAAC Units. Your nominee must send written instructions by facsimile to Continental Stock Transfer & Trust Company. Such written instructions must include the number of NAAC Units to be split and the nominee holding such NAAC Units. Your nominee must also initiate electronically, using DTC’s DWAC (deposit withdrawal at custodian) system, a withdrawal of the relevant NAAC Units and a deposit of the corresponding number of public shares and public warrants. This must be completed far enough in advance to permit your nominee to exercise your redemption rights with respect to the public shares following the separation of such public shares from the NAAC Units. While this is typically done electronically on the same business day, you should allow at least one full business day to accomplish the separation. If you fail to cause your public shares to be separated in a timely manner, you will likely not be able to exercise your redemption rights.
Any request to redeem public shares, once made, may be withdrawn at any time, with NAAC’s consent, until the closing of the Business Combination. If NAAC receives valid redemption requests from
 
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holders of public shares prior to the redemption deadline, NAAC may, at its sole discretion, following the redemption deadline and until the date of Closing, seek and permit withdrawals by one or more of such holders of their redemption requests. NAAC may select which holders to seek such withdrawals of redemption requests from based on any factors we may deem relevant, and the purpose of seeking such withdrawals may be to increase the funds held in the Trust Account, including where NAAC otherwise would not satisfy the closing condition that the amount in the Trust Account and the proceeds from the PIPE Financing equal or exceed $200,000,000, following payment of the aggregate amount of cash proceeds that will be required to satisfy any redemptions and payment of all NAAC Transaction Expenses and Company Transaction Expenses. If you delivered your public shares for redemption to the transfer agent and decide within the required timeframe not to exercise your redemption rights, you may request that the transfer agent return the shares (physically or electronically). You may make such request by contacting NAAC’s transfer agent at the email address or address listed under the question “Who can help answer my questions?” below.
Q:
What are the U.S. federal income tax consequences of exercising my redemption rights?
A:
We expect that a U.S. holder (defined in “Material U.S. Federal Income Tax Considerations — U.S. Holders”) that exercises its redemption rights to receive cash from the Trust Account in exchange for its Class A Ordinary Shares will generally be treated as selling such shares resulting in the recognition of capital gain or capital loss. There may be certain circumstances in which the redemption may be treated as a distribution for U.S. federal income tax purposes depending on the amount of shares of Class A Ordinary Shares that such U.S. holder owns or is deemed to own prior to and following the redemption. For a more complete discussion of the U.S. federal income tax considerations of an exercise of redemption rights, see “Material U.S. Federal Income Tax Considerations.” In addition, if NAAC were classified as a PFIC, a U.S. holder of Class A Ordinary Shares that exercises its redemption rights may be subject to the PFIC rules under “Material U.S. Federal Income Tax Considerations — U.S. Holders — PFIC Considerations” below on such redemption. All holders of our Class A Ordinary Shares considering exercising their redemption rights are urged to consult their tax advisor on the tax consequences to them of an exercise of redemption rights, including the applicability and effect of U.S. federal, state, local and foreign income and other tax laws.
Q:
If I am a warrant holder, can I exercise redemption rights with respect to my warrants?
A:
No. The holders of NAAC Warrants have no redemption rights with respect to such warrants.
Q:
Do I have appraisal rights if I object to the proposed Business Combination?
A:
No. There are no appraisal rights available to holders of Class A Ordinary Shares, Class B Ordinary Shares, or NAAC Warrants in connection with the Business Combination under Cayman Islands law or the DGCL.
Q:
What happens to the funds deposited in the Trust Account after consummation of the Business Combination?
A:
If the Business Combination Proposals are approved, NAAC intends to use a portion of the funds held in the Trust Account to pay (a) any transaction costs associated with the Business Combination Agreement and Business Combination, (b) taxes and deferred underwriting discounts and commissions from the IPO, and (c) for any redemptions of public shares. The remaining balance in the Trust Account, together with PIPE Funds, will be used for general corporate purposes of New Holdco. See the section entitled “The Business Combination” for additional information.
Q:
What happens if a substantial number of public shareholders vote in favor of the business combination proposal and exercise their redemption rights?
A:
NAAC’s public shareholders may vote in favor of the business combination and still exercise their redemption rights. Accordingly, the business combination may be consummated even though the funds available from the trust account and the number of public shareholders are substantially reduced as a result of redemptions by public shareholders.
 
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If a NAAC public shareholder exercises its redemption rights, such exercise will not result in the loss of any warrants that it may hold. Assuming that 100% or 37,950,000 Class A Ordinary Shares held by NAAC’s public shareholders were redeemed, the 12,650,000 retained outstanding NAAC Warrants would have had an aggregate value of $3,415,500 (based on the closing price of the NAAC Warrants on April 13, 2022). If a substantial number of, but not all, NAAC public shareholders exercise their redemption rights, any non-redeeming shareholders would experience dilution to the extent such warrants are exercised and additional shares of New Holdco Common Stock are issued.
In no event will NAAC redeem its Class A Ordinary Shares in an amount that would cause its (or New Holdco’s after giving effect to the transactions contemplated by the Business Combination Agreement) net tangible assets to be less than $5,000,001, as provided in NAAC’s Amended and Restated Memorandum and Articles of Association and as required as a closing condition to each party’s obligation to consummate the Business Combination under the terms of the Business Combination Agreement.
With fewer public shares and public shareholders, the trading market for New Holdco Common Stock may be less liquid than the market for NAAC’s public shares was prior to the Business Combination and New Holdco may not be able to meet the listing standards for Nasdaq. If New Holdco’s securities are not listed on Nasdaq and certain other conditions are not met, the PIPE Financing will not close and any monies paid by the applicable subscriber to NAAC pursuant to the subscription agreement shall promptly (but not later than two business days after termination) be returned to the subscriber without any deduction for or on account of any tax, withholding, charges, or set-off. In addition, with fewer funds available from the trust account, the working capital infusion from the trust account into TeleSign’s business will be reduced. See “Risk Factors” for more details.
The below table shows the anticipated share ownership of various holders of New Holdco Common Stock upon closing of the Business Combination in the no redemption, interim redemption (which assumes that 75.3% Class A Ordinary Shares held by public shareholders are redeemed) and maximum redemption (which assumes that 100% Class A Ordinary Shares held by public shareholders are redeemed) scenarios and is based on the following assumptions: (i) there are no other issuances of equity interests of NAAC or TeleSign, (ii) none of NAAC’s initial shareholders or BICS purchase Class A Ordinary Shares in the open market, (iii) the aggregate NAAC Transaction Expenses and Company Transaction Expenses will be $50 million, (iv) the Sponsor forfeits 948,750 NAAC Founder Shares in connection with the Business Combination (and up to an additional 948,750 NAAC Founder Shares are forfeited as result of NAAC shareholder redemption levels exceeding 50%), (v) TeleSign’s valuation is not otherwise reduced by factors set forth in the Business Combination Agreement, and (vi) no New Holdco Warrants are exercised, except that, in the maximum redemption scenario, with respect to clause (iv), we assume that the number of NAAC Founder Shares to be forfeited by the Sponsor shall be 1,897,500, and we further assume that the parties to the Business Combination Agreement waive the minimum cash condition. The residual equity value owned by non-redeeming shareholders will remain $10.00 per share as illustrated in the sensitivity table below.
No
Redemptions
Interim
Redemption
Maximum
Redemptions(1)
Percentage Share Ownership in New Holdco
NAAC Public Shareholders
22% 6.5% 0%
BICS
66% 80.2% 86%
PIPE Investors
7% 8.1% 9%
NAAC Initial Shareholders(2)
5% 5.2% 5%
Value of the Shares Owned by Non-Redeeming Shareholders
Total Shares Outstanding Excluding Warrants
173,700,000 145,136,667 135,750,000
Total Equity Value Post-Redemptions
$ 1,737,000,000 $ 1,451,366,670 $ 1,357,500,000
Per Share Value
$ 10.00 $ 10.00 $ 10.00
(1)
Assumes that NAAC’s public shareholders exercise redemption rights with respect to 37,950,000 Class A Ordinary Shares, which represents redemption of approximately 100% of NAAC Class A Ordinary Shares, for an aggregate redemption payment of approximately $379.5 million.
 
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(2)
The Sponsor and its Affiliates will hold up to 8,538,750 Ordinary Shares, which will be cancelled and exchanged on a one-for-one basis for New Holdco Common Stock upon consummation of the proposed business combination. In the interim redemption and maximum redemption scenarios, an additional 569,250 NAAC Founder Shares or 948,750 NAAC Founder Shares, respectively, would be forfeited in connection with the Business Combination, resulting in the Sponsor holding 7,590,000 Ordinary Shares in the interim redemption scenario or 7,590,000 Ordinary Shares in the maximum redemption scenario. The Sponsor paid $25,000 for the 9,487,500 NAAC Founder Shares, or approximately $0.003 per NAAC Founder Share. Assuming a value of $10.00 per share of New Holdco Common Stock, based on the deemed value of $10.00 per share of New Holdco Common Stock in the proposed business combination, this represents an appreciation in value of approximately $9.99 per share of New Holdco Common Stock. Assuming a value of $9.88 per New Holdco Ordinary Share, the closing price of a Class A Ordinary Share on April 13, 2022, this represents an appreciation in value of approximately $9.87 per New Holdco Ordinary Share.
Q:
What are the material differences, if any, in the terms and price of securities issued at the time of the NAAC IPO as compared to the securities that will be issued as part of the PIPE Financing at the closing of the proposed business combination? Will Sponsor or any of its directors, officers or Affiliates participate in the PIPE Financing?
A:
The Units were issued at the time of the NAAC IPO, with each Unit consisting of one NAAC Class A Ordinary Share and one-third of one NAAC Public Warrant, at an offering price per unit of $10.00. At the closing of the proposed business combination, the NAAC Class A Ordinary Shares will be cancelled in exchange for the right to receive shares of New Holdco Common Stock and the NAAC Public Warrants will convert into New Holdco Warrants. The PIPE Investors will receive shares of New Holdco Common Stock at a price per share of $9.19 as part of the PIPE Financing, which will close substantially concurrently with the Business Combination. No PIPE Investor will receive any New Holdco Warrants in its capacity as such.
Q:
How do the NAAC Public Warrants differ from the Private Placement Warrants and what are the related risks for any holders of NAAC Public Warrants following the proposed business combination?
A:
The NAAC Private Warrants are identical to the NAAC Public Warrants in all material respects, except that, so long as they are held by the Sponsor or its permitted transferees, the Private Placement Warrants (i) will not be redeemable by NAAC, (ii) may not (including the Class A Ordinary Shares issuable upon exercise of these warrants), subject to certain limited exceptions, be transferred, assigned or sold by the holders until 30 days after the completion of the Initial Business Combination, (iii) may be exercised by the holders on a cashless basis and (iv) will be entitled to registration rights. If the Private Placement Warrants are held by holders other than the Sponsor or its permitted transferees, the Private Placement Warrants will be redeemable by NAAC and exercisable by the holders on the same basis as the warrants included in the Units sold in the IPO. If NAAC does not complete an Initial Business Combination within 24 months from the closing of the IPO (or such later period, if extended), the Private Placement Warrants will expire worthless.
As a result, following the proposed business combination, New Holdco may redeem your New Holdco Warrants prior to their exercise at a time that is disadvantageous to you, thereby significantly impairing the value of such warrants. New Holdco will have the ability to redeem outstanding New Holdco Warrants at any time after they become exercisable and prior to their expiration, at a price of $0.01 per warrant, provided that the last sales price of the New Holdco Common Stock reported has been at least $18.00 per share (as adjusted for share sub-divisions, share capitalizations, reorganizations, recapitalizations and the like) on each of 20 trading days within the 30 trading day period ending on the third trading day prior to the date on which a notice of redemption is sent to the warrantholders. New Holdco will not redeem the warrants as described above unless (i) a registration statement under the Securities Act covering the New Holdco Common Stock issuable upon exercise of such warrants is effective and a current prospectus relating to those shares of New Holdco Common Stock is available throughout the 30-day redemption period or (ii) New Holdco has elected to require the exercise of the New Holdco Warrants on a cashless basis; provided, however, that if and when the New Holdco Warrants become redeemable by New Holdco, New Holdco may not exercise such redemption right if the issuance of New Holdco Common Stock upon exercise of the New Holdco Warrants is not exempt
 
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from registration or qualification under applicable state blue sky laws or New Holdco is unable to effect such registration or qualification. Redemption of the outstanding New Holdco Warrants could force you (i) to exercise your New Holdco Warrants and pay the exercise price therefor at a time when it may be disadvantageous for you to do so, (ii) to sell your New Holdco Warrants at the then-current market price when you might otherwise wish to hold your New Holdco Warrants, or (iii) to accept the nominal redemption price which, at the time the outstanding New Holdco Warrants are called for redemption, is likely to be substantially less than the market value of your New Holdco Warrants.
Recent trading prices for New Holdco Common Stock have not met the $18.00 per share threshold at which the New Holdco Warrants would become redeemable. In such a case, the holders will be able to exercise their New Holdco Warrants prior to redemption for a number of shares of New Holdco Common Stock determined based on the fair market value of New Holdco Common Stock. The value received upon exercise of the New Holdco Warrants (1) may be less than the value the holders would have received if they had exercised their New Holdco Warrants at a later time where the underlying share price is higher and (2) may not compensate the holders for the value of the New Holdco Warrants.
New Holdco may only call the New Holdco Warrants for redemption upon a minimum of 30 days’ prior written notice of redemption to each holder, provided that holders will be able to exercise their New Holdco Warrants prior to the time of redemption and, at New Holdco’s election, any such exercise may be required to be on a cashless basis.
Q:
What happens if the Business Combination is not consummated or is terminated?
A:
There are certain circumstances under which the Business Combination Agreement may be terminated. See the subsection entitled “The Business Combination — Termination” for additional information regarding the parties’ specific termination rights. In accordance with the Existing Organizational Documents, if an Initial Business Combination is not consummated within the Combination Period, NAAC will (a) cease all operations except for the purpose of winding up, (b) as promptly as reasonably possible but not more than ten business days thereafter, redeem the public shares, at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the Trust Account, including interest earned on the funds held in the Trust Account and not previously released to NAAC to pay its taxes (less up to $100,000 of interest to pay dissolution expenses and net of taxes payable), divided by the number of then-outstanding public shares, which redemption will completely extinguish public shareholders’ rights as shareholders (including the right to receive further liquidating distributions, if any), and (c) as promptly as reasonably possible following such redemption, subject to the approval of NAAC’s remaining shareholders and the NAAC Board, liquidate and dissolve, subject in each case of (b) and (c) above to NAAC’s obligations under Cayman Islands law to provide for claims of creditors and in all cases subject to the other requirements of applicable law.
It is expected that the amount of any distribution NAAC’s public shareholders will be entitled to receive upon its dissolution will be approximately the same as the amount they would have received if they had redeemed their shares in connection with the Business Combination, subject in each case to NAAC’s obligations under Cayman Islands law to provide for claims of creditors and other requirements of applicable law. Holders of the NAAC Founder Shares have waived any right to any liquidating distributions with respect to those shares.
In the event of liquidation, there will be no distribution with respect to the outstanding NAAC Warrants. Accordingly, the NAAC Warrants will expire worthless.
Q:
When is the Business Combination expected to be consummated?
A:
It is currently anticipated that the Business Combination will be consummated promptly following the extraordinary general meeting to be held on May 18, 2022, provided that all the requisite shareholder approvals are obtained and other conditions to the consummation of the Business Combination have been satisfied or waived. For a description of the conditions for the completion of the Business Combination, see the subsection entitled “The Business Combination — Conditions to Consummation of the Business Combination Agreement.”
 
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Q:
What do I need to do now?
A:
You are urged to read carefully and consider the information included in this proxy statement/prospectus, including the section entitled “Risk Factors” and the annexes attached to this proxy statement/prospectus, and to consider how the Business Combination will affect you as a shareholder. You should then vote as soon as possible in accordance with the instructions provided in this proxy statement/prospectus and on the enclosed proxy card or, if you hold your shares through a brokerage firm, bank, or other nominee, on the voting instruction form provided by the broker, bank, or nominee.
Q:
How do I vote?
A:
If you were a holder of record of Class A Ordinary Shares or Class B Ordinary Shares on April 13, 2022, the record date for the extraordinary general meeting, you may vote with respect to the Proposals online at the virtual extraordinary general meeting or by completing, signing, dating, and returning the enclosed proxy card in the postage-paid envelope provided. If you hold your shares in “street name,” which means your shares are held of record by a broker, bank, or other nominee, you should follow the instructions provided by your broker, bank, or nominee to ensure that votes related to the shares you beneficially own are properly counted. In this regard, you must provide the record holder of your shares with instructions on how to vote your shares or, if you wish to virtually attend the extraordinary general meeting and vote online, obtain a proxy from your broker, bank, or nominee.
Q:
What will happen if I abstain from voting or fail to vote at the extraordinary general meeting?
A:
At the extraordinary general meeting, a properly executed proxy marked “ABSTAIN” with respect to a particular proposal will count as present for purposes of determining whether a quorum is present. For purposes of approval, failure to vote or an abstention will have no effect on the Proposals.
Q:
What will happen if I sign and submit my proxy card without indicating how I wish to vote?
A:
Signed and dated proxies received by NAAC without an indication of how the shareholder intends to vote on a proposal will be voted “FOR” each Proposal being submitted to a vote of the shareholders at the extraordinary general meeting.
Q:
If I am not going to attend the virtual extraordinary general meeting online, should I submit my proxy card instead?
A:
Yes. Whether you plan to attend the extraordinary general meeting or not, please read this proxy statement/prospectus carefully, and vote your shares by completing, signing, dating, and returning the enclosed proxy card in the postage-paid envelope provided.
Q:
If my shares are held in “street name,” will my broker, bank, or nominee automatically vote my shares for me?
A:
No. Under the rules of various national and regional securities exchanges, your broker, bank, or nominee cannot vote your shares with respect to non-discretionary matters unless you provide instructions on how to vote in accordance with the information and procedures provided to you by your broker, bank, or nominee. NAAC believes the Proposals presented to NAAC’s shareholders will be considered non-discretionary and therefore your broker, bank, or nominee cannot vote your shares without your instruction. Your bank, broker, or other nominee can vote your shares only if you provide instructions on how to vote. You should instruct your broker to vote your shares in accordance with directions you provide.
Q:
May I change my vote after I have submitted my executed proxy card?
A:
Yes. You may change your vote by sending a later-dated, signed proxy card to NAAC at the address listed below so that it is received by NAAC prior to the extraordinary general meeting or by attending the extraordinary general meeting online and voting there. You also may revoke your proxy by sending a notice of revocation to NAAC, which must be received prior to the extraordinary general meeting.
 
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Q:
What should I do if I receive more than one set of voting materials?
A:
You may receive more than one set of voting materials, including multiple copies of this proxy statement/prospectus and multiple proxy cards or voting instruction forms. For example, if you hold your shares in more than one brokerage account, you will receive a separate voting instruction form for each brokerage account in which you hold shares. If you are a holder of record and your shares are registered in more than one name, you will receive more than one proxy card. Please complete, sign, date, and return each proxy card and voting instruction form that you receive in order to cast your vote with respect to all of your shares.
Q:
Who can help answer my questions?
A:
If you have questions about the Proposals or if you need additional copies of the proxy statement/prospectus or the enclosed proxy card you should contact NAAC’s proxy solicitor at:
Morrow Sodali LLC
470 West Avenue
Stamford, Connecticut 06902
Telephone: (800) 662-5200
(bank and brokers call collect at (203) 658-9400)
Email: NAAC.info@investor.morrowsodali.com
To obtain timely delivery, NAAC’s shareholders must request the materials no later than five business days prior to the extraordinary general meeting.
You may also obtain additional information about NAAC from documents filed with the SEC by following the instructions in the section entitled “Where You Can Find Additional Information.”
If you intend to seek redemption of your public shares, you will need to send a letter demanding redemption and deliver your shares (either physically or electronically) to NAAC’s transfer agent at least two business days prior to the extraordinary general meeting in accordance with the procedures detailed under the question “How do I exercise my redemption rights?” If you have questions regarding the certification of your position or delivery of your shares, please contact:
Continental Stock Transfer & Trust Company
1 State Street, 30th Floor
New York, New York 10004-1561
Attention: Mark Zimkind
Email: mzimkind@continentalstock.com
Q:
Who will solicit and pay the cost of soliciting proxies?
A:
The NAAC Board is soliciting your proxy to vote your Class A Ordinary Shares and Class B Ordinary Shares on all matters scheduled to come before the extraordinary general meeting. NAAC will pay the cost of soliciting proxies for the extraordinary general meeting. NAAC has engaged Morrow Sodali LLC to assist in the solicitation of proxies for the extraordinary general meeting. NAAC has agreed to pay Morrow Sodali LLC a fee of $37,500, plus disbursements. NAAC will reimburse Morrow Sodali LLC for reasonable out-of-pocket expenses and will indemnify Morrow Sodali LLC and its Affiliates against certain claims, liabilities, losses, damages, and expenses.
NAAC will also reimburse banks, brokers, and other custodians, nominees, and fiduciaries representing beneficial owners of Class A Ordinary Shares and Class B Ordinary Shares for their expenses in forwarding soliciting materials to beneficial owners of Class A Ordinary Shares and Class B Ordinary Shares and in obtaining voting instructions from those owners. NAAC’s directors and officers may also solicit proxies by telephone, by facsimile, by mail, on the Internet, or in person. They will not be paid any additional amounts for soliciting proxies.
 
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SUMMARY OF THE PROXY STATEMENT/PROSPECTUS
This summary highlights selected information from this proxy statement/prospectus and does not include all of the information that is important to you. To better understand the Business Combination and the Proposals to be considered at the extraordinary general meeting, you should read this entire proxy statement/prospectus carefully, including the annexes. See also the section entitled “Where You Can Find Additional Information.”
Parties to the Business Combination
North Atlantic Acquisition Corporation
NAAC is a Cayman Islands exempted company formed on October 14, 2020 for the purpose of effecting a merger, amalgamation, share exchange, asset acquisition, share purchase, reorganization, or similar business combination involving NAAC and one or more businesses.
The Class A Ordinary Shares, public warrants, and NAAC Units, consisting of one Class A Ordinary Share and one-third of one public warrant, are traded on Nasdaq under the ticker symbols “NAAC,” “NAACW” and “NAACU,” respectively. The parties anticipate that, following the Business Combination, the New Holdco Common Stock and New Holdco Warrants will be listed on Nasdaq under the symbols “TSGN” and “TSGNW,” respectively, and the NAAC Units, Class A Ordinary Shares, and NAAC Warrants will be cancelled in connection with the Business Combination and accordingly will cease trading on Nasdaq and be deregistered under the Exchange Act, upon the SPAC Merger Closing.
The mailing address of NAAC’s principal executive office is c/o McDermott Will & Emery LLP, One Vanderbilt Avenue, New York, New York 10017, its registered office in the Cayman Islands is PO Box 309, Ugland House, Grand Cayman KY-1104, Cayman Islands and its telephone number is +353 1 567 6959.
For more information about NAAC, see the sections entitled “Management’s Discussion and Analysis of Financial Condition and Results of Operations of NAAC,” “Information About NAAC,” and the financial statements of NAAC included herein.
TeleSign
TeleSign is a digital identity and communications platform as a service, or CPaaS, company that provides solutions for security, authentication, fraud detection, compliance and reputation scoring through its easy-to-integrate application programming interfaces. TeleSign’s products and services portfolio combines digital identity with global communications capabilities to help enterprises connect, protect and engage with their customers, while assisting those customers in securely engaging with their preferred digital platforms. Founded in 2005, TeleSign is defining the way the largest brands in the world securely engage with their users by delivering solutions that facilitate trust between enterprises and their customers. A pioneer in communications services for security and authentication use cases since its inception, and later expanding into digital identity, TeleSign excels at helping its customers detect, prevent, and combat online account and telecommunications fraud.
The mailing address of TeleSign’s principal executive office is 13274 Fiji Way, Suite 600, Marina del Rey, California 90292, and the telephone number is +1 310 740 9700.
For more information about TeleSign, see the sections entitled “Management’s Discussion and Analysis of Financial Condition and Results of Operations of TeleSign,” “Information About TeleSign,” and the financial statements of TeleSign included herein.
New SPAC
New SPAC is a wholly owned subsidiary of New Holdco formed solely for the purpose of effectuating the transactions contemplated by the Business Combination Agreement. New SPAC was formed under the laws of the State of Delaware on December 8, 2021. New SPAC owns no material assets and does not operate any business.
The mailing address of New SPAC’s principal executive office is c/o McDermott Will & Emery LLP, One Vanderbilt Avenue, New York, New York 10017, and the telephone number is +353 1 567 6959.
 
1

 
New Holdco
New Holdco is a wholly owned subsidiary of NAAC formed solely to serve as the publicly traded parent company of TeleSign following the Acquisition Closing. New Holdco was incorporated under the laws of the State of Delaware on December 8, 2021. New Holdco owns no material assets and does not operate any business. Immediately after the Share Acquisition, New Holdco will be renamed “TeleSign, Inc.”
The mailing address of New Holdco’s principal executive office is 13274 Fiji Way, Suite 600, Marina del Rey, California 90292, and the telephone number is +1 310 740 9700.
The Business Combination
On December 16, 2021, NAAC entered into the Business Combination Agreement with BICS, TeleSign, New Holdco and New SPAC. Pursuant to the Business Combination Agreement, and subject to the terms and conditions contained therein, the Business Combination will be effected in two steps: (a) on the SPAC Merger Closing Date, NAAC will merge with and into New SPAC, with New SPAC surviving the SPAC Merger, and (b) immediately following the SPAC Merger Effective Time, New Holdco and BICS will consummate the Share Acquisition, whereby New Holdco will purchase all outstanding shares of TeleSign Common Stock from BICS.
The SPAC Merger
At the SPAC Merger Effective Time, NAAC securities will be converted into the right to receive the following consideration:

each then-outstanding Class A Ordinary Share will be canceled in exchange for consideration consisting of one share of New Holdco Common Stock; and

each then-outstanding NAAC Founder Share will be canceled in exchange for consideration consisting of one share of New Holdco Common Stock; and

each then-outstanding NAAC Warrant will be cancelled in exchange for consideration consisting of one New Holdco Warrant pursuant to the Warrant Agreement; and

each then-outstanding NAAC Unit will be cancelled in exchange for consideration consisting of (i) the right to receive one share of New Holdco Common Stock and (ii) the right to receive one-third of one New Holdco Warrant.
The Share Acquisition
Upon the terms and subject to the terms and conditions set forth in the Business Combination Agreement, immediately following the SPAC Merger Effective Time, BICS shall sell, transfer, assign and convey to New Holdco all of the issued and outstanding shares of TeleSign Common Stock (the “Purchased Shares”), and New Holdco shall acquire such Purchased Shares from BICS, free and clear of all liens (other than as set forth in the organizational documents of TeleSign and pursuant to applicable securities laws generally), in exchange for (i) New Holdco Common Stock issued to the seller in the quantity equal to (a)        (I) the Company Equity Value minus (II) the product of (A) $10.00 multiplied by (B) the number of NAAC Founder Shares (net of those NAAC Founder Shares forfeited by the Sponsor pursuant to the provisions in Section 2 of the Transaction Support Agreement), minus (III) Company Transaction Expenses minus (IV) NAAC Transaction Expenses, divided by (b) ten (10) (such New Holdco Common Stock, the “Share Consideration”) and (ii) $1,000 (the “Cash Consideration”) (such transaction, the “Share Acquisition”) and together with all rights attaching to them at the Acquisition Closing (including the right to receive all distributions, returns of capital and dividends declared, paid or made in respect of the Purchased Shares after the Acquisition Closing).
For more information about the Business Combination Agreement and the Business Combination and other transactions contemplated thereby, see the section entitled “The Business Combination.”
The obligations of BICS, TeleSign, NAAC, New Holdco and New SPAC to consummate the Business Combination are subject to the satisfaction or waiver (where permissible) at or prior to the Acquisition Closing of the following conditions:
 
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The Business Combination Proposals having been approved and resolved by the requisite affirmative vote of the shareholders of NAAC in accordance with this Registration Statement / prospectus, applicable Law, the Existing Organizational Documents and the rules and regulations of Nasdaq;

No Governmental Authority shall have enacted, issued, promulgated, enforced or entered any law, rule, regulation, judgment, decree, executive order or award which is then in effect and has the effect of making the Business Combination, illegal or otherwise prohibiting consummation of the Business Combination;

All required filings under the HSR Act having been completed and any applicable waiting period (and any extension thereof) applicable to the consummation of the Business Combination under the HSR Act shall have expired;

The NSIA Approval having been received;

The PRC National Security Approval having been received;

New Holdco’s initial listing application with Nasdaq in connection with the Business Combination shall have been conditionally approved, and the New Holdco Common Stock shall have been accepted for listing on Nasdaq (subject to the Acquisition Closing occurring), or, in each case, with another national securities exchange mutually agreed to by the parties in writing, as of the Closing Date;

SPAC shall have at least $5,000,001 of net tangible assets after giving effect to the Private Placements and following the exercise of Redemption Rights in accordance with the Existing Organizational Documents;

This Registration Statement / prospectus shall have been declared effective under the Securities Act. No stop order suspending the effectiveness of this Registration Statement / prospectus shall be in effect, and no proceedings for purposes of suspending the effectiveness of the Registration Statement / prospectus shall have been initiated or be threatened in writing by the SEC; and

The sale and issuance by New Holdco of New Holdco Common Stock in connection with the Private Placements shall have been consummated prior to or in connection with the Acquisition Closing.
The obligations of NAAC, New Holdco and New SPAC to consummate the Business Combination are subject to the satisfaction or waiver (where permissible) at or prior to the Acquisition Closing of the following additional conditions:

The accuracy of the representations and warranties of BICS and TeleSign as determined in accordance with the Business Combination Agreement;

BICS and TeleSign shall have performed or complied in all material respects with all agreements and covenants required by the Business Combination Agreement to be performed or complied with by it on or prior to the Acquisition Closing;

BICS and TeleSign having each delivered to NAAC a certificate, dated the date of the Acquisition Closing, signed by an officer of it, certifying as to the satisfaction of certain conditions specified in the Business Combination Agreement; and

No TeleSign material adverse effect having occurred between the date of the Business Combination Agreement and the Acquisition Closing.
The obligations of BICS and TeleSign to consummate the Business Combination are subject to the satisfaction or waiver (where permissible) at or prior to the Acquisition Closing of the following additional conditions:

The accuracy of the representations and warranties of NAAC, New Holdco and New SPAC as determined in accordance with the Business Combination Agreement;.

NAAC, New Holdco and New SPAC shall have performed or complied in all material respects with all other agreements and covenants required by the Business Combination Agreement to be performed or complied with by it on or prior to the Acquisition Closing;
 
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NAAC shall have delivered to BICS a certificate, dated the date of the Acquisition Closing, signed by the President of NAAC, certifying as to the satisfaction of the conditions specified in the Business Combination Agreement;

No NAAC Material Adverse Effect shall have occurred between the date of the Business Combination Agreement and the Acquisition Closing;

The amount of Available Cash shall not be less than an amount equal to $200,000,000;

All parties to the Registration Rights Agreement (other than BICS) shall have delivered, or cause to be delivered, to BICS copies of the Registration Rights Agreement duly executed by all such parties;

Sponsor shall deliver an irrevocable and unconditional written waiver, in form and substance reasonably satisfactory to BICS, of all of its rights pursuant to Section 15 of the Promissory Note, dated August 6, 2021, made by and between NAAC and Sponsor;

All officers and directors of New SPAC and New Holdco shall have executed written resignations effective as of the SPAC Merger Effective Time, copies of which shall have been delivered to BICS; and

All Other Approvals shall have been obtained in a manner satisfactory to BICS.
New Holdco Incentive Plan
In connection with the Business Combination, New Holdco intends to adopt, and NAAC shareholders will be asked to approve, the Incentive Plan Proposal. New Holdco proposes a Restricted Stock Units and Performance Stock Units Incentive Plan (the “Incentive Plan”). The implementation of the Incentive Plan may be administered by the Board itself or by the Board’s delegation to a Committee. The Plan is set to terminate automatically on the ten-year anniversary of the date the Plan is approved by the Board. However, the Board reserves the right to amend, suspend, or terminate the Plan earlier. Upon termination of the Plan, the Awards granted prior to termination shall survive the termination of the Plan and continue to be honored. For additional information about the Incentive Plan, please see the section entitled, “Proposal No. 5 — The Incentive Plan Proposal” elsewhere in this proxy statement/prospectus.
Regulatory Matters
Under the HSR Act and rules that have been promulgated thereunder by the Federal Trade Commission (the “FTC”), certain transactions may not be consummated unless information has been furnished to the Antitrust Division of the Department of Justice (the “Antitrust Division”) and the FTC and certain waiting period requirements have been satisfied. The Business Combination is subject to these requirements and may not be completed until the expiration of the waiting period following the parties’ submission of Notification and Report Forms with the Antitrust Division and the FTC. On January 6, 2022, the parties filed the required forms under the HSR Act with respect to the Business Combination with the Antitrust Division and the FTC. The waiting period will expire on February 7, 2022 at 11:59 p.m. Eastern time, unless extended by one of the agencies.
At any time before or after consummation of the Business Combination, notwithstanding expiration or termination of the waiting period under the HSR Act, the Antitrust Division, the FTC, or any state or foreign governmental authority could take such action under applicable antitrust laws as such authority deems necessary or desirable in the public interest, including seeking to enjoin the consummation of the Business Combination, conditionally approving the Business Combination upon divestiture of assets, subjecting the completion of the Business Combination to regulatory conditions, or seeking other remedies. Private parties may also seek to take legal action under the antitrust laws under certain circumstances. NAAC cannot assure you that the Antitrust Division, the FTC, any state attorney general, or any other governmental authority will not attempt to challenge the Business Combination on antitrust grounds, and, if such a challenge is made, NAAC cannot assure you as to its result.
Neither NAAC nor TeleSign is aware of any material regulatory approvals or actions that are required for completion of the Business Combination other than as required under (i) the HSR Act; (ii) the NSIA; and (iii) the PRC National Security Laws. It is presently contemplated that if any additional regulatory
 
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approvals or actions are required, those approvals or actions will be sought, and the Business Combination Agreement entitles BICS to designate any additional required antitrust approvals as conditions to its and Telesign’s obligations to close. There can be no assurance, however, that any such additional approvals or actions will be obtained.
Related Agreements
Transaction Support Agreement
Concurrently with the execution and delivery of the Business Combination Agreement, BICS, TeleSign, NAAC, New Holdco, the Sponsor and certain other parties affiliated with the Sponsor executed and delivered a transaction support agreement (the “Transaction Support Agreement”), pursuant to which the Sponsor and certain of its members agreed to support the approval and adoption of the transactions contemplated by the Business Combination Agreement, including agreeing to vote all NAAC ordinary shares owned by it in favor of the Business Combination, to waive the anti-dilution provisions set forth in Sections 17.3-17.6 of NAAC’s Amended and Restated Articles of Association, and to execute and deliver any further document, agreement or instrument of assignment, transfer or conveyance as necessary to effectuate the purposes thereof and as may be reasonably requested in writing by another party thereto.
In addition, the Sponsor agreed that, in the event that the shareholder redemption amount is greater than 50%, the Sponsor shall transfer to NAAC, for no consideration, the number of NAAC Founder Shares equal to such redemption percentage, minus 50%, multiplied by 3,795,000, subject to a maximum of 948,750 NAAC Founder Shares. The Sponsor further agreed to transfer to NAAC, for no consideration, 948,750 NAAC Founder Shares.
A&R Registration Rights Agreement
In connection with the Acquisition Closing, that certain Registration Rights Agreement, dated January 21, 2021, among NAAC, the Sponsor and certain persons and entities holding securities of NAAC (the “Initial Holders”), will be amended and restated substantially in the form attached to the Business Combination Agreement as Exhibit C (the “A&R Registration Rights Agreement”), and New Holdco, the Sponsor, certain persons and entities holding securities of New Holdco prior to the Acquisition Closing (together with the Sponsor, the “Initial Holders”), and certain persons and entities receiving New Holdco Common Stock or instruments exercisable for New Holdco Common Stock in connection with the Business Combination (the “New Holders” and, together with the Initial Holders, the “Registration Rights Holders”) will enter into the A&R Registration Rights Agreement. Pursuant to the A&R Registration Rights Agreement, New Holdco will agree that as soon as practicable (but in any case within 30 calendar days after the consummation of the Business Combination) New Holdco will file with the SEC (at New Holdco’s sole cost and expense) a registration statement registering the resale of certain securities held by or issuable to the Registration Rights Holders (the “Resale Registration Statement”), and New Holdco will use its commercially reasonable efforts to have the Resale Registration Statement declared effective as soon as reasonably practicable after the filing thereof. In certain circumstances, the Initial Holders can demand up to three underwritten offerings and certain of the New Holders can demand up to three underwritten offerings, and all of the Registration Rights Holders can demand up to four block trades within any 12-month period and will be entitled to customary piggyback registration rights. The A&R Registration Rights Agreement does not provide for the payment of any cash penalties by New Holdco if it fails to satisfy any of its obligations under the A&R Registration Rights Agreement.
PIPE Financing
In connection with the execution of the Business Combination Agreement, on December 16, 2021, NAAC entered into separate subscription agreements (each a “PIPE Subscription Agreement” and, collectively, the “PIPE Subscription Agreements”) with each of the PIPE Investors, pursuant to which the PIPE Investors agreed to purchase, and NAAC agreed that New Holdco will sell to the PIPE Investors, an aggregate of 11,698,750 PIPE Shares for a purchase price of $9.19 per share and an aggregate purchase price of $107.5 million in the PIPE Financing.
 
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For avoidance of doubt, the PIPE Investors will not include the Sponsor, nor the NAAC directors, officers, or their affiliates.
The closing of the sale of the PIPE Shares pursuant to the Subscription Agreements will take place substantially concurrently with the Acquisition Closing and is contingent upon, among other customary closing conditions, the subsequent consummation of the Business Combination. The purpose of the PIPE Financing is to raise additional capital for use by the post-combination company following the Acquisition Closing.
Pursuant to the Subscription Agreements, NAAC agreed that, as soon as practicable (but in any case within 30 calendar days after the consummation of the Business Combination), New Holdco will file with the SEC (at New Holdco’s sole cost and expense) a registration statement registering the resale of the PIPE Shares (the “PIPE Resale Registration Statement”), and New Holdco will use its commercially reasonable efforts to have the PIPE Resale Registration Statement declared effective as soon as practicable after the filing thereof, but no later than the earlier of (a) 60 calendar days (or 90 calendar days if the SEC notifies New Holdco that it will review the PIPE Resale Registration Statement) following the Acquisition Closing and (a)       the tenth business day after the SEC notifies New Holdco that the PIPE Resale Registration Statement will not be reviewed or will not be subject to further review.
Interests of the Sponsor and NAAC Directors and Officers in the Business Combination
In considering the recommendation of the NAAC Board to vote in favor of the Business Combination, shareholders should be aware that, aside from their interests as shareholders, the Sponsor and certain of NAAC’s directors and officers have interests in the Business Combination that are different from, or in addition to, those of other shareholders generally. NAAC’s directors were aware of and considered these interests, among other matters, in evaluating the Business Combination, and in recommending to shareholders that they approve the Business Combination. Shareholders should take these interests into account in deciding whether to approve the Business Combination. These interests include, among other things:

the beneficial ownership of our initial shareholders of an aggregate of 9,487,500 NAAC Founder Shares and 7,126,667 private placement warrants, which shares and warrants would become worthless if NAAC does not complete a business combination within the applicable time period, as our initial shareholders have waived any redemption right with respect to these shares. Our initial shareholders paid an aggregate of $25,000, or approximately $0.003 per share, for the NAAC Founder Shares, and $10,690,000, or $1.50 per warrant, for the private placement warrants, and such shares and warrants, if unrestricted and freely tradeable, would be valued at approximately $93.7 million and $1.9 million, respectively based on the closing price of the Class A Ordinary Shares of $9.88 per share and closing price of the warrants of $0.27 per warrant on         Nasdaq on April 13, 2022, the most recent practicable date prior to the date of this proxy statement/prospectus.

the fact that the Sponsor and NAAC’s officers and directors have agreed not to redeem any shares held by them in connection with a shareholder vote to approve the Business Combination;

the fact that our initial shareholders, including the Sponsor, and our directors and officers, paid an aggregate of $10,690,000 for its 7,126,667 private placement warrants to purchase Class A Ordinary Shares and that such private placement warrants will expire worthless if a business combination is not consummated by January 26, 2023;

the fact that, following the Closing, the Sponsor would be entitled to the repayment of an outstanding working capital loan and advances that have been made to NAAC. The Sponsor agreed to loan to NAAC up to $1,500,000 to be used for a portion of the expenses of NAAC. These loans are non-interest bearing, unsecured and are due upon consummation of an initial business combination. As of December 31, 2021, NAAC owed $1,199,994 under the August 6, 2021 promissory note, and there were no other material working capital loans outstanding. If NAAC fails to complete an Initial Business Combination by January 26, 2023, NAAC may use a portion of the working capital held outside the Trust Account to repay the working capital loans, but no proceeds held in the Trust Account would be used to repay the working capital loans;

the fact that the Sponsor will benefit from the completion of a business combination and may be incentivized to complete an acquisition of a less favorable target company or on terms less favorable to shareholders rather than liquidate;
 
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the fact that given the differential in the purchase price that the Sponsor paid for the NAAC Founder Shares as compared to the price of the NAAC Units sold in the IPO and up to 8,538,750 shares of New Holdco Common Stock that the Sponsor will receive upon conversion of the NAAC Founder Shares in connection with the Business Combination, the Sponsor and its Affiliates may earn a positive rate of return on their investment even if the New Holdco Common Stock trades below the price initially paid for the NAAC Units in the IPO and the public shareholders experience a negative rate of return following the completion of the Business Combination. As a result of the low initial purchase price, the Sponsor, its Affiliates and NAAC’s management team and advisors stand to earn a positive rate of return or profit on their investment, even if other shareholders, such as NAAC’s public shareholders, experience a negative rate of return because the post-business combination company subsequently declines in value. Thus, NAAC’s Sponsor, officers and directors and their respective Affiliates and associates may have more of an economic incentive for NAAC to, rather than liquidate if it fails to complete an Initial Business Combination by January 26, 2023, enter into an Initial Business Combination on potentially less favorable terms with a potentially less favorable, riskier, weaker-performing or financially unstable business, or an entity lacking an established record of revenues or earnings, than would be the case if such parties had paid the full offering price for their NAAC Founder Shares;

the fact that Patrick Doran, president and director of NAAC, may be deemed to have or share beneficial ownership of the NAAC Founder Shares held directly by the Sponsor by virtue of his ownership interest in the manager of the Sponsor;

the fact that up to an aggregate amount of $1,500,000 of any amounts outstanding under any working capital loans made by the Sponsor or any of its Affiliates to NAAC may be converted into NAAC Warrants to purchase Class A Ordinary Shares at a price of $1.50 per warrant at the option of the lender;

if the Trust Account is liquidated, including in the event NAAC is unable to complete an Initial Business Combination within the required time period, the Sponsor has agreed to indemnify NAAC to ensure that the proceeds in the Trust Account are not reduced below $10.00 per public share, or such lesser amount per public share as is in the Trust Account on the liquidation date, by the claims of (a) any third party (other than NAAC’s independent registered public accounting firm) for services rendered or products sold to NAAC or (b) a prospective target business with which NAAC has entered into a letter of intent, confidentiality, or other similar agreement or business combination agreement, but only if such a third party or target business has not executed a waiver of all rights to seek access to the Trust Account. NAAC did not require the Sponsor to reserve funds for such indemnification obligations, nor did NAAC independently verify whether the Sponsor has sufficient funds to satisfy its indemnity obligations. NAAC believes that the Sponsor’s only assets are securities of NAAC. Therefore, NAAC believes it is unlikely that the Sponsor will be able to satisfy its indemnification obligations if it is required to do so;

if NAAC does not complete an Initial Business Combination by January 26, 2023, NAAC may use a portion of its working capital held outside the Trust Account to repay any working capital loans, but no proceeds held in the Trust Account would be used to repay any working capital loans. As of December 31, 2021, there was approximately $379.6 million in investments held in the Trust Account and approximately $1,500,000 of cash held outside the Trust Account available for working capital purposes;

the fact that, in the event that NAAC completes an Initial Business Combination, Woodberry Management Services Ltd., a private investment firm of which Patrick Doran currently serves as the chief executive officer and founder, will be paid fees in the amount of approximately $1.7 million for corporate finance and consulting services provided to NAAC in connection with the Business Combination;

the fact that, in the event that NAAC completes an Initial Business Combination, the Sponsor and NAAC’s officers and directors will be reimbursed for any out-of-pocket expenses incurred in connection with activities on NAAC’s behalf, such as identifying potential target businesses and performing due diligence on suitable business combinations, though there have been no material out-of-pocket expenses subject to reimbursement to date and NAAC does not anticipate any such expenses prior to Closing;
 
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the Sponsor will be a party to the Amended and Restated Registration Rights Agreement, which will come into effect at the closing of the Business Combination;

the fact that the Sponsor and NAAC’s officers and directors will lose their entire investment in NAAC if an Initial Business Combination is not completed within the Combination Period; and

the fact that Gary Quin will be appointed to the New Holdco Board following the Acquisition Closing and shall be entitled to receive compensation for serving on the New Holdco Board.
These financial interests of the Sponsor, NAAC’s officers and directors, and their respective Affiliates and associates may have influenced their motivation in identifying and selecting TeleSign as a business combination target, and their decision to approve the Transactions. In considering the recommendations of the NAAC Board to vote for the Proposals, NAAC public shareholders should consider these interests.
Reasons for the Approval of the Business Combination
After careful consideration, the NAAC Board recommends that NAAC’s shareholders vote “FOR” the approval of the Business Combination Proposals.
For a more complete description of NAAC’s reasons for the approval of the Business Combination and the recommendation of the NAAC Board, see the subsection entitled “The Business Combination — The NAAC Board’s Reasons for the Approval of the Business Combination.”
Redemption Rights
Pursuant to the Existing Organizational Documents, a public shareholder may request that NAAC redeem all or a portion of its public shares for cash if the Business Combination is consummated. As a holder of public shares, you will be entitled to receive cash for any public shares to be redeemed only if you:
(a)
hold public shares or, if you hold public shares through NAAC Units, you elect to separate your NAAC Units into the underlying public shares and public warrants prior to exercising your redemption rights with respect to the public shares;
(b)
submit a written request to Continental Stock Transfer & Trust Company, NAAC’s transfer agent, in which you (i) request that New Holdco redeem all or a portion of your public shares for cash, and (ii) identify yourself as the beneficial holder of the public shares and provide your legal name, phone number, and address; and
(c)
deliver your public shares to Continental Stock Transfer & Trust Company, NAAC’s transfer agent, physically or electronically through the DTC.
Holders must complete the procedures for electing to redeem their public shares in the manner described above prior to 5:00 p.m., Eastern time, on May 16, 2022 (two business days before the extraordinary general meeting) in order for their shares to be redeemed.
Holders of NAAC Units must elect to separate the NAAC Units into the underlying Class A Ordinary Shares and public warrants prior to exercising redemption rights with respect to the public shares. If public shareholders hold their NAAC Units in an account at a brokerage firm or bank, such public shareholders must notify their broker or bank that they elect to separate the NAAC Units into the underlying public shares and public warrants, or if a holder holds NAAC Units registered in its own name, the holder must contact Continental Stock Transfer & Trust Company, NAAC’s transfer agent, directly and instruct it to do so. The redemption rights include the requirement that a holder must identify itself to NAAC in order to validly redeem its shares. Public shareholders (other than the initial shareholders) may elect to exercise their redemption rights with respect to their public shares even if they vote “FOR” the Business Combination Proposals. If the Business Combination is not consummated, the public shares will be returned to the respective holder, broker, or bank. If the Business Combination is consummated, and if a public shareholder properly exercises its redemption right with respect to all or a portion of the public shares that it holds and timely delivers its shares to Continental Stock Transfer & Trust Company, NAAC will redeem such public shares for a per-share price, payable in cash, equal to the pro rata portion of the Trust Account, calculated as of two business days prior to the consummation of the Business Combination. For illustrative purposes, as of December 31,
 
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2021, this would have amounted to approximately $10.00 per issued and outstanding public share. Each redemption of Class A Ordinary Shares held by NAAC’s public shareholders will decrease the amount in the Trust Account. In no event will NAAC redeem public shares in an amount that would cause its net tangible assets to be less than $5,000,001 after giving effect to the transactions contemplated by the Business Combination Agreement and the PIPE Financing, unless the Class A Ordinary Shares otherwise do not constitute “penny stock” as such term is defined in Rule 3a51-1 of the Exchange Act. If a public shareholder exercises its redemption rights in full, then it will not own public shares or shares of New Holdco Common Stock following the redemption and will not participate in the future growth of New Holdco, if any, except to the extent that it continues to hold public warrants. See the subsection entitled “Extraordinary General Meeting — Redemption Rights” for the procedures to be followed if you wish to exercise your redemption rights with respect to your public shares.
Ownership of New Holdco After the Acquisition Closing
It is anticipated that, upon completion of the Business Combination, the ownership of New Holdco will be as follows:

BICS will own 115,512,500 shares of New Holdco Common Stock, or approximately 66% of the issued and outstanding New Holdco Common Stock;

the public shareholders will own 37,950,000 shares of New Holdco Common Stock, or approximately 22% of the issued and outstanding New Holdco Common Stock;

the PIPE Investors will own 11,698,750 shares of New Holdco Common Stock, or approximately 7% of the issued and outstanding New Holdco Common Stock; and

the initial shareholders will own 8,538,750 shares of New Holdco Common Stock, or approximately 5% of the issued and outstanding New Holdco Common Stock (which, for the avoidance of doubt, does not include shares of New Holdco Common Stock that will be issued to certain initial shareholders in connection with the PIPE Financing, which shares are reflected in the preceding bullet).
The number of shares and the interests set forth above (a) assume that (i) no public shareholders elect to have their public shares redeemed, (ii) there are no other issuances of equity interests of NAAC or TeleSign, (iii) none of NAAC’s initial shareholders or BICS purchase Class A Ordinary Shares in the open market, (iv) the aggregate NAAC Transaction Expenses and Company Transaction Expenses will be $50 million, (v) the Sponsor forfeits 948,750 NAAC Founder Shares in connection with the Business Combination (and no additional NAAC Founder Shares are subject to forfeiture as a result of NAAC shareholder redemption levels exceeding 50% or otherwise), and (vi) TeleSign’s valuation is not otherwise reduced by factors set forth in the Business Combination Agreement, and (b) do not take into account New Holdco Warrants that will remain outstanding following the Business Combination and may be exercised at a later date. As a result of the Business Combination, the economic and voting interests of NAAC’s shareholders will decrease. If we assume the maximum redemptions scenario described under the section entitled “Unaudited Pro Forma Condensed Combined Financial Information,” i.e., 37,950,000 public shares are redeemed, and the assumptions set forth in the foregoing clauses (a)(ii) — (vi) and (b) remain true, except that, with respect to clause (v), the number of NAAC Founder Shares to be forfeited by the Sponsor shall be 1,897,500, and if we further assume that the parties to the Business Combination Agreement waive the minimum cash condition, the ownership of New Holdco upon completion of the Business Combination will be as follows:

BICS will own 116,461,250 shares of New Holdco Common Stock, or approximately 86% of the issued and outstanding New Holdco Common Stock;

the PIPE Investors will own 11,698,750 shares of New Holdco Common Stock, or approximately 9% of the issued and outstanding New Holdco Common Stock; and

the initial shareholders will own 7,590,000 shares of New Holdco Common Stock, or approximately 5% of the issued and outstanding New Holdco Common Stock (which, for the avoidance of doubt, does not include shares of New Holdco Common Stock that will be issued to certain initial shareholders in connection with the PIPE Financing, which shares are reflected in the preceding bullet).
 
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The ownership percentages with respect to New Holdco set forth above do not take into account NAAC Warrants that will remain outstanding immediately following the Business Combination, but do include the NAAC Founder Shares, which will convert into New Holdco Common Stock upon the Share Acquisition. If the facts are different than these assumptions, the percentage ownership retained by NAAC’s existing shareholders in New Holdco following the Business Combination will be different. For example, if we assume that all outstanding 12,650,000 public warrants and 7,126,667 private placement warrants were exercisable and exercised following completion of the Business Combination and further assume that no public shareholders elect to have their public shares redeemed (and each other assumption set forth in the preceding paragraph remains the same), then the ownership of New Holdco would be as follows:

BICS will own 115,512,500 shares of New Holdco Common Stock, or approximately 60% of the issued and outstanding New Holdco Common Stock;

the public shareholders will own 50,600,000 shares of New Holdco Common Stock, or approximately 26% of the issued and outstanding New Holdco Common Stock;

the PIPE Investors will own 11,698,750 shares of New Holdco Common Stock, or approximately 6% of the issued and outstanding New Holdco Common Stock; and

the initial shareholders will own 15,665,417 shares of New Holdco Common Stock, or approximately 8% of the issued and outstanding New Holdco Common Stock (which, for the avoidance of doubt, does not include shares of New Holdco Common Stock that will be issued to certain initial shareholders in connection with the PIPE Financing, which shares are reflected in the preceding bullet).
The NAAC Warrants will become exercisable on the later of 30 days after the completion of an Initial Business Combination and 12 months from the closing of the Initial Public Offering, and will expire five years after the completion of an Initial Business Combination or earlier upon their redemption or liquidation.
Please see the section entitled “Unaudited Pro Forma Condensed Combined Financial Information” for further information.
The following table shows the anticipated share ownership of various holders of New Holdco Common Stock upon closing of the Business Combination in the no redemption, interim redemption (which assumes that 75.3% Class A Ordinary Shares held by public shareholders are redeemed) and maximum redemption (which assumes that 100% Class A Ordinary Shares held by public shareholders are redeemed) scenarios and is based on the following assumptions: (i) there are no other issuances of equity interests of NAAC or TeleSign, (ii) none of NAAC’s initial shareholders or BICS purchase Class A Ordinary Shares in the open market, (iii) the aggregate NAAC Transaction Expenses and Company Transaction Expenses will be $50 million, (iv) the Sponsor forfeits 948,750 NAAC Founder Shares in connection with the Business Combination (and up to an additional 948,750 NAAC Founder Shares are forfeited as result of NAAC shareholder redemption levels exceeding 50%), (v) TeleSign’s valuation is not otherwise reduced by factors set forth in the Business Combination Agreement, and (vi) no New Holdco Warrants are exercised, except that, in the maximum redemption scenario, with respect to clause (iv), we assume that the number of NAAC Founder Shares to be forfeited by the Sponsor shall be 1,897,500, and we further assume that the parties to the
 
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Business Combination Agreement waive the minimum cash condition. The residual equity value owned by non-redeeming shareholders will remain $10.00 per share as illustrated in the sensitivity table below.
Percentage Share Ownership in New Holdco
No
Redemptions
Interim
Redemption
Maximum
Redemptions(1)
NAAC Public Shareholders
22% 6.5% 0%
BICS 66% 80.2% 86%
PIPE Investors
7% 8.1% 9%
NAAC Initial Shareholders(2)
5% 5.2% 5%
Value of the Shares Owned by Non-Redeeming Shareholders
Total Shares Outstanding Excluding Warrants
173,700,000 145,136,667 135,750,000
Total Equity Value Post-Redemptions
$ 1,737,000,000 $ 1,451,366,670 $ 1,357,500,000
Per Share Value
$ 10.00 $ 10.00 $ 10.00
(1)
Assumes that NAAC’s public shareholders exercise redemption rights with respect to 37,950,000 Class A Ordinary Shares, which represents redemption of approximately 100% of NAAC Class A Ordinary Shares, for an aggregate redemption payment of approximately $379.5 million.
(2)
The Sponsor and its Affiliates will hold up to 8,538,750 Ordinary Shares, which will be cancelled and exchanged on a one-for-one basis for New Holdco Common Stock upon consummation of the proposed business combination. In the interim redemption and maximum redemption scenarios, an additional 948,750 NAAC Founder Shares would be forfeited in connection with the Business Combination, resulting in the Sponsor holding 7,590,000 Ordinary Shares. The Sponsor paid $25,000 for the 9,487,500 NAAC Founder Shares, or approximately $0.003 per NAAC Founder Share. Assuming a value of $10.00 per share of New Holdco Common Stock, based on the deemed value of $10.00 per share of New Holdco Common Stock in the proposed business combination, this represents an appreciation in value of approximately $9.99 per share of New Holdco Common Stock. Assuming a value of $9.88 per New Holdco Ordinary Share, the closing price of a Class A Ordinary Share on April 13, 2022, this represents an appreciation in value of approximately $9.87 per New Holdco Ordinary Share.
NAAC’s public shareholders that do not elect to redeem their NAAC Public Shares will experience significant dilution as a result of the proposed business combination. The NAAC public shareholders currently own 80% of NAAC’s Ordinary Shares. As noted in the above table, if no NAAC public shareholders redeem their NAAC Public Shares in the proposed business combination, the NAAC public shareholders will go from owning 80% of NAAC’s Ordinary Shares prior to the Business Combination to owning 22% of New Holdco Common Stock, and NAAC’s public shareholders will own 6.5% and 0% respectively, assuming 75.3% and the maximum number of the NAAC Ordinary Shares are redeemed in connection with the proposed business combination, respectively.
Board of Directors and Officers of New Holdco Following the Business Combination
The directors and officers of New Holdco as of immediately prior to the SPAC Merger Effective Time will continue as initial directors and officers of New Holdco, respectively. The parties anticipate that, effective immediately after the Share Acquisition Effective Time, the New Holdco Board will be comprised of Guillaume Boutin, Dirk Lybaert, Gary Quin, Joseph Burton, Karen Gould, Aparna Rayasam, Allison Cerra, and Jos Callens. See “The Business Combination — Board of Directors of New Holdco Following the Business Combination” and “Management After the Business Combination — Executive Officers and Directors After the Business Combination.”
Expected Accounting Treatment
The Business Combination will be accounted for as a reverse capitalization, with no goodwill or other intangible assets recorded, in accordance with GAAP. Under this method of accounting, NAAC will be
 
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treated as the “acquired” company for financial reporting purposes. Accordingly, for accounting purposes, the Business Combination will be treated as the equivalent of TeleSign issuing stock for the net assets of NAAC, accompanied by a recapitalization. The net assets of NAAC will be stated at historical cost, with no goodwill or other intangible assets recorded. See the subsection entitled “The Business Combination — Expected Accounting Treatment.”
Appraisal Rights
There are no appraisal rights available to holders of Class A Ordinary Shares, Class B Ordinary Shares, or NAAC Warrants in connection with the Business Combination under the DGCL. There are no appraisal rights available to holders NAAC Warrants in connection with the Business Combination under Cayman Islands law.
Dissent Rights and Limitations under the Cayman Islands Companies Act (As Revised)
The Cayman Islands Companies Act (As Revised) (the “Companies Act”) prescribes when NAAC shareholder appraisal rights will be available and sets the limitations on such rights. Where such rights are available, NAAC shareholders are entitled to receive fair value for their shares. However, regardless of whether such rights are or are not available, NAAC shareholders are still entitled to exercise the rights of redemption, as set out in the section of this proxy statement/prospectus entitled “Redemption Rights”, and the NAAC board of directors has determined that the redemption proceeds payable to NAAC shareholders who exercise such redemption rights represents the fair value of those shares.
Extracts of relevant sections of the Companies Act follow:
238. (1) A member of a constituent company incorporated under this Act shall be entitled to payment of the fair value of that person’s shares upon dissenting from a merger or consolidation.
239. (1) No rights under section 238 shall be available in respect of the shares of any class for which an open market exists on a recognized stock exchange or recognized interdealer quotation system at the expiry date of the period allowed for written notice of an election to dissent under section 238(5), but this section shall not apply if the holders thereof are required by the terms of a plan of merger or consolidation pursuant to section 233 or 237 to accept for such shares anything except — (a) shares of a surviving or consolidated company, or depository receipts in respect thereof; (b) shares of any other company, or depository receipts in respect thereof, which shares or depository receipts at the effective date of the merger or consolidation, are either listed on a national securities exchange or designated as a national market system security on a recognized interdealer quotation system or held of record by more than two thousand holders; (c) cash in lieu of fractional shares or fractional depository receipts described in paragraphs (a) and (b); or (d) any combination of the shares, depository receipts and cash in lieu of fractional shares or fractional depository receipts described in paragraphs (a), (b) and (c).
Other NAAC Proposals
In addition to the two separate proposals to approve and adopt the Business Combination Agreement and the Business Combination, the SPAC Merger and the Plan of Merger, NAAC’s shareholders will be asked to vote upon (a) a proposal to approve by special resolution and adopt the Proposed Organizational Documents; (b) eight separate proposals to approve, on a non-binding advisory basis, by special resolution material changes from the Existing Organizational Documents to the Proposed Certificate of Incorporation and the Proposed Bylaws of New Holdco; (c) a proposal to approve by ordinary resolution, for purposes of complying with the applicable listing rules of Nasdaq, (i) the issuance of up to 115,512,500 shares of New Holdco Common Stock in connection with the Share Acquisition and (ii) the issuance and sale of 11,698,750 shares of New Holdco Common Stock in a private offering of securities to certain investors in connection with the PIPE Financing, which will occur substantially concurrently with, and is contingent upon, the consummation of the Share Acquisition; (d) a proposal to approve by ordinary resolution and adopt the Incentive Plan; and (e) a proposal to approve by ordinary resolution the adjournment of the extraordinary general meeting to a later date or dates, if necessary or appropriate, to permit further solicitation and vote of proxies in the event that there are insufficient votes for, or otherwise in connection with, the approval of one or more Proposals at the extraordinary general meeting. For more information, see the sections entitled
 
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“Proposal No. 1 — The Business Combination Proposals,” “Proposal No. 2 — The Organizational Documents Proposal,” “Proposal No. 3 — The Advisory Organizational Documents Proposals,” “Proposal No. 4 — The Nasdaq Proposal,” “Proposal No. 5 — The Incentive Plan Proposal,” “Proposal No. 6 — The Adjournment Proposal” for more information.
Date, Time, and Place of Extraordinary General Meeting
The extraordinary general meeting will be held in person on May 18, 2022, at 11:00 a.m., Eastern time, at the offices of McDermott Will & Emery LLP, located at One Vanderbilt Avenue, New York, New York 10017, or such other date, time, and place to which such meeting may be adjourned, to consider and vote upon the Proposals. In the interest of public health, and due to the impact of the ongoing COVID-19 pandemic, NAAC is also planning for the meeting to be held virtually pursuant to the procedures described in the accompanying proxy statement/prospectus, but the physical location of the meeting will remain at the location specified above for the purposes of Cayman Islands law and the Existing Organizational Documents.
Voting Power; Record Date
You will be entitled to vote or direct votes to be cast at the virtual extraordinary general meeting if you owned Class A Ordinary Shares or Class B Ordinary Shares at the close of business on April 13, 2022, which is the record date for the extraordinary general meeting. You are entitled to one vote for each Class A Ordinary Share or Class B Ordinary Share that you owned as of the close of business on the record date. If your shares are held in “street name” or are in a margin or similar account, you should contact your broker, bank, or other nominee to ensure that votes related to the shares you beneficially own are properly counted. On the record date, there were 47,437,500 Class A Ordinary Shares and Class B Ordinary Shares outstanding in the aggregate, of which 37,950,000 were public shares and 9,487,500 were NAAC Founder Shares held by the initial shareholders.
Proxy Solicitation
Proxies may be solicited by mail. NAAC has engaged Morrow Sodali LLC to assist in the solicitation of proxies. If a shareholder grants a proxy, it may still vote its shares online if it revokes its proxy before the extraordinary general meeting. A shareholder may also change its vote by submitting a later-dated proxy as described in the subsection entitled “Extraordinary General Meeting — Revoking Your Proxy.”
Quorum and Required Vote for Proposals for the Extraordinary General Meeting
A quorum of NAAC’s shareholders is necessary to hold a valid meeting. A quorum will be present at the extraordinary general meeting if holders of a majority the Class A Ordinary Shares and Class B Ordinary Shares entitled to vote thereat attend in person or by proxy. Abstentions will count as present for the purposes of establishing a quorum.
The approval of each of the Share Acquisition Proposal, the Nasdaq Proposal, the Incentive Plan Proposal, and the Adjournment Proposal is being proposed as an ordinary resolution, being the affirmative vote of the holders of a majority of the Ordinary Shares of NAAC represented in person or by proxy and entitled to vote thereon and who vote at the extraordinary general meeting of NAAC. Approval of the SPAC Merger Proposal, the Advisory Organizational Documents Proposals and the Organizational Documents Proposal requires a special resolution under Cayman Islands law, being the affirmative vote of the holders of at least two-thirds of the ordinary shares of NAAC represented in person or by proxy and entitled to vote thereon and who vote at the extraordinary general meeting. Accordingly, a shareholder’s failure to vote in person or by proxy at the extraordinary general meeting will have no effect on the outcome of the vote on any of the Proposals. Abstentions and broker non-votes, while considered present for the purposes of establishing a quorum, will not count as votes cast at the extraordinary general meeting.
The SPAC Merger Closing and Acquisition Closing are conditioned on the approval of the Condition Precedent Proposals at the extraordinary general meeting. Each of the Condition Precedent Proposals is cross-conditioned on each of the other Condition Precedent Proposals.
 
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Recommendation to NAAC Shareholders
The NAAC Board believes that each of the Business Combination Proposals, the Organizational Documents Proposal, the Advisory Organizational Documents Proposals, the Nasdaq Proposal, the Incentive Plan Proposal, and the Adjournment Proposal is in the best interests of NAAC and NAAC’s shareholders and recommends that its shareholders vote “FOR” each Proposal being submitted to a vote of the shareholders at the extraordinary general meeting. For more information, see the sections entitled “Proposal No. 1 — The Business Combination Proposals,” “Proposal No. 2 — The Organizational Documents Proposal,” “Proposal No. 3 — The Advisory Organizational Documents Proposals,” “Proposal No. 4 — The Nasdaq Proposal,” “Proposal No. 5 — The Incentive Plan Proposal,” “Proposal No. 6 — The Adjournment Proposal.”
When you consider the recommendation of the NAAC Board in favor of approval of these Proposals, you should keep in mind that, aside from their interests as shareholders, the Sponsor and certain of NAAC’s directors and officers have interests in the Business Combination that are different from, or in addition to, your interests as a shareholder. Please see the subsection entitled “The Business Combination — Interests of the Sponsor and NAAC Directors and Officers in the Business Combination.”
Summary Risk Factors
In evaluating the Proposals set forth in this proxy statement/prospectus, you should carefully read this proxy statement/prospectus, including the annexes, and especially consider the factors discussed in the section entitled “Risk Factors.” Such risks include, but are not limited to the following:

The occurrence of any event, change, or other circumstances that could delay the Business Combination or give rise to the termination of the Business Combination Agreement.

The outcome of any legal proceedings that may be instituted against NAAC following announcement of the Business Combination and the possibility of third-party claims against the Trust Account.

The inability to complete the Business Combination due to the failure to obtain approval of the shareholders of NAAC or satisfy the other conditions to closing in the Business Combination Agreement.

There will be material differences between your current rights as a holder of NAAC securities and the rights one can expect as a holder of New Holdco securities, some of which may adversely affect you.

NAAC may not be able to consummate the PIPE Financing.

The proposed Business Combination may disrupt current plans and operations of TeleSign or NAAC as a result of the announcement and consummation of the Business Combination.

TeleSign faces intense competition, especially from larger, well-established companies, and it may lack sufficient financial or other resources to maintain or improve its competitive position.

TeleSign faces risks associated to natural disaster and health pandemics, including the recent coronavirus (“COVID-19”) pandemic, which could have a material adverse effect on its business and results of operations.

TeleSign’s international operations and continued international expansion subject TeleSign to additional costs and risks, which could adversely affect its business, financial condition and results of operations.

A number of potential occurrences, including potential data breach, failure to effectively exercise its growth plan, loss of important strategic partners, and increased supplier costs, could lead to negative publicity and TeleSign’s reputation, business, financial condition, and results of operations could be adversely affected.

TeleSign is subject to stringent laws and regulations with regards to consumer privacy, data use, and data protection. Any actual, suspected or perceived failure by TeleSign to comply with such laws and regulations would materially affect its business.
 
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Anti-takeover provisions contained in the Proposed Organizational Documents and applicable laws could impair a takeover attempt.

If NAAC is unable to complete an Initial Business Combination within the Combination Period, its public shareholders may receive only approximately $10.00 per share on the liquidation of the Trust Account (or less than $10.00 per share in certain circumstances where a third party brings a claim against NAAC that the Sponsor is unable to indemnify), and the NAAC Warrants will expire worthless.

An active, liquid trading market for New Holdco’s securities may not develop or be sustained.
 
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SUMMARY HISTORICAL FINANCIAL DATA OF TELESIGN
The summary historical consolidated statements of operations data of TeleSign for the years ended December 31, 2021, 2020 and 2019 and the historical consolidated balance sheet data as of December 31, 2021 and 2020 are derived from TeleSign’s audited consolidated financial statements included elsewhere in this proxy statement/prospectus. TeleSign’s historical results are not necessarily indicative of the results that may be expected in the future. You should read the following summary historical consolidated financial data together with the section titled “TeleSign’s Management’s Discussion and Analysis of Financial Condition and Results of Operations” and TeleSign’s consolidated financial statements and related notes included elsewhere in this proxy statement/prospectus.
Summary Historical Financial Data
For the year ended
December 31, 2021
For the year ended
December 31, 2020
For the year ended
December 31, 2019
(in thousands, except per share information)
Statement of Operations Data:
Total Revenue
$ 385,960 $ 313,698 $ 200,095
Total Operating Expenses
78,688 60,432 42,007
Income Before Provision for Income Taxes
7,790 23,470 20,132
Net Income per Share Attributable to Common Stockholder, Basic and diluted
64,132.34 187,664.04 160,081.74
Weighted-average shares used in computing net income per share attributable to common stockholder, basic and diluted
100 100 100
Balance Sheet Data
Total Assets
$ 142,562 $ 106,730 $ 96,610
Total Liabilities
83,184 53,335 33,322
Total Stockholder equity
59,378 53,395 63,288
Total liabilities and stockholder equity
142,562 106,730 96,610
Statement of Cash Flows Information:
Net Cash Provided by Operating Activities
$ 19,690 $ 19,179 $ 15,157
Net Cash Used in Investing Activities
(25,615) (7,924) (4,254)
Net Cash Provided by (Used in) Financing
Activities
14,771 (28,117)
 
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SUMMARY HISTORICAL FINANCIAL DATA OF NAAC
The summary historical statements of operations data of NAAC for the period from October 14, 2020 (inception) through December 31, 2020 and the historical balance sheet data as of December 31, 2020 are derived from NAAC’s audited financial statements included elsewhere in this proxy statement/prospectus. The summary historical condensed statements of operations data of NAAC for the year ended December 31, 2021 and the condensed balance sheet data as of December 31, 2021 are derived from NAAC’s audited financial statements included elsewhere in this proxy statement/prospectus. In NAAC’s management’s opinion, the audited financial statements include all adjustments necessary to state fairly NAAC’s financial position as of December 31, 2021, and its results of operations for the year ended December 31, 2021.
NAAC’s historical results are not necessarily indicative of the results that may be expected in the future, and NAAC’s results for the year ended December 31, 2021 are not necessarily indicative of the results that may be expected for the full year ending December 31, 2021 or any other period and NAAC’s results for the period from October 14, 2020 (inception) through December 31, 2020 are not necessarily indicative of the results that may be expected for any other period. The information below is only a summary and should be read in conjunction with the sections entitled “Management’s Discussion and Analysis of Financial Condition and Results of Operations of NAAC” and “Information About NAAC” and the financial statements, and the notes related thereto, which are included elsewhere in this proxy statement/prospectus.
For the
Year Ended
December 31, 2021
For the period from
October 14, 2020
(inception)through
December 31, 2020
Statements of Operations Data
Formation and operating costs
$ 2,669,205 $ 5,000
Loss from operations
(2,669,205) (5,000)
Other income (expense):
Warrant issue costs
(933,632)
Share based compensation
(1,079,197)
Change in fair value of Forward Purchase Agreement liability
1,668,542
Change in fair value of warrant liability
9,593,945
Trust interest income
88,190
Total other income
9,337,848
Net Income (loss)
$ 6,668,643 $ (5,000)
Basic and diluted weighted average shares outstanding, Class A ordinary shares subject to possible redemption
35,350,685 8,250,000
Basic and diluted net income per Class A ordinary share subject to possible redemption
$ 0.15 $ 0.00
Basic and diluted weighted average shares outstanding, Class B ordinary shares
9,487,500
Basic and diluted net income per Class B ordinary share
$ 0.15 $ 0.00
December 31, 2021
(Audited)
December 31, 2020
(Audited)
Balance Sheet Data
Total assets
$ 381,588,029 $ 375,453
Total liabilities
$ 32,214,132 $ 355,453
Total commitments
$ 379,588,190 $
Total stockholders’ (deficit) equity
$ (30,214,293) $ 20,000
 
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SUMMARY UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL INFORMATION
The following summary unaudited pro forma condensed combined financial data (the “summary pro forma information”) gives effect to the Business Combination described in the section entitled “Unaudited Pro Forma Condensed Combined Financial Information.” The Business Combination is expected to be accounted for as a reverse capitalization in accordance with GAAP. Under this method of accounting, NAAC is treated as the “acquired” company for financial reporting purposes. Accordingly, for accounting purposes, the financial statements of New Holdco will represent a continuation of the financial statements of TeleSign, with the Business Combination being treated as the equivalent of TeleSign issuing stock for the net assets of NAAC, accompanied by a recapitalization. The net assets of NAAC will be stated at historical cost, with no goodwill or other intangible assets recorded. Operations prior to the Business Combination will be presented as those of TeleSign in future reports of New Holdco.
The summary unaudited pro forma condensed combined statements of operations data for the year ended December 31, 2021 gives pro forma effect to the Business Combination as if it had occurred on January 1, 2021.
The summary pro forma information has been derived from, and should be read in conjunction with, the unaudited pro forma condensed combined financial information of New Holdco appearing elsewhere in this proxy statement/prospectus and the accompanying notes, in the section entitled “Unaudited Pro Forma Condensed Combined Financial Information.” The unaudited pro forma condensed combined financial information is derived from, and should be read in conjunction with, the historical financial statements of NAAC and TeleSign and related notes included elsewhere in this proxy statement/prospectus. The summary pro forma information has been presented for informational purposes only and is not necessarily indicative of what New Holdco’s financial position or results of operations actually would have been had the Business Combination and the other transactions contemplated by the Business Combination Agreement been completed as of the dates indicated. In addition, the summary pro forma information does not purport to project the future financial position or operating results of New Holdco.
Summary Unaudited
Pro Forma Condensed Combined
Statement of Operations Data
(In thousands, except share and per share data)
Assuming No
Redemption
Assuming Interim
Redemption
Assuming
Maximum
Redemption
Year Ended December 31, 2021
Revenue
$ 385,960 $ 385,960 $ 385,960
Income from operations
$ 5,261 $ 5,261 $ 5,261
Income before (provision) benefit for income taxes
$ 12,454 $ 12,454 $ 12,454
Net income attributable to common stockholders
$ 11,943 $ 11,943 $ 11,943
Net income per share attributable to common stockholders
Basic and Diluted
$ 0.07 $ 0.08 $ 0.09
Summary Unaudited
Pro Forma Condensed Combined
Statement of Balance Sheet Data
(In thousands, except share and per share data)
Assuming No
Redemption
Assuming Interim
Redemption
Assuming
Maximum
Redemption
December 31, 2021
Total Assets
$ 588,862 $ 303,162 $ 209,274
Total Liabilities
$ 99,653 $ 99,653 $ 99,653
New Holdco Class A common stock
17 14 13
Total Stockholder equity
$ 489,209 $ 203,509 $ 109,621
 
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RISK FACTORS
The following risk factors will apply to the business and operations of NAAC, TeleSign or New Holdco. These risk factors are not exhaustive and investors are encouraged to perform their own investigation with respect to the business, financial condition and prospects of NAAC, TeleSign and New Holdco and their respective businesses, financial conditions and prospects prior to or following the completion of the Business Combination, as the case may be. You should carefully consider the following risk factors in addition to the other information included in this proxy statement/prospectus, including matters addressed in the section entitled “Cautionary Note Regarding Forward-Looking Statements.” NAAC, TeleSign and New Holdco may face additional risks and uncertainties that are not presently known to them, or that they currently deem immaterial, which may also impair their respective businesses or financial conditions. The following discussion should be read in conjunction with the sections entitled “Management’s Discussion and Analysis of Financial Condition and Results of Operations of TeleSign,” “Management’s Discussion and Analysis of Financial Condition and Results of Operations of NAAC,” the financial statements of TeleSign and NAAC and notes to the financial statements included herein, as applicable.
Risks Related to TeleSign
Unless the context otherwise requires, all references in this subsection to the “Company,” “TeleSign,” “we,” “us,” or “our” refer to the business of TeleSign and its subsidiaries prior to the consummation of the Business Combination and to New Holdco and its subsidiaries following the Business Combination.
Risks Related to TeleSign’s Business and Industry
If TeleSign or its third-party service providers experience a data security breach or network incident that allows, or is perceived to allow, unauthorized access to TeleSign’s solutions or TeleSign’s customers’ personal data, it could lead to negative publicity and TeleSign’s reputation, business, financial condition, and results of operations could be adversely affected.
Third parties may attempt to fraudulently induce employees, contractors, customers, or TeleSign’s customers’ users into disclosing sensitive information, such as user names, passwords, or other information or otherwise compromise the security of TeleSign’s internal networks, electronic systems, or physical facilities in order to gain access to TeleSign’s data or TeleSign’s customers’ data, which could result in significant legal and financial exposure, a loss of confidence in the security of TeleSign’s solutions, interruptions, or malfunctions in TeleSign’s operations, account lock outs, and, ultimately, harm to TeleSign’s products and services, business, financial condition, and results of operations.
TeleSign’s products and services collect, use, store, transmit, and otherwise process enterprises’ and their customers’ proprietary information and personal data. A breach of customer data at TeleSign could occur as a result of third-party action, technology limitations, employee or contractor error, malfeasance or otherwise. If such a breach disrupts the confidentiality, integrity or availability of TeleSign’s, enterprises’ or their customers’ data or systems, TeleSign could incur significant liability. Further, and notwithstanding any contractual rights or remedies TeleSign may have, because it does not control its third-party service providers, including their security measures and the processing of data by TeleSign’s third-party service providers, TeleSign cannot ensure the integrity or security of measures they take to protect customer information and prevent data loss.
Security breaches or incidents impacting TeleSign’s solutions could result in a risk of loss or unauthorized disclosure of critical information, including personal data, or the denial of access to this information, which, in turn, could lead to enforcement actions, litigation, regulatory or governmental audits, investigations, inquiries and possible significant liability, and increased requests by individuals regarding their personal data. Furthermore, as a provider of identity and security solutions, such security breaches and incidents could also erode customer confidence in the effectiveness of TeleSign’s data security measures and damage TeleSign’s relationships with current customers and ability to attract new customers and partners, which could trigger service availability, indemnification, and other contractual obligations. The risk of reputational harm may be magnified and/or distorted through the rapid dissemination of information over the internet, including through news articles, blogs, social media, and other online communication forums and services. Security breaches and incidents may also cause TeleSign to incur significant investigation,
 
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mitigation, remediation, notification and other expenses, including necessitating that TeleSign put in place additional measures designed to prevent further security breaches or incidents. TeleSign may be required to expend significant capital and financial resources to protect against such threats or to alleviate problems caused by breaches in security. Such security breach could create system disruptions, or slowdowns and exploit security vulnerabilities of TeleSign’s systems, and the information stored on TeleSign’s systems could be improperly accessed, publicly disclosed, altered, lost or stolen, which could subject TeleSign to liability and cause TeleSign financial harm.
Any breaches, or any perceived breach, of TeleSign’s systems, whether or not any such breach is due to a vulnerability in TeleSign’s solutions, may also undermine confidence in TeleSign’s solutions and result in damage to TeleSign’s reputation and brand, negative publicity, loss of partners, customers and sales, increased costs to remedy any problem, costly litigation, and other liability. In addition, a breach of the security measures of one of TeleSign’s third-party service providers could result in the exfiltration of confidential information or personal data and may provide additional avenues of attack on TeleSign’s reputation, which could adversely impact TeleSign’s ability to retain existing customers or attract new ones, potentially causing a negative impact on its business. Any of these negative outcomes could negatively impact market acceptance of TeleSign’s solutions and its business, financial condition, and results of operations could be adversely affected.
TeleSign may experience significant fluctuations in its operating results and rates of growth.
TeleSign’s operating results and rates of growth could vary significantly in the future based upon a number of factors, including many factors over which TeleSign has little or no control. TeleSign operates in a highly dynamic industry and future results could be subject to significant fluctuations. These fluctuations could cause TeleSign to fail to meet or exceed financial expectations of securities analysts or investors, which could cause its stock price to decline rapidly and significantly. Revenue and expenses in future periods may be greater or less than revenue and expenses in the immediately preceding period or in the comparable period of the prior year. Therefore, period-to-period comparisons of TeleSign’s operating results are not necessarily a good indication of TeleSign’s future performance.
Most of TeleSign’s expenses, such as employee compensation, benefits and rent, are relatively fixed in the short term, however, its revenue fluctuates since it is driven by volume. Moreover, TeleSign’s expense levels are based, in part, on TeleSign’s expectations regarding future revenue levels. As a result, if revenue for a particular quarter is below TeleSign’s expectations, TeleSign may not be able to reduce operating expenses proportionately for that quarter, and, therefore, this revenue shortfall would have a disproportionately negative impact on TeleSign’s operating results for that quarter.
Any significant interruptions or delays in IT service or any undetected errors or design faults in IT systems could result in limited capacity, reduced demand, processing delays and loss of customers, suppliers or marketplace merchants and a reduction in commercial activity.
TeleSign’s continued growth depends on the ability of its existing and potential customers to access TeleSign’s products and services 24 hours a day, seven days a week, without significant interruption or degradation of performance. TeleSign has experienced and may in the future experience disruptions, outages and other performance problems with its infrastructure due to a variety of factors, including infrastructure changes, introductions of new functionality, human or software errors, capacity constraints, distributed denial-of-service attacks or other security-related incidents. In some instances, TeleSign may not be able to identify the cause or causes of these performance problems immediately or in short order. TeleSign may not be able to maintain the level of service uptime and performance required by its customers, especially during peak usage times and as TeleSign’s solutions become more complex and its user traffic increases. If TeleSign’s customers are unable to access its solutions within a reasonable amount of time, or at all, its business would be harmed. Frequent or persistent interruptions in TeleSign’s products and services could cause customers to believe that its products and services are unreliable, leading them to switch to TeleSign’s competitors or to otherwise avoid its products and services.
The adverse effects of any service interruptions on TeleSign’s reputation and financial condition may be disproportionately heightened due to the nature of its business and the fact that TeleSign’s customers expect continuous and uninterrupted access to its solutions and have a low tolerance for interruptions of any
 
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duration. Since TeleSign’s customers rely on its products to provide critical services to support their own customer-facing applications, any outage on TeleSign’s products would impair the ability of TeleSign’s customers to operate their businesses, which would negatively impact TeleSign’s brand, reputation and customer satisfaction.
Moreover, TeleSign depends on services from various third parties. If a third-party service provider fails to provide sufficient capacity to support TeleSign’s solutions or otherwise experiences service outages, such failure could interrupt TeleSign’s customers’ access to its services, which could adversely affect their perception of TeleSign’s solutions reliability. Any disruptions in these services, including as a result of actions outside of TeleSign’s control, would significantly impact the performance of its solutions. In the event that TeleSign’s service agreements are terminated with its solutions or infrastructure providers, or there is a lapse of service, interruption of internet service provider connectivity or damage to such providers’ facilities, TeleSign could experience interruptions in access to its solutions as well as delays and additional expense in arranging new facilities and services. In the future, these services may not be available to TeleSign on commercially reasonable terms, or at all. Any loss of the right to use any of these services could result in decreased functionality of TeleSign’s solutions until equivalent technology is either developed by TeleSign or, if available from another provider, is identified, obtained and integrated into TeleSign’s solutions or infrastructure. TeleSign may also be unable to effectively address capacity constraints, upgrade its systems as needed, and continually develop its technology and network architecture to accommodate actual and anticipated changes in technology.
TeleSign’s solutions are accessed by a large number of customers, often at the same time. As TeleSign continues to expand the number of its customers and solutions available to TeleSign’s customers, its technology may not be able to scale to accommodate the increased capacity requirements, which may result in interruptions or delays in service. In addition, the failure of third-party cloud infrastructure providers, third-party internet service providers or other third-party service providers whose services are integrated with TeleSign’s solutions to meet TeleSign’s capacity requirements could result in interruptions or delays in access to TeleSign’s solutions or impede its ability to scale its operations. Any of the above circumstances or events may harm TeleSign’s reputation, cause customers to terminate their agreements with it, impair its ability to grow its customer base, result in the expenditure of significant financial, technical and engineering resources, subject TeleSign to financial penalties and liabilities under its service level agreements, and otherwise could adversely affect its business, financial condition, and results of operations.
TeleSign may be unable to prevent unlawful or fraudulent activities in its operations, and it could be liable for such fraudulent or unlawful activities.
TeleSign depends on data processing, communication, and information exchange on a variety of platforms and networks and over the internet. TeleSign cannot be certain all of its systems are entirely free from unlawful or fraudulent activities, despite safeguards it has installed. TeleSign does business with a number of third-party service providers and vendors with respect to its business, data, and communications needs. Any current or future fraud or unlawful activities in TeleSign’s operations may result in significant liability to TeleSign in excess of its insurance coverage, and may cause existing and potential customers to refrain from doing business with TeleSign. Although TeleSign, with the help of third-party service providers, intends to continue to implement various safeguards and establish operational procedures to prevent such damage, there can be no assurance that these measures will be successful.
Employee or customer fraud could subject TeleSign to operational losses or regulatory sanctions and seriously harm TeleSign’s reputation. Misconduct by TeleSign’s employees could include hiding unauthorized activities, improper or unauthorized activities on behalf of a customer, or improper use of confidential information. It is not always possible to prevent employee errors and misconduct, and the precautions TeleSign takes to prevent and detect this activity may not be effective in all cases. TeleSign maintains a substantial system of internal controls and insurance coverage to mitigate against operational risks, including data processing failures and errors and customer or employee fraud. Should TeleSign’s internal controls fail to prevent or detect an occurrence, or if any resulting loss is not insured or exceeds applicable insurance limits, it could have an adverse effect on its business, financial condition, or results of operations.
 
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If TeleSign’s solutions do not effectively interoperate with its customers’ existing or future IT infrastructures, TeleSign’s business would be harmed.
TeleSign success depends in part on the interoperability of TeleSign’s solutions with TeleSign’s customers’ IT infrastructures, including third-party operating systems, applications, data and devices that TeleSign has not developed and does not control. Third-party products and services are constantly evolving, and TeleSign may not be able to modify its products to ensure their compatibility with those of other third parties following development changes. Any changes in such infrastructure, operating systems, applications, data or devices that degrade the functionality of TeleSign’s solutions or give preferential treatment to competitive solutions could adversely affect the adoption and usage of TeleSign’s products. TeleSign may not be successful in quickly or cost effectively adapting its solutions to operate effectively with these operating systems, applications, data, or devices. If it is difficult for TeleSign’s customers to access and use TeleSign’s solutions, or if TeleSign’s solutions cannot conveniently connect a broadening range of applications, data and devices, then TeleSign’s customer growth and retention may be harmed, and its business, financial condition, and results of operations could be adversely affected. TeleSign relies on open-source software for many integrations between TeleSign’s solutions and third-party applications that TeleSign’s customers utilize, and in other instances on such third parties making available the necessary tools for TeleSign to create interoperability with their applications. If application providers were to move away from open standards, or if a critical, widely-utilized application provider were to adopt proprietary integration standards and not make them available for the purposes of facilitating interoperability with TeleSign’s solutions, the utility of TeleSign’s solutions for TeleSign’s customers would be decreased, TeleSign’s solutions may become less marketable, less competitive, or obsolete, and its business, financial condition, and results of operations could be adversely affected.
TeleSign could be subject to the unauthorized disclosure of its confidential information to its competitors. A malicious insider could disclose sensitive TeleSign information, including information on pricing, cost structure, business practices, intellectual property or artificial intelligence to its competition.
TeleSign’s business depends on its intellectual property, the protection of which is crucial to the success of its business. TeleSign relies on a combination of patent, trademark, trade secret and copyright law and contractual restrictions to protect its intellectual property. In addition, TeleSign attempts to protect its intellectual property, technology and confidential information by requiring its employees and consultants who develop intellectual property on TeleSign’s behalf to enter into confidentiality and assignment of inventions agreements and non-competition agreements, and third parties to enter into nondisclosure agreements. These agreements may not effectively prevent unauthorized use or disclosure of TeleSign’s confidential information, intellectual property or technology and may not provide an adequate remedy in the event of unauthorized use or disclosure of TeleSign’s confidential information, intellectual property or technology. Despite TeleSign’s efforts to protect its proprietary rights, unauthorized parties may copy aspects of its website features, software and functionality or obtain and use information that TeleSign considers proprietary.
TeleSign is subject to the risk that it does not adequately maintain information security.
There continues to be significant and organized cyber-attack activity against western organizations, including but not limited to the technology sector, and no organization is fully immune to cyber-attacks. Risks related to cyber-attack arise in the following areas:

Protecting both “structured” and “unstructured” sensitive information is a constant need. However, some risks cannot be fully mitigated using technology or otherwise.

Unsuspecting employees represent a primary avenue for external parties to gain access to TeleSign’s network and systems. Many attacks, even from sophisticated actors, include rudimentary techniques such as coaxing an internal user to click on a malicious attachment or link to introduce malware or steal their username and password (i.e., phishing).

The risk associated with wrongdoers encrypting data (i.e., ransomware) or disrupting communications (i.e., denial of service) for the purposes of extortion continues to increase.
 
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Nation-state sponsored organizations are engaged in cyber-attacks, but not only for monetization purposes. Nation-states appear to be motivated by the desire to gain information about foreign citizens and governments or to influence or cause disruptions in commerce or political affairs. Tech companies are a prime target.

TeleSign uses third parties to provide certain services. While TeleSign maintains certain standards for all vendors that provide services, such vendors may become subject to a security breach, including as a result of their failure to perform in accordance with contractual arrangements.
The quality of TeleSign’s digital identity products depends heavily on the availability of meaningful data insights lawfully acquired through third party suppliers (carriers and data brokers) and customers. A loss of such contracts and consequential access to such data could have a direct impact on performance of TeleSign’s data models used and quality of its products.
TeleSign’s digital identity business relies extensively upon content and data from external sources; specifically, carriers and data brokers. Applicable legal regulations, including, without limitation, the California Consumer Privacy Act, or CCPA, the California Privacy Rights Act, or CPRA, General Data Protection Regulation, or GDPR, and many other local, state, and national laws in jurisdictions relating to privacy, data subject rights, and data protection, and others relating to internet communications, e-commerce, information governance, and use of public records, are becoming more prevalent worldwide. Such laws generally give consumers, or data subjects, more control over data suppliers’ use of their personal information, including in some cases the right to stop the sharing or “selling” of their personal information with third parties like TeleSign. The disruption or loss of data sources, either because of changes in the law or because data suppliers decide not to supply them, would negatively impact TeleSign’s ability to use certain types of information about individuals and reduce its ability to communicate such information effectively with its customers. The loss of access to such data would directly impact TeleSign’s data models and reduce the quality of its data-driven products.
A substantial increase of data acquisition costs could harm TeleSign’s business, financial condition, and results of operations.
TeleSign relies on data acquired from third parties, such as carriers and data brokers, to build its models and to design and improve its products. If there is a substantial increase in the cost of data acquisition, TeleSign may not be able to pass that cost increase on to its customers; that would result in reduced profit margin for TeleSign. Additionally, even if TeleSign is able to renegotiate the terms of its business arrangements, TeleSign could incur additional transaction costs and the business relationships could be adversely affected. A substantial increase in the costs of acquiring data could harm TeleSign’s business, financial condition, and results of operations.
TeleSign has no direct control over the data quality it acquires from its suppliers which are needed to provide its digital identity services. If the data quality it acquires deteriorates over time, TeleSign’s coverage may decrease and become irrelevant for the customer.
Although TeleSign typically enters into long-term contractual arrangements with many of its suppliers of data, at the time of entry into a new contract or renewal of an existing contract, suppliers may increase restrictions on TeleSign’s use of such data, increase the price they charge for data or refuse altogether to license the data to TeleSign. In addition, during the term of any data supply contract, suppliers may fail to adhere to TeleSign’s data quality control standards or fail to deliver the required data. Further, although no single individual data supplier is material to TeleSign’s business, if a number of suppliers collectively representing a significant amount of data that TeleSign uses for one or more of its services were to impose additional contractual restrictions on its use of or access to data, fail to adhere to TeleSign’s quality-control standards, repeatedly fail to deliver data or refuse to provide data, now or in the future, TeleSign’s ability to provide those services to its clients could be materially adversely impacted, which may harm its operating results and financial condition.
Newer or more innovative technology may disrupt the adoption of SMS as a solution in the communication and authentication space.
TeleSign uses SMS technology for a range of functions, including enabling secure account recovery, business to consumer communications, two-factor authentication, and number masking. Although SMS
 
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continues to be the preferred channel of communication, its use has undergone significant decline relative to other technologies over the recent years. Additionally, newer more innovative technology might emerge and disrupt the adoption of SMS as a solution in the communication and authentication space. If TeleSign fails to innovate and keep pace with these disruptions, its operating results and financial condition may be adversely impacted.
TeleSign faces intense competition, especially from larger, well-established companies, and it may lack sufficient financial or other resources to maintain or improve its competitive position. If TeleSign fails to deliver time critical communication, produce reliable and fast results or provide a global reach, its business and reputation could suffer.
The digital identity and secure communications markets are intensely competitive, and TeleSign expects competition to increase in the future from established competitors and new market entrants. TeleSign faces competition from digital identity providers such as ForgeRock, Okta, Ekata, Saaspass, Prove and Neustar and communications providers such as Sinch and Twilio.
With the continued increase in merger and acquisition transactions in the technology industry, particularly transactions involving cloud-based technologies, there is a significant likelihood that TeleSign will compete with other large technology companies in the future. For example, other technology companies could acquire or develop digital identity solutions that compete directly with any or all of the lines of products offered by TeleSign. These companies have significant name recognition, considerable resources and existing IT infrastructures, and powerful economies of scale and scope, which allow them to rapidly develop and deploy new solutions. Many of TeleSign’s existing competitors have, and some of TeleSign’s potential competitors could have, substantial competitive advantages such as greater name recognition and brand awareness, longer operating histories, larger customer bases, larger sales and marketing budgets and resources, broader distribution and established relationships with partners and customers, greater professional services and customer support resources, greater resources to make acquisitions and enter into strategic partnerships, lower labor and research and development costs, larger and more mature intellectual property portfolios, and substantially greater financial, technical and other resources. Certain of TeleSign’s competitors may also have greater ease of implementation of their products with customers in TeleSign’s market, as well as flexibility, scale, and breadth of integration points.
Consolidation in the markets in which TeleSign competes may affect its competitive position. This is particularly true in circumstances where customers are seeking to obtain a broader set of solutions and services than TeleSign is currently able to provide. In addition, some of TeleSign’s competitors may enter into new alliances with each other or may establish or strengthen cooperative relationships with telecommunication providers, system integrators, third-party consulting firms, or other parties. Any such consolidation, acquisition, alliance, or cooperative relationship could lead to pricing pressure and loss of TeleSign’s market share and could result in a competitor with greater financial, technical, marketing, service, and other resources, all of which could harm TeleSign’s ability to compete. Furthermore, customers may be more willing to incrementally add solutions to their existing infrastructure from competitors than to replace their existing infrastructure with TeleSign’s solutions. Any failure to meet and address the foregoing could adversely affect TeleSign’s business, financial condition, and results of operations.
TeleSign has material customer concentration, with a limited number of customers accounting for a material portion of its 2021 revenues.
TeleSign’s business experiences customer concentration from time to time. For the year ended December 31, 2021, Microsoft and Amazon together accounted for 37% of TeleSign’s revenue. While TeleSign does not believe that the loss of any single customer would have a material adverse effect on TeleSign, such loss could result in an adverse impact on certain of TeleSign’s businesses. The loss of a customer or reduction in usage volumes could adversely impact TeleSign’s revenue, the absorption of fixed overhead costs and TeleSign’s future expansion plans. TeleSign’s business operates in a competitive environment. Sales can fluctuate based on customer demand, market conditions and the competitive landscape. TeleSign’s ability to deliver high-quality solutions globally, quickly and accurately is critical to TeleSign’s success. Any delay or disruption could impact TeleSign’s competitive position and result in loss of customer usage, which could impact TeleSign’s financial position and operating results.
 
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In both digital identity and communications segments, TeleSign’s customer base is concentrated. This customer concentration increases the risk of quarterly fluctuations in TeleSign’s operating results, depending on the seasonal pattern of TeleSign’s top customers’ business. In addition, TeleSign’s top customers could make greater demands on TeleSign with regard to pricing and contractual terms in general. The loss of, or significant decrease in demand from, any of TeleSign’s top customers could affect its business, results of operations and financial condition of the segment.
TeleSign’s sales cycle in certain segments or geography may be long and its sales efforts require considerable time.
In certain segments or geography, TeleSign and TeleSign’s partners are often required to spend significant time and resources to better educate and familiarize potential customers with the value proposition of TeleSign’s solutions. Customers often view the use of TeleSign’s solutions as a strategic decision and, as a result, frequently require considerable time to evaluate, test, and qualify TeleSign’s solutions prior to integrating TeleSign’s solutions. In particular, as the solution entails the processing of users’ personal data, additional checks are often in place by customer’s privacy and security teams prior to the final decision. During the sales cycle, TeleSign expends significant time and money on sales and marketing and contract negotiation activities, which may not result in a sale. Additional factors that may influence the length and variability of TeleSign’s sales cycle include:

the discretionary nature of purchasing and budget cycles and decisions;

lengthy purchasing approval processes;

lengthy privacy and security considerations by the customer;

the industries in which TeleSign’s customers operate;

the evaluation of competing solutions and offerings during the purchasing process;

time, complexity and expense involved in replacing existing solutions;

announcements or planned introductions of new offerings, features or functionality by TeleSign’s competitors or of new offerings, features or functionality by TeleSign; and

evolving functionality demands.
If TeleSign’s efforts in pursuing sales and customers are unsuccessful, or if its sales cycles lengthen, TeleSign’s revenue could be lower than expected, which would adversely affect its business, financial condition, and results of operations.
TeleSign has an aggressive growth plan in the next 5 years; if TeleSign fails to execute its growth plan effectively, it may be unable to adequately address competitive challenges and its business and prospects may be materially and adversely affected.
TeleSign has experienced, and may continue to experience, rapid growth and organizational change, which has placed, and may continue to place, significant demands on TeleSign’s management and its operational and financial resources. TeleSign’s employee headcount grew from 441 as of December 31, 2020 to 507 as of December 31, 2021. Employee growth has occurred at TeleSign’s headquarters, in its other office and among remote employees. As TeleSign expands its business in the U.S. and non-U.S. regions and matures as a public company, TeleSign may find it difficult to maintain its corporate culture while executing its growth plan. Any failure to execute TeleSign’s growth plan and manage organizational changes in a manner that preserves the key aspects of TeleSign’s culture could hurt TeleSign’s chance for future success, including TeleSign’s ability to recruit and retain employees, and effectively focus on and pursue TeleSign’s corporate objectives. This, in turn, could adversely affect its business, results of operations and financial condition.
Continued growth could challenge TeleSign’s ability to develop and improve its operational, financial, and management controls, enhance its reporting systems and procedures, recruit, train, and retain highly skilled personnel, and maintain customer satisfaction. In addition, TeleSign has encountered and will continue to encounter risks and challenges frequently experienced by growing companies in evolving industries, including market acceptance of its products, intense competition, and TeleSign’s ability to manage its costs
 
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and operating expenses. TeleSign must continue to improve and expand its IT and financial infrastructure, operating, and administrative systems and relationships with various partners and other third parties. If TeleSign is unable to execute its growth plan successfully, its business, financial condition, and results of operations could suffer. In addition, as TeleSign expands its business, it is important that it continues to maintain a high level of customer service and satisfaction. As TeleSign’s customer base continues to grow, TeleSign will need to expand its account management, customer service, and other support personnel, and its network of partners, to provide personalized account management and customer service. If TeleSign is not able to continue to provide high levels of customer service, its reputation, as well as its business, financial condition, and results of operations could be adversely affected.
The COVID-19 pandemic has impacted, and may continue to impact, the growth of TeleSign’s business and businesses of certain segments of TeleSign’s customers (e.g. hospitality, travel) which may negatively affect TeleSign’s business. Likewise, any future outbreak or other public health emergency could materially affect TeleSign’s business, liquidity, financial condition and operating results.
The ongoing COVID-19 pandemic and efforts to mitigate its impact have significantly curtailed the movement of people, goods and services worldwide, including in the geographic areas or verticals in which TeleSign conducts its business operations and from which it generates its revenue. It has also caused societal and economic disruption and financial market volatility, resulting in business shutdowns, and reduced business activity. TeleSign believes that the COVID-19 pandemic has had a negative effect on some of its business and results of operations, primarily as a result of:

certain enterprises, especially those in industries that were severely affected by the pandemic, such as hospitality and travel, delaying or pausing digital transformation and expansion projects and negatively impacting IT spending, which has caused some potential customers to delay or forgo purchases of TeleSign’s services, extended payment terms, pricing reductions and some existing customers to fail to renew subscriptions, reduce their usage or fail to expand their usage of TeleSign’s solutions due to the COVID-19 pandemic’s impact on their business; and

restricting TeleSign’s sales operations and marketing efforts, reducing the effectiveness of such efforts in some cases and delaying or lengthening TeleSign’s sales cycles.
The COVID-19 pandemic may cause TeleSign to continue to experience the foregoing challenges in its business in the future and could have other effects on its business, including disrupting TeleSign’s ability to develop new solutions and enhance existing products, market, and sell TeleSign’s products and conduct business activities generally.
In light of the spread of COVID-19, TeleSign has taken precautionary measures intended to reduce the risk of the virus spreading to TeleSign’s employees, TeleSign’s customers and the communities in which it operates. These precautionary measures and policies could negatively impact product innovation and development and employee and organizational productivity, training, and collaboration, or otherwise disrupt TeleSign’s business operations. The extent and duration of working remotely may expose TeleSign to increased risks of security breaches or incidents. TeleSign may need to enhance the security of its solutions and offerings, its data, and internal IT infrastructure, which may require additional resources and may not be successful.
Other disruptions or potential disruptions resulting from the COVID-19 pandemic and any future outbreak or other public health emergency could include restrictions on TeleSign’s personnel and the personnel of TeleSign’s partners to travel and access customers, delays in product development efforts and additional government requirements or other incremental mitigation efforts that may further impact TeleSign’s business, financial condition, and results of operations. The extent to which the COVID-19 pandemic continues to impact TeleSign’s business and results of operations will also depend on future developments that are highly uncertain and cannot be predicted, including new information which may emerge concerning the severity of the disease, the duration and spread of the outbreak, the scope of travel restrictions imposed in geographic areas in which TeleSign operates, mandatory or voluntary business closures, the impact on businesses and financial and capital markets and the extent and effectiveness of the development and distribution of vaccines and other actions taken throughout the world to contain the virus or treat its impact. An extended period of global supply chain and economic disruption as a result of the COVID-19 pandemic
 
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or any future pandemics could have a material negative impact on TeleSign’s business, financial condition, and results of operations, though the full extent and duration is uncertain. To the extent the COVID-19 pandemic adversely affects TeleSign’s business, financial condition, and results of operations it is likely to also have the effect of heightening many of the other risks described in this “Risk Factors” section.
TeleSign has important strategic partnerships with BICS and Proximus, and if it were to lose those partnerships, it could adversely affect TeleSign’s business, results of operations and financial condition while alternative relationships are established.
In 2017, TeleSign entered into an important strategic partnership with BICS, a leading international communications enabler, one of the key global voice carriers and the leading provider of mobile data services worldwide. This partnership created the first global end-to-end communication platform as a service, allowing TeleSign to combine its online traffic with BICS’s communication data, including over 700 direct connections to carriers, to deliver an end-to-end communications platform. The BICS partnership is vital to TeleSign’s success. For example, BICS and TeleSign entered into a Framework Agreement in 2017, which was subsequently updated in 2021, pursuant to which BICS and TeleSign agreed to provide various services to each other. Currently, BICS is TeleSign’s largest supplier. Further, TeleSign and Proximus have entered into a Treasury Services Agreement, pursuant to which Proximus provides TeleSign with a range of services, including a revolving credit facility, as well as a Framework Agreement, pursuant to which administrative services are provided to TeleSign by Proximus. The loss of TeleSign’s relationships with BICS and Proximus could affect TeleSign’s capacity to deliver its services while alternative relationships are sought and established, which could adversely affect its business, results of operations and financial condition.
A substantial part of Telesign’s cost basis is driven by termination charges. Material price increases by telecom operators could have an adverse effect on Telesign’s financial results.
TeleSign’s significantly relies on the services of telecom suppliers or operators to offer its products and services. If any of these telecom suppliers or operators are unable or unwilling to provide or expand their current levels of service to TeleSign, the services TeleSign offers to its customers would be adversely affected. TeleSign may not be able to obtain substitute services from other providers at reasonable or comparable prices or in a timely fashion. Any resulting disruptions in the services TeleSign offers that are provided in reliance on the telecom suppliers or operators would likely result in customer dissatisfaction and adversely affect TeleSign’s operations. Furthermore, pricing increases by any of the telecom suppliers or operators TeleSign relies on for its products and services could adversely affect TeleSign’s results of operations if it is unable to pass pricing increases through to its customers.
If TeleSign is unable to manage the costs associated with its suppliers, its profit margins could be adversely affected.
There is substantial and continuing pressure from customers to reduce their total cost for products. Suppliers may also seek to increase their own profitability by reducing TeleSign’s gross profit margin on products and services they sell to it. TeleSign expends substantial amounts on the value creation services required to remain competitive, retain existing business, and gain new customers, and TeleSign must evaluate the expense of those efforts against the impact of price and margin reductions.
Further, TeleSign’s margins are lower in certain geographic markets and certain parts of its business than in others. For example, TeleSign has different SMS margins in different countries. In certain markets, such as Indonesia and India, higher competition results in lower margins for its SMS business. If TeleSign experiences increased competition in markets where it has higher margins, such as Canada and Spain, there is a risk that its margins in those markets could decrease. If TeleSign is unable to maintain acceptable gross profit margins, its business, financial condition, and results of operations could be adversely affected.
If TeleSign cannot maintain its corporate culture as it grows, it may not be able to retain employees or its culture of innovation and its business could be adversely affected. Furthermore, TeleSign may not be able to attract or retain employees in critical roles at a reasonable cost.
TeleSign believes that its corporate culture has been a critical component to its success and that its culture creates an environment that drives and perpetuates TeleSign’s overall business strategy. TeleSign has
 
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invested substantial time and resources in building its team and it expects to continue to hire as it expands, including with respect to its international operations. As TeleSign transitions and grow as a public company and grow internationally, it may find it difficult to maintain its corporate culture. Any failure to preserve TeleSign’s culture could negatively affect TeleSign’s future success, including TeleSign’s ability to recruit and retain personnel and effectively execute on TeleSign’s business strategy.
TeleSign and its growing corporate culture also depends on the continued contributions of its management team, key employees, and other highly skilled personnel. TeleSign’s management team and key employees are at-will employees, which means they may terminate their relationship with it at any time. The loss of the services of any of TeleSign’s key personnel or delays in hiring required personnel, particularly within its research and development and engineering teams, could adversely affect TeleSign’s business, financial condition, and results of operations.
TeleSign’s future success also depends, in part, on TeleSign’s ability to continue to attract and retain highly skilled personnel. Competition for these personnel in Los Angeles, where TeleSign’s headquarters is located, and in other locations where it maintain offices, is intense, and the industry in which TeleSign operates is generally characterized by significant competition for skilled personnel as well as high employee attrition. TeleSign may not be successful in attracting, retaining, training or motivating qualified personnel to fulfill its current or future needs. Additionally, the former employers of TeleSign’s new employees may attempt to assert that TeleSign’s new employees or TeleSign has breached their legal obligations, which may be time-consuming, distracting to management and may divert TeleSign’s resources. Current and potential personnel also often consider the value of equity awards they receive in connection with their employment, and to the extent the perceived value of TeleSign’s equity awards declines relative to TeleSign’s competitors, TeleSign’s ability to attract and retain highly skilled personnel may be harmed. If TeleSign fails to attract and integrate new personnel or retain and motivate TeleSign’s current personnel, its business, financial condition, and results of operations could be adversely affected.
TeleSign’s international operations and continued international expansion subject TeleSign to additional costs and risks, which could adversely affect its business, financial condition and results of operations.
TeleSign generated 30% of its revenue outside the United States for the year ended December 31, 2021. TeleSign’s growth strategy depends, in part, on TeleSign’s continued international expansion. TeleSign is continuing to adapt to and develop strategies to address international markets, but there is no guarantee that such efforts will be successful. Between December 31, 2020 and December 31, 2021, TeleSign’s headcount grew from 441 employees to 507 employees, 62% of which are located outside of the U.S. TeleSign expects to open additional international offices and hire employees to work at these offices in order to reach new customers and gain access to additional technical talent. Operating in international markets requires significant resources and management attention and will subject TeleSign to regulatory, economic and political risks in addition to those TeleSign already faces in the United States.
TeleSign faces exposure to foreign currency exchange rate fluctuations, and such fluctuations could adversely affect TeleSign’s business, results of operations and financial condition.
As TeleSign’s international operations expand, its exposure to the effects of fluctuations in currency exchange rates grows. For example, global political events, including Brexit, trade tariff developments and other geopolitical events have caused global economic uncertainty and variability in foreign currency exchange rates. While TeleSign has primarily transacted with customers and business partners in U.S. dollars, TeleSign has transacted with customers and suppliers in Euros and GBP. TeleSign expects to significantly expand the number of transactions with customers that are denominated in foreign currencies in the future as TeleSign continues to expand its business internationally. TeleSign also incurs expenses for some of its network service provider costs outside of the United States in local currencies and for employee compensation and other operating expenses at TeleSign’s non-U.S. locations in the respective local currency. Fluctuations in the exchange rates between the U.S. dollar and other currencies could result in an increase to the U.S. dollar equivalent of such expenses. In addition, TeleSign’s international subsidiaries maintain net assets that are denominated in currencies other than the functional operating currencies of these entities. As TeleSign continues to expand its international operations, TeleSign becomes more exposed to the effects of fluctuations in currency exchange rates. Accordingly, changes in the value of foreign currencies relative to
 
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the U.S. dollar can affect TeleSign’s results of operations due to transactional and translational remeasurements. As a result of such foreign currency exchange rate fluctuations, it could be more difficult to detect underlying trends in TeleSign’s business and results of operations.
TeleSign may be unable to make acquisitions and investments or successfully integrate acquired companies into its business, or TeleSign’s acquisitions and investments may not meet its expectations, any of which could adversely affect TeleSign’s business, financial condition, and results of operations.
TeleSign has in the past acquired, and it may in the future acquire or invest in, businesses, offerings, technologies, or talent that it believes could complement or expand TeleSign’s solutions, enhance its technical capabilities or otherwise offer growth opportunities. TeleSign may not be able to fully realize the anticipated benefits of such acquisitions or investments. The pursuit of potential acquisitions may divert the attention of management and cause TeleSign to incur significant expenses related to identifying, investigating and pursuing suitable acquisitions, whether or not they are consummated.
There are inherent risks in integrating and managing acquisitions. If TeleSign acquires additional businesses, it may not be able to assimilate or integrate the acquired personnel, operations, solutions and technologies successfully, or effectively manage the combined business following the acquisition. TeleSign also may not achieve the anticipated benefits or synergies from the acquired business due to a number of factors, including, without limitation:

delays or reductions in customer purchases for both TeleSign and the acquired business;

disruption of partner and customer relationships;

potential loss of key employees of the acquired company;

claims by and disputes with the acquired company’s employees, customers, stockholders or third parties;

unknown liabilities or risks associated with the acquired business, product or technology, such as contractual obligations, potential security vulnerabilities of the acquired company and its products and services, potential intellectual property infringement, misappropriation or other violation, costs arising from the acquired company’s failure to comply with legal or regulatory requirements and litigation matters;

acquired technologies or products may not comply with legal or regulatory requirements and may require TeleSign to make additional investments to make them compliant;

acquired technologies or products may not be able to provide the same support service levels that TeleSign generally offers with its other offerings;

they could be viewed unfavorably by TeleSign’s partners, its customers, its stockholders or securities analysts;

unforeseen difficulties relating to integration or other expenses; and

future impairment of goodwill or other acquired intangible assets.
Acquisitions also increase the risk of unforeseen legal liability, including for potential violations of applicable law or industry rules and regulations, arising from prior or ongoing acts or omissions by the acquired businesses that are not discovered by due diligence during the acquisition process. TeleSign may have to pay cash, incur debt or issue equity or equity-linked securities to pay for any future acquisitions, each of which could adversely affect TeleSign’s financial condition or the market price of its common stock. The sale of equity or issuance of equity-linked debt to finance any future acquisitions could result in dilution to TeleSign’s stockholders. The incurrence of indebtedness would result in increased fixed obligations and could also include covenants or other restrictions that would impede TeleSign’s ability to manage its operations. Any of the foregoing could adversely affect TeleSign’s business, financial condition, and results of operations.
 
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TeleSign’s failure to raise additional capital or generate cash flows necessary to expand its operations and invest in new technologies in the future could reduce TeleSign’s ability to compete successfully and harm its results of operations.
TeleSign may need to raise additional funds, and it may not be able to obtain additional debt or equity financing on favorable terms, if at all. If TeleSign raises additional equity or convertible debt financing, TeleSign’s security holders may experience significant dilution of their ownership interests. If TeleSign engages in additional debt financing, it may be required to accept terms that restrict TeleSign’s ability to incur additional indebtedness, force it to maintain specified liquidity or other ratios or restrict its ability to pay dividends or make acquisitions. If TeleSign needs additional capital and cannot raise it on acceptable terms, or at all, it may not be able to, among other things:

develop and enhance its solutions;

continue to expand its product development, sales and marketing organizations;

hire, train and retain employees;

respond to competitive pressures or unanticipated working capital requirements; or

pursue acquisition opportunities.
TeleSign’s inability to do any of the foregoing could reduce its ability to compete successfully and harm its business, results of operations and financial condition.
TeleSign’s results of operations may be adversely affected by changes in accounting principles applicable to it. Additionally, estimates or judgments relating to its critical accounting policies may be based on assumptions that change or prove to be incorrect, which could cause TeleSign’s results of operations to fall below expectations of securities analysts and investors, resulting in a decline in the market price of TeleSign’s common stock.
U.S. GAAP is subject to interpretation by the Financial Accounting Standards Board, or the FASB, the SEC and other various bodies formed to promulgate and interpret appropriate accounting principles. Changes in accounting principles applicable to TeleSign, or varying interpretations of current accounting principles, could have a significant effect on TeleSign’s reported results of operations. Further, any difficulties in the implementation of changes in accounting principles, including the ability to modify TeleSign’s accounting systems, could cause TeleSign to fail to meet its financial reporting obligations, which could result in regulatory discipline and harm investors’ confidence in TeleSign.
Furthermore, the preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in TeleSign’s financial statements and accompanying notes. TeleSign bases its estimates on historical experience and on various other assumptions that TeleSign believes to be reasonable under the circumstances, as described in the section titled “Management’s Discussion and Analysis of Financial Condition and Results of Operations.” The results of these estimates form the basis for making judgments about the recognition and measurement of certain assets and liabilities and revenue and expenses that is not readily apparent from other sources. TeleSign’s accounting policies that involve judgment include those related to revenue recognition, certain accrued liabilities, and valuation allowances associated with income taxes. If TeleSign’s assumptions change or if actual circumstances differ from those in TeleSign’s assumptions, TeleSign’s results of operations could be adversely affected, which could cause TeleSign’s results of operations to fall below the expectations of securities analysts and investors, resulting in a decline in the market price of TeleSign’s common stock.
TeleSign has had and may continue to have significant deficiencies or material weaknesses over internal reporting in the future.
As a privately held company, TeleSign was not required to evaluate its internal control over financial reporting in a manner that meets the standards of publicly traded companies required by Section 404 of the Sarbanes-Oxley Act. As a public company, it will be subject to the reporting requirements of the Exchange Act, Sarbanes-Oxley Act, and Nasdaq listing standards. The Sarbanes-Oxley Act requires, among other things, that TeleSign maintain effective disclosure controls and procedures and internal control over financial reporting.
 
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TeleSign did not design and maintain an effective control environment commensurate with its financial reporting requirements. TeleSign lacked a sufficient number of professionals with an appropriate level of accounting knowledge, training and experience to appropriately analyze, record and disclose accounting matters timely and accurately. Additionally, the limited personnel resulted in an inability to consistently establish appropriate authorities and responsibilities in pursuit of financial reporting objectives, as demonstrated by, among other things, insufficient segregation of duties in its finance and accounting functions.
Telesign did not design and maintain effective controls over certain information technology (IT) general controls for information systems that are relevant to the preparation of its financial statements, specifically, with respect to: (i) program change management controls to ensure that IT program and data changes affecting financial IT applications and underlying accounting records are identified, tested, authorized and implemented appropriately; (ii) user access controls to ensure appropriate segregation of duties and that adequately restrict user and privileged access to financial applications, programs, and data to appropriate company personnel, and (iii) computer operations controls to ensure that critical batch jobs are monitored and data backups are authorized and monitored. These IT deficiencies did not result in a material misstatement to the financial statements, however, the deficiencies, when aggregated, could impact maintaining effective segregation of duties, as well as the effectiveness of IT-dependent controls (such as automated controls that address the risk of material misstatement to one or more assertions, along with the IT controls and underlying data that support the effectiveness of system-generated data and reports) that could result in misstatements potentially impacting all financial statement accounts and disclosures that would not be prevented or detected. Accordingly, management has determined these deficiencies in the aggregate constitute a material weakness.
TeleSign is continuing to develop and refine its disclosure controls and other procedures that are designed to ensure that information required to be disclosed by TeleSign in the reports that it will file with the SEC is recorded, processed, summarized and reported within the time periods specified in SEC rules and forms and that information required to be disclosed in reports under the Exchange Act is accumulated and communicated to TeleSign’s principal executive and financial officers. TeleSign is also continuing to improve its internal control over financial reporting. TeleSign has expended, and anticipates that it will continue to expend, significant resources in order to maintain and improve the effectiveness of TeleSign’s disclosure controls and procedures and internal control over financial reporting.
Although TeleSign believes these actions would remediate the material weaknesses, there can be no assurance that the material weaknesses will be remediated on a timely basis or at all, or that additional material weaknesses will not be identified in the future.
TeleSign’s current controls and any new controls that it develops may become inadequate because of changes in the conditions in its business, including increased complexity resulting from any further international expansion. Further, weaknesses in TeleSign’s disclosure controls or TeleSign’s internal control over financial reporting may be discovered in the future. Any failure to develop or maintain effective controls, or any difficulties encountered in their implementation or improvement, could harm TeleSign’s results of operations or cause TeleSign to fail to meet its reporting obligations and may result in a restatement of TeleSign’s financial statements for prior periods. Any failure to implement and maintain effective internal control over financial reporting could also adversely affect the results of periodic management evaluations and annual independent registered public accounting firm attestation reports regarding the effectiveness of TeleSign’s internal control over financial reporting that it will eventually be required to include in TeleSign’s periodic reports that will be filed with the SEC. Ineffective disclosure controls and procedures and internal control over financial reporting could also cause investors to lose confidence in TeleSign’s reported financial and other information, which would likely adversely affect the market price of TeleSign’s common stock. In addition, if TeleSign is unable to continue to meet these requirements, TeleSign may not be able to remain listed on Nasdaq. TeleSign is not currently required to comply with the SEC rules that implement Section 404 of the Sarbanes-Oxley Act and is therefore not required to make a formal assessment of the effectiveness of TeleSign’s internal control over financial reporting for that purpose. As a public company, TeleSign will be required to provide an annual management report on the effectiveness of TeleSign’s internal control over financial reporting commencing with TeleSign’s second annual report on Form 10-K.
 
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TeleSign’s independent registered public accounting firm is not required to formally attest to the effectiveness of TeleSign’s internal control over financial reporting until after TeleSign is no longer an “emerging growth company.” At such time, TeleSign’s independent registered public accounting firm may issue a report that is adverse in the event it is not satisfied with the level at which TeleSign’s internal control over financial reporting is documented, designed or operating. Any failure to maintain effective disclosure controls and internal control over financial reporting could have an adverse effect on TeleSign’s business, financial condition, and results of operations, and could cause a decline in the market price of TeleSign’s common stock.
TeleSign tracks certain operational metrics with internal systems and tools and does not independently verify such metrics. Certain of TeleSign’s operational metrics are subject to inherent challenges in measurement, and any real or perceived inaccuracies in such metrics may adversely affect TeleSign’s business and reputation.
TeleSign tracks certain operational metrics with internal systems and tools that are not independently verified by any third party and which may differ from estimates or similar metrics published by third parties due to differences in sources, methodologies or the assumptions on which TeleSign relies. For example, certain of TeleSign’s operational metrics, including some of its marketing and sales revenue attribution rubrics, have not been independently verified by any third party. TeleSign’s internal systems and tools have a number of limitations, and TeleSign’s methodologies for tracking these metrics may change over time, and may be interpreted differently by different departments within TeleSign, which could result in unexpected changes to its metrics, including the metrics it publicly discloses. If the internal systems and tools TeleSign uses to track these metrics undercount or overcount performance or contain algorithmic or other technical errors, the data TeleSign reports may not be accurate. While these numbers are based on what TeleSign believes to be reasonable estimates of its metrics for the applicable period of measurement, there are inherent challenges in measuring these metrics. Limitations or errors with respect to how TeleSign measures data or with respect to the data that it measures may affect TeleSign’s understanding of certain details of its business, which could affect its long-term strategies. If TeleSign’s operating metrics are not accurate representations of its business, if investors do not perceive TeleSign’s operating metrics to be accurate or if it discovers material inaccuracies with respect to these figures, TeleSign expects that its business, financial condition, and results of operations could be adversely affected.
Adverse macro-economic conditions and their impact on consumer spending patterns could adversely affect TeleSign.
TeleSign’s business depends on the overall demand for information technology and on the economic health of its current and prospective customers. Weak global and regional economic conditions and spending environments, geopolitical instability and uncertainty, weak economic conditions in certain regions or a reduction in information technology spending regardless of macro-economic conditions could have adverse impacts on TeleSign’s business, financial condition and results of operations, including longer sales cycles, lower prices for its products and services, higher default rates among its customers or channel partners, reduced unit sales and slower or declining growth.
TeleSign’s business could be adversely affected by pandemics, natural disasters, political crises or other unexpected or unforeseen events.
A significant natural disaster, such as an earthquake, fire, hurricane, tornado, flood or significant power outage, could disrupt TeleSign’s operations, mobile networks, the Internet or the operations of TeleSign’s telecom suppliers or operators and third-party technology providers. For example, a power outage could disrupt the utilities and communications infrastructure and TeleSign could have fewer telecommunication providers able to provide services — as a result, TeleSign’s costs would increase given it depends on telecommunications and utilities infrastructure. Further, TeleSign’s corporate headquarters are located in the Southern California, a region known for seismic activity. In addition, any unforeseen public health crises, such as the COVID-19 pandemic, political crises, such as terrorist attacks, war and other political instability, or other catastrophic events, whether in the United States or abroad, can continue to adversely affect TeleSign’s operations or the economy as a whole.
Furthermore, instability in geographies where TeleSign has customers, partners and/or operations could have a material adverse effect on its business. In particular, TeleSign’s business could be affected by
 
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the ongoing conflict between Russia and Ukraine, where some of its customers and suppliers are located, including potentially due to increased costs from Russian carriers. On February 24, 2022, Russian forces launched significant military action against Ukraine, and sustained conflict and disruption in the region is likely. The U.S. government and other governments in jurisdictions in which TeleSign operates have imposed severe sanctions and export controls against Russia and Russian interests and threatened additional sanctions and controls. The impact of these measures, as well as announced and potential responses to them by Russia, is currently unknown and they could adversely affect TeleSign’s business, partners or customers.
Additionally, a large proportion of TeleSign’s employees are based in its offices in Belgrade, Serbia. To the extent TeleSign’s office in Serbia experiences disruptions in relation to the ongoing turmoil in Eastern Europe and Russia, its business could be negatively affected.
The impact of any natural disaster, act of terrorism, act of war or other disruption to TeleSign or its third-party providers’ abilities could result in decreased demand for its solutions or a delay in the provision of its solutions, which would adversely affect TeleSign’s business, financial condition, and results of operations. All of the aforementioned risks would be further increased if TeleSign’s disaster recovery plans prove to be inadequate.
Risks Related to TeleSign’s Intellectual Property
If TeleSign fails to adequately obtain, maintain, defend, protect or enforce its intellectual property or proprietary rights, TeleSign’s competitive position could be impaired and it may lose valuable assets, generate less revenue and incur costly litigation.
TeleSign’s success is dependent, in part, upon protecting its intellectual property, proprietary information and technology. TeleSign relies, or may in the future rely, on a combination of patents, copyrights, trademarks, service marks, trade secret laws in the United States and certain other jurisdictions and contractual restrictions to establish and protect its proprietary rights, all of which provide only limited protection. The steps TeleSign takes to protect its intellectual property may be inadequate and TeleSign will not be able to protect its intellectual property if it is unable to enforce its rights or if it does not detect unauthorized use of TeleSign’s intellectual property. Various factors outside TeleSign’s control pose a threat to its intellectual property rights, as well as to its products, services and technologies. For example, TeleSign may fail to obtain effective intellectual property protection, or the efforts TeleSign has taken to protect its intellectual property rights may not be sufficient or effective, and any of TeleSign’s intellectual property rights may be challenged, which could result in them being narrowed in scope or declared invalid or unenforceable.
TeleSign makes business decisions about when to seek patent protection for a particular technology and when to rely upon trade secret protection, and the approach it selects may ultimately prove to be inadequate. There can be no assurance TeleSign’s intellectual property rights will be sufficient to protect against others offering products or services that are substantially similar to TeleSign’s and compete with its business or that unauthorized parties may attempt to copy aspects of TeleSign’s technology and use information that it considers proprietary. For example, it is possible that third parties, including TeleSign’s competitors, may obtain patents relating to technologies that overlap or compete with TeleSign’s technology. If third parties obtain patent protection with respect to such technologies, they may assert that TeleSign’s technology infringes their patents and seek to charge TeleSign a licensing fee or otherwise preclude the use of TeleSign’s technology.
TeleSign relies in part on trade secrets, proprietary know-how and other confidential information to maintain its competitive position. TeleSign attempts to protect its intellectual property, technology and confidential information by requiring its employees, contractors, consultants, corporate collaborators, advisors and other third parties who develop intellectual property on its behalf to enter into confidentiality and invention assignment agreements and third parties TeleSign shares information with to enter into nondisclosure and confidentiality agreements. However, TeleSign cannot guarantee that it has entered into such agreements with each party who has developed intellectual property on its behalf and each party that has or may have had access to TeleSign’s confidential information, know-how and trade secrets, and no assurance can be given that these agreements will be effective in controlling access to and distribution of TeleSign’s intellectual property, trade secrets, solutions and proprietary and confidential information. Further,
 
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these agreements do not prevent TeleSign’s competitors from independently developing technologies that are substantially equivalent or superior to its solutions or offerings. These agreements may be insufficient or breached, or may not effectively prevent unauthorized access to or unauthorized use, disclosure, misappropriation or reverse engineering of, TeleSign’s confidential information, intellectual property, or technology. Moreover, these agreements may not provide an adequate remedy for breaches or in the event of unauthorized use or disclosure of TeleSign’s confidential information or technology, or infringement of TeleSign’s intellectual property. Enforcing a claim that a party illegally disclosed or misappropriated a trade secret or know-how is difficult, expensive, and time-consuming, and the outcome is unpredictable. In addition, trade secrets and know-how can be difficult to protect and some courts inside and outside the U.S. are less willing or unwilling to protect trade secrets and know-how. If any of TeleSign’s trade secrets were to be lawfully obtained or independently developed by a competitor or other third party, TeleSign would have no right to prevent them from using that technology or information to compete with TeleSign, and TeleSign’s competitive position would be adversely harmed. The loss of trade secret protection could make it easier for third parties to compete with TeleSign’s products and services by copying functionality. Additionally, individuals not subject to invention assignment agreements may make adverse ownership claims to TeleSign’s current and future intellectual property, and, to the extent that TeleSign’s employees, independent contractors or other third parties with whom it does business use intellectual property owned by others in their work for TeleSign, disputes may arise as to the rights in related or resulting know-how and inventions.
Despite TeleSign’s precautions, it may be possible for unauthorized third parties to copy its solutions or offerings and use information that TeleSign regards as proprietary to create products that compete with it. Some license provisions protecting against unauthorized use, copying, transfer and disclosure of TeleSign’s solutions or offerings may be unenforceable under the laws of certain jurisdictions and foreign countries. Further, the laws of some countries do not protect intellectual property and proprietary rights to the same extent as the laws of the United States, and mechanisms for enforcement of intellectual property rights in some foreign countries may be inadequate. Any of TeleSign’s intellectual property rights may be challenged or circumvented by others or invalidated or held unenforceable through administrative process or litigation in the United States or in foreign jurisdictions. Furthermore, legal standards relating to the validity, enforceability and scope of protection of intellectual property rights are uncertain and any changes in, or unexpected interpretations of, intellectual property laws may compromise TeleSign’s ability to enforce TeleSign’s trade secrets and intellectual property rights. To the extent TeleSign expands its international activities, its exposure to unauthorized copying and use of TeleSign’s solutions or offerings and proprietary information may increase. Accordingly, despite TeleSign’s efforts, it may be unable to prevent third parties from infringing, misappropriating, or otherwise violating its technology and intellectual property.
To protect TeleSign’s intellectual property rights, TeleSign may be required to spend significant time, money, and resources to maintain, monitor, and protect these rights. Litigation may be necessary in the future to enforce TeleSign’s intellectual property rights and to protect its trade secrets. Such litigation could be costly, time consuming and distracting to management and could result in the impairment or loss of portions of TeleSign’s intellectual property. Furthermore, TeleSign’s efforts to enforce its intellectual property rights may be met with defenses, counterclaims and countersuits attacking the validity and enforceability of its intellectual property rights. Additionally, because of the substantial amount of discovery required in connection with intellectual property litigation, there is a risk that some of TeleSign’s confidential information could be compromised by disclosure during this type of litigation. TeleSign’s inability to protect its proprietary technology against unauthorized copying or use, as well as any costly litigation or diversion of TeleSign’s management’s attention and resources, could delay further sales or the implementation of its solutions or offerings, impair the functionality of its solutions or offerings, delay introductions of new offerings, result in TeleSign’s substituting inferior or more costly technologies into its solutions and offerings, or injure TeleSign’s reputation.
If TeleSign is subject to a claim that it infringes, misappropriates or otherwise violates a third party’s intellectual property rights, TeleSign’s business, financial condition, or results of operations could be adversely affected.
Claims by third parties that TeleSign infringe, misappropriate or otherwise violate their proprietary technology or other intellectual property rights could harm its business. A number of companies in TeleSign’s industry hold a large number of patents and also protect their copyrights, trade secrets and other intellectual property rights, and there is considerable patent and other intellectual property development activity in
 
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TeleSign’s industry. TeleSign expects that software companies will increasingly be subject to claims of infringement, misappropriation and other violations of intellectual property rights as the number of products and competitors grows and the functionality of products in different industry segments overlaps. As TeleSign faces increasing competition and become increasingly high profile, the possibility of receiving a larger number of intellectual property claims against TeleSign grows. In addition, various “non-practicing entities,” and other intellectual property rights holders may attempt to assert intellectual property claims against TeleSign or seek to monetize the intellectual property rights they own to extract value through licensing or other settlements.
In addition, the patent portfolios of many of TeleSign’s competitors are larger than TeleSign’s, and this disparity may increase the risk that TeleSign’s competitors may sue TeleSign for patent infringement and may limit TeleSign’s ability to counterclaim for patent infringement or settle through patent cross-licenses. TeleSign’s use of third-party software and other intellectual property rights also may be subject to claims of infringement or misappropriation. For example, a claim may be made relating to technology that TeleSign acquires or license from third parties. In addition, to the extent TeleSign hires personnel from competitors, TeleSign may be subject to allegations that such personnel have divulged proprietary or other confidential information to TeleSign. Further, TeleSign may be unaware of the intellectual property rights of others that may cover some or all of TeleSign’s technology, and TeleSign’s insurance may not cover intellectual property rights infringement claims that may be made.
Any claim of infringement, misappropriation or other violation, regardless of its merit or TeleSign’s defenses, could:

require costly litigation to resolve or the payment of substantial damages, ongoing royalty payments, or other significant amounts to settle such disputes;

require significant management time and attention;

cause TeleSign to enter into unfavorable royalty or license agreements, which may not be available on commercially reasonable terms, if at all;

require TeleSign to discontinue the sale of some or all of TeleSign’s solutions, remove, or reduce features or functionality of TeleSign’s solutions or comply with other unfavorable terms;

require TeleSign to indemnify TeleSign’s customers or third-party service providers; or

require TeleSign to expend additional development resources to redesign TeleSign’s solutions.
Any of the foregoing could adversely affect TeleSign’s business, financial condition, and results of operations.
TeleSign may be obligated to disclose its proprietary source code to certain of its customers, which may limit TeleSign’s ability to protect its intellectual property and proprietary rights and could reduce the renewals of TeleSign’s solutions. Additionally, use of open-source software in TeleSign’s solutions without proper prior review and analysis could negatively affect TeleSign’s ability to license its services and may subject it to possible litigation.
Some of TeleSign’s customer agreements contain provisions permitting the customer to become a party to, or a beneficiary of, a source code escrow agreement under which TeleSign places the proprietary source code for certain of TeleSign’s products in escrow with a third party, and in certain circumstances, upon customer request, TeleSign also makes available the source code of TeleSign’s proprietary software. TeleSign is currently party to a source code escrow agreement, pursuant to which an escrow agent may release TeleSign’s source code to customers identified as beneficiaries under such agreement if TeleSign becomes the subject of a voluntary or involuntary petition in bankruptcy (other than a case filed under chapter 11 of the U.S. Bankruptcy Code), and such petition is not dismissed within 120 days of filing, or if TeleSign admits in writing of TeleSign’s inability to pay TeleSign’s debts as they become due. TeleSign has never released TeleSign’s source code from escrow. Agreements with certain customers may also require TeleSign to release TeleSign’s source code under certain other circumstances, such as material breach of the applicable agreement. Disclosing the content of TeleSign’s source code may limit the intellectual property protection TeleSign can obtain or maintain for TeleSign’s source code or TeleSign’s products containing that source code
 
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and may facilitate intellectual property infringement, misappropriation or other violation claims against TeleSign. Following any such release, TeleSign cannot be certain that customers will comply with the restrictions on their use of the source code and TeleSign may be unable to monitor and prevent unauthorized disclosure of such source code by customers. Any increase in the number of people familiar with TeleSign’s source code as a result of any such release also may increase the risk of a successful hacking attempt. Any of these circumstances could result in an adverse effect on TeleSign’s business, financial condition, and results of operations.
Risks Related to the Legal and Regulatory Environment
TeleSign is subject to stringent laws and regulations with regards to consumer privacy, data use, and data protection. Any actual, suspected or perceived failure by TeleSign to comply with such laws and regulations would materially affect its business.
Many jurisdictions have enacted or are considering enacting or revising privacy, data protection or information security legislation, including laws, rules and regulations applying to the collection, use, storage, transfer, disclosure or other processing of personal data, including for purposes of marketing and other communications. The costs of compliance with, and other burdens imposed by, such laws, rules and regulations that are applicable to the operations of TeleSign’s business, or those of its customers, will limit the use and adoption of TeleSign’s service and reduce overall demand for it. These privacy, data protection and information security related laws, rules and regulations are evolving and will likely result in increasing regulatory and public scrutiny and escalating levels of enforcement and sanctions. In addition, TeleSign is subject to certain contractual obligations regarding the collection, use, storage, transfer, disclosure or other processing of personal data. Although TeleSign is working to comply with applicable federal, state, and foreign laws, rules and regulations, industry standards, contractual obligations and other legal obligations that apply to it, those laws, rules, regulations, standards and obligations are evolving and may be modified, interpreted and applied in an inconsistent manner from one jurisdiction to another, and may conflict with one another, other requirements or legal obligations, TeleSign’s practices or the features of its solutions. TeleSign also expects that there will continue to be new proposed laws, regulations and industry standards concerning privacy, data protection and information security in the United States, the European Union and other jurisdictions, and TeleSign cannot yet determine the impact that such future laws, regulations and standards may have on its business.
In June 2018, California enacted the CCPA, which took effect on January 1, 2020 and established a new privacy framework for covered businesses such as TeleSign, which has required TeleSign to modify its data processing practices and policies and to incur compliance-related costs and expenses. The CCPA broadly defines personal information and gave California residents expanded privacy rights and protections, such as affording them the right to access and request deletion of their information and to opt out of certain sharing and sales of personal information. The law also prohibits covered businesses from discriminating against California residents (for example, charging more for services) for exercising any of their CCPA rights. The CCPA provides for civil penalties and statutory damages for violations and a private right of action for data breaches that result in the loss of certain types of personal information if the breached entity failed to implement reasonable safeguards. This private right of action is expected to increase the likelihood of, and risks associated with, data breach litigation in the state of California. Given how new the CCPA is and the fact that many enforcement actions are resolved informally between businesses and the California Attorney General during a 30-day cure period, it is still somewhat unclear how certain provisions of the CCPA will be interpreted and enforced. In November 2020, California voters passed the California Privacy Rights Act of 2020, or CPRA. Effective in most material respects starting on January 1, 2023, the CPRA imposes additional obligations on companies covered by the legislation and will significantly modify the CCPA, including by expanding the CCPA with additional data privacy compliance requirements that will impact TeleSign’s business, such as providing limited opt-out rights for the processing and sharing of sensitive personal information, and requiring businesses to maintain data retention schedules and generally describe data retention guidelines in their privacy notices. The CPRA also establishes a regulatory agency dedicated to enforcing the CCPA and the CPRA, which is expected to lead to increased enforcement activity. The effects of the CPRA, the CCPA, other similar state or federal laws, and other future changes in laws or regulations relating to privacy, data protection and information security, particularly any new or modified laws or regulations that require enhanced protection of certain types of data or new obligations with regard
 
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to data retention, transfer or disclosure, are significant, will require TeleSign to modify its data processing practices and policies, will increase the cost of providing TeleSign’s offerings, could require significant changes to its operations, or even prevent TeleSign from providing certain offerings in jurisdictions in which it currently operates and in which it may operate in the future, or incur potential liability in an effort to comply with such legislation.
Other state legislatures are currently contemplating, and may pass or in the case of Virginia and Colorado, have passed, their own comprehensive data privacy and security laws, with potentially greater penalties and more rigorous compliance requirements relevant to TeleSign’s business, and many state legislatures have already adopted legislation that regulates how businesses operate online, including measures relating to privacy, data security, data breaches and the protection of sensitive and personal information. For example, in March 2021, Virginia enacted the Virginia Consumer Data Protection Act, or CDPA, a comprehensive privacy statute that becomes effective on January 1, 2023 and shares similarities with the GDPR and, to a lesser extent, the CCPA and the CPRA,. Similarly, Colorado passed the Colorado Privacy Act, which closely resembles the substantive provisions of the CDPA and will take effect on July 1, 2023. A patchwork of different laws in all 50 states require businesses to provide notice under certain circumstances to customers whose personally identifiable information has been subject to unauthorized access or acquisition as a result of a data breach. New laws, amendments to or re-interpretations of existing laws and regulations, industry standards, contractual obligations and other obligations may require TeleSign to incur additional costs and restrict its business operations. Such laws and regulations would require companies to implement privacy and security policies, permit users to access, correct and delete personal data stored or maintained by such companies, inform individuals of security breaches that affect their personal data, and, in some cases, obtain individuals’ consent to use personal data for certain purposes, such as a new affirmative opt-in requirement for the processing of sensitive personal data under the CDPA and CPA. If TeleSign, or the third parties on which TeleSign relies, fail to comply with federal, state or international laws or regulations relating to privacy, data protection or information security, TeleSign’s ability to successfully operate its business and pursue its business goals could be harmed. In addition to government activity, privacy advocacy groups and technology and other industries are considering various new, additional or different self-regulatory standards that could place additional burdens on TeleSign. Future laws, regulations, standards and other obligations, and changes in the interpretation of existing laws, regulations, standards and other obligations could require TeleSign to modify its data processing practices and policies, and could impair TeleSign’s or its customers’ ability to collect, use or disclose information relating to consumers, which could decrease demand for TeleSign’s applications, increase its costs and impair its ability to maintain and grow TeleSign’s customer base and increase its revenue.
Internationally, many jurisdictions have established their own legal frameworks governing privacy, data protection, and information security with which TeleSign may need to comply. For example, the European Union has adopted the GDPR, which went into effect in May 2018 and contains numerous requirements and changes from previously existing EU law, including more robust obligations on data controllers, data processors, controllers and data, and heavier documentation requirements for data protection compliance programs. The GDPR requires the implementation of more stringent requirements for processors and controllers of personal data, including, for example, transparent and expanded disclosure to data subjects about how their personal data is to be used, imposes limitations on data retention, introduces mandatory data breach notification requirements, and sets higher standards for data controllers to demonstrate that they have obtained from data subjects valid consent for certain data processing activities. The GDPR also imposes strict rules on the transfer of personal data to countries outside the European Economic Area, or EEA, including the United States. In 2016, the EU and United States agreed to a transfer framework for data transferred from the EEA to the United States, called the Privacy Shield, but the Privacy Shield was invalidated in July 2020 by the Court of Justice of the EU, or CJEU. The standard contractual clauses issued by the European Commission for the transfer of personal data, an alternative to the Privacy Shield, also have been drawn into question for use under certain circumstances, and in June 2021 regulators issued updated standard contractual clauses, as well as additional guidance regarding considerations and requirements that TeleSign and other companies must consider and undertake when using such clauses, in particular conducting a transfer impact assessment prior to the intended transfer and implementing additional safeguards measures. Fines for noncompliance with the GDPR are significant and can be up to the greater of €20 million or 4% of total worldwide annual turnover in the preceding financial year. The GDPR also provides that EU member states may introduce further conditions, including limitations, and make their
 
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own laws and regulations further limiting processing activities, in particular the processing of ‘special categories of personal data,’ including personal data related to health, biometric data and genetic information. Any of these framework, requirements, changes rules or fines would limit TeleSign’s ability to collect, use and share certain EU data, and have caused TeleSign’s compliance costs to increase, ultimately having an adverse impact on its business, financial condition, and results of operations.
Further, the United Kingdom’s exit from the European Union, often referred to as Brexit, and ongoing developments in the United Kingdom have created uncertainty with regard to data protection regulation in the United Kingdom. As of January 1, 2021, following the expiry of transitional arrangements agreed to between the United Kingdom and European Union, data processing in the United Kingdom is governed by a United Kingdom version of the GDPR (combining the GDPR and the United Kingdom’s Data Protection Act 2018), which authorizes significant fines, up to the greater of £17.5 million or 4% of total worldwide annual turnover, and exposes TeleSign to two parallel regimes and other potentially divergent enforcement actions for certain violations. On June 28, 2021, the European Commission adopted two adequacy decisions for the United Kingdom — that the United Kingdom ensures adequate protection of personal data from the EU to the United Kingdom under both the GDPR and the Law Enforcement Directive of 2016. However, unless they are extended, both adequacy decisions will expire on June 27, 2025. Furthermore, following the expiration of this specified period, there will be increasing scope for divergence in application, interpretation and enforcement of the data protection law as between the United Kingdom and EEA. Other countries have also passed or are considering passing laws requiring local data residency or restricting the international transfer of data. Additionally, many jurisdictions outside the United States, EEA, and United Kingdom in which TeleSign has operations or for which such jurisdictions’ laws or regulations may apply to TeleSign or its operations, including Canada, Australia, New Zealand, and Singapore, maintain laws and regulations relating to privacy, data protection, and information security that provide for extensive obligations in connection with the use, collection, protection, and processing of personal data. Many of these legal regimes provide for substantial fines, penalties, or other consequences for noncompliance. TeleSign may be required to implement new measures or policies, or change its existing policies and measures or the features of its solutions, in an effort to comply with future developments under U.S. and international laws, rules, and regulations relating to privacy, data protection and information security, which could require TeleSign to expend substantial financial and other resources and which could otherwise be difficult to undertake.
Any failure or perceived failure by TeleSign to comply with federal, state or foreign laws, rules or regulations, industry standards, contractual or other legal obligations relating to privacy, data protection or information security, or any actual, perceived or suspected security incident, whether or not resulting in accidental or unlawful destruction, loss, alteration, unauthorized disclosure of, or access to, personal data or other data, may result in enforcement actions and prosecutions, private litigation, significant fines, penalties and censure, claims for damages by customers and other affected individuals, regulatory inquiries and investigations or adverse publicity and could cause TeleSign’s customers to lose trust in it, any of which could have an adverse effect on its reputation and/or business. Since many of TeleSign’s offerings involve the processing of personal data from its customers and their employees, contractors, customers, partners and others, any inability to adequately address privacy, data protection or information security concerns, even if unfounded, or failure to comply with applicable laws, rules, regulations, policies, industry standards, contractual or other legal obligations could result in additional cost and liability to TeleSign, damage TeleSign’s reputation, inhibit sales and adversely affect its business, financial condition, and results of operations.
Around the world, there are numerous lawsuits in process against various technology companies that process personal data. If those lawsuits (and in particular those against companies implementing processing operations similar to TeleSign) are successful, it could increase the likelihood that TeleSign may be exposed to liability for its own policies and practices concerning the processing of personal data, which could hurt its business. Furthermore, the costs of compliance with, and other burdens imposed by laws, regulations and policies concerning privacy, data protection and information security that are applicable to the businesses of TeleSign’s customers may limit the use and adoption of its solutions and reduce overall demand for it. Concerns relating to privacy, data protection or information security whether or not valid, may inhibit market adoption of TeleSign’s solutions. Additionally, concerns about privacy, data protection or information security may result in the adoption of new legislation that restricts the implementation of technologies like
 
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TeleSign’s or requires TeleSign to make modifications to its solutions, which could significantly limit the adoption and deployment of TeleSign’s technologies or result in significant expense to modify its solutions.
TeleSign publicly posts its privacy policies and practices concerning TeleSign’s collection, use, disclosure and other processing of the personal data provided to TeleSign by its customers. Although TeleSign endeavors to comply with its public statements and documentation, it may at times fail to do so or be alleged to have failed to do so. TeleSign’s publication of its privacy policies and other statements it publishes that provide promises and assurances about privacy, data protection and information security can subject TeleSign to potential regulatory action and/or private litigation, not only if they are found to be non-compliant with applicable requirements but also if such statements are found to be deceptive, unfair or misrepresentative of TeleSign’s actual practices.
Evolving and changing definitions of what constitutes “personal information” and “personal data” within the EEA, the United States and elsewhere, especially relating to classification of IP addresses, machine or device identification numbers, location data and other information, may limit or inhibit TeleSign’s ability to operate or expand its business, including limiting technology alliance partners that may involve the sharing of data. In addition, rapidly-evolving privacy laws and frameworks distinguish between a data processor and data controller (or under the CCPA, whether a company is a ‘service provider’), and different risks and requirements may apply to TeleSign, depending on the nature of TeleSign’s data processing activities. If TeleSign’s business model expands and changes over time, different sets of risks and requirements may apply to TeleSign, requiring it to re-orient the business accordingly.
If TeleSign’s solutions are perceived to cause, or are otherwise unfavorably associated with, violations of privacy, data protection or information security requirements, they may subject TeleSign or its customers to public criticism and potential legal liability. Existing and potential laws, rules and regulations concerning privacy, data protection and information security and increasing sensitivity of consumers to unauthorized processing of personal data may create negative public reactions to technologies, products and services such as TeleSign’s. Public concerns regarding privacy, data protection and information security may cause some of TeleSign’s customers’ end users to be less likely to visit their websites or otherwise interact with them. If enough end users choose not to visit TeleSign’s customers’ websites or otherwise interact with them, TeleSign’s customers could stop using TeleSign’s solutions. This, in turn, would reduce the value of TeleSign’s service, and slow or eliminate the growth of its business, or cause TeleSign’s business to contract.
TeleSign’s business is subject to a wide range of laws and regulations, many of which are evolving, and failure to comply or adapt/adopt quickly with such laws and regulations or if more stringent laws and regulations come into law, it could negatively affect TeleSign’s business, financial condition, and results of operations.
TeleSign’s business is subject to regulation by various federal, state, local and foreign governmental agencies, including agencies responsible for monitoring and enforcing data privacy, security and protection laws and regulations, intellectual property, employment and labor laws, workplace safety, consumer protection laws, anti-bribery laws, import and export controls, immigration laws, federal securities laws and tax laws and regulations. In certain foreign jurisdictions, these regulatory requirements may be more stringent than in the United States. These laws and regulations impose added costs on TeleSign’s business. Noncompliance with applicable regulations or requirements could subject TeleSign to:

investigations, enforcement actions, orders and sanctions (potentially made public);

mandatory changes to its products and services;

disgorgement of profits, fines and damages;

civil and criminal penalties or injunctions;

claims for damages by its customers or partners;

termination of contracts;

loss of intellectual property rights; and

temporary or permanent debarment from sales to heavily regulated organizations and governments.
 
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If any governmental sanctions are imposed, or if TeleSign does not prevail in any possible civil or criminal litigation, its business, financial condition, and results of operations could be adversely affected. In addition, responding to any action will likely result in a significant diversion of management’s attention and resources and an increase in professional fees. Enforcement actions and sanctions could materially harm TeleSign’s business, financial condition, results of operations, and reputation.
Indemnity provisions in various agreements potentially expose TeleSign to substantial liability for breach of data protection laws, intellectual property infringement and other losses.
TeleSign’s agreements with customers, partners and other third parties may include indemnification or other provisions under which TeleSign agrees to indemnify or otherwise be liable to them for losses suffered or incurred as a result of claims of intellectual property infringement, misappropriation or other violation, damages caused by TeleSign to property or persons, or other liabilities relating to or arising from the use of its solutions or other acts or omissions. The term of these contractual provisions sometimes survives termination or expiration of the applicable agreement. As TeleSign continues to grow, the possibility of infringement claims and other intellectual property rights claims against TeleSign may increase. For any intellectual property rights indemnification claim against TeleSign or its customers, TeleSign will incur significant legal expenses and may have to pay damages, settlement fees, license fees or stop using technology found to be in violation of the third party’s rights. Large indemnity payments could harm TeleSign’s business, financial condition, and results of operations. TeleSign may also have to seek a license for the infringing or allegedly infringing technology. Such license may not be available on reasonable terms, if at all, and may significantly increase its operating expenses or may require TeleSign to restrict its business activities and limit its ability to deliver certain offerings. As a result, TeleSign may also be required to develop alternative non-infringing technology, which could require significant effort and expense or cause TeleSign to alter its solutions, which could adversely affect its business, financial condition, and results of operations.
From time to time, customers require TeleSign to indemnify or otherwise be liable to them for breach of confidentiality, breach of data protection, violation of applicable law or failure to implement adequate security measures with respect to their data stored, transmitted or accessed using its solutions. Although TeleSign normally contractually limits its liability with respect to such obligations, the existence of such a dispute may have adverse effects on its customer relationship and reputation and TeleSign may still incur substantial liability related to them.
Any assertions by a third party, whether or not successful, with respect to such indemnification obligations could subject TeleSign to costly and time-consuming litigation, expensive remediation and licenses, divert management attention and financial resources, harm TeleSign’s relationship with that customer and other current and prospective customers, reduce demand for TeleSign’s solutions, and adversely affect its brand, business, financial condition, and results of operations.
TeleSign may be subject to liability claims if it breaches its contracts and TeleSign’s insurance may be inadequate to cover its losses.
TeleSign is subject to numerous obligations in its contracts with its customers and partners. Despite the procedures, systems and internal controls TeleSign has implemented to comply with its contracts, TeleSign may breach these commitments, whether through a weakness in these procedures, systems and internal controls, negligence or the willful act of an employee or contractor. TeleSign’s insurance policies, including its errors and omissions insurance, may be inadequate to compensate TeleSign for the potentially significant losses that may result from claims arising from breaches of its contracts, disruptions in its service, including those caused by cybersecurity incidents, failures or disruptions to TeleSign’s infrastructure, catastrophic events and disasters or otherwise. In addition, such insurance may not be available to TeleSign in the future on economically reasonable terms, or at all. Further, TeleSign’s insurance may not cover all claims made against TeleSign and defending a suit, regardless of its merit, could be costly and divert management’s attention.
Any successful action by state, foreign or other authorities to collect additional or past indirect taxes, including sales tax and others could adversely affect TeleSign’s business, financial condition, and results of operations.
States, some local taxing jurisdictions, and foreign jurisdictions have differing rules and regulations governing indirect taxes such as sales and use taxes, value added taxes, or VAT, and goods and services
 
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taxes, and these rules and regulations are subject to varying interpretations that may change over time. In particular, the applicability of indirect taxes to TeleSign’s solutions in various jurisdictions is unclear. TeleSign files indirect tax returns and collects indirect taxes in certain states within the United States and certain foreign jurisdictions as required by law, and it does not file and collect indirect or other similar taxes in certain other states, certain other foreign jurisdictions and on certain of the offerings that TeleSign provides on the basis that such taxes are not applicable. It is possible that TeleSign could face indirect tax audits and that one or more states, local jurisdictions or foreign authorities could seek to impose additional indirect or other tax collection and record-keeping obligations on TeleSign or may determine that such taxes should have, but have not been, paid by TeleSign. TeleSign could also be subject to audits in states, local taxing jurisdictions and foreign jurisdictions for which it has not accrued tax liabilities. A successful assertion that TeleSign should be collecting additional indirect or other taxes on its service in jurisdictions where it has not historically done so and do not accrue for indirect taxes could result in substantial tax liabilities for past sales, discourage customers from purchasing TeleSign’s solutions and offerings or otherwise adversely affect its business, financial condition, and results of operations.
A violation of applicable telecommunications laws and regulations by TeleSign’s customers or resellers could lead TeleSign to violate its carrier compliance requirements.
In each geographical market in which TeleSign operates, one or more regulatory entities regulate the licensing, construction, acquisition, ownership and operation of its wireless communications systems. Adoption of new regulations, changes in the current telecommunications laws or regulations or changes in the manner in which they are interpreted or applied could adversely affect its operations and its features, services or solutions. Because of the uncertainty as to the interpretation of regulations in some countries in which TeleSign operates, it may not always be able to provide the services it has planned in each market. In some markets, TeleSign is unable, or has limitations on its ability, to offer some services, such as interconnection to other telecommunications networks, which may increase its net costs. It is possible that, in the future, TeleSign may face additional regulatory prohibitions or limitations on its services. Inability to provide planned services could make it more difficult for TeleSign to compete in the affected markets. Further, some countries in which TeleSign conducts business impose foreign ownership limitations upon telecommunications companies. These issues affect TeleSign’s ability to operate in each of its markets, and therefore impact its business strategies.
TeleSign is subject to anti-corruption, anti-bribery and sanctions restrictions, and non-compliance with such laws can subject it to criminal penalties or significant fines and harm TeleSign’s business and reputation.
TeleSign is subject to the U.S. Foreign Corrupt Practices Act of 1977, as amended, or the FCPA; the U.S. domestic bribery statute contained in 18 U.S.C. § 201, U.S. Travel Act, the U.K. Bribery Act 2010 and possibly other anti-corruption, anti-bribery and anti-money laundering laws in countries in which TeleSign conducts activities. Anti-corruption and anti-bribery laws have been enforced aggressively in recent years and are interpreted broadly and prohibit companies and their employees, agents, representatives, business partners, and third-party intermediaries from promising, authorizing, making or offering, directly or indirectly, improper payments or other benefits to recipients in the public or private sector. As TeleSign increases its international sales and business, its risks under these laws may increase.
In addition, TeleSign uses third parties to sell its solutions or offerings and conduct business on its behalf in the U.S. and abroad. TeleSign, its employees, agents, representatives, business partners and third-party intermediaries may have direct or indirect interactions with officials and employees of government agencies or state-owned or affiliated entities and TeleSign may be held liable for the corrupt or other illegal activities of these employees, agents, representatives, business partners and third-party intermediaries, representatives, contractors, partners, and agents, even if TeleSign does not explicitly authorize such activities. These laws also require that TeleSign keeps accurate books and records and maintain internal controls and compliance procedures designed to prevent any such actions. TeleSign has policies to address compliance with such laws, but cannot ensure that all its employees, agents, representatives, business partners and third-party intermediaries, will not take actions in violation of its policies and applicable law, for which TeleSign may be ultimately held responsible.
Any allegations or violations of the FCPA, other applicable anti-bribery, anti-corruption laws, or anti-money laundering laws could subject TeleSign to investigations, whistleblower complaints, sanctions,
 
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settlements, prosecution, and other enforcement actions, which could lead to disgorgement of profits, significant fines, damages, injunctions, adverse media coverage, loss of export privileges, severe criminal or civil sanctions, suspension or debarment from government contracts and other consequences, any of which could have a material adverse effect on TeleSign’s reputation, business, financial condition, prospects and results of operations. Responding to any investigation or action will likely result in a materially significant diversion of management’s attention and resources and significant defense costs and other professional fees.
TeleSign’s international operations may give rise to potentially adverse tax consequences.
TeleSign’s income tax obligations are based in part on its corporate operating structure and intercompany arrangements, including the manner in which TeleSign develops, values, manages and uses its intellectual property and the valuation of its intercompany transactions. TeleSign’s existing corporate structure and intercompany arrangements have been implemented in a manner TeleSign believes is in compliance with current prevailing tax laws. The tax laws applicable to TeleSign’s business, including the laws of the United States and other jurisdictions, are subject to interpretation and certain jurisdictions are aggressively interpreting their laws in new ways in an effort to raise additional tax revenue. New income, sales, use or other tax laws, statutes, rules, regulations or ordinances could be enacted at any time. Those enactments could harm TeleSign’s business, financial condition, and results of operations. In addition, taxing authorities in these jurisdictions could impose additional tax, interest and penalties on TeleSign, claim that various withholding requirements apply to TeleSign or assert that benefits of tax treaties are not available to TeleSign. These events could require TeleSign or its customers to pay additional tax amounts on a prospective or retroactive basis, as well as require TeleSign or its customers to pay fines or penalties and interest for past amounts deemed to be due. If TeleSign raises its prices to offset the costs of these changes, existing and potential future customers may elect not to purchase TeleSign’s products in the future.
In addition, TeleSign’s intercompany relationships are subject to complex transfer pricing regulations administered by taxing authorities in various jurisdictions. The relevant taxing authorities may disagree with TeleSign’s current and historic determinations as to the value of assets sold or acquired or income and expenses attributable to specific jurisdictions. If such a disagreement were to occur, and TeleSign’s position were not sustained, TeleSign could be required to pay additional taxes, interest, and penalties, which could result in one-time tax charges, higher effective tax rates, reduced cash flows, and lower overall profitability of its operations. In addition, changes to TeleSign’s corporate structure and intercompany agreements could impact its worldwide effective tax rate and adversely affect its financial condition and results of operations.
There is also a high level of uncertainty in today’s tax environment stemming from both global initiatives put forth by the Organization for Economic Co-operation and Development, or OECD, and unilateral measures being implemented by various countries due to a lack of consensus on these global initiatives. As an example, the OECD has put forth two proposals — Pillar One and Pillar Two — that revise the allocation of revenues to market jurisdiction based on customer jurisdiction rather than physical presence of the provider and ensure a minimal level of taxation, respectively. Further, certain countries have implemented or are considering implementing measures such as digital services tax. These measures and corresponding tariffs in response to such measures create additional tax liabilities and uncertainty. As a result, TeleSign may have to pay higher taxes in countries where such rules are applicable. Further, any changes in the U.S. or foreign taxation of TeleSign’s international business activities may also apply retroactively to TeleSign’s historical operations and result in taxes greater than the amounts estimated and recorded in its financial statements.
TeleSign’s ability to use its net operating loss carryforwards and certain other tax attributes may be limited.
Under Section 382 of the Internal Revenue Code of 1986, as amended, or the Code, if a corporation undergoes an “ownership change,” generally defined as a greater than 50% cumulative change (by value) in its equity ownership by certain shareholders or groups of shareholders over a three-year period, the corporation’s ability to use its pre-change net operating loss carry-forwards and other pre-change tax attributes, such as research tax credits and interest deduction carryover, to offset its post-change income may be limited. Any ownership change in the future could result in increased future tax liability. In addition, TeleSign may experience ownership changes in the future as a result of subsequent shifts in its stock ownership. As a result, if TeleSign earns net taxable income, its ability to use its pre-change net operating
 
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loss carry-forwards to offset U.S. federal taxable income may be subject to limitations, which could potentially result in increased future tax liability to TeleSign. The impact of any limitations that may be imposed due to such ownership changes has not been determined.
In addition, on December 22, 2017, the U.S. government enacted new tax legislation commonly referred to as the Tax Cuts and Jobs Act, or the Tax Act. The Tax Act makes broad and complex changes to the U.S. tax code, including changes to the uses and limitations of net operating losses carryforwards. For example, under the Tax Act, as modified by the Coronavirus Aid, Relief, and Economic Security Act, or the CARES Act, federal net operating losses incurred during TeleSign’s taxable years beginning after December 31, 2017 can be carried forward indefinitely, however, the deductibility of its federal net operating losses generated in such years will be limited to 80% of taxable income in the year utilized. Federal net operating losses incurred in years beginning before January 1, 2018 are subject to a twenty-year carryforward but are not limited to 80% of taxable income. Furthermore, TeleSign’s ability to use its net operating loss carryforwards is conditioned upon generating future U.S. federal taxable income. Since TeleSign does not know whether or when it will generate the U.S. federal taxable income necessary to use its remaining net operating loss carryforwards, certain of TeleSign’s net operating loss carryforwards generated could expire before use.
Risks Related to TeleSign Being a Public Company
New Holdco will qualify as an “emerging growth company” and a smaller reporting company, and the reduced disclosure requirements applicable to “emerging growth companies” and smaller growth companies may make its securities less attractive to investors.
New Holdco will qualify as an “emerging growth company,” as defined in Section 2(a)(19) of the Securities Act. For as long as New Holdco continues to be an emerging growth company, it may choose to take advantage of certain exemptions and relief from various reporting requirements that are applicable to other public companies, including, but not limited to: (i) not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act (“Section 404”); (ii) reduced disclosure obligations regarding executive compensation in its periodic reports and proxy statements; and (iii) exemptions from the requirements of holding nonbinding advisory votes on executive compensation and stockholder approval of any golden parachute payments not previously approved. New Holdco will remain an emerging growth company until the last day of the fiscal year ending after the fifth anniversary of the effectiveness of the registration statement of which this proxy statement/prospectus forms a part, though it may cease to be an emerging growth company earlier if (1) it has more than $1.07 billion in annual gross revenue, (2) it qualifies as a “large accelerated filer” as defined in Rule 12b-2 under the Exchange Act, or (3) it issues, in any three-year period, more than $1.0 billion in non-convertible debt securities held by non-Affiliates. New Holdco currently intends to take advantage of each of the reduced reporting requirements and exemptions described above. As a result, New Holdco securityholders may not have access to certain information they may deem important.
Further, the Jumpstart Our Business Startups Act of 2012 (the “ JOBS Act”) exempts emerging growth companies from being required to comply with new or revised financial accounting standards until private companies are required to comply with the new or revised financial accounting standards. The JOBS Act provides that a company can elect to opt out of the extended transition period and comply with the requirements that apply to non-emerging growth companies but any such election to opt out is irrevocable. New Holdco has elected, and expects to continue to elect, 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, New Holdco, 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 New Holdco’s financial statements with another public company, which is neither an emerging growth company nor a company that has opted out of using the extended transition period, difficult because of the potential differences in accounting standards used.
Additionally, New Holdco will qualify as a “smaller reporting company” as defined in Item 10(f)(1) of Regulation S-K under the Securities Act. Smaller reporting companies may take advantage of certain reduced disclosure obligations, including, among other things, providing only two years of audited financial
 
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statements in its periodic reports. New Holdco will remain a smaller reporting company until the last day of the fiscal year in which it fails to meet the following criteria: (i) the market value of its common stock held by non-Affiliates does not exceed $250 million as of the end of that fiscal year’s second fiscal quarter; or (ii) its annual revenues do not exceed $100 million during such completed fiscal year and the market value of its common stock held by non-Affiliates does not exceed $700 million as of the end of that fiscal year’s second fiscal quarter. To the extent New Holdco takes advantage of such reduced disclosure obligations, it may also make comparison of its financial statements with other public companies difficult or impossible.
It is difficult to predict whether investors will find New Holdco’s securities less attractive as a result of its taking advantage of these exemptions and relief granted to emerging growth companies and smaller reporting companies. If some investors find New Holdco’s securities less attractive as a result, the trading prices of New Holdco’s securities may be lower than they otherwise would be, there may be a less active trading market for New Holdco’s securities and the market price of New Holdco’s securities may be more volatile.
When New Holdco loses its “smaller reporting company” and “emerging growth company” status, it will no longer be able to take advantage of certain exemptions from reporting, and it will also be required to comply with the auditor attestation requirements of Section 404. New Holdco will incur additional expenses in connection with such compliance and its management will need to devote additional time and effort to implement and comply with such requirements.
The requirements of being a public company require significant resources and management attention and affect TeleSign’s ability to attract and retain executive management and qualified board members.
As a public company following the Business Combination, TeleSign will incur legal, regulatory, finance, accounting, investor relations and other expenses that it did not previously incur as a private company, including costs associated with public company reporting requirements and costs of recruiting and retaining non-executive directors. New Holdco will be subject to the Exchange Act, including the reporting requirements thereunder, the Sarbanes-Oxley Act, the Dodd-Frank Wall Street Reform and Consumer Protection Act, Nasdaq rules and other applicable securities rules and regulations. Compliance with these rules and regulations will increase TeleSign’s legal and financial compliance costs, make some activities more difficult, time-consuming, or costly (although these costs are currently unable to be estimated with any degree of certainty), and increase demand on TeleSign’s systems and resources, particularly after New Holdco is no longer an “emerging growth company” or a “smaller reporting company.” The expenses incurred by public companies generally for reporting and corporate governance purposes have been increasing. TeleSign’s management will need to devote a substantial amount of time to ensure that it complies with all of these requirements, diverting the attention of management away from revenue-producing activities. Further, these rules and regulations may make it more difficult and more expensive for TeleSign to obtain certain types of insurance, including directors’ and officers’ liability insurance, which could make it more difficult for TeleSign to attract and retain qualified members of its board of directors. TeleSign may be forced to accept reduced policy limits and coverage or incur substantially higher costs to obtain the same or similar coverage. In addition, enhanced legal and regulatory regimes and heightened standards relating to corporate governance and disclosure for public companies result in increased legal and financial compliance costs and make some activities more time consuming.
Pursuant to Section 404, once New Holdco is no longer an emerging growth company or a smaller reporting company, it may be required to furnish an attestation report on internal control over financial reporting issued by its independent registered public accounting firm. When New Holdco’s independent registered public accounting firm is required to undertake an assessment of its internal control over financial reporting, the cost of complying with Section 404 will significantly increase, and management’s attention may be further diverted from other business concerns, which could adversely affect TeleSign’s business and results of operations. TeleSign may need to hire more employees in the future or engage outside consultants to comply with the requirements of Section 404, which will further increase cost and expense.
If New Holdco is unable to satisfy its obligations as a public company, it could be subject to delisting of the New Holdco Common Stock, fines, sanctions, and other regulatory actions and potentially civil litigation.
 
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An active, liquid trading market for New Holdco’s securities may not develop or be sustained.
There can be no assurance that an active trading market for New Holdco Common Stock and New Holdco Warrants will develop after the Acquisition Closing, or, if such a market develops, that TeleSign will be able to maintain an active trading market for those securities on Nasdaq or any other exchange in the future. If an active market for New Holdco’s securities does not develop or is not maintained after the Business Combination, or if New Holdco fails to satisfy the continued listing standards of Nasdaq for any reason and its securities are delisted, it may be difficult for New Holdco’s securityholders to sell their securities without depressing the market price for the securities or at all. An inactive trading market may also impair TeleSign’s ability to both raise capital by selling shares of capital stock, attract and motivate employees through equity incentive awards and acquire other companies, products, or technologies by using shares of capital stock as consideration.
The stock price following the consummation of the Business Combination will be volatile, and you may not be able to sell shares at or above the price at the Acquisition Closing.
After the consummation of the Business Combination, the trading price of the New Holdco Common Stock and New Holdco Warrants will be volatile and could be subject to wide fluctuations in response to various factors, some of which are beyond New Holdco’s control. These factors include:

actual or anticipated fluctuations in operating results;

failure to meet or exceed financial estimates and projections of the investment community or that New Holdco provides to the public;

issuance of new or updated research or reports by securities analysts or changed recommendations for the industry in general;

announcements of significant acquisitions, strategic partnerships, joint ventures, collaborations or capital commitments;

operating and share price performance of other companies in the industry or related markets;

the timing and magnitude of investments in the growth of the business;

actual or anticipated changes in laws and regulations;

additions or departures of key New Holdco management or other personnel;

increased labor costs;

disputes or other developments related to intellectual property or other proprietary rights, including litigation;

disputes or other developments related to allegations of misclassification of service providers, including fleet managers, as independent contractors, including litigation;

the ability to market new and enhanced solutions on a timely basis;

sales of substantial amounts of the New Holdco Common Stock by the New Holdco Board, executive officers or significant stockholders or the perception that such sales could occur;

changes in capital structure, including future issuances of securities or the incurrence of debt; and

general economic, political and market conditions.
In addition, the stock market in general, and the stock prices of technology companies in particular, have experienced extreme price and volume fluctuations that have often been unrelated or disproportionate to the operating performance of those companies. Broad market and industry factors may seriously affect the market price of New Holdco Common Stock, regardless of actual operating performance. In addition, in the past, following periods of volatility in the overall market and the market price of a particular company’s securities, securities class action litigation has often been instituted against these companies. This litigation, if instituted, could result in substantial costs and a diversion of New Holdco management’s attention and resources.
 
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If securities or industry analysts do not publish research or publish inaccurate or unfavorable research about TeleSign’s business, the price and trading volume of New Holdco’s securities could decline.
The trading market for New Holdco’s securities depends in part on the research and reports that securities or industry analysts publish about TeleSign or its business. TeleSign will not control these analysts, and the analysts who publish information about TeleSign may have relatively little experience with TeleSign or its industry, which could affect their ability to accurately forecast TeleSign’s results and could make it more likely that TeleSign fails to meet their estimates. If few or no securities or industry analysts cover TeleSign, the trading price for New Holdco’s securities would be negatively impacted. If one or more of the analysts who covers TeleSign downgrades New Holdco’s securities, publishes incorrect or unfavorable research about TeleSign, ceases coverage of TeleSign, or fails to publish reports on TeleSign regularly, demand for and visibility of New Holdco’s securities could decrease, which could cause the price or trading volumes of New Holdco’s securities to decline.
TeleSign may be subject to securities class action litigation, which may harm its business and operating results.
Companies that have experienced volatility in the market price of their stock have been subject to securities class action litigation. TeleSign may be the target of this type of litigation in the future. Securities litigation against TeleSign could result in substantial costs and damages, and divert TeleSign management’s attention from other business concerns, which could seriously harm TeleSign’s business, results of operations, financial condition, or cash flows.
TeleSign may also be called on to defend itself against lawsuits relating to its business operations. Some of these claims may seek significant damages amounts. Due to the inherent uncertainties of litigation, the ultimate outcome of any such proceedings cannot be accurately predicted. A future unfavorable outcome in a legal proceeding could have an adverse impact on TeleSign’s business, financial condition, and results of operations. In addition, current and future litigation, regardless of its merits, could result in substantial legal fees, settlements, or judgment costs and a diversion of TeleSign management’s attention and resources that are needed to successfully run TeleSign’s business.
Risks Related to Ownership of the New Holdco Common Stock after the Consummation of the Business Combination
Because TeleSign does not expect to pay dividends in the foreseeable future after this offering, you must rely on a price appreciation of the common stock for a return on your investment.
TeleSign currently intends to retain most, if not all, of its available funds and any future earnings after this offering to fund the development and growth of its business. As a result, TeleSign does not expect to pay any cash dividends in the foreseeable future. Therefore, you should not rely on an investment in the New Holdco Common Stock as a source for any future dividend income.
Anti-takeover provisions contained in the Proposed Organizational Documents and applicable laws could impair a takeover attempt.
Upon the consummation of the Business Combination, the Proposed Organizational Documents will afford certain rights and powers to the New Holdco Board that could contribute to the delay or prevention of an acquisition that it deems undesirable. New Holdco will elect not to be governed by Section 203 of the DGCL, but the Proposed Organizational Documents will provide other restrictions that limit the ability of stockholders in certain situations to effect certain business combinations. Any of the foregoing provisions and terms that have the effect of delaying or deterring a change in control could limit the opportunity for stockholders to receive a premium for their shares of New Holdco Common Stock, and could also affect the price that some investors are willing to pay for the New Holdco Common Stock.
New Holdco will be subject to risks related to taxation in the United States.
Significant judgments based on interpretations of existing tax laws or regulations are required in determining New Holdco’s provision for income taxes. New Holdco’s effective income tax rate could be adversely affected by various factors, including, but not limited to, changes in the mix of earnings in tax
 
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jurisdictions with different statutory tax rates, changes in the valuation of deferred tax assets and liabilities, changes in existing tax policies, laws, regulations, treaties, or interpretation thereof, changes in tax or rates, changes in the level of non-deductible expenses (including share-based compensation), changes in the location of New Holdco’s operations, changes in New Holdco’s future levels of research and development spending, mergers and acquisitions or the results of examinations by various tax authorities. Although New Holdco believes its tax estimates are reasonable, if the IRS or any other taxing authority disagrees with the positions taken on its tax returns, New Holdco could have additional tax liability, including interest and penalties. If material, payment of such additional amounts upon final adjudication of any disputes could have a material impact on New Holdco’s results of operations and financial position.
Changes to applicable tax laws and regulations or exposure to additional income tax liabilities could affect New Holdco’s business and future profitability.
New Holdco is a U.S. corporation and thus will be subject to U.S. corporate income tax on its worldwide income. Further, since New Holdco’s operations and customers are located throughout the United States, New Holdco will be subject to various U.S. state and local taxes. U.S. federal, state, local and non-U.S. tax laws, policies, statutes, rules, regulations or ordinances could be interpreted, changed, modified or applied adversely to New Holdco and may have an adverse effect on its business and future profitability.
For example, several tax proposals have been set forth that would, if enacted, make significant changes to U.S. tax laws. Such proposals include an increase in the U.S. income tax rate applicable to corporations (such as New Holdco) from 21% to 28%. Congress may consider, and could include, some or all of these proposals in connection with tax reform that may be undertaken. It is unclear whether these or similar changes will be enacted and, if enacted, how soon any such changes could take effect. The passage of any legislation as a result of these proposals and other similar changes in U.S. federal income tax laws could adversely affect New Holdco’s business and future profitability.
As a result of plans to expand New Holdco’s business operations, including to jurisdictions in which tax laws may not be favorable, its obligations may change or fluctuate, become significantly more complex or become subject to greater risk of examination by taxing authorities, any of which could adversely affect New Holdco’s after-tax profitability and financial results.
In the event that New Holdco’s business expands domestically or internationally, its effective tax rates may fluctuate widely in the future. Future effective tax rates could be affected by operating losses in jurisdictions where no tax benefit can be recorded under GAAP, changes in deferred tax assets and liabilities, or changes in tax laws. Factors that could materially affect New Holdco’s future effective tax rates include, but are not limited to: (a) changes in tax laws or the regulatory environment, (b) changes in accounting and tax standards or practices, (c) changes in the composition of operating income by tax jurisdiction and (d) pre-tax operating results of New Holdco’s business.
Additionally, after the Business Combination, New Holdco may be subject to significant income, withholding and other tax obligations in the United States and may become subject to taxation in numerous additional U.S. state and local and non-U.S. jurisdictions with respect to income, operations and subsidiaries related to those jurisdictions. New Holdco’s after-tax profitability and financial results could be subject to volatility or be affected by numerous factors, including (a) the availability of tax deductions, credits, exemptions, refunds and other benefits to reduce tax liabilities, (b) changes in the valuation of deferred tax assets and liabilities, if any, (c) the expected timing and amount of the release of any tax valuation allowances, (d) the tax treatment of stock-based compensation, (e) changes in the relative amount of earnings subject to tax in the various jurisdictions, (f) the potential business expansion into, or otherwise becoming subject to tax in, additional jurisdictions, (g) changes to existing intercompany structure (and any costs related thereto) and business operations, (h) the extent of intercompany transactions and the extent to which taxing authorities in relevant jurisdictions respect those intercompany transactions, and (i) the ability to structure business operations in an efficient and competitive manner. Outcomes from audits or examinations by taxing authorities could have an adverse effect on New Holdco’s after-tax profitability and financial condition. Additionally, the IRS and several foreign tax authorities have increasingly focused attention on intercompany transfer pricing with respect to sales of products and services and the use of intangibles. Tax authorities
 
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could disagree with New Holdco’s intercompany charges, cross-jurisdictional transfer pricing or other matters and assess additional taxes. If New Holdco does not prevail in any such disagreements, New Holdco’s profitability may be affected.
New Holdco’s after-tax profitability and financial results may also be adversely affected by changes in relevant tax laws and tax rates, treaties, regulations, administrative practices and principles, judicial decisions and interpretations thereof, in each case, possibly with retroactive effect.
Risks Related to NAAC, New Holdco, and the Business Combination
Following the consummation of the Business Combination, New Holdco’s sole material asset will be its direct and indirect interests in its subsidiaries and, accordingly, New Holdco will be dependent upon distributions from its subsidiaries to pay taxes and cover its corporate and other overhead expenses and pay dividends, if any, on the New Holdco Common Stock.
New Holdco is a holding company and, subsequent to the completion of the Business Combination, will have no material assets other than its direct and indirect equity interests in its subsidiaries. New Holdco will have no independent means of generating revenue. To the extent New Holdco’s subsidiaries have available cash, New Holdco will cause its subsidiaries to make distributions of cash to pay taxes, cover New Holdco’s corporate and other overhead expenses and pay dividends, if any, on the New Holdco Common Stock. To the extent that New Holdco needs funds and its subsidiaries fail to generate sufficient cash flow to distribute funds to New Holdco or are restricted from making such distributions or payments under applicable law or regulation or under the terms of their financing arrangements, or are otherwise unable to provide such funds, New Holdco’s liquidity and financial condition could be materially adversely affected.
Subsequent to the consummation of the Business Combination, New Holdco may be required to take write-downs or write-offs, restructuring and impairment or other charges that could have a significant negative effect on New Holdco’s financial condition, results of operations and stock price, which could cause you to lose some or all of your investment in New Holdco.
Although NAAC has conducted due diligence on TeleSign, there are no assurances that this diligence revealed all material issues that may be present in TeleSign, that it would be possible to uncover all material issues through a customary amount of due diligence or that factors outside of NAAC’s or New Holdco’s control will not later arise. As a result, following the consummation of the Business Combination, New Holdco may be forced to later write-down or write-off assets, restructure its operations or incur impairment or other charges that could result in losses. Even if NAAC’s due diligence successfully identifies certain risks, unexpected risks may arise and previously known risks may materialize in a manner not consistent with NAAC’s preliminary risk analysis. Even though these charges may be non-cash items and may not have an immediate impact on New Holdco’s liquidity, the fact that charges of this nature will be reported could contribute to negative market perceptions about New Holdco following the completion of the Business Combination or its securities. In addition, charges of this nature may cause New Holdco to be unable to obtain future financing on favorable terms or at all.
NAAC’s initial shareholders have agreed to vote in favor of the Business Combination, regardless of how NAAC’s public shareholders vote.
Unlike many other blank check companies in which the founders agree to vote their founder shares in accordance with the majority of the votes cast by public shareholders in connection with an Initial Business Combination, NAAC’s initial shareholders have agreed to vote any Class A Ordinary Shares and Class B Ordinary Shares owned by them in favor of the Business Combination. As of the date hereof, NAAC’s initial shareholders own shares equal to approximately 20% of NAAC’s issued and outstanding Class A Ordinary Shares and Class B Ordinary Shares in the aggregate. Accordingly, it is more likely that the necessary shareholder approval will be received for the Business Combination than would be the case if the initial shareholders agreed to vote any Class A Ordinary Shares and Class B Ordinary Shares owned by them in accordance with the majority of the votes cast by NAAC’s public shareholders. No consideration was provided to NAAC’s initial shareholders in exchange for their agreeing to vote in favor of the business combination.
 
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The Sponsor and certain of NAAC’s directors and officers have interests in the Business Combination that are different from, or in addition to, those of other shareholders generally, and NAAC’s directors were aware of and considered such interests, among other matters, in recommending that shareholders vote in favor of approval of the Business Combination Proposals.
When considering the NAAC Board’s recommendation that NAAC’s shareholders vote in favor of the approval of the Business Combination Proposals, NAAC’s shareholders should be aware that the Sponsor and certain of NAAC’s directors and officers have interests in the Business Combination that are different from, or in addition to, those of other shareholders generally. These interests include:

the beneficial ownership of our initial shareholders of an aggregate of 9,487,500 NAAC Founder Shares and 7,126,667 private placement warrants, which shares and warrants would become worthless if NAAC does not complete a business combination within the applicable time period, as our initial shareholders have waived any redemption right with respect to these shares. Our initial shareholders paid an aggregate of $25,000, or approximately $0.003 per share, for the NAAC Founder Shares, and $10,690,000, or $1.50 per warrant, for the private placement warrants, and such shares and warrants, if unrestricted and freely tradeable, would be valued at approximately $93.7 million and $1.9 million, respectively, based on the closing price of the Class A Ordinary Shares of $9.88 per share and closing price of the warrants of $0.27 per warrant on Nasdaq on April 13, 2022, the most recent practicable date prior to the date of this proxy statement/prospectus;

the fact that the Sponsor and NAAC’s officers and directors have agreed not to redeem any Class A shares held by them in connection with a shareholder vote to approve the Business Combination;

the fact that our initial shareholders, including the Sponsor, and our directors and officers, paid an aggregate of $10,690,000 for its 7,126,667 private placement warrants to purchase Class A Ordinary Shares and that such private placement warrants will expire worthless if a business combination is not consummated by January 26, 2023;

the fact that, following the Closing, the Sponsor would be entitled to the repayment of an outstanding working capital loan and advances that have been made to NAAC. The Sponsor agreed to loan to NAAC up to $1,500,000 to be used for a portion of the expenses of NAAC. These loans are non-interest bearing, unsecured and are due upon consummation of an initial business combination. As of December 31, 2021, NAAC owed $1,199,994 under the August 6, 2021 promissory note, and there were no other material working capital loans outstanding. If NAAC fails to complete an Initial Business Combination by January 26, 2023, NAAC may use a portion of the working capital held outside the Trust Account to repay the working capital loans, but no proceeds held in the Trust Account would be used to repay the working capital loans;

the fact that the Sponsor will benefit from the completion of a business combination and may be incentivized to complete an acquisition of a less favorable target company or on terms less favorable to shareholders rather than liquidate;

the fact that given the differential in the purchase price that the Sponsor paid for the NAAC Founder Shares as compared to the price of the NAAC Units sold in the IPO and up to 8,538,750 shares of New Holdco Common Stock that the Sponsor will receive upon conversion of the NAAC Founder Shares in connection with the Business Combination, the Sponsor and its Affiliates may earn a positive rate of return on their investment even if the New Holdco Common Stock trades below the price initially paid for the NAAC Units in the IPO and the public shareholders experience a negative rate of return following the completion of the Business Combination. As a result of the low initial purchase price, the Sponsor, its Affiliates and NAAC’s management team and advisors stand to earn a positive rate of return or profit on their investment, even if other shareholders, such as NAAC’s public shareholders, experience a negative rate of return because the post-business combination company subsequently declines in value. Thus, NAAC’s Sponsor, officers and directors and their respective Affiliates and associates may have more of an economic incentive for NAAC to, rather than liquidate if it fails to complete an Initial Business Combination by January 26, 2023, enter into an Initial Business Combination on potentially less favorable terms with a potentially less favorable, riskier, weaker-performing or financially unstable business, or an entity lacking an established record of revenues or earnings, than would be the case if such parties had paid the full offering price for their NAAC Founder Shares;
 
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