Form S-1/A AEI CapForce II Investme

December 8, 2021 3:16 PM EST

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As filed with the Securities and Exchange Commission on December 8, 2021

 

Registration No. 333-259362

 

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

AMENDMENT NO. 1 TO

FORM S-1

REGISTRATION STATEMENT

UNDER

THE SECURITIES ACT OF 1933

 

AEI CAPFORCE II INVESTMENT CORP

(Exact name of registrant as specified in its charter)

 

Cayman Islands   6770   N/A

(State or other jurisdiction of

incorporation or organization)

 

(Primary Standard Industrial

Classification Code Number)

 

(I.R.S. Employer

Identification Number)

 

AEI CAPFORCE II INVESTMENT CORP

Duplex Penthouse, Unit A-33A-6, Level 33A, Tower A, UOA Bangsar Tower, No. 5, Bangsar Utama 1 Road,

59000 Kuala Lumpur, Malaysia

+603 2770 2752

(Address, including zip code, and telephone number, including area code, of registrant’s principal executive offices)

 

Attention: Chairman (SPAC)

AEI CAPFORCE II INVESTMENT CORP

Duplex Penthouse, Unit A-33A-6, Level 33A, Tower A, UOA Bangsar Tower, No. 5, Bangsar Utama 1 Road,

59000 Kuala Lumpur, Malaysia

+603 2770 2752

(Name, address, including zip code, and telephone number, including area code, of agent for service)

 

Copies to:

 

Debbie A. Klis

Rimon, P.C.

1990 K. Street, NW Suite 340

Washington DC 20006

Telephone: (202) 935-3390

 

Mitchell S. Nussbaum

David J. Levine

Loeb & Loeb LLP

345 Park Avenue

New York, NY 10154

Telephone: (212) 407-4923

 

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

 

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

 

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

 

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

 

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

 

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

 

Large accelerated filer Accelerated filer
       
Non-accelerated filer Smaller reporting company
       
    Emerging growth company

 

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

 

CALCULATION OF REGISTRATION FEE

 

Title of Each Class of
Security Being Registered
  Amount Being Registered  Proposed Maximum Offering Price per Security(1)    Proposed Maximum Aggregate Offering Price(1)   Amount of Registration Fee 
Units, each consisting of one Class A ordinary share, par value $0.0001 per share, and one-half of one redeemable warrant(2)  11,500,000 Units  $10.00   $115,000,000   $ 10,660.50  
Class A ordinary shares included as part of the units(3)  11,500,000 Shares   -    -    -(4)
Redeemable warrants included as part of the units(3)  5,750,000 Warrants   -    -    -(4)
Total  11,500,000 Units  $ 10.00    $115,000,000   $ 10,660.50  

 

(1)

Estimated solely for the purpose of calculating the registration fee pursuant to Rule 457(a) under the Securities Act.

(2) Includes 1,500,000 units, consisting of 1,500,000 Class A ordinary shares and 750,000 redeemable warrants, which may be issued upon exercise of a 45-day option granted to the underwriters to cover over-allotments, if any.
(3) Pursuant to Rule 416(a), there are also being registered an indeterminable number of additional securities as may be offered or issued to prevent dilution resulting from share subdivisions, share dividends or similar transactions.
(4) No fee pursuant to Rule 457(g).

 

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

 

 

 

 
 

 

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

 

SUBJECT TO COMPLETION DATED DECEMBER 8, 2021

 

PRELIMINARY PROSPECTUS

 

 

$100,000,000

 

AEI CAPFORCE II INVESTMENT CORP

 

10,000,000 Units

 

AEI CapForce II Investment Corp is a newly incorporated blank check company incorporated as a Cayman Islands exempted company for the purpose of effecting a merger, share exchange, asset acquisition, share purchase, reorganization or similar business combination with one or more businesses or entities, which we refer to throughout this prospectus as our initial business combination. We have not selected any potential business combination target and we have not, nor has anyone on our behalf, initiated any substantive discussions, directly or indirectly, with any potential business combination target with respect to an initial business combination with us.

 

While we may pursue a target in any industry, section or geography, we intend to seek a target in the Greater China Region or Southeast Asia in the “new economy” that is composed of a trilogy of interactive features that include globalization, information technology and the communication revolution, or high growth industries, such as internet, financial technology such as e-commerce, O2O Retail (i.e., online-to-offline commerce is a business model that draws potential customers from online channels to make purchases in physical stores), renewable energy, AI, cloud-based technology, healthcare, education, and other consumer-driven and big data or digitally-enabled characteristics that should enable us to capitalize on a number of major global trends, including the globally optimized value chain — a familiar feature of the current phase of globalization that is expected to give way to value chains that blend digital technology with older lower-cost technologies, allow greater integration across products and services, and leverage the growth of independent global platforms for the exchange of goods and services.

 

This is an initial public offering of our securities. Each unit has an offering price of $10.00 and consists of one Class A ordinary share and one-half of one redeemable warrant. Each whole warrant entitles the holder thereof to purchase one Class A ordinary share at a price of $11.50 per share, subject to adjustment as described herein. Only whole warrants are exercisable. No fractional warrants will be issued upon separation of the units and only whole warrants will trade. The warrants will become exercisable commencing on the later of 12 months from the closing of this offering or 30 days after the consummation by the Company of our initial business combination and will expire five years after the completion of our initial business combination or earlier upon redemption or our liquidation, as described in this prospectus. The underwriters have a 45-day option from the date of this prospectus to purchase up to an additional 1,500,000 units to cover over-allotments, if any.

 

We will provide our public shareholders with the opportunity to redeem all or a portion of their Class A ordinary shares, or public shares, upon the completion of our initial business combination, at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the trust account described below as of two business days prior to the consummation of our initial business combination, including interest (net of taxes payable) earned on the funds held in the trust account and not previously released to us to pay our taxes, divided by the number of then outstanding public shares, subject to the limitations and on the conditions described herein. If we are unable to complete our initial business combination within 12 months (subject to a six-month extension of time), we will redeem 100% of the public shares at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the trust account, including interest earned on the funds held in the trust account and not previously released to us to pay our taxes (less up to $101,000 of interest to pay dissolution expenses), divided by the number of then outstanding public shares, subject to applicable law and certain conditions as further described herein. Public shareholders will not be offered the opportunity to vote on or redeem their shares in connection with any such extension.

 

Our sponsor, AEI Capital SPAC Venture II LLC, has agreed to purchase an aggregate of 360,530 placement units (or up to 398,030 placement units if the over-allotment option is exercised in full) at a price of $10.00 per unit, for an aggregate purchase price of $3,605,300 (up to $3,980,300 if the over-allotment option is exercised in full). Each placement unit will be identical to the units sold in this offering, except as described in this prospectus. The placement units will be sold in a private placement that will close simultaneously with the closing of this offering.

 

Our sponsor and certain of our directors own an aggregate of 2,875,000 Class B ordinary shares (the founder shares), up to 375,000 shares of which are subject to forfeiture depending on the extent to which the underwriters’ over-allotment option is exercised, which will automatically convert into Class A ordinary shares at the time of our initial business combination, on a one-for-one basis, subject to adjustment pursuant to certain anti-dilution rights, as described herein.

 

 
 

 

Currently, there is no public market for our units, Class A ordinary shares or warrants. We have applied to have our units approved for listing on The NASDAQ Stock Market LLC, or Nasdaq, under the symbol “AEIBU ” on or promptly after the date of this prospectus. We expect the Class A ordinary shares and warrants comprising the units will begin separate trading on the 52nd day following the date of this prospectus (or if such date is not a business day, the following business day) unless EF Hutton, informs us of its decision to allow earlier separate trading, subject to our filing a Current Report on Form 8-K with the Securities and Exchange Commission containing an audited balance sheet reflecting our receipt of the gross proceeds of this offering and issuing a press release announcing when such separate trading will begin. Once the securities comprising the units begin separate trading, we expect that the Class A ordinary shares and warrants will be listed on Nasdaq under the symbols “AEIB” and “AEIBWS,” respectively. We cannot assure you that our securities will continue to be listed on Nasdaq after this offering.

 

We are a Cayman Islands blank check company with no material operations of our own. We conduct our operations through an office in Kuala Lumpur, Malaysia, which is where our chief executive officer and our chief financial officer are domiciled. Our three independent director nominees are currently permanent residents of Hong Kong and have personal and professional ties to China. For a detailed disclosure about our officers, directors and independent director nominees’ biographies, education and work history, please see “Our Management Team” below. Although we do not have any specific business combination under consideration and we have not, directly or indirectly, contacted any prospective target business or had any substantive discussions, formal or otherwise, with respect to such a transaction, we may pursue or consummate an initial business combination with a company located or doing business in the PRC, in which event we will be subject to certain additional legal and operational risks. These additional risks include, without limitation, regulatory review of an overseas listing of PRC companies, potential restrictions on foreign ownership in certain industries, and potential unforeseen legislative changes.

 

Since PRC laws and regulations restrict foreign investment in companies that are engaged in business operations of certain industries, a company based in China may use a corporate structure without direct equity ownership held by foreign investors. Therefore, a series of contractual arrangements may be entered into between the PRC operating entities, which are consolidated variable interest entities (the “VIEs”) of the combined company, as well as the VIEs’ founders and owners, on one side, and a PRC subsidiary of the combined company which may be a company incorporated in the Cayman Islands, on the other side. To the extent that the combined company conducts its operations in China through its PRC subsidiaries and VIEs, such corporate structure involves unique risks to our investors after the business combination, as the combined company does not hold any direct equity interest in the PRC operating entities. If the PRC government deems that the combined company’s contractual arrangements with its VIEs do not comply with PRC regulatory restrictions on foreign investment in the relevant industries, or if these regulations or the interpretation of existing regulations change in the future, the PRC subsidiaries and the VIEs of the combined company could be subject to material penalties or the combined company could be forced to relinquish its interests in those operations or otherwise significantly change its corporate structure.

 

If we enter into a business combination with a China-based business utilizing a VIE structure, our investors and our business may face significant uncertainty about potential future actions by the PRC government that could affect the legality and enforceability of the contractual arrangements with the VIEs and, consequently, significantly affect the financial performance of the combined company as a whole. For a detailed description of risks related to the corporate structure using contractual arrangements, see “Risk Factors Related to Acquiring or Operating a Business in China” under “Risk Factors” for detailed discussions.

 

We note further that the PRC government has significant authority to exert influence on the ability of a China-based company to conduct its business, make or accept foreign investments or list on a U.S. stock exchange. For example, if we enter into a business combination with a target business operating in China, the combined company may face risks associated with regulatory approvals of the proposed business combination between us and the target, offshore offerings, anti-monopoly regulatory actions, cybersecurity and data privacy, as well as the lack of PCAOB inspection on its auditors or the auditors of the target business. The PRC government may also intervene with or influence the combined company’s operations at any time as the government deems appropriate to further regulatory, political and societal goals.

 

The PRC government has recently published new policies that significantly affected certain industries such as the education and internet industries, and we cannot rule out the possibility that it will in the future release regulations or policies regarding any industry that could adversely affect our potential business combination with a PRC operating business and the business, financial condition and results of operations of the combined company. Any such action, once taken by the PRC government, could make it more difficult and costly for us to consummate a business combination with a target business operating in the PRC, result in material changes in the combined company’s post-combination operations and cause the value of the combined company’s securities to significantly decline, or in extreme cases, become worthless or completely hinder the combined company’s ability to offer or continue to offer securities to investors. For a detailed description of risks associated with being based in or acquiring a company that does business in China, see “Risk Factors Related to Acquiring or Operating a Business in China” under “Risk Factors” below.

 

We believe that we are currently not required to obtain permission from PRC authorities to operate and issue our securities to foreign investors generally. In addition, within the asset classes in which we would consider completing an initial business combination in China, such as e-commerce,1 renewable energy2 or mobile technology/smart device company,3 at present, foreign investment is encouraged in the PRC. Consequently, in the event we were to acquire a target business in the e-commerce, renewable energy or mobile technology/smart device company in the PRC, we would not be required to obtain permission from any PRC authorities under present law assuming such law did not change before or during such transaction. Accordingly, such acquisition would not be subject to a VIE structure, whose function is to enable a foreign investor to invest and hold shares in a listed company that is incorporated overseas and carries on and owns businesses that would otherwise be subject to foreign ownership restrictions in the relevant place of operation. Shareholding limits for special-purpose vehicles and new energy vehicles were eliminated for foreign investors in a series of laws from 2015 through 2018 that remain in effect through the date hereof.

 

 

1 http://www.usito.org/news/china-lifts-restrictions-e-commerce-foreign-investment#:~:text=On%20June%2019%2C%20the%20Ministry,ownership%20across%20China%2C%20effective%20immediately.

2 https://energyiceberg.com/foreign-investment-catalog-renewable/

3 http://english.www.gov.cn/state_council/ministries/2018/04/18/content_281476115987782.htm

 

 

 

 

If the NDRC were to change its rules on foreign investors in the industries in which we are focused after we have completed a potential business combination, an additional risk could include those associated with the use of VIEs, including regulatory changes in the VIE structure and the validity and enforcement of the agreements in connection with a VIE structure to the extent our target company is required to employ a VIE structure. We are also subject to the risks of uncertainty about any future actions of the PRC government. Moreover, we are not limited to a particular industry segment, as we believe our management and board’s experience will allow us to evaluate targets that have the potential to accelerate financial value creation while also having a measurable net positive impact on the environment and society. Thus, ultimately, we might not benefit from the elimination of shareholding limits in the PRC on commerce, renewable energy or mobile technology/smart device manufacturing or mechanical companies. Any of these risks could significantly limit or completely hinder our ability to offer or continue to offer securities to investors and cause the value of such securities to significantly decline or be worthless. For a detailed description of the risks relating to doing business in the PRC, and the offering as a result of the structure, please see “Risk Factors Related to Acquiring or Operating a Business in China” under “Risk Factors” below.

 

We are an “emerging growth company” and a “smaller reporting company” under applicable federal securities laws and will be subject to reduced public company reporting requirements. Investing in our securities involves a high degree of risk. See “Risk Factors” beginning on page 59 for a discussion of information that should be considered in connection with an investment in our securities. Investors will not be entitled to protections normally afforded to investors in Rule 419 blank check offerings.

 

Neither the SEC nor any state securities commission has approved or disapproved of these securities or determined if this prospectus is truthful or complete. Any representation to the contrary is a criminal offense. No offer or invitation to subscribe for securities is being made to the public in the Cayman Islands.

 

   Per Unit   Total 
Public offering price  $10.00   $100,000,000 
Underwriting discounts and commissions(1)  $0.50   $5,000,000 
Proceeds, before expenses, to AEI CapForce II Investment Corp  $9.50   $95,000,000 

 

(1) Includes $0.35 per unit, or $3,500,000 (or $4,025,000 if the over-allotment option is exercised in full) in the aggregate, payable to the underwriters for deferred underwriting commissions to be placed in a trust account located in the United States as described herein. The deferred commissions will be released to the representative of the underwriters only on completion of an initial business combination, as described in this prospectus, which does not include certain fees and expenses payable to the underwriters in connection with this offering. See the section of this prospectus entitled “Underwriting” beginning on page 217 for a description of compensation and other items of value payable to the underwriters.

 

Of the proceeds we receive from this offering and the sale of the placement units described in this prospectus, $101,000,000 or $116,500,000 if the underwriters’ over-allotment option is exercised in full ($10.10 per unit in either case), will be deposited into a segregated trust account located in the United States with J.P. Morgan Securities LLC and with Continental Stock Transfer & Trust Company acting as trustee.

 

Except with respect to interest earned on the funds held in the trust account that may be released to us to pay our taxes, our amended and restated memorandum and articles of association will provide that the proceeds from this offering and the sale of the placement units, will not be released from the trust account until the earliest of (a) the completion of our initial business combination; and (b) the redemption of all of our public shares if we have not completed our initial business combination within 12 months (subject to a six month extension of time). The proceeds deposited in the trust account could become subject to the claims of our creditors, if any, which could have priority over the claims of our public shareholders.

 

The underwriters expect to deliver the units to the purchasers on or about ________, 2021.

 

EF Hutton

division of Benchmark Investments, LLC

 

The date of this prospectus is ________, 2021

 

 
 

 

TABLE OF CONTENTS

 

SUMMARY 1
RISK FACTORS 59
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS 114
USE OF PROCEEDS 115
DIVIDEND POLICY 118
DILUTION 118
CAPITALIZATION 120
MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS 121
PROPOSED BUSINESS 127
MANAGEMENT 171
PRINCIPAL SHAREHOLDERS 184
CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS 186
DESCRIPTION OF SECURITIES 188
UNITED STATES FEDERAL INCOME TAX CONSIDERATIONS 206
UNDERWRITING 217
LEGAL MATTERS 225
EXPERTS 225
WHERE YOU CAN FIND ADDITIONAL INFORMATION 225
INDEX TO FINANCIAL STATEMENTS F-1

 

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

 

Trademarks

 

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

 

 
 

 

SUMMARY

 

This summary only highlights the more detailed information appearing elsewhere in this prospectus. You should read this entire prospectus carefully, including the information under “Risk Factors” and our financial statements and the related notes included elsewhere in this prospectus, before investing.

 

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

 

  “Companies Act” are to the Companies Act (2021 Revision) of the Cayman Islands, as the same may be amended from to time;
     
  “company” or “Company” are to AEI CapForce II Investment Corp;
     
  “directors” are to our current directors and our director nominees named in this prospectus;
     
  “equity-linked securities” are to any debt or equity securities that are convertible, exercisable or exchangeable for our Class A ordinary shares issued in connection with our initial business combination including but not limited to a private placement of equity or debt;

 

  “founder” are to AEI CapForce Venture II (Labuan) LLP and AEI CapForce Venture IV (Labuan) LLP, each private fund vehicles advised by European Credit Investment Bank Ltd. and managed by AEI Fund Management Co. Ltd., a fund management company owned by AEI Capital Ltd. based in Hong Kong, Kuala Lumpur and Shenzhen that focuses on technology enabled products and solutions to identify, harness and develop key trends relevant to their customers and markets.
     
 

“founder shares” are to our Class B ordinary shares initially issued to our sponsor in a private placement prior to this offering and the Class A ordinary shares that will be issued upon the automatic conversion of the Class B ordinary shares at the time of our initial business combination (for the avoidance of doubt, such Class A ordinary shares will not be “public shares”);

 

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  “ initial shareholders” are to our sponsor and any other holders of our founder shares prior to this offering including our officers, directors, and director nominees among others (or their permitted transferees);
     
  “management” or “management team” are to our executive officers, directors, director nominees, and to our advisors unless otherwise specified;
     
  “memorandum and articles of association” are to our amended and restated memorandum and articles of association to be in effect upon completion of this offering;
     
  “ordinary shares” are to our Class A ordinary shares and Class B ordinary shares, collectively;
     
  “placement shares” are to our ordinary shares included within the placement units being purchased by our sponsor in the private placement;
     
  “placement units” are to the units being purchased by our sponsor, with each placement unit consisting of one placement share and one-half of one placement warrant;
     
  “private placement” are to the private placement of 360,530 placement units at a purchase price of $10.00 per unit, for an aggregate purchase price of $3,605,300 (or up to 398,030 units for an aggregate purchase price of up to $3,980,300 if the over-allotment option is exercised in full), which will occur simultaneously with the completion of this offering;
     
  “placement warrants” are to the warrants included within the placement units being purchased by our sponsor in the private placement and to the warrants included within the units issued upon conversion of working capital loans, if any;
     
  “public shares” are to our Class A ordinary shares sold as part of the units in this offering (whether they are purchased in this offering or thereafter in the open market);

 

  “public shareholders” are to the holders of our public shares, including our sponsor and management team to the extent our sponsor and/or members of our management team purchase public shares, provided that our sponsor’s and each member of our management team’s status as a “public shareholder” will only exist with respect to such public shares;
     
  “public warrants” are to our redeemable warrants sold as part of the units in this offering (whether they are purchased in this offering or thereafter in the open market);
     
  “sponsor” are to AEI Capital SPAC Venture II LLC, a Cayman Islands limited liability company, of which certain of our officers and directors are beneficial owners;
     
 

 

 “representative” are to EF Hutton, division of Benchmark Investments, LLC, who is the representative of the underwriters in this offering;
     
  “trust account” are to the segregated trust account located in the United States with J.P. Morgan Securities LLC and with Continental Stock Transfer & Trust Company acting as trustee, into which we will deposit certain proceeds from this offering and the sale of the placement units;
     
  “underwriter” are to EF Hutton, division of Benchmark Investments, LLC, the underwriter of this offering;
     
  “warrants” are to our public warrants; and
     
  “we,” “us,” “Company” or “our company” are to AEI CapForce II Investment Corp, a Cayman Islands exempted company incorporated with limited liability.

 

Any forfeiture of shares described in this prospectus will take effect as a surrender of shares for no consideration of such shares as a matter of Cayman Islands law. Any conversion of the founder shares described in this prospectus will take effect as a compulsory redemption of founder shares and an issuance of Class A ordinary shares as a matter of Cayman Islands law. Any share dividends described in this prospectus will take effect as share capitalizations as a matter of Cayman Islands law. Unless we tell you otherwise, the information in this prospectus assumes that the underwriters will not exercise their over-allotment option and the forfeiture by our sponsor of 375,000 founder shares following the closing of this offering.

 

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General

 

Overview and Objective

 

We are a newly incorporated blank check company incorporated as a Cayman Islands exempted company with limited liability on July 8, 2021, for the purpose of effecting a merger, share exchange, asset acquisition, share purchase, reorganization or similar business combination with one or more businesses, which we refer to throughout this prospectus as our initial business combination. We have not selected any potential business combination target and we have not, nor has anyone on our behalf, initiated any substantive discussions, directly or indirectly, with any potential business combination target with respect to an initial business combination with us. While we may pursue a target in any industry, section or geography, we intend to seek a target in the Greater China Region or Southeast Asia in the “new economy” that is composed of a trilogy of interactive features that include globalization, information technology and the communication revolution, or high growth industries.

 

We intend to use resources across our international management team to source and evaluate attractive, high growth private companies in the financial technology and the financial services and technology industries that offer a differentiated technology platform or product for interfacing with the financial services sector. We believe the growth-oriented subsectors of the financial technology industry present particularly attractive investment opportunities, as does e-commerce, online-to-offline commerce (O2O), plus healthcare, education, renewable energy and big data, AI, cloud-based technology, with digitally-empowering and/or digitally-enabled characteristics that will enable us to capitalize on a number of major global trends, including the globally optimized value chain — a familiar feature of the current phase of globalization that is expected to give way to value chains that blend digital technology with older lower-cost technologies, allow greater integration across products and services, and leverage the growth of independent global platforms for the exchange of goods and services.

 

We intend to capitalize on our management team’s significant expertise that has been cultivated over the past four decades. Our diverse, complementary management team has a proven track record of sourcing and executing deals, as well as direct experience in operating and managing companies, especially in the Asia Pacific region. Our management team also has a strong network in the industry and a deep understanding of the most pressing trends in the space. We believe that these factors will benefit our ability to search for, and conduct rigorous due diligence on, a high-quality target company.

 

Our Management Team

 

Our management team is led by John Tan, our Chief Executive Officer and Chairman of the Board, who has been leading the Asia-Pacific (APAC)-focused private equity investment group headquartered in Kuala Lumpur and Hong Kong with AUM exceeding $500 million, and Gilbert Loke, our Chief Financial Officer, who brings extensive accounting and financial experience including several dozens of IPOs; their summary biographies and those of our independent director nominees and advisors appear in the following narrative.

 

John Tan Honjian, Chief Executive Officer and Chairman of the Board

 

Mr. Tan brings extensive experience as a corporate strategist and private equity investor who brings significant legal experience with local and cross-border corporate mergers and acquisitions, corporate joint ventures and strategic alliances, foreign investment, private equity and venture capital deals, private fund establishment and structuring for private equity fund and venture capital funds, project financing, structuring of investment deals for high net-worth family offices, strategic structuring of business deals, and property transactions for both corporate and individual clients.

 

Since January 2015, Mr. Tan has served as Chairman and CEO of AEI Capital Group located in Hong Kong, Kuala Lumpur and Shenzhen, where he lead the Asia-Pacific-focused private equity investment group with AUM exceeding USD $500 million with the support of a seasoned team backed by diverse experience in more than 100 M&A transactions, exceeding 50 private equity deals and above 20 IPO exercises in major financial centers such as New York, Hong Kong, Singapore, Sydney and Kuala Lumpur. AEI Capital Group specializes in late-stage, pre-IPO investments, merger and acquisition/joint venture transactions, private equity/venture capital deals, private investment in public equity (PIPE), hedge fund portfolio, private fund structuring, and buy-out of high growth small and medium-sized enterprises and tech ventures, with preferred exit via IPO on global stock exchanges such as HKEX, ASX and NASDAQ. AEI Capital Group received the award of Best Private Equity Firm (East Asia) in Fund Awards 2021 granted by Wealth & Finance International (WFI).

 

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Since January 2016, Mr. Tan has served as a Partner with Ng, Gan and Partners in Kuala Lumpur, Malaysia and has served as President of AEI Tech Venture Group where he provides board-level guidance to this tech venture builder with an in-house early-stage investment arm that co-builds digital business units of established mid-sized pre-IPO companies under AEI Capital’s investment portfolio.

 

Since January 2017, Mr. Tan has served as President for Ashita Group in Malaysia where he chairs the Strategic Planning Committee on the Board of this corporate group exceeding billion-dollar annual turnover and provides board-level guidance and leadership for the capitalization, strategization and digitization while catalyzing the Ashita Group’s tremendous topline growth by 400% within 5 years to get very close to the milestone of second billion-turnover soon, steering valuation of the Group to jump by 1600% within 5 years in private markets. Mr. Tan joined the Board after AEI Capital became the largest institutional investor in Ashita Group.

 

Since January 2020, Mr. Tan has served as co-President, Investment Banking Services Group at European Credit Investment Bank Ltd. where he leads its offshore investment banking services group to serve small-mid cap listed companies across Asia Pacific whose capital market needs are still mostly underserved by onshore investment banks and global institutional investors. Mr. Tan has served on the board of directors of various high growth companies across Asia Pacific and acted as the Board advisor to various public listed companies across Asia Pacific.

 

Earlier in his career, Mr. Tan specialized in mergers and acquisitions, capital markets and private equity as a common law-qualified cross-border corporate lawyer at Rajah and Tann Singapore LLP, the largest law firm in ASEAN, headquartered in Singapore, with affiliate offices in Cambodia, China, Indonesia, Laos, Malaysia, Myanmar, Philippines, Thailand and Vietnam, and founded in 1976. Mr. Tan also served as the regional counsel for a Fortune 100 Company in charge of the ASEAN and South Asia regions. Mr. Tan has received the honor of Global Innovator Award 2018 in Finance and Investment Category by Global SME Alliance, United Nations due to his significant contribution on ASEAN-plus-China One-Belt-One-Road private equity investment thesis. Mr. Tan spoke as a Panel Speaker in Global SME Summit alongside with global leaders such as France ex-Prime Minister Mr. Jean-Pierre Raffarin and China ex-Vice Premier Mdm. Wu Gui Xian. Mr. Tan completed his Master of Business Administration (MBA) Essentials Programme at the London School of Economics and Political Science (LSE), with Executive Program completed at University of Oxford on Blockchain Strategy.

 

Gilbert Loke (Che Chan), Chief Financial Officer and Director

 

Mr. Loke brings extensive experience in the financial industry, with an emphasis on corporate and private banking. Mr. Loke has served as the Chairman and Chief Financial Officer of Greenpro Capital Corp (NASDAQ:GRNQ) since July 2019 and as Chief Financial Officer and Executive Director of Greenpro Venture Capital Ltd. since its inception on July 19, 2013. Mr. Loke has extensive knowledge in accounting and has been an accountant for more than 30 years. He was trained and qualified with UHY (formerly known as Hacker Young), Chartered Accountants, one of the large accounting firms based in London, England between 1980 and 1988. His extensive experience in auditing, accounting, taxation, SOX compliance and corporate listing has prompted him to specialize in corporate advisory, risk management and internal controls serving those small medium-sized enterprises.

 

From September 1999 until June 2013, Mr. Loke served as an adjunct lecturer in ACCA P3 Business Analysis at HKU SPACE (HKU School of Professional and Continuing Education), which is an extension of the University of Hong Kong and provides professional and continuing education. Mr. Loke worked as an independent, non-executive director of ZMay Holdings Limited, a public company listed on the Hong Kong Stock Exchange from January 2008 to July 2008, as Chief Financial Officer for Asia Properties Inc. from May 31, 2011 to March 28, 2012, and Sino Bioenergy Inc., with both companies listed on the OTC Markets in the United States from 2011 to 2012. Mr. Loke has served as the Chief Executive Officer and a director of Greenpro Resources Corporation since October 16, 2012. He has also served the Chief Executive Officer and a director of Moxian Corporation from October 2012 until December 2014. Mr. Loke served as an independent director of Odenza Corp. from February 2013 to May 2015. He has also served as the Chief Financial Officer, Secretary, Treasurer, and a director of CGN Nanotech, Inc. from September 4, 2014 to September 28, 2016.

 

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Mr. Loke served as director of Greenpro Talents Ltd. from November 16, 2015 to June 6, 2017, and as director of GC Investment Management Limited, which is the investment manager of Greenpro Asia Strategic SPC, since April 6, 2016. Mr. Loke earned his Masters of Business Administration degree (MBA) from Bulacan State University, Philippines, and earned his professional accountancy qualifications from the ACCA, AIA and HKICPA. He also earned other professional qualifications from the HKICS, ICSA as Chartered Secretary, FPAM - Malaysia as a Certified Financial Planner, ATIHK as tax adviser in Hong Kong and CWM Institute as Chartered Wealth Manager in Hong Kong. Mr. Loke brings to the board of directors accounting and financial expertise and business leadership.

 

Our Independent Director Nominees

 

Andy Chow (Siu Hang), Independent Director Nominee, Chair of the Audit Committee, Member of the Compensation Committee and Member of the Corporate Governance and Nominating Committee

 

Mr. Chow brings more than 20 years of investment banking and financial experience and is currently Chief Executive Officer and in charge of investment banking of Eddid Capital Ltd. (Hong Kong SFC-licensed investment bank) since May 2020, where he has led and actively participated in various large-scale Hong Kong listings, financial advisory, equity and bond placements and underwritings, domestic and overseas mergers and acquisitions, corporate restructurings, pre-IPO investments and other projects. He also currently sits on the board of directors of Eddid Special Portfolio Investment Fund SPC since October 2020 and he is an independent non-executive director and a chairman of the audit committee of a Hong Kong-listed Yincheng Life Service Co., Ltd. (1922:HK) since October 2019 and an independent non-executive director of a Hong Kong-listed Ziyuanyuan Holdings Group Ltd. (8223:HK) since June 2018.

 

Mr. Chow served in management positions in many large-scale Chinese and Hong Kong listed investment banks, including the managing director of Investment Banking Department of Essence International, the managing director and head of Investment Banking Department of CASH Financial Services Group, the managing director and head of Corporate Finance Department of CEB International, the executive director of Corporate Finance Department of Bank of Communications International, the associate director of Corporate Finance Department of Bank of China International and the manager of Corporate Finance Department of Haitong International. Mr. Chow has completed multiple IPOs on the Hong Kong Main Board involving numerous asset classes, including financial technology, financial services, healthcare and pharma, industrial and engineering, environmental, food and beverage, REITs, real estate and construction, and coal.

 

Mr. Chow graduated from City University of Hong Kong with a Bachelor’s Degree in Accounting. He is a fellow member of the Hong Kong Institute of Certified Public Accountants and the Association of Chartered Certified Accountants.

 

Dr. Li Zhong Yuan, Independent Director Nominee, Chair of the Compensation Committee, Member of the Audit Committee and Member of the Corporate Governance and Nominating Committee

 

Dr. Li brings nearly 30 years of financial services experience, including bringing mathematics to the process of investment successfully. From June 2016 to July 2021, Dr. Li has served as the Executive Chairman of Pan Asia Data Holdings Inc. (1561:HK), listed on Hong Kong Main Board. He is currently the Chairman of the Board of Beijing Universal Medical Assistance Co. Ltd. and sits on the board of directors of Essenlix Corporation. Previously, Dr. Li occupied the position of Executive Director at China Health Group Limited (673:HK) from 2001 until June 2016. Dr Li is also a member of the International Advisory Board of the University of California at San Diego’s School of Global Policy and Strategy and its 21st Century China Center’s China Leadership Board member. Prior to that, Dr. Li held senior positions with a number of major international investment banks on Wall Street, including Bankers Trust Company, Salomon Brothers and IBJ Asia Limited. Dr. Li has extensive experience in capital raising and risk management and innovatively structured financial products until starting his own independent businesses in 2000, including incubating and driving up innovative service ventures from scratch to successful exit as anchor principal. In late 1996, Dr. Li was in charge of building up capital markets and derivative businesses in multi-asset classes in Northern Asia and was a director of Rabobank International before setting up a financial and technology investment firm.

 

Dr. Li is experienced in financial services and algorithmic technology and economy. Dr. Li has held roles as member of boards of directors and advisory boards of several innovative enterprises globally. Dr. Li received a doctorate (Ph.D.) from the University of Michigan in mathematics in 1990 and subsequently worked as an Assistant Professor of Mathematics at the Massachusetts Institute of Technology, the USA (“MIT”), where he was consecutively awarded research grants from the National Science Foundation.

 

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Christopher Clower, Independent Director Nominee, Chair of the Corporate Governance and Nominating Committee, Member of the Audit Committee and Member of the Compensation Committee

 

Mr. Clower has been in the financial industry for approximately 27 years, and has raised more than $4 billion in capital for his clients. Mr. Clower co-founded, and built PT Manoor Bulatn Lestari, an Indonesian resource company, and sold it for more than $120 million and achieved 30x return on investment in two years for himself and his investors. Mr. Clover serves as the Chief Operating Officer of Welbsach Holdings Pte Ltd. of Singapore since April 2021, as Director of N51 Capital Management Pte Ltd. since February 2021, as Director of BetShop Pte Ltd. since February 2021, as a Director of Argo Lake Management LLC and Argo Lake Management Pte Ltd. each since November 2020, Chief Executive Officer, Director of Tiger Tech Acquisition Corp, a special purpose acquisition company, and Tiger Tech Acquisition Corp Pte Ltd. each since October 2020. He also serves as Director of Batavia Prosperindo Premium Pte Ltd. since February 2017 and non-executive director for Malacca Trust Pte Ltd. since February 2015 and Director of Batavia Prosperindo Premium Pte Ltd. since February 2017 and Commissioner of PT Batavia Prosperindo Asset Management since January 2014.

 

Previously, Mr. Clower was Managing Director and Head of Corporate Finance for Southeast Asia at Merrill Lynch for 11 years when he left the firm in 2009. Mr. Clower sits on a number of boards of financial services and financial technology companies in Southeast Asia, including PT Batavia Prosperindo Finance Tbk, an Indonesian consumer finance company, listed on the Indonesia Stock Exchange and regulated by OJK, the Indonesia Government financial regulatory authority. Mr. Clower also continues to advise on and invest in deals with a network of private investors, and helps build companies, primarily in Southeast Asia.

 

Prior to Merrill Lynch, Mr. Clower was with Deutsche Bank investment banking in Singapore and Bankers Trust investment banking in New York and Chicago. Mr. Clower has a bachelor of science degree in Nuclear Engineering from Northwestern University, and an MBA with Honors from University of Chicago.

 

Our independent director nominees have experience in public company governance, executive leadership, operational oversight and capital markets experience. Our directors also have experience with acquisitions, divestitures and corporate strategy and implementation, which we believe will significantly benefit us as we evaluate potential acquisition or merger candidates as well as following the completion of our initial business combination.

 

Our Strategic Advisory Board

 

In addition to our management team described above, we have assembled a highly differentiated strategic advisory board. Members of our strategic advisory board have a wide range of experience in the e-commerce, manufacturing, online retail, marketing technology, etc., and experience in the greater China and Asia Pacific region and will advise our sponsor in connection with the identification, evaluation, negotiation and consummation with respect to potential business combination targets.

 

Juan Fernandez, Chief Executive Officer of Genesis Unicorn Acquisition Corp and is an advisor to another SPAC, Benessere Capital Acquisition Corp, which completed its IPO in January 2021. Benessere Capital Acquisition Corp has focused its search on technology-focused middle market and emerging growth companies in North, Central and South America. Previously, Mr. Fernandez served as President of Gira Cluster of Automotive Industries of Cantabria from May 2019 to March 2021 based in Spain. He has also served as the General Manager of Chassis Brakes International Spain, part of Hitachi Automotive Systems from April 2019 to February 2021 based in San Felices de Buelna, Autonomía de Cantabria, Spain. From September 2018 to April 2019, Mr. Fernandez served as the Smart Factory Platform Leader of Linxens based in Levallois, Île-de-France, France.

 

From January 2017 to April 2019, Mr. Fernandez served as the Site Director of Linxens. From September 2015 to December 2016, Mr. Fernandez served as the Senior Area Sales Manager Southern Europe for Quintus Technologies, based in Västerås, Sweden. From September 2014 to September 2015, Mr. Fernandez served as the Site Director of Hutchinson based in Châteaudun, France. From April 2013 to August 2014, Mr. Fernandez served as the Production Area Manager of Gestamp based in Le Theil, Basse-Normandie, France. From November 2005 to March 2013, Mr. Fernandez served as Process Engineer Manager at ArcelorMittal Aviles, Spain. From September 2003 to October 2005, Mr. Fernandez served as Resident Engineer of ArcelorMittal based Electrolux premises in Conegliano, Veneto, Italy. In 2018, Mr. Fernandez received his Executive MBA degree at ESCP Europe. In 1999, Mr. Fernandez received his DEA (Master in Sciences) at Ecole Polytechnique.

 

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Victor Chua, Managing Partner and Founder of Vynn Capital, a venture capital firm investing in early-stage technology companies in the Asia Pacific that works alongside family offices and large institutions and companies in technology adoption and innovation. Vynn Capital is a partner of the United Nations World Tourism Organization that works with companies in the industries of travel mobility, property, food and fast-moving consumer goods or packaged goods. Prior to that, he was the Vice President of Investments for Gobi Partners, an early to late stage venture capital firm where he managed two Southeast Asia-focused early stage funds and a growth stage fund. Prior to that, he served with the venture capital arm of Malaysia’s Ministry of Finance where he managed direct and indirect investments. Some of the notable investments he supervised include Carsome (Malaysia), Travelio (Indonesia), Dropee, Triip.me (Vietnam), Hermo and Jirnexu.

 

Earlier in his career, he was with Willis Towers Watson, where he advised corporate, pension and sovereign wealth funds on investment strategies. He was an honoree of the Forbes Asia 30 under 30 in 2017. He is the Immediate Past Chairman of the Malaysia Venture Capital and Private Equity Association and a mentor with the Founder Institute and other grass-root entrepreneurial initiatives. Mr. Chua is also a Council Member of the Malaysian Venture Capital and Private Equity Development Council appointed by the Securities Commission of Malaysia. Mr. Chua was also a startup founder of an online education platform as well as two other businesses. He is a member of Mensa and a CFA charter holder.

 

Dr. Eva Law, Chairperson of the Association of Family Offices in Asia and the Association of Private Bankers in Greater China Region and the Women in Leadership Association. Dr. Law is a seasoned professional in asset management, private equity and wealth management, having diversified knowledge and experience in running multi-lines of business. She specialized in serving ultra-affluence and entrepreneurs, carried proven track records in creating new business and generating profits. Dr. Law is the Chief Executive Officer of Flex Group, a single family office in North America and has its Asia operation in Singapore and Hong Kong. She is also the chairperson of the investment management company that serves the family office.

 

Dr. Law is the owner of CAG International Group and Consortium of Family Offices and Investors Limited running various lines of business. CAG International received the Best Investment Manager Serving Family Offices and the Best Advisor to Family Offices Awards in 2019 while the consortium offers platform solutions. She manages her group for venturing direct investment and family office solutions business. The investment focus of her group is ESG and impact investment and disruptive technology contributing to a better future. She owns a superb business relationship with family principals and extensive industry stakeholders globally. Dr. Law established the Association of Private Bankers in Greater China Region (APB) in 2010 aiming to promote industry development, offer professional training to practitioners, foster knowledge exchange and collaboration and launch service portals designated for market participants. While in 2013, Dr. Law also set up the Association of Family Offices in Asia (AFO) specialized to support ultra-affluence and industry practitioners who own intimate and deep relationship with mega wealth holders to establish and manage their family councils, single or independent family offices and to administer the family’s wealth succession, strategic philanthropy, direct investment and corporate development of their family business.

 

Dr. Law has served the industry for more 20 years. Before setting up the Associations, she worked in the head office of a top-rated Chinese bank, responsible for the strategic development and the PandL performance of private banking and cross-border financial services. She has been with a Chinese boutique investment banking firm, through leveraging Swiss EAM private banking platform (UBS and Credit Suisse) and arranging direct investment to serve the Ultra HNW clients in great China region. Dr. Law also served Fortune 500 companies, including global bank, pension fund, asset manager, insurer, China stated-owned enterprises and listed family business enterprises, taking leadership positions and sitting on board of directors, investment management, risk management, asset and liability management, product development and audit committees.

 

Dr. Law possesses extensive management experience, she has been the registered responsible officer and chief executive licensed with regulators under SFC, Insurance, Retirement and Money Lending regimes. She also won the Best Master Trust Award, Wealth Management High Flyer Award and various Fund Performer Awards from Lipper, Morning-Star for her served companies. Dr. Law serves the HK government in the Financial Service Development Council being the Family Offices Work Group member. She is the Chairman of APB, AFO, Asia Co-Investors Club and Chartered Institute of Asia Family Firms and Offices, she is also the founding member of Women in Leadership Association, the Women Leaders in PE VC Industry – Hong Kong and Pearl River Delta Chapter, the Honorary Chairman of Hong Kong Family Offices Association and the Executive Chairman of Association of China Independent Wealth Advisory Institutions - Family Office Council, the researcher of Xi’an Jiaotong University, the Honorary Research Fellow of Legacy Academy, the Special Advisor to Singapore Private Wealth Association, US Family Offices Institute, Global Visions Community in Switzerland, Venture Avenue – The Tsing Hua University Social Innovation Platform, the ESG and Responsible Business Committee Chair of the Institute of Compliance Officers, the Advisory Board Member of Belt and Road Multinational Enterprises Union, Asia Startups Festival, World Business Angels Council - Ethical Governance, Quality Leaders and Standards of Excellence Committee and the Benevolence Foundation, the voluntary coach of Shanghai Financial Education Development Fund and the appointed writer for Family Office Elite Magazine, Capital, CEO and Entrepreneur Magazine and frequent speaker in international conferences. Dr. Law is advancing her studies at Wharton Business School - University of Pennsylvania and has been awarded the Honorary Doctor by Horizon University in France. She earned a Master of Science with Edinburgh Napier University and is a Chartered Family Office Specialist, an FLMI certificate in insurance, a Bachelor’s of Arts degree with honors and several professional diplomas in mergers and acquisition as well as investment banking with University of Hong Kong, she also held security and asset management certification with Hong Kong Securities Institute.

 

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Puan Chan Cheong (“CC Puan”), Group Managing Director and Chief Executive Officer of Kuala Lumpur-listed Green Packet Berhad (KLSE: GPACKET 0082), a recognized telecommunications, media and technology company drives the strategic planning and spearheads the business development while putting his focus on building a deliberately growth culture company. Mr. Puan led the company to become an international player in the provision of connectivity devices and solutions to telecommunications companies globally. He subsequently led the company to its Main Market listing in 2005. The Group’s biggest endeavor was to raise substantial capital to launch and operate Malaysia’s challenger telecommunications company before it was acquired by TM Berhad. Thereafter, Mr. Puan relinquished his role as Group CEO in 2014 when he became Packet One’s CEO after the TM acquisition for two years.

 

Led by his passion in driving life improving digital innovations, Mr. Puan aims to propel Green Packet and its group of companies further by expanding the Group’s digital agenda to global exposure and presence in the area of solutions (devices), communications (voice minutes and data) and digital services (comprising Internet-of-Things, Financial Technology, Property Technology and Artificial Intelligence). Mr. Puan is an astute entrepreneur and a visionary man with a strong success track record in advanced technology, consulting, developing and managing large-scale telecommunications, infrastructure and property projects internationally. His personal accolades include Malaysia’s coveted PIKOM Technopreneur of the Year award. Mr. Puan holds a Bachelor of Science in Business Administration with a double major in Management Information Systems and Finance from University of Nebraska-Lincoln, USA.

 

Ye Xiang, Founder and Managing Director of VisionGain Capital Limited, an asset management company licensed by the Securities and Futures Commission of Hong Kong. From 2001-2007, he was the senior advisor to the Chairman and Chief Executive Officer of the Securities and Futures Commission (“SFC”) in Hong Kong. Prior to joining the SFC, Mr. Ye was the Executive Director and the Head of Financial Institutions Group at the BOC International (Asia) from 2000 – 2001. Mr. Ye was a Senior Analyst of the Market Development Division and Bank Supervision Department of the Hong Kong Monetary Authority (“HKMA”) from 1998 -2000 and Senior Economist and Section Chief of the Foreign Financial Institutions Department of the Peoples’ Bank of China (“PBOC”) from 1994- 1998. Mr. Ye has a Doctorate Degree in International Finance at the Graduate School of the Peoples’ Bank of China.

 

Hans-Peter Ressel, Chief Executive Officer of Momentum Commerce, a global e-Commerce solution provider for brands & SME’s, offering end-to-end services that create a bridge between brands and consumers across the entire e-Commerce value chain. Mr. Ressel was the Co-Founder, Chief Executive Officer and Group Chief International Officer of Lazada Group which is the largest e-Commerce platform in Southeast Asia. In 2016, Alibaba Group Holding Ltd. (BABA:NYSE), one of the largest e-Commerce and technology companies in the world acquired a majority stake in Lazada and further increased its stake in 2017 at a valuation of US $3 billion, one of the top three tech exits in Southeast Asia at that time. Before embarking on his career in Lazada, Hans-Peter was a Global Venture Development Manager at Berlin-based Rocket Internet. He successfully rolled out Home24, an online home furnishing store with a focus on early stage support and retail operations. Mr. Ressel began his career in Asia as a Co-Founder and Managing Director of Home24 in Malaysia and Singapore. He has also had several years of mergers and acquisition consulting experience advising companies from various industries such as media, retail and telecommunications at Goetz Partners in Germany. Hans-Peter is a graduate of Corporate Finance and European Business Law from Vienna University. He has been awarded the JADE Excellence Award for the “Most Innovative Project” category and the “Business Master” title by Booz Allen Hamilton.

 

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In addition, we have engaged the services of ARC Group Ltd. to provide financial advisory services in connection with this offering, and our sponsor has also engaged the services of its investment banking partner, European Credit Investment Bank Ltd. to provide strategic advisory services.

 

We believe that our management team’s extensive experience and deep expertise in our target industries position us well to take advantage of the growing set of acquisition opportunities and that our vast network, ranging from owners and management teams of private and public companies, private equity funds, investment bankers, attorneys, to accountants and business brokers will allow us to generate an attractive transaction for our shareholders.

 

The past performance of the members of our management team or their affiliates is not a guarantee that we will be able to identify a suitable candidate for our initial business combination or of success with respect to any business combination we may consummate. You should not rely on the historical record of the performance of our management team or any of its affiliates’ performance as indicative of our future performance.

 

Market and Industry Opportunity

 

While we may acquire a business in any industry, we intend to focus on mid-market companies considered disruptors and innovators within the greater technology and consumer sectors in Southeast Asia and China. Southeast Asia consists of 11 countries, with six of those leading the region economically, Indonesia, Thailand, Malaysia, Singapore, the Philippines and Vietnam, which are termed “the ASEAN-6.” Economic growth in Southeast Asia and the ASEAN-6 in particular have a GDP of close to $3 trillion and growing, driven in no small part by them being some of the world’s fastest-growing consumer markets.1

 

More specifically, within Southeast Asia and China, we believe that the financial technology, e-commerce, O2O, green energy, healthcare, education, and related consumer sectors represent attractive target markets given their size and growth profile. The products and services related to these industries are positioned to benefit from shifting consumer demand megatrends coupled with the demographics of the region. We believe that technological innovation involving banking, insurance, automation, robotics, artificial intelligence (AI), data analysis and digitized networks is poised to have a profound impact on traditional methods of consumption, production, delivery and fulfillment of consumer needs by increasing access and reducing cost, while improving consumer experience, as reviewed in the following discussion.

 

There is little doubt that growth in financial technology will continue to disrupt the economy in the years ahead, from retail and banking to all aspects of financial services. We intend to focus our search, in part, for a business combination on companies that offer a differentiated technology platform or product for interfacing with the financial services sector in China or Southeast Asia, which are leading countries among adult consumers of financial technology services regularly according to a June 2021 Finovate study. We believe that demand for financial technology solutions is stronger than ever, so 2021 and 2022 are key years for retaining relevance and for new innovation.

 

Consumers’ adoption of financial technology services has been rising at a significant rate in recent years. Fintech assists small- and medium-sized enterprises (SMEs) with financial requirements such as banking and transfers, financial reporting, investing, and insurance. SMEs are critical in Asia, accounting for 42 percent of GDP and half of all employment and, despite this, SMEs received just 18.7% of overall bank credit in 2017 according to a World Bank report. Moreover, over the last decade, financial technology has steadily increased its share of the global economy, and the financial services industry has become one of the largest consumers of technology worldwide, spending more than $347 billion on technology annually according to the 2020 McKinsey Global Payments Report. We believe these adoption levels continue to benefit from robust secular tailwinds including the growth in digital commerce, the proliferation of mobile technology, the ubiquitous acceptance of digital payments and continuous technological advancement, positioning the sector for long-term growth.

 

Riding this wave of financial technology growth, are the trending “Buy Now, Pay Later” (“BNPL”) platforms that have taken Southeast Asia by storm recently; BNPL platforms allow consumers to buy products and pay them off over time. The repayment period could be weekly, bi-weekly, or monthly. Some platforms provide attractive offers like zero-interest and the flexibility to pay-in-installments. The global BNPL market is expected to grow at 21.1% CAGR to exceed $33.6 billion by 2027, according to Coherent Market Insights.

 

 

1 https://www.macquarie.com/au/en/perspectives/delivering-digital-financial-inclusion-in-southeast-asia.html

 

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Indeed, Worldpay from FIS’ 2021 Global Payments Report found that BNPL is the fastest growing online payment method in many countries including Singapore and Malaysia. It predicts that the BNPL e-commerce market share will more than double in the region from 0.6% to 1.3% over the next four years and, further, that cash will be the least used traditional payment method in four years.

 

In 2019, digital financial services earned $11 billion in Southeast Asia, which grew to an estimated $100 billion in 2020 according to the World Bank. One of the contributing factors to this growth in this region is its insufficient financial inclusion. It was estimated that almost three fourths of adults in Southeast Asia were not adequately banked with 50% adults being unbanked and 25% adults being underbanked, presenting a significant opportunity for digital financial services, according to an October 2019 report, “Google, Temasek and Bain, e-Conomy SEA 2019.” Additionally, World Bank data points to a lack of access to financial tools in Southeast Asia. For example, in Indonesia, only 49% of adults have formal bank accounts; in Cambodia, the number is 22%, and in the Philippines and Vietnam, it is 34% and 31%, respectively.

 

The number of mobile wallets within Southeast Asia in use is projected to grow 311% from 2020 to almost 440 million by 2025 across Indonesia, Malaysia, the Philippines, Singapore, Thailand and Vietnam, reflecting an e-commerce boom, according to The 2021 Mobile Wallets Report from Boku, a global study published July 8, 2021, with Juniper Research Ltd. Within Southeast Asia, Singapore is at the forefront of the financial technology boom, dominating the region’s financial technology market for several years according to a December 25, 2020, Finovate article.2 In 2017, 400 local financial technology companies in Singapore raised approximately $229 million across a diversified market including fund transfers, peer-to-peer payments, cryptocurrency trading, investment apps, insurance services, money lending services, and crowdfunding platforms. Indonesia ranks second with its large population but only 50% of its population being active internet users leaving 150 million people relying on financial technology.

 

The Philippines ranks third with its central banks’ plans to make at least a fifth of its transactions digital within two years; already the country has 71% active internet users and 65.5% unbanked while financial technology companies have emerged to bridge the gap according to The 2021 Mobile Wallets Report. Ranked fourth is Vietnam where the total transaction value in the personal finance sector has crossed the $1 billion mark with payment apps leading the sector in Vietnam and peer-to-peer lending growing rapidly, which is projected to show an annual growth by 38.4% resulting in a projected total amount of $4.5 billion by 2024 according to the December 25, 2020, Finovate article. Vietnam’s unbanked population turns to financial technology for its ease of financial transactions. Fifth on the top five in Southeast Asia is Thailand where 74% of the population banks online and still 47% of all internet users make mobile payments, and 71% of them use their phones to purchase goods online each month according to The 2021 Mobile Wallets Report.

 

China has one of the most dynamic financial technology markets in the world. In 2018, its financial technology investments reached $25.5 billion, ranking first in the world and amounting to about half of the global total of financial technology investments that year.3 It is clear that Chinese firms have begun to dominate the financial technology sector globally.

 

China’s dominance in the financial technology space is also evident in terms of intellectual property filings. China’s leading insurer, Ping An, took the top spot in the world in financial technology patents by filling 1,604 patents last year, according to a report by World Intellectual Property Organization. Moreover, 3,909 enterprises from 33 countries filed 14,706 financial technology patents by the end of 2019 according to the report; among the top 100 list, 48 enterprises came from China, covering traditional finance, financial technology, internet, e-commerce, technology, and telecommunications.4

 

E-Commerce. E-commerce represents an area of our focus for a potential business combination, as the proliferation of digitally enabled retail continues to grow. According to eMarketer, global retail ecommerce sales grew from $3.345 trillion in 2019 to $4.28 trillion in 2020, representing 27.6% growth. Over that same period, retail e-commerce sales as a percentage of total retail sales increased from 13.6% to 18.0% and sales, according to eMarketer, are expected to grow globally at a compounded annual growth rate of 10.5% through 2024.

 

 

2 https://finovate.com/southeast-asias-fintech-boom-all-you-need-to-know/

3 https://www.institutmontaigne.org/en/publications/chinas-fintech-end-wild-west

4 https://investinchina.chinadaily.com.cn/s/202008/11/WS5f340396498ed1e2f34088cd/top-10-companies-with-most-fintech-patent-applications.html

 

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Moreover, recent events, particularly the COVID-19 global pandemic and its impact on brick-and-mortar shopping behaviors, have accelerated the industry’s transition to online retail commerce. Consumer preferences are shifting to prioritize digital convenience, resulting in a new, widespread and urgent demand for digital commerce.

 

In 2019, the added value of e-commerce accounted for more than one-third of China’s GDP. Today, China is leading e-commerce sales worldwide $862.6 billion as of 2019 and is expected to reach $1,556.2 billion by 2024 according to Statista’s study of 151 countries. Attracting every day thousands of entrepreneurs and companies from all four corners of the world, we believe that China is one of the most promising markets worldwide. With a population of almost 1.4 billion people, China’s rapidly rising wages have contributed to growth in consumption and an increasing purchasing power. The development of various new technologies-related industries, and China’s digitalization greatly contributed to the success of the most lucrative industry in China, that of E-commerce.

 

 

The e-commerce market in China is expected to grow from sales revenue of projected of $2.1 trillion in 2021 to $3.0 trillion in 2024, representing a compound annual growth rate (CAGR) of 12.4 percent, according to newly-released GlobalData forecasts in April 2021. This year alone, e-commerce sales in China are expected to register growth of 17.2 percent and, according to an eMarketer report released earlier this year, will surpass offline sales for the first time. In 2021, eMarketer predicted that 52 percent of China’s sales will take place online, up from almost 45 percent in 2020.

 

Meanwhile, Southeast Asia is the emerging hub of the e-commerce market, due to the already high and yet growing population, rising disposable income, increasing access to the internet, smartphone penetration, and developing transport infrastructure leading to efficient logistics services with faster and last mile delivery options. With a combined population of 655 million, a young demographic and online retail sales projected to grow by 44.4% annually, Southeast Asia is an exciting region for e-commerce.

 

 

 

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The region has a rich landscape of local e-commerce companies with brands that will be recognized by few people outside of Southeast Asia. The largest players, including Shopee, Lazada and Tokopedia, are online marketplaces selling a diverse range of goods, similar to the Amazon and Alibaba model. They take a large share of Southeast Asia’s total online retail sales, which are forecast to reach $55 billion in 2020.5 Despite the similarities of Southeast Asia’s local online marketplaces to Amazon, it is a region where Amazon is a very small force. It launched in Singapore in 2019, but still lags far behind local alternatives. Chinese ecommerce brands do not have a strong ecommerce presence in the region either, though their market influence is deeply felt through their indirect participation in Southeast Asia e-commerce market via merger and acquisition or strategic investment. There has, however, been billions of dollars of foreign investment in Southeast Asia’s ecommerce industry, from both China and the West.

 

In 2020, the e-commerce market in Southeast Asia amounted to approximately $62 billion, which is forecasted to increase significantly by 2025 to $172 billion according to the Southeast Asia B2C E-Commerce Market 2021 study. The business-to-consumer (“B2C”) e-commerce market, in particular, in Asia saw significant growth during the coronavirus pandemic and was expected to continue its lead over other world regions. Moreover, as a result of consumers’ shopping behavior shift towards online purchasing, numerous e-commerce platforms generated considerable revenue since the start of the COVID-19 pandemic.

 

Given the acceleration of digital adoption in the industry, digital capabilities, including data and analytics and other specialized competencies, are in high demand. In addition, retailers are entering into deals that allow them to participate in open ecosystems and non-traditional partnerships to provide consumer value through digital avenues. We believe the flux in the market has created an opportunity for new entrants providing new software services, innovating on traditional ecommerce business models.

 

We believe many such businesses would benefit from the diverse skill set of our management team, including the integration of business best-practices with marketing best-practices, and using data-driven insights and technology to understand customer preferences and to optimize the customer experience. We intend to focus on evaluating companies or assets with leading competitive positions, attractive financial profiles and robust long-term potential for growth and profitability.

 

Digitalization and O2O Online-to-Offline Commerce. Digitalization and O2O is becoming a disrupting factor at a significant pace and merits our close attention as well. As a business strategy, O2O is online-to-offline commerce that relies on identifying and drawing potential consumers found on online channels and funnels them into actual customers at a traditional brick-and-mortar store. This structures not only includes taking advantage of promotions offered through online channels for in-store purchases, but also in-store pick-up of purchased online orders and in-store online sales.

 

O2O Commerce has demonstrated that most brands do not have to separate strategies between online channels and offline channels in marketing. We believe that O2O businesses can compete with pure e-commerce players by focusing on targeting the right consumers who are willing to make the trip to the store to compare products, test or try on the products for experiential purpose and trust build-up, or save on delivery time when they buy the product. Businesses are taking notice to these trends and adapting using technology tools to improve their products and services and to enhance the consumer experience.

 

The increasing O2O Commerce trend of having multiple touchpoints with consumers has also generated significant benefits to users and merchants. For example, online businesses can benefit from the offline presence, delivery networks and storage infrastructure of offline businesses; meanwhile, the offline businesses can also benefit from users and Internet traffics directed from online visits as well as consumer insights and data collected from online activities.

 

The Southeast Asia internet economy is expected to grow significantly in the next few years as it volume was approximately $105 billion in 2020 and is estimated to grow to $309 billion in 2025, representing a compounded annual growth rate of 24% for the period, according to a report, “Google, Temasek and Bain, e-Conomy SEA 2020” published in November 2020 (the “e-Conomy SEA 2020 Report”).

 

O2O Commerce is the latest trend in China where O2O online-to-offline model was popularized and where we have seen dramatic growth according to a report, “Digital Consumers of Tomorrow, Here Today” by Facebook and Bain & Company in August 2020 (“Sync Southeast Asia Report”). The Chinese O2O online-to-offline marketing takes business strategy to the next level, channeling the power of online business with physical location presence to grab hold of key markets. Already the concept has spread to travel, ride services, grocery stores, and even haircut and dry cleaning services in China.

 

 

5 https://www.digitalcommerce360.com/article/asia-ecommerce-top-retailers/

 

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In 2013, GMIC Beijing made O2O marketing one of the most talked-about trends. The true revolution of O2O Commerce began to take hold with market giant Alibaba in 2016 when it announced the creation of “New Retail” and demonstrated a commitment to turn the e-commerce online retailer into a new business model with the addition of a physical store location. The idea weaved together offline, online, and logistical components into a single chain of data.

 

At the 2021 China International Retail Innovation Summit, Dada Group opened a talk with the prediction that, by 2024, on-demand and O2O commerce will close in on $154.5 billion. As the concept continues to take hold in China and the rest of the world follows, the Chinese government is encouraging the business shift in order to maintain the lead in market landscapes. China is the clear leader in this space due to efforts by its two biggest tech giants – Tencent, the maker of the social messaging app WeChat and Alibaba, China’s biggest e-commerce player. WeChat uses QR codes for easy offline payments via its in-built mobile wallet to enable stores to connect better with customers and collect comprehensive customer data in order to push specific offers in-app for use in offline stores.6 While e-commerce in Southeast Asia is surging, their O2O online-to-offline business model is a fast-emerging trend behind China.

 

Healthcare. Our search for a potential business combination is expected to include evaluating and targeting companies in the private healthcare space in Southeast Asia with a scalable model and strong fundamentals.

 

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Private health care is deeply entrenched in the Southeast Asia region, amounting to 53 percent of the $420 billion healthcare market as of 2020.7 A strong private direct provision of health care is common to all Southeast Asia countries from Singapore to Vietnam according to the World Economic Forum. What commenced gradually in the mid-1990s, has now led to a robust private health care system including health or medical tourism as an increasingly significant revenue generator in Southeast Asia. Medical tourism generates one-third or more of revenue for private hospitals in most Southeast Asian countries, according to a report by Zion Market Research, which found Asia-Pacific dominating the growing medical tourism market in 2017. Zion Market Research projects that the global medical tourism market could generate revenue of $28 billion by the end of 2024, based on an estimated CAGR of around 8.8% from 2018. By 2026, market research firm Acumen Research and Consulting projects the global market value of medical tourism in Southeast Asian countries to reach $162 billion. In 2017, the global medical tourism market generated revenue of $15.5 billion according to Zion Market Research. Regional governments provide many incentives for private investment in health tourism.

 

Moreover, locals are willing to pay large out-of-pocket sums for private healthcare that is efficient, responsive, convenient, and comfortable. Private hospitals in Southeast Asia operate in a highly competitive environment where they need to differentiate themselves to attract patients with high expectations and wanting the best clinical care, which means they are continually improving upon their services. The most common transformational changes that Asian private hospitals expect to make – whether improving the value they receive, better targeted treatments, improved care coordination, or wellness strategies – all have a strong focus on the patient according to a study “Private Healthcare Providers in Southeast Asia: Poised for Continued Growth.”

 

Health care delivery in Southeast Asia now relies on significant private enterprise, and seeking private health care is now present across all socioeconomic levels, which has shaped the way healthcare is financed and organized. Aside from the standard model of private hospital, innovative business models have been launched, such as corporatized public hospitals in Singapore and Malaysia, self-financing public hospitals in Indonesia with its own commercial section that allows retention and use of patient revenues, or other public–private partnerships.

 

As healthcare organizations begin to catch their breath from the pandemic, we believe that many are re-evaluating their current business model in which non-critical services pay for the majority of critical ones with top business goals including growing sales, improving financials, and increasing business value. Heading into 2021, healthcare organizations will place a high importance on acquiring and retaining talent, which they plan to address by hiring new employees and offering more flexible or remote work arrangements and investing in technology for digital health.8 Digital transformation can help individual health care organizations and the wider health ecosystem improve ways of working, expand access to services, and deliver a more effective patient and clinician experience such as through cloud computing, AI, and virtual care delivery according to Deloitte’s 2021 study “2021 Global Health Care Outlook.”

 

The Southeast Asia telehealth market size was valued at $194.5 million in 2020 and is expected to expand at a compound annual growth rate (CAGR) of 17.6% from 2021 to 2028 to $916.2 million according to a May 2021 Grand View Research study, “South East Asia Telehealth Market Size, Share & Trends Analysis Report By Service Type. The global telehealth market size is projected to reach USD 559.52 billion by 2027, as online audio and video consultation practices have grown in popularity in view of their easy access, low waiting times in the outpatient department and cost-effectiveness.9 Increasing penetration of the internet and the constant evolution of smartphones and tablets have made accessing telehealth services more convenient and are expected to contribute to the growing demand. Users are increasingly turning aware of the importance of monitoring health and fitness to control the incidence of chronic ailments and are using their smartphones to track the same. In addition, innovators are designing technologies to deliver quality care through various web and cloud-based platforms.

 

We believe that the emergence of the internet of things in healthcare with integrated analytics, advanced wearable devices, and strong mobile connectivity has significantly transformed the healthcare industry and has enabled efficient patient monitoring, optimizing prescriptions, and chronic disease management. Furthermore, deep learning and AI functionalities enhance the personalization of healthcare and even provide physicians with feedback on their performance and consultation and training for performance enhancement.

 

 

7 https://www.weforum.org/agenda/2018/08/cost-healthcare-rising-asean-nations-money/

8 https://www.asianhhm.com/healthcare-management/china-private-hospitals

9 https://www.globenewswire.com/news-release/2021/05/18/2231503/0/en/Telehealth-Market-Size-2021-Is-Projected-to-Reach-USD-559-52-Billion-by-2027-with-a-CAGR-of-25-2.html

 

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We have observed an increasing trend of bio-pharmaceutical and biotech companies in Southeast Asia in particular in Indonesia, Thailand, Singapore and Malaysia and a number of them have proceeded to expand into various parts of the regions in their respective forms - from clinical trials to R&D labs and manufacturing sites. Annual revenue growth in the Southeast Asian pharmaceutical market is predicted to exceed 11% over the next 5 years with such performance making it one of the fastest growing pharmaceutical markets in the world. The region presents rich pickings for pharma manufacturers that can effectively synergize good manufacturing practices (GMP) standards, competitive pricing and an export strategy according to a CPhI South East Asia Report (July 2020).

 

Education. We see considerable growth potential in Southeast Asia in particular for private and international schools, mainly due to the continued growth of the economies in these parts of Asia. Private education is a trillion–dollar industry globally. Emerging markets have seen a surge in private provision of education during the last decade. Population growth during the last century, along with macroeconomic gains, has paved the way for this trend. Rising affluence has contributed to increased enrollment across levels of education. As a result, private sector education has become quite sophisticated over the past ten years.

 

Singapore and Malaysia have the most developed private education markets. Malaysia has a long history of establishing private higher education institutions and generating significant investments from corporations and private equity. Both countries are also benefiting from the increased popularity of international schools. Singapore is now the largest international schools market in the world, with estimated revenues of more than $700 million. It is not uncommon to find schools with an enrollment of more than 2,500 students, priced at more than $25,000 per year. The Thai, Indonesian and Vietnamese markets, though smaller in size, are expected to expand as their economies grow, bringing more high-quality, private offerings. In recent years, Indonesia and Thailand are also topping the list, along with China and Japan outside of Southeast Asia, that offer premium private schools, many of which are international schools to accommodate the expatriate community as well.

 

In East Asia, the international school sector grew by 32 percent, from 828 schools in 2013 to 1,125 in 2017; Southeast Asia saw an even higher growth of 39 percent, from 725 to 1,008 international schools over the same period.10 The burgeoning middle class in emerging markets has turned to private education to meet the demand for high-quality education; The private education spend in Southeast Asia has reached nearly $60 billion according to Ernst & Young. Private K-12 and higher education are the largest segments in the market and the most developed. In part due to their scalability, K-12 and higher education also accelerate quickly as economies develop and students invest in higher education to take advantage of these new economic opportunities. We believe that the education opportunity in Southeast Asia is growing increasingly attractive. The region is mostly middle income, with a GDP per capita equivalent to that of China and a $10 billion private education market. Both private K-12 and higher education still offer many growth opportunities.

 

 

10 https://www.studyinternational.com/news/southeast-asia-growth-private-international-schools/#:~:text=SEA%20saw%20a%20higher%20growth,the%20world%2C%20according%20to%20Greenhill

 

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Moreover, the global enterprise resource planning (ERP) market size geared specifically towards education is projected to grow from USD 12.7 billion in 2021 to USD 25.2 billion by 2026, at a Compound Annual Growth Rate (CAGR) of 14.7% during the forecast period. The education ERP market is gaining traction due to availability of cloud-based ERP solutions, need of automated management to carry out business processes in academic institutions, enhanced performance of administrative modules increasing the need for managing academic processes, and rising enrollments in the higher education sector. The global education ERP market size is projected to grow from $12.7 billion in 2021 to $25.2 billion by 2026, at a compound annual growth rate (CAGR) of 14.7% according to the report, Education ERP Market with Covid-19 Analysis by Component, Deployment Type, End User, Application, Region - Global Forecast to 2026.”

 

Owing to the closure of schools and colleges, the academic activities and administration processes are carried online. Institutions are looking for flexible and scalable ERP software that can be implemented quickly, help in carrying out their operations seamlessly, and provide students and faculties with access to resources and institutional services from anywhere and at any time. According to MarketWatch’s Global Asia-Pacific Market Outlook, Industry Analysis and Prospect 2018-2025, the use of AI in the education industry will grow by 47.5% through 2025 as the citizens of the world are becoming more adaptive and open to technology tools.

 

The educational institutes are adopting AI to offer personalized learning experience and enhance tutoring methods. The integration of intelligent algorithms through AI in the learning platform has shown positive impact on the learning of students. This is promoting the growth of AI in education sector. The technology has transformed the classrooms and changed the role of educators in the learning process by providing more user-friendly and sophisticated tools. The educational institutes are utilizing the proficiencies of the AI for content development, curriculum designing, online learning platforms, and administrative operations. Moreover, the increasing adoption of the web-based services and smartphones has encouraged the educational institutes to move toward online learning solutions to increase the student base and provide high-quality education.

 

Renewable Energy Investment. We also intend to identify and analyze businesses within the renewable energy industry, as we believe that this sector represents an attractive target market given the size, breadth and prospects for growth. To address climate change, countries adopted the Paris Agreement at the COP21 in Paris on December 12, 2015; the Paris Agreement entered into force less than a year later. In the agreement, all countries agreed to work to limit global temperature rise to well below 2 degrees Celsius, and given the grave risks, to strive for 1.5 degrees Celsius. Implementation of the Paris Agreement is essential for the achievement of the Sustainable Development Goals, and provides a roadmap for climate actions that will reduce emissions and build climate resilience.

 

The Paris Agreement requires all countries to take action, while recognizing their differing situations and circumstances, yet all countries are responsible for taking action on both mitigation and adaptation. Each country submitted their own nationally determined climate actions for which they have an obligation to implement, and if they do, it will bend the curve downward in the projected global temperature rise. The agreement not only formalizes the process of developing national plans, but will require countries to continuously upgrade their commitments so that they are ready to implement the 2030 Sustainable Development Agenda.

 

China is already leading in renewable energy production figures. It is currently the world’s largest producer of wind and solar energy, and the largest domestic and outbound investor in renewable energy. Four of the world’s five biggest renewable energy deals were made by Chinese companies in 2016. As of early 2017, China owns five of the world’s six largest solar-module manufacturing companies and the world’s largest wind turbine manufacturer.11 By 2030, one-fifth of the country’s electricity consumption is forecasted to come from non-fossil fuel sources. According to the International Energy Agency, 36 percent and 40 percent of the world’s growth in solar and wind energy in the next five years will come from China. Renewable energy deployment is also a part of a larger effort within China to develop an ecological civilization, that is, a cross-industrial approach to lower pollution level and fossil fuel use, mitigate climate change, and improve energy efficiency. China’s renewable energy workforce far surpasses that of the United States, and also leads by investing in a growing number of international renewable energy projects through increasing contributions to multilateral organizations.

 

 

11https://www.theguardian.com/environment/2017/jan/06/china-cementing-global-dominance-of-renewable-energy-and-technology

 

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In the pre-pandemic world, energy transition was already at the forefront of the minds of policymakers and investors in the Association of Southeast Asian Nations (ASEAN). Renewable energy infrastructure investment in the region had been strong, reflecting government efforts to reduce carbon emissions, as well as due to the lower costs involved, given cheaper technology and economies of scale. Although construction activity in the sector weakened in 2020 due to fiscal constraints as governments diverted budgets towards social expenditure, we believe investment in the renewable sector is expected to pick up quickly.

 

To improve the renewable energy capacity and revive the pandemic-hit economies, ASEAN governments have laid out an aspirational five-year sustainability plan under the second phase of ASEAN Plan of Action for Energy Cooperation 2021-2025 containing ambitious targets and initiatives to enhance energy security and sustainability. Under this, ASEAN energy ministers agreed to set a target of 23% share of renewable energy in total primary energy supply in the region and 35% in ASEAN installed power capacity by 2025. This would require approximately 35 to 40 gigawatts of renewable energy capacity to be added by 2025.

 

Vietnam, Thailand, the Philippines, Malaysia and Indonesia represent a share of 84% of the total installed renewable energy capacity among the Southeast Asian countries. Vietnam leads the sustainability change with a 34% share, followed by Thailand (17%), Indonesia (13%), Malaysia (10%) and the Philippines (10%).12 We believe that the renewable investments in this region are to double to $1.3 trillion by 2030 and is tipped to become a powerhouse of renewable energy, with more than half of the world’s electricity generation projected to originate from the region by 2030, according to the firm BlackRock. The region could expect to lead investment activity over the decade, thanks to its rising population, economic growth and a currently small installed capacity.

 

We also intend to explore potential business combination targets in the electric vehicle industry particularly in China, which is the fastest growing electric vehicle market in the world. In 2019, electric cars topped 2.1 million globally, surpassing 2018, which was a record year, to boost the stock to 7.2 million electric cars. As technological progress in the electrification of cars and trucks advances and the market for them grows, electric vehicles are expanding significantly.

 

International Energy Association - Global Electric Car Stock, 2010-2019 (Oct 2020)

 

 

In China, by 2035, electric vehicles (EVs) are expected to account for 50% of all new car sales, according to the government’s “Energy-saving and New Energy Vehicle Technology Roadmap 2.0.” This sets out how China’s automotive industry will be transformed into a largely electric and hybrid industry. The State Council, China’s cabinet, also set specific tasks for EV manufacturers to ensure they are fit for purpose by the time the mandatory emission quotas for internal combustion engines are phased out.

 

Asia’s power generation investments are leading the world and expected to hit $2.4 trillion in the current decade, with renewables accounting for over half of power investments with China, Japan, India, South Korea and Taiwan that are among the top contributors to renewable investments, which include solar and wind, in Asia Pacific with an average of about 140 gigawatts of additional capacities annually according to Woodmac.13

 

 

12https://www.power-technology.com/comment/south-east-asia-renewable-energy/#:~:text=Vietnam%2C%20Thailand%2C%20the%20Philippines%2C,and%20the%20Philippines%20(10%25).

13 https://www.reuters.com/business/sustainable-business/asia-pacific-renewable-investments-double-13-trillion-by-2030-woodmac-2021-06-22/

 

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Many parts of Asia are in a later stage of renewables adoption and are still incentivizing their build-out, providing attractive opportunities for early movers. The global renewable energy market was valued at $928.0 billion in 2017, and is expected to reach $1,512.3 billion by 2025, registering a CAGR of 6.1% from 2018 to 2025, according to “Renewable Energy Market Outlook - 2025” prepared by Allied Market Research, which also noted that Asia-Pacific is expected to grow at the fastest rate during the forecast period, owing to increase in demand for energy due to rise in industrialization in developing countries such as China, and India. Presence of these countries boosts the renewable energy market owing to factors such as rise in population, rapid industrialization along with favorable policies for the renewable energy sector.14

 

For many international investors, there are some challenges that come with investing in Asia Pacific. Originating an attractive pipeline of investible renewables projects is not a straightforward task, and this requires working closely with experienced local developers and having an in-depth understanding of local regulatory frameworks. Our directors and officers have deep roots throughout Asia with the relationships and experience to originate potential business combinations and navigate the due diligence and investment phases of a business combination.

 

Mobile Technology and Smart Devices. The advance of mobile technology and proliferation of smart devices has ushered in an era of leapfrogging development in China and the Southeast Asia technology space, which we will consider in our search for a business combination. The Southeast Asia region has high “mobile Internet engagement,” which means that the population-weighted average daily time spent on mobile Internet for Southeast Asia countries in 2020 is 4 hours and 32 minutes compared to world average of 3 hours and 22 minutes, according to a report titled “Digital in 2020” produced by “We Are Social” in January 2020 (the “Digital in 2020 January Report”).

 

Smartphone penetration rate in Southeast Asia contributes to such high mobile Internet engagement. Smartphone penetration for Southeast Asia (excluding Philippines) averaged around 58% in 2019, according to the Global Payments Trends Reports, compared to 35% in 2015, according to eMarketer.com database, and is expected to further increase in the next few years. As a result of greater Internet and smartphone penetration, the number of digital consumers in Southeast Asia reached approximately 250 million in 2018 and an additional 90 million people are expected to join the ranks of digital consumers by 2025, bringing the total number to approximately 340 million, according to the Sync Southeast Asia Report.

 

Likewise, in China, by the end of 2020, 1.22 billion people subscribed to mobile services, equivalent to 83% of the region’s population according to the GSM Association’s “2021 The Mobile Economy China” study. This places China among the world’s most developed mobile markets, given that global average penetration is 66%. However, increasing market saturation also means that subscriber growth is slowing, a scenario that is also occurring in other advanced markets around the world. That said, mobile internet adoption and usage continues to grow steadily as operators focus on expanding access to digital services. More than 990 million people in China now use mobile internet services and this figure is expected to increase by a further 200 million by 2025.

 

Digital consumers in Southeast Asia countries have high levels of social media engagement, with a population-weighted average of 3 hours and 14 minutes, as measured by amount of time spent daily on social media platforms, according to the Digital in 2020 report. Four Southeast Asia countries were ranked among top ten countries with the largest number of Facebook accounts in 2020: Indonesia, the Philippines, Vietnam and Thailand were ranked No. 3, 6, 7 and 8, respectively, with the greatest potential Facebook advertising reach ranging from 50 million to 140 million, according to an updated “Digital in 2020” report in October 2020. Indonesia was also ranked No. 4 among the countries with the greatest potential Instagram advertising reach with 78 million Instagram accounts, according to the Digital in 2020 October Report.

 

In China, every second of the day, 486 WeChat articles are published, 166 rooms booked on Qunar, 115,740 Q&A’s on Zhihu, and 3,472 orders placed on E’leme, and over 62% of people open the WeChat app more than 10 times a day. The role of mobile social media and smartphone-based mobile app economy in China is massive as it not only entertains but also influences food, life, and fashion choices, provides makeup and homestyle reviews, and advises on holiday spots.15

 

Scarcity of Listed Southeast Asian Tech Companies. Also contributing to our market opportunity is our belief that the scarcity of listed Southeast Asia companies will lead to strategic opportunities. The tech industry in Southeast Asia, home to about one-tenth of the world’s population and some of the fastest-growing economies like Indonesia, is overdue for recognition. The region did not have a single major tech company listed till gaming and e-commerce leader, Sea Ltd., went public in New York in 2017. The dearth of public companies remains despite a smartphone-using population growing at rates unmatched in much of the world, driven by economic growth and government policies that encourage investment in technology. That potential is attracting the likes of Amazon.com Inc. and Chinese majors including Tencent Holdings Ltd. and Alibaba Group Holding Ltd., who see Southeast Asia’s increasingly affluent consumers as key to their global ambitions.

 

 

14 https://www.alliedmarketresearch.com/ renewable-energy-market

15 https://www.hicom-asia.com/chinese-kol-top-10-social-media-platforms-they-use/

 

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Despite an attractive long list of high growth businesses in Southeast Asia, there is a lack of mid-to late-stage funding to bring the high growth businesses to initial public offering. There are 10 unicorns according to the e-Conomy SEA 2020 Report, and more than 20 aspiring unicorns in Southeast Asia, according to the e-Conomy SEA 2019 Report. A significant portion of the institutional investors and private funding has been focused on earlier stage investments, varying from angel/seed round of financing to series B round of financing. However, the first listing of a multibillion-dollar Southeast Asian tech company in Indonesia occurred on August 6, 2021 when PT Bukalapak.com Tbk (BUKA.JK), an 11-year-old e-commerce company backed by Ant Group, Singapore sovereign fund GIC (GIC.UL) and local media and tech conglomerate Emtek (EMTK.JK), made its market debut after raising $1.5 billion in Indonesia’s largest ever IPO. Inspirational capital market success stories originated from Southeast Asia like Razer Inc., a gaming hardware tech company listed in Hong Kong with market capitalization value exceeding $2 billion and Sea Ltd, a gaming platform and e-commerce tech company listed on New York Stock Exchange with market capitalization value exceeding $100 billion, we believe signals the emerging trend of more Southeast Asian tech companies gaining success in developed capital markets like United States. We are committed to closing the gaps in the fast growing e-commerce market in Southeast Asia and believe that we have the experience and commitment to turn a high growth business into a quality publicly listed company.

 

Appealing Demographics in China and Southeast Asia. China and Southeast Asia offer very appealing macroeconomic fundamentals from demographic, economic and consumption perspectives. Southeast Asia has a large population currently exceeding 583 million, vastly outnumbering the total population of 328 million in the United States, according to World Bank data obtained in November 2020 (the “World Bank Data”). Southeast Asia has one of the youngest populations in the world – more than 50% of the total population in Southeast Asia in 2019 was below the age of 35, according to the World Bank Data. Furthermore, Southeast Asia is one of the fastest growing economies globally with estimated annual nominal GDP growth rate of 5% from 2019 to 2025, according to the International Monetary Fund World Economic Outlook dataset as of October 2020 (the “IMF WEO Dataset”).

 

Southeast Asia also demonstrates significant potential for growth and is expected to become the fourth largest economy globally after the United States, China and the European Union by 2030, according to an overview of ASEAN published by Enterprise Singapore in 2019, citing a study titled “Winning Hearts, Minds in ASEAN” by the Straits Times published in August 2017. In addition, approximately 55% of the combined nominal GDP of Southeast Asia was contributed by household consumption, according to the World Bank Data and statistics reported by government of Southeast Asia countries. The current consumption power in Southeast Asia is nearly comparable to that of China five years ago, which may offer a potential to replicate China’s growth where the population-weighted average household consumption per capita in Southeast Asia in 2015 was $2,065 and increased to $2,923 in 2019; whereas household consumption per capita in China in 2015 was $2,888 and had increased to $3,723 in 2018, according to the statistics reported by governments of Southeast Asia countries and China.

 

Another appealing vestige of the Southeast Asia demographic is that more and more of the current generations of family-owned businesses are open to embrace capitalization and digitalization and potential a business combination to fund growth and business expansion. According to a recent PriceWaterhouse (PwC) – Singapore study, “Family Business Survey 2021-Asia Pacific Findings,” Asia Pacific family businesses have seen a mixed performance over the last financial year (pre-COVID-19), with 51% experiencing growth and 21% seeing reduction in sales, which is slightly less positive than the global scene where the majority of family businesses experienced higher growth (55%). Nevertheless, their growth objectives are ambitious for 2022, with 87% expecting growth to surge in 2022 with 2021 offering more cautious projections with 65% of Asia Pacific family businesses expecting to see growth, which is in line with family businesses worldwide according to the recent PwC study.

 

When asked to name their top priorities for the next two years, family businesses in Singapore, for example, listed ambitious performance growth compared to their global and Asia Pacific counterparts, with 90% surge in growth expected in 2022 and listed expansion and/or diversification (82%) as their top priority, followed by digital, innovation, technology (77%) and improving evolving/new thinking (66%). The priorities of the Asia Pacific family business leaders resonate with business priorities of their global counterparts according to the recent PwC study.

 

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A recent Deloitte study “Asian Business Families Succession Going the Distance with the Next Generation” concluded that business families in Southeast Asia do not just face the usual corporate challenges of profitability, competition and growth – they also face a unique challenge in ensuring a smooth succession to maintain the momentum of the business from generation to generation. This desire for intra-family succession must be balanced, according to Deloitte, with another essential element that of the involvement of trusted non-family management and advisors whose input can provide an objective perspective to evenly balance the needs of the business and the family. Their objectivity may also lead to unbiased input that could revive and bring fresh relevance to businesses.

 

Our management team’s efforts to seek a suitable business combination target will be complemented by the experience and network of our founders who will utilize their extensive networks of seasoned industry operators and advisors to not only identify potential targets and effect the initial business combination efficiently but, post-closing, serve in the meaningful role of trusted non-family advisors. We believe that our team and vision will make us an attractive partner for founders and owners in the industries in which we plan to pursue business combination targets. Our team has a proven track record of experience and deal-making in the technology, digital and consumer sectors. As such, we believe that we will have a significant competitive advantage in identifying and acquiring a target in China and Southeast Asia area. We also believe that we are well-positioned to identify attractive businesses that would benefit from the diverse skill set of our management team, including the integration of business best-practices with marketing best-practices, and using data-driven insights and technology to understand customer preferences and to optimize the customer experience. We intend to focus on evaluating companies or assets with leading competitive positions, attractive financial profiles and robust long-term potential for growth and profitability.

 

Our Business Strategy

 

Our business strategy is to utilize our management team’s past to identify and complete our initial business combination with a company that our management believes, with proper utilization of our network and experience, has compelling potential for value creation.

 

We believe our management team and members of our board have experience in:

 

  Operating companies, setting and changing strategies, and identifying, mentoring and recruiting exceptional talent;
     
  Developing and growing companies, both organically and through strategic transactions and acquisitions, and expanding the product range and geographic footprint of a number of target businesses;
     
  Investing in leading private and public technology companies to accelerate their growth and maturation; and
     
  Accessing the capital markets, including financing businesses and helping companies transition to public ownership.

 

We will aim to create significant value uplift for our shareholders via a business combination by leveraging our skills and networks. Our management team has a wide network of relationships globally and especially in the Asia-Pacific region, providing significant access to originating attractive opportunities for transformational growth. Our management team has a deep understanding of the ongoing global trends that drive high growth industries, such as internet, financial technology, e-commerce, O2O Retail, consumer, healthcare, education, renewable energy and big data, AI, cloud-based technology, that will play an integral part in realizing those trends. Furthermore, the team has a proven track record of sourcing, executing and monetizing opportunities making it well placed to add value to target businesses, both strategically and operationally.

 

Our business strategy is to identify and complete our initial business combination with a company that complements the experience of our management team and can benefit from their operational and investment expertise. Our selection process will leverage their broad and deep relationship network, unique industry experiences and deal sourcing capabilities to access a broad spectrum of differentiated opportunities.

 

We intend to identify and complete our initial business combination with a company that can benefit from (i) the managerial and operational experience of our management team, (ii) additional capital, and (iii) access to public securities markets. We plan to leverage our management team’s network of potential proprietary and public transaction sources where we believe a combination of our relationships, knowledge and experience could effect a positive transformation or augmentation of existing businesses to improve their overall value. We believe this approach will create long-term value for our shareholders.

 

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There is no geographic limitation to the location of targets, as these types of opportunities are not necessarily bound by geography. We do believe that there are attractive business combination candidates in the Asia Pacific that are looking to the US for both opportunities and capital. We believe that a US-based company with a listing and capital would be an ideal fit for one of those companies. Such a connection would unlock value and increase growth opportunities for the right company. We believe that the way businesses and consumers operate, make decisions, and spend has forever been changed because of the pandemic.

 

Upon completion of this offering, our management team will communicate with their network of relationships to articulate the parameters for our search for a target company and a potential business combination and begin the process of pursuing and reviewing potential opportunities.

 

Competitive Advantage

 

Our sponsor is an affiliate of AEI Capital Ltd., based in Hong Kong, Kuala Lumpur and Shenzhen, that focuses on technology enabled products and solutions to identify, harness and develop key trends relevant to their customers and markets. AEI Capital Ltd. works with tech scalable businesses with the potential to improve productivity and reduce costs through our in-depth organization transformation expertise and technology-enabled business growth insights. AEI Capital Ltd. works directly with its investee-companies to enhance the intrinsic value of their equity investment in each portfolio company by focusing on (i) Capitalization; (ii) Strategization; and (iii) Digitalization, to engineer their growth direction.

 

AEI Capital Ltd., along with our officers, directors and advisors, bring deep and extensive experience including a significant track record of successfully identifying, investing in and operating businesses across a broad range of industries including technology, AI, healthcare, energy and cloud-based technology, which provides us with a competitive advantage in sourcing, evaluating and pursuing a broad range of opportunities in these targeted sectors primarily in the Asia Pacific area. In particular, we believe that our management team’s expertise and experience that creates a competitive advantage for us includes:

 

  Significant industry experience and market knowledge
     
    Our team has extensive experience in managing, investing and monetizing assets with a focus to creating and delivering significant value to shareholders. Our management and directors, in addition to their own deep and sophisticated sector knowledge, have a strong network of relationships with industry professionals across key expertise and geographies in the technology sector, which they can draw upon to further enable them to identify and take advantage of a wide range of investment opportunities. This extensive market knowledge has a significant positive impact on investment decisions and aids in a holistic evaluation of transactions.
     
  Deal flow and sourcing
     
    Members of our management, advisors and our sponsor have developed deep relationships with market leaders in the global technology industry that will provide a substantial pipeline of proprietary acquisition opportunities.
     
  Value Creation Capabilities
     
    The members of our team have extensive experience working closely with management teams and board members to assist with growth strategy and value creation. The target company can benefit from both the operational and financial experience of our team to unlock additional value.
     
  Capital Structure Optimization and Support
     
    The members of our team have strong expertise in navigating the capital markets. With strong relationships in the banking and finance industry, proven ability to complete capital raising efforts, and a proven history of executing M&A deals and other transactions, we believe that we will be able to complete a business combination that will create value for our shareholders.
     
  Core strength in the APAC region
     
    We believe that the Asia Pacific region is becoming an increasingly important player in the global technology landscape. Home to a large base of technology companies, the region is also growing rapidly and it contains numerous established and fast-growing companies that largely remain undiscovered to global market participants. As such, even though we may identify potential targets in other regions, we believe it is critical to understand the dynamics behind the Asia Pacific technology space. Accordingly, our management team is especially established in Asia Pacific, thanks to our close relationships with professionals in the industry and our region-specific expertise that has been developed over four decades. We believe our strong network and deep understanding of Asia Pacific will be instrumental in potentially identifying and executing a deal with a high-quality target in the region.

 

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Our Acquisition Philosophy and Business Combination Criteria

 

We will aim to create significant value uplift via a business combination by leveraging our skills and networks. Consistent with our business strategy, we plan to invest in an innovative high-quality company with strong growth potential, an exceptional management team and operational upside. We will target opportunities that have well-established regulations and a safe and healthy track records. We will focus on companies in Asia Pacific, where our management team is able to leverage its extensive experience and network to source for attractive investment opportunities, as well as impart its expertise on strategic, operational, and transactional matters. We expect considerable investor interest in Asia, as the region is home to a wealth of untapped resources, along with highly valuable companies that have remained undiscovered to the global marketplace.

 

Strong management teams will be a key criterion in our target selection - teams with a track record of value creation, accompanied with a clear growth vision for the business. We have selected some guiding factors, which along with our key competitive advantages, will enable us to identify the appropriate businesses to create compelling combination opportunities. Specifically, we will prioritize companies that we believe have the following attributes:

 

  strong growth potential and operational upside. These businesses may be in growth sectors of the technology areas of interest, which are expected to benefit from the strong demand pull with the technology efforts;
     
  headed by strong management teams with a track record of value creation, accompanied with a clear growth vision for the business;
     
  a significant market opportunity and sustainable runway for growth;
     
  a proven business/operational model that has the ability to compound at high or rising returns on invested capital;
     
  a strong hidden or innate value that can be unlocked with more operational, commercial or financial focus;
     
  a business that will benefit from being publicly traded and that can effectively utilize the broader access to capital markets to pursue further growth opportunities;
     
  a management team focused on execution and possessing high standards of integrity; and
     
  a reasonable entry valuation that provides an asymmetric risk-reward.

 

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

 

Our Acquisition Process

 

In identifying opportunities for our business combination, our management will utilize a comprehensive, disciplined approach that incorporates the following steps:

 

1. Deal Sourcing and Screening. Our management has extensive expertise and a broad network with the ability to tap in to and synthesize inputs from a variety of sources (including consultations with industry experts, proprietary research, market intel, research papers, and other sources) to identify the most favourable trends. Our management will use their established network of relationships to identify and source target opportunities, and perform a thorough screening of relevant companies using criteria such as valuation multiples, financial data, and competitive positioning. We also expect that our management’s connections in the space will facilitate our search for high-quality targets. The objective of this step would ultimately be to identify a shortlist of compelling potential targets.

 

2. Preliminary Assessment of Target Companies. Management will then perform a preliminary assessment of the shortlisted target companies and perform a preliminary comparables analysis. Management may also directly engage in initial conversations with the potential targets. The objective of this step would be to further condense the shortlist, arriving at a smaller and more focused group of potential targets.

 

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3. Detailed Evaluation and Due Diligence of Target Companies. Management will engage the shortlisted targets in more substantive conversations and perform a rigorous due diligence review to assess the target company’s quality and potential valuation. The due diligence review will encompass, among other things, fundamental analysis, financial statement analysis, valuation benchmarking, comparables and SWOT analysis (i.e., a strategic technique to identify strengths, weaknesses, opportunities, and threats related to business competition), detailed document reviews, technology diligence, multiple meetings with incumbent management and employees, inspection of facilities, consultations with relevant industry and academic experts, competitors, customers and suppliers, as well as a review of operational, legal and additional information that we will seek to obtain as part of our analysis. We believe our management is tremendously well-positioned to conduct this thorough evaluation, given their decades of experience.

 

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

 

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

 

We have not selected any specific business combination target and we have not, nor has anyone on our behalf, initiated any substantive discussions, directly or indirectly, with any business combination target. Certain of our officers and directors presently have, and any of them in the future may have additional, fiduciary or contractual obligations to other entities pursuant to which such officer or director is or will be required to present a business combination opportunity to such entity subject to his or her fiduciary duties. As a result, if any of our officers or directors becomes aware of a business combination opportunity which is suitable for an entity to which he or she has then-current fiduciary or contractual obligations, then, subject to such officer’s and director’s fiduciary duties under Cayman Islands law, he or she will need to honor such fiduciary or contractual obligations to present such business combination opportunity to such entity, before we can pursue such opportunity. If these other entities decide to pursue any such opportunity, we may be precluded from pursuing the same. However, we do not expect these duties to materially affect our ability to complete our initial business combination.

 

Our founders, sponsor, officers, and directors may sponsor, form or participate in other blank check companies similar to ours during the period in which we are seeking an initial business combination. Any such companies may present additional conflicts of interest in pursuing an acquisition target, particularly in the event there is overlap among investment mandates. Moreover, our founders, sponsor, officers, and directors may sponsor, form or participate in other blank check companies in the future. In addition, our founders, sponsor, officers, and directors are not required to commit any specified amount of time to our affairs and, accordingly, will have conflicts of interest in allocating management time among various business activities, including identifying potential business combinations and monitoring the related due diligence.

 

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As more fully discussed in “Management — Conflicts of Interest,” if any of our directors or officers becomes aware of a business combination opportunity that falls within the line of business of any entity to which he or she has pre-existing fiduciary or contractual obligations, he or she may be required to present such business combination opportunity to such entity prior to presenting such business combination opportunity to us. Our directors and officers currently have fiduciary duties or contractual obligations that may take priority over their duties to us.

 

Initial Business Combination

 

Nasdaq rules require that we must complete one or more business combinations having an aggregate fair market value of at least 80% of the value of the assets held in the trust account (excluding the deferred underwriting commissions and taxes payable on the interest earned on the trust account) at the time of our signing a definitive agreement in connection with our initial business combination. Our board of directors will make the determination as to the fair market value of our initial business combination. If our board of directors is not able to independently determine the fair market value of our initial business combination, we will obtain an opinion from an independent investment banking firm or an independent accounting firm with respect to the satisfaction of such criteria. While we consider it unlikely that our board of directors will not be able to make an independent determination of the fair market value of our initial business combination, it may be unable to do so if it is less familiar or experienced with the business of a particular target or if there is a significant amount of uncertainty as to the value of a target’s assets or prospects.

 

We anticipate structuring our initial business combination either (i) in such a way so that the post-transaction company in which our public shareholders own shares will own or acquire 100% of the equity interests or assets of the target business or businesses, or (ii) in such a way so that the post-transaction company owns or acquires less than 100% of such interests or assets of the target business in order to meet certain objectives of the target management team or shareholders, or for other reasons. However, we will only complete an initial business combination if the post-transaction company owns or acquires 50% or more of the outstanding voting securities of the target or otherwise acquires a controlling interest in the target sufficient for it not to be required to register as an investment company under the Investment Company Act of 1940, as amended (the “Investment Company Act”). Even if the post-transaction company owns or acquires 50% or more of the voting securities of the target, our shareholders prior to the initial business combination may collectively own a minority interest in the post-transaction company, depending on valuations ascribed to the target and us in the initial business combination. For example, we could pursue a transaction in which we issue a substantial number of new shares in exchange for all of the outstanding capital stock, shares or other equity interests of a target. In this case, we would acquire a 100% controlling interest in the target.

 

However, as a result of the issuance of a substantial number of new shares, our shareholders immediately prior to our initial business combination could own less than a majority of our outstanding shares subsequent to our initial business combination. If less than 100% of the equity interests or assets of a target business or businesses are owned or acquired by the post-transaction company, the portion of such business or businesses that is owned or acquired is what will be taken into account for purposes of Nasdaq’s 80% of net assets test. If the initial business combination involves more than one target business, the 80% of net assets test will be based on the aggregate value of all of the transactions and we will treat the target businesses together as the initial business combination for purposes of a tender offer or for seeking shareholder approval, as applicable.

 

To the extent we effect our initial business combination with a company or business that may be financially unstable or in its early stages of development or growth, we may be affected by numerous risks inherent in such company or business. Although our management will endeavor to evaluate the risks inherent in a particular target business, we cannot assure you that we will properly ascertain or assess all significant risk factors.

 

Even if the post-business combination company owns or acquires 50% or more of the voting securities of the target, our shareholders prior to the business combination may collectively own a minority interest in the post-business combination company, depending on valuations ascribed to the target and us in the business combination. For example, we could pursue a transaction in which we issue a substantial number of new shares in exchange for all of the outstanding capital stock of a target. In this case, we would acquire a 100% controlling interest in the target. However, as a result of the issuance of a substantial number of new shares, our shareholders immediately prior to our initial business combination could own less than a majority of our outstanding shares subsequent to our initial business combination. If less than 100% of the equity interests or assets of a target business or businesses are owned or acquired by the post-business combination company, the portion of such business or businesses that is owned or acquired is what will be valued for purposes of the 80% of net assets test. If the business combination involves more than one target business, the 80% of net assets test will be based on the aggregate value of all of the target businesses. In addition, we have agreed not to enter into a definitive agreement regarding an initial business combination without the prior consent of our sponsor.

 

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To the extent we effect our initial business combination with a company or business that may be financially unstable or in its early stages of development or growth, we may be affected by numerous risks inherent in such company or business. Although our management will endeavor to evaluate the risks inherent in a particular target business, we cannot assure you that we will properly ascertain or assess all significant risk factors.

 

The time required to select and evaluate a target business and to structure and complete our initial business combination, and the costs associated with this process, are not currently ascertainable with any degree of certainty. Any costs incurred with respect to the identification and evaluation of a prospective target business with which our initial business combination is not ultimately completed will result in our incurring losses and will reduce the funds we can use to complete another business combination.

 

The net proceeds of this offering and the sale of the placement units released to us from the trust account upon the closing of our initial business combination may be used as consideration to pay the sellers of a target business with which we complete our initial business combination. If our initial business combination is paid for using equity or debt securities, or not all of the funds released from the trust account are used for payment of the consideration in connection with our initial business combination or used for redemption of our public shares, we may use the balance of the cash released to us from the trust account following the closing for general corporate purposes, including for maintenance or expansion of operations of the post-transaction businesses, the payment of principal or interest due on indebtedness incurred in completing our initial business combination, to fund the purchase of other companies or for working capital. In addition, we may be required to obtain additional financing in connection with the closing of our initial business combination to be used following the closing for general corporate purposes as described above.

 

Our amended and restated memorandum and articles of association will provide that, following this offering and prior to the consummation of our initial business combination, we will be prohibited from issuing additional securities that would entitle the holders thereof to (i) receive funds from the trust account or (ii) vote as a class with our public shares (a) on any initial business combination or (b) to approve an amendment to our amended and restated memorandum and articles of association to (x) extend the time we have to consummate a business combination beyond 12 months (subject to a six month extension of time) or (y) amend the foregoing provisions, unless (in connection with any such amendment to our amended and restated memorandum and articles of association) we offer our public shareholders the opportunity to redeem their public shares.

 

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

 

Business Combination with One or More Businesses in PRC

 

We are a Cayman Islands blank check company with no material operations of our own. We conduct our operations through an office in Kuala Lumpur, Malaysia, which is where our chief executive officer and our chief financial officer are domiciled. Our three independent director nominees are currently permanent residents of Hong Kong with personal and professional ties that continue to China. For a detailed disclosure about our officers, directors and independent director nominees’ biographies, education and work history, please see “Our Management Team” in this prospectus. Although we do not have any specific business combination under consideration and we have not, directly or indirectly, contacted any prospective target business or had any substantive discussions, formal or otherwise, with respect to such a transaction, we may pursue or consummate an initial business combination with a company located or doing business in the PRC, in which event we will be subject to certain additional legal and operational risks. These additional risks include, without limitation, regulatory review of an overseas listing of PRC companies, potential restrictions on foreign ownership in certain industries, and potential unforeseen legislative changes.

 

Since PRC laws and regulations restrict foreign investment in companies that are engaged in business operations of certain industries, a company based in China may use a corporate structure without direct equity ownership held by foreign investors. Therefore, a series of contractual arrangements may be entered into between the PRC operating entities, which are consolidated variable interest entities (the “VIEs”) of the combined company, as well as the VIEs’ founders and owners, on one side, and a PRC subsidiary of the combined company which may be a company incorporated in the Cayman Islands, on the other side. To the extent that the combined company conducts its operations in China through its PRC subsidiaries and VIEs, such corporate structure involves unique risks to our investors after the business combination, as the combined company does not hold any direct equity interest in the PRC operating entities. If the PRC government deems that the combined company’s contractual arrangements with its VIEs do not comply with PRC regulatory restrictions on foreign investment in the relevant industries, or if these regulations or the interpretation of existing regulations change in the future, the PRC subsidiaries and the VIEs of the combined company could be subject to material penalties or the combined company could be forced to relinquish its interests in those operations or otherwise significantly change its corporate structure.

 

If we enter into a business combination with a China-based business utilizing a VIE structure, our investors and our business may face significant uncertainty about potential future actions by the PRC government that could affect the legality and enforceability of the contractual arrangements with the VIEs and, consequently, significantly affect the financial performance of the combined company as a whole. For a detailed description of risks related to the corporate structure using contractual arrangements, see “Risk Factors Related to Acquiring or Operating a Business in China” under “Risk Factors” for detailed discussions.

 

Furthermore, the PRC government has significant authority to exert influence on the ability of a China-based company to conduct its business, make or accept foreign investments or list on a U.S. stock exchange. For example, if we enter into a business combination with a target business operating in China, the combined company may face risks associated with regulatory approvals of the proposed business combination between us and the target, offshore offerings, anti-monopoly regulatory actions, cybersecurity and data privacy, as well as the lack of PCAOB inspection on its auditors or the auditors of the target business. The PRC government may also intervene with or influence the combined company’s operations at any time as the government deems appropriate to further regulatory, political and societal goals.

 

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The PRC government has recently published new policies that significantly affected certain industries such as the education and internet industries, and we cannot rule out the possibility that it will in the future release regulations or policies regarding any industry that could adversely affect our potential business combination with a PRC operating business and the business, financial condition and results of operations of the combined company. Any such action, once taken by the PRC government, could make it more difficult and costly for us to consummate a business combination with a target business operating in the PRC, result in material changes in the combined company’s post-combination operations and cause the value of the combined company’s securities to significantly decline, or in extreme cases, become worthless or completely hinder the combined company’s ability to offer or continue to offer securities to investors. For a detailed description of risks associated with being based in or acquiring a company that does business in China, see “Risk Factors Related to Acquiring or Operating a Business in China” under “Risk Factors” below.

 

If the NDRC were to change its rules on foreign investors in e-commerce, renewable energy or mobile technology/smart device area in the PRC or if we were to acquire a target business in the PRC outside of that industry, we would be subject to numerous additional risks including those associated with the use of VIEs including regulatory changes in the VIE structure, as discussed throughout this prospectus, including the validity and enforcement of the agreements in connection with a VIE structure to the extent our target company is required to employ a VIE structure. Moreover, we are not limited to a particular industry segment or geographic region, as we believe our management and board’s experience will allow us to evaluate targets that have the potential to accelerate financial value creation while also having a measurable net positive impact on the environment and society. We are also subject to the risks of uncertainty about any future actions of the PRC government. Any of these risks could significantly limit or completely hinder our ability to offer or continue to offer securities to investors and cause the value of such securities to significantly decline or be worthless. For a detailed description of the risks relating to doing business in the PRC, and the offering as a result of the structure, please see “Flow of Funds Under Contractual Arrangements” and “Risk Factors Related to Acquiring or Operating a Business in China” under “Risk Factors” below.

 

On January 13, 2015, China’s Ministry of Industry and Information Technology (the “MIIT”) announced that wholly foreign-owned enterprises (“WFOEs”) are now allowed to operate “online data processing and transaction processing (operational e-commerce)” within the China (Shanghai) Pilot Free-Trade Zone (the “Shanghai FTZ”). The Shanghai Communications Administration (the “Shanghai MIIT”), the local counterpart of the MIIT, is authorized to carry out the pilot program implementing the foregoing decision. E-commerce companies incorporated in the Shanghai FTZ can conduct their business nationwide. This began a significant opportunity in this area and future foreign investments in China’s e-commerce space to gradually abandon use of the VIE structure in favor of simpler deal structures in this space.

 

Prior to that, on January 6, 2014, the MIIT and the Shanghai Municipal Government jointly issued an opinion, according to which foreign investors’ shareholding restrictions for investment in online data processing and transaction processing (operational e-commerce) businesses formed in the Shanghai FTZ was increased to 55%. MIIT’s January 2015 announcement further relaxed foreign investors’ shareholding requirement for investment in China’s e-commerce businesses. With the deregulation of China’s e-commerce businesses and China’s proposed amendment of its entire foreign investment regulatory system, including regulation of VIE structures, existing e-commerce enterprises gradually unwound their VIE Structures and new foreign investments in China-based e-commerce businesses to adopted simpler WFOE structures thereafter.

 

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Moreover, in the PRC, foreign companies are “encouraged” to invest in and acquire Chinese renewable power projects.4 Renewable power projects (including wind, solar, biomass, geothermal, waste, wave, tidal, and others) do not require a Chinese person or entity serving as the majority shareholder. Wholly foreign-owned, majority foreign-owned, as well as other Chinese-foreign ventures, are all allowed equity structures in the renewable power business. Specifically, the incentivized areas renewable equipment for foreign investment, on a national level, are:

 

in wind: gearbox, turbine bearings, and turbines of large than 2.5 megawatt
in solar: photovoltaic, and centralized solar power (CSP) complete sets of equipment
in others: (general) equipment for geothermal, wave, tidal, waste and biomass power
in energy efficiency: equipment for residual heat, pressure and gas utilization from industry process and coal production

 

Most of the items have been tagged as “encouraged” since several previous FI catalogs. However, there is a new entry added into the 2019 edition “encouraged” list, which is equipment manufacturing for the utilization of residual heat, pressure, and gas.

 

We are also subject to the risks of uncertainty about any future actions of the PRC government. Any of these risks could significantly limit or completely hinder our ability to offer or continue to offer securities to investors and cause the value of such securities to significantly decline or be worthless. For a detailed description of the risks relating to the VIE structure, doing business in the PRC, and the offering as a result of the structure, please see “ Risk Factors Related to Acquiring or Operating a Business in China” under “Risk Factors” below.

 

In the unlikely event that we would have to acquire the business through the use of contractual arrangements due to restrictions on foreign investment in a target business or the company that we may target for an initial business combination utilizing the VIE structure, the combined company may be a company incorporated in jurisdictions other than the PRC, and may conduct substantially all of its business operations in the PRC through its PRC subsidiaries and operations (the VIEs), while the combined company will not hold any direct equity interests in the VIEs. The combined company’s PRC subsidiaries known as Wholly Foreign Owned Enterprises (“WFOEs”) will control the VIEs through a series of contractual arrangements with the VIEs, as well as their founders and owners. Under such structure, the VIEs may hold key operating licenses, provide services to customers, and enter into contracts with suppliers and employ workforce.

 

These contractual arrangements with the VIEs are put into place as a mechanism for the combined company’s PRC subsidiaries (i.e., WFOEs) to (i) exercise control over its VIEs, (ii) receive substantially all of the economic benefits of the VIEs, and (iii) have an exclusive option to purchase all or part of the equity interests in the VIEs when and to the extent permitted by PRC law. These contractual arrangements often include exclusive technology and consulting service agreements, equity interest pledge agreements, exclusive option agreements and powers of attorney. In exchange, WFOEs will provide cash raised from US investors to the VIE’s to fund business operations, as shown in the following diagram.

 

 

 

4 https://energyiceberg.com/foreign-investment-catalog-renewable/

 

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As a result of these contractual arrangements, the combined company will exert control over, and will be considered the primary beneficiary of its VIEs and is able to consolidate such VIEs’ operating results in its financial statements under the U.S. GAAP. Under such corporate structure, the combined company whose securities will be listed on a U.S. stock exchange after the business combination will not hold any direct equity interests in its VIEs. If such structure is utilized by the combined company, the investors of the combined company will not be holding equity interest of the operating business in China. As a result, the control through these contractual arrangements may be less effective than direct ownership, and the combined company could face heightened risks and costs in enforcing these contractual arrangements, because there are substantial uncertainties regarding the interpretation and application of current and future PRC laws, regulations, and rules relating to the legality and enforceability of these contractual arrangements.

 

If the PRC government finds such agreements to be illegal, the PRC subsidiaries and the VIEs of the combined company could be subject to severe penalties or the combined company could be forced to relinquish its interests in the VIEs. Under such circumstances, the value of the combined company’s securities may significantly decline, or in extreme cases, become worthless. Following any business combination with a target company through a VIE structure, we would face numerous uncertainties regarding the status of the rights of a holding company with respect to the contractual arrangements with the VIEs, their founders and owners, and would face challenges enforcing these contractual agreements due to uncertainties under Chinese law and jurisdictional limits. See “ Risk Factors Related to Acquiring or Operating a Business in China” under “Risk Factors” below for more information.

 

Potential Approvals From the PRC Governmental Authorities for this Offering or a Business Combination

 

The Regulations on Mergers and Acquisitions of Domestic Companies by Foreign Investors5 (the “M&A Rules”), adopted by six PRC regulatory agencies in 2006 and amended in 2009, require an offshore special purpose vehicle formed for the purpose of an overseas listing of securities in a PRC company to obtain the approval of the China Securities Regulatory Commission (the “CSRC”) prior to the listing and trading of such special purpose vehicle’s securities on an overseas stock exchange. However, substantial uncertainty remains regarding the scope and applicability of the M&A Rules to offshore special purpose vehicles.

 

Recently, the General Office of the Central Committee of the Communist Party of China and the General Office of the State Council jointly issued the Opinions on Strictly Cracking Down on Illegal Securities Activities According to Law (the “Opinions”), which call for strengthened regulation over illegal securities activities and supervision on overseas listings by China-based companies and propose to take effective measures, such as promoting the development of relevant regulatory systems to deal with the risks and incidents faced by China-based overseas-listed companies.

 

While the application of the M&A Rules remains unclear, no official guidance and related implementation rules have been issued in relation to the Opinions, and the interpretation and implementation of the Opinions also remain unclear at this stage, based on our understanding of the current PRC laws and regulations, no prior permission is required under the M&A Rules or the Opinions from any PRC governmental authorities (including the CSRC) for consummating this offering by our company. However, there can be no assurance that the relevant PRC governmental authorities, including the CSRC, would reach the same conclusion as us, or that the CSRC or any other PRC governmental authorities would not promulgate new rules or new interpretation of current rules to require us to obtain CSRC or other PRC governmental approvals for this offering or for the business combination if we decide to consummate the business combination with a target business based in and primarily operating in China. See “Risk Factors Related to Acquiring or Operating a Business in China” under “Risk Factors” below.

 

 

5 http://www.pathtochina.com/sample/PTC_Merger_and_Acquisition_of_Domestic_Enterprises_in_China.pdf

 

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Contractual Arrangements and Corporate Structure for a PRC-based Target Business

 

Notwithstanding our expectation not to consummate a business combination that would require a VIE structure, if ultimately we decide to consummate our initial business combination with a target business based in and primarily operating in China utilizing a VIE structure due to restrictions imposed by PRC laws and regulations on foreign investment in certain industries, the combined company may be a company incorporated in jurisdictions other than the PRC, such as the Cayman Islands, and may conduct substantially all of its business operations in the PRC through its PRC subsidiaries and VIEs, while the combined company will not hold any direct equity interests in the VIEs. The combined company’s PRC subsidiaries will control the VIEs through a series of contractual arrangements with the VIEs, as well as their founders and owners.

 

Under such structure, the VIEs may hold key operating licenses, provide services to customers, and enter into contracts with suppliers and employ workforce. These contractual arrangements with the VIEs are put into place as a mechanism for the combined company’s PRC subsidiaries to (i) exercise control over its VIEs, (ii) receive substantially all of the economic benefits of the VIEs, and (iii) have an exclusive option to purchase all or part of the equity interests in the VIEs when and to the extent permitted by PRC law. These contractual arrangements often include exclusive technology and consulting service agreements, equity interest pledge agreements, exclusive option agreements and powers of attorney. As a result of these contractual arrangements, the combined company will exert control over, and will be considered the primary beneficiary of its VIEs and is able to consolidate such VIEs’ operating results in its financial statements under the U.S. GAAP. Under such corporate structure, the combined company whose securities will be listed on a U.S. stock exchange after the business combination will not hold any direct equity interests in its VIEs. If such structure is utilized by the combined company, the investors of the combined company will not be holding equity interest of the operating business in China.

 

As a result, the control through these contractual arrangements may be less effective than direct ownership, and the combined company could face heightened risks and costs in enforcing these contractual arrangements, because there are substantial uncertainties regarding the interpretation and application of current and future PRC laws, regulations, and rules relating to the legality and enforceability of these contractual arrangements. If the PRC government finds such agreements to be illegal, the PRC subsidiaries and the VIEs of the combined company could be subject to severe penalties or the combined company could be forced to relinquish its interests in the VIEs. Under such circumstances, the value of the combined company’s securities may significantly decline, or in extreme cases, become worthless. See “Risk Factors Related to Acquiring or Operating a Business in China” under “Risk Factors” below.

 

Flow of Funds Under Contractual Arrangements

 

Our three independent director nominees are currently permanent residents of Hong Kong and have personal and professional ties to China. If our founders decide to consummate our initial business combination with a target business based in and primarily operating in China, the combined company may face various legal and operational risks and uncertainties after the business combination. Since PRC laws and regulations restrict foreign investment in companies that are engaged in business operations of certain industries, we may use a corporate structure without direct equity ownership held by foreign investors. A series of contractual arrangements may be entered into between the PRC operating entities, which are consolidated VIEs of the combined company, as well as the VIEs’ founders and owners, on one side, and a PRC subsidiary of the combined company which may be a company incorporated in the Cayman Islands, on the other side. To the extent that the combined company conducts its operations in China through its PRC subsidiaries and VIEs, such corporate structure involves unique risks to investors after the business combination, as the combined company does not hold any direct equity interest in the PRC operating entities.

 

If the PRC government deems that the combined company’s contractual arrangements with its VIEs do not comply with PRC regulatory restrictions on foreign investment in the relevant industries, or if these regulations or the interpretation of existing regulations change in the future, the PRC subsidiaries and the VIEs of the combined company could be subject to material penalties or the combined company could be forced to relinquish its interests in those operations or otherwise significantly change its corporate structure. If we enter into a business combination with a China-based business utilizing a VIE structure, we and investors may face significant uncertainty about potential future actions by the PRC government that could affect the legality and enforceability of the contractual arrangements with the VIEs and, consequently, significantly affect the financial performance of the combined company as a whole.

 

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If we decide to consummate our initial business combination with a target business based in and primarily operating in China, the combined company whose securities will be listed on a U.S. stock exchange may make capital contributions or extend loans to its PRC subsidiaries through intermediate holding companies subject to compliance with relevant PRC foreign exchange control regulations. In the unlikely event that a VIE structure is used to effect a business combination as result of the applicable restrictions on foreign investment in the target entity’s industry, the PRC subsidiaries may subsequently provide funds to the VIEs through extending loans subject to statutory limits and restrictions. After the business combination, the combined company’s ability to pay dividends, if any, to the shareholders and to service any debt it may incur will depend upon dividends paid by its PRC subsidiaries which are entitled to substantially all of the economic benefits of the VIEs. Under PRC laws and regulations, PRC companies are subject to certain restrictions with respect to paying dividends or otherwise transferring any of their net assets to offshore entities. In particular, under the current PRC laws and regulations, dividends may be paid only out of distributable profits. Distributable profits are the net profit as determined under Chinese accounting standards and regulations, less any recovery of accumulated losses and appropriations to statutory and other reserves required to be made. A PRC company is required to set aside at least 10% of its after-tax profits each year to fund certain statutory reserve funds (up to an aggregate amount equal to half of its registered capital). As a result, the combined company’s PRC subsidiaries may not have sufficient distributable profits to pay dividends to the combined company.

 

Furthermore, if certain procedural requirements are satisfied, the payment in foreign currencies on current account items, including profit distributions and trade and service related foreign exchange transactions, can be made without prior approval from State Administration of Foreign Exchange or its local branches. However, where RMB is to be converted into foreign currency and remitted out of China to pay capital expenses, such as the repayment of loans denominated in foreign currencies, approval from or registration with competent government authorities or its authorized banks is required. The PRC government may take measures at its discretion from time to time to restrict access to foreign currencies for current account or capital account transactions.

 

If the foreign exchange control regulations prevent the PRC subsidiaries of the combined company from obtaining sufficient foreign currencies to satisfy their foreign currency demands, the PRC subsidiaries of the combined company may not be able to pay dividends or repay loans in foreign currencies to their offshore intermediary holding companies and ultimately to the combined company. We cannot assure you that new regulations or policies will not be promulgated in the future, which may further restrict the remittance of RMB into or out of the PRC. We cannot assure you, in light of the restrictions in place, or any amendment to be made from time to time, that the PRC subsidiaries of the combined company will be able to satisfy their respective payment obligations that are denominated in foreign currencies, including the remittance of dividends outside of the PRC. If the PRC government determines that the agreements we entered into to acquire control of a target business through contractual arrangements with one or more operating businesses in China do not comply with restrictions on foreign investment, or if these regulations or the interpretation of existing regulations change in the future, the PRC subsidiaries and VIEs of the combined company could be subject to significant penalties or the combined company could be forced to relinquish its interests in those operations. See also “Risk Factors Related to Acquiring or Operating a Business in China” under “Risk Factors” below.

 

Potential Consequences of the Holding Foreign Companies Accountable Act

 

The Holding Foreign Companies Accountable Act (“HFCA Act”), enacted on December 18, 2020, states that if the SEC determines that an issuer’s audit reports issued by a registered public accounting firm have not been subject to inspection by the PCAOB for three consecutive years beginning in 2021, the SEC shall prohibit such issuer’s securities from being traded on a national securities exchange or in the over-the-counter trading market in the United States. If we decide to consummate our initial business combination with a target business based in and primarily operating in China, auditors of the combined company and their workpapers may be located in China, a jurisdiction where the PCAOB has been unable to conduct inspections without the approval of the PRC authorities. Therefore, the combined company’s securities may be delisted from a national securities exchange in the United States pursuant to the HFCA Act. See “Risk Factors Related to Acquiring or Operating a Business in China” under “Risk Factors” below.

 

Our Sponsor

 

Our Sponsor is AEI Capital SPAC Venture II LLC, a limited liability company incorporated in the Cayman Islands owned by AEI CapForce Venture II (Labuan) LLP and AEI CapForce Venture IV (Labuan) LLP, private investment funds advised by European Credit Investment Bank Ltd. and managed by AEI Fund Management Co. Ltd., a fund management company owned by AEI Capital Ltd. based in Hong Kong, Kuala Lumpur, and Shenzhen, China, that focuses on technology enabled products and solutions to identify, harness and develop key trends relevant to their customers and markets.

 

Notwithstanding our founder’s and management team’s past experiences, past performance is not a guarantee (i) that we will be able to identify a suitable candidate for our initial business combination or (ii) that we will provide an attractive return to our shareholders from any business combination we may consummate. You should not rely on the historical record of the members of our management team or our sponsor or their respective affiliates or any related investment’s performance as indicative of our future performance of an investment in the company or the returns the company will, or is likely to, generate going forward. Each of our officers and directors may become an officer or director of another special purpose acquisition company with a class of securities intended to be registered under the Securities Exchange Act of 1934, as amended, or the Exchange Act, even before we have entered into a definitive agreement regarding our initial business combination. For more information, see the section of this prospectus entitled “Management — Conflicts of Interest” and see “Risk Factors.”

 

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Our sponsor, officers and directors, or their affiliates, may sponsor or form additional special purpose acquisition companies similar to ours or may pursue other business or investment ventures during the period in which we are seeking an initial business combination. Any such companies, businesses or investments may present additional conflicts of interest in pursuing an initial business combination. We do not believe, however, that the fiduciary duties or contractual obligations of our officers or directors will materially affect our ability to complete our initial business combination because (i) our management team has significant experience in identifying and executing multiple acquisition opportunities simultaneously, and (ii) we may pursue a broad universe of targets.

 

Other Considerations

 

The net proceeds of this offering and the sale of the placement units released to us from the trust account upon the closing of our initial business combination may be used as consideration to pay the sellers of a target business with which we complete our initial business combination. If our initial business combination is paid for using equity or debt securities, or not all of the funds released from the trust account are used for payment of the consideration in connection with our initial business combination or used for redemption of our public shares, we may use the balance of the cash released to us from the trust account following the closing for general corporate purposes, including for maintenance or expansion of operations of the post-transaction businesses, the payment of principal or interest due on indebtedness incurred in completing our initial business combination, to fund the purchase of other companies or for working capital. In addition, we may be required to obtain additional financing in connection with the closing of our initial business combination to be used following the closing for general corporate purposes as described above.

 

There is no limitation on our ability to raise funds through the issuance of equity or equity-linked securities or through loans, advances or other indebtedness in connection with our initial business combination, including pursuant to forward purchase agreements or backstop agreements we may enter into following consummation of this offering. Subject to compliance with applicable securities laws, we would only complete such financing simultaneously with the completion of our initial business combination. At this time, we are not a party to any arrangement or understanding with any third party with respect to raising any additional funds through the sale of securities or otherwise. None of our sponsors, officers, directors or shareholders is required to provide any financing to us in connection with or after our initial business combination. We may also obtain financing prior to the closing of our initial business combination to fund our working capital needs and transaction costs in connection with our search for and completion of our initial business combination.

 

Our amended and restated memorandum and articles of association will provide that, following this offering and prior to the consummation of our initial business combination, we will be prohibited from issuing additional securities that would entitle the holders thereof to (i) receive funds from the trust account or (ii) vote as a class with our public shares (a) on any initial business combination or (b) to approve an amendment to our amended and restated memorandum and articles of association to (x) extend the time we have to consummate a business combination beyond 12 months (subject to a six month extension of time) or (y) amend the foregoing provisions, unless (in connection with any such amendment to our amended and restated memorandum and articles of association) we offer our public shareholders the opportunity to redeem their public shares.

 

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

 

Corporate Information

 

Our executive offices are located at Duplex Penthouse, Unit A-33A-6, Level 33A, Tower A, UOA Bangsar Tower, No. 5, Bangsar Utama 1 Road, 59000 Kuala Lumpur, Malaysia, and our telephone number is +603 2770 2752. We are a Cayman Islands exempted company incorporated on July 8, 2021, with limited liability. Cayman Islands exempted companies are Cayman Islands companies conducting business mainly outside the Cayman Islands and, as such, are exempted from complying with certain provisions of the Companies Act. As an exempted company, we have applied for, a tax exemption undertaking from the Cayman Islands government that, in accordance with Section 6 of the Tax Concessions Act (as Revised) of the Cayman Islands, for a period of 20 years from the date of the undertaking, no law which is enacted in the Cayman Islands imposing any tax to be levied on profits, income, gains or appreciations will apply to us or our operations and, in addition, that no tax to be levied on profits, income, gains or appreciations or which is in the nature of estate duty or inheritance tax will be payable (i) on or in respect of our shares, debentures or other obligations or (ii) by way of the withholding in whole or in part of a payment of dividend or other distribution of income or capital by us to our shareholders or a payment of principal or interest or other sums due under a debenture or other obligation of us.

 

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

 

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

 

We will remain an emerging growth company until the earlier of (1) the last day of the fiscal year (a) following the fifth anniversary of the completion of this offering, (b) in which we have total annual gross revenue of at least $1.07 billion (as adjusted for inflation pursuant to SEC rules from time to time), or (c) in which we are deemed to be a large accelerated filer, which means the market value of our Class A ordinary shares that is held by non-affiliates equals or exceeds $700.0 million as of the prior June 30th, and (2) the date on which we have issued more than $1.0 billion in non-convertible debt securities during the prior three-year period. References herein to “emerging growth company” will have the meaning associated with it in the JOBS Act.

 

Additionally, we are a “smaller reporting company” as defined in Item 10(f)(1) of Regulation S-K. Smaller reporting companies may take advantage of certain reduced disclosure obligations, including, among other things, providing only two years of audited financial statements. We will remain a smaller reporting company until the last day of any fiscal year for so long as either (1) the market value of our Class A ordinary shares held by non-affiliates did not equal or exceed $250.0 million as of the prior June 30th, or (2) our annual revenues did not exceed $100.0 million during such completed fiscal year and the market value of our Class A ordinary shares held by non-affiliates did not equal or exceed $700.0 million as of the prior June 30th. To the extent we take advantage of such reduced disclosure obligations, it may also make comparison of our financial statements with other public companies difficult or impossible.

 

THE OFFERING

 

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

 

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Securities offered 10,000,000 Units, at $10.00 per unit, each unit consisting of:
   
  one Class A ordinary share; and
     
  one-half of one redeemable warrant.

 

Proposed Nasdaq symbols

Units: “AEIBU”

 

Class A ordinary shares: “AEIB”

 

Warrants: “AEIBWS”

 

Trading commencement and

 

separation of Class A ordinary

 

share and warrants

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

 

Additionally, the units will automatically separate into their component parts and will not be traded after completion of our initial business combination.

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

 

Units:

 

Number outstanding before this offering 0
   
Number of placement units to be sold in a private placement simultaneously this offering 360,530(1)
   
Number outstanding after this offering 10,360,530 (1)

 

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Ordinary shares:  
   
Number outstanding before this offering 0 Class A ordinary shares and 2,875,000 Class B ordinary shares (founder shares)(2)
   
Number outstanding after this offering 12,860,530 Class A ordinary shares and Class B ordinary shares(1)(3)
   
Redeemable Warrants:  
   
Number outstanding before this offering and the private placement 0
   
Number of warrants to be outstanding after this offering and the private placement 5,180,265(1)(4)

 

Exercisability Each whole warrant is exercisable to purchase one Class A ordinary share. Only whole warrants are exercisable. No fractional warrants will be issued upon separation of the units and only whole warrants will trade.
   
 

We structured each unit to contain one-half of one warrant, with each whole warrant exercisable for one Class A ordinary share.

 

The warrants will become exercisable commencing on the later of 12 months from the closing of this offering or 30 days after the completion of our initial business combination. The warrants will expire at 5:00 p.m., New York City time, on the fifth anniversary of our completion of an initial business combination, or earlier upon redemption.

 

No warrants will be exercisable for cash unless we have an effective and current registration statement covering the Class A ordinary shares issuable upon exercise of the warrants and a current prospectus relating to such Class A ordinary shares. Notwithstanding the foregoing, if a registration statement covering the Class A ordinary shares issuable upon exercise of the warrants is not effective within a specified period following the consummation of our initial business combination, warrant holders may, until such time as there is an effective registration statement and during any period when we shall have failed to maintain an effective registration statement, exercise warrants on a cashless basis pursuant to the exemption provided by Section 3(a)(9) of the Securities Act, provided that such exemption is available. If that exemption, or another exemption, is not available, holders will not be able to exercise their warrants on a cashless basis.

 

1 Assumes no exercise of the underwriters’ over-allotment option and the forfeiture by our sponsor of an aggregate of 375,000 founder shares.

 

2 Includes up to an aggregate of 375,000 shares that are subject to forfeiture by our sponsor depending on the extent to which the underwriters’ over-allotment option is exercised.

 

3 Comprised of 10,360,530 Class A ordinary shares (including 360,530 placement shares) and 2,500,000 founder shares. The founder shares are convertible into Class A ordinary shares on a one-for-one basis, subject to adjustment as described herein adjacent to the caption “Founder shares conversion and anti-dilution rights.”

 

4 Includes 5,000,000 public warrants and 180,265 placement warrants.

 

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

 

Exercise Period The warrants will become exercisable commencing on the later of 12 months from the closing of this offering or 30 days after the completion of our initial business combination, provided that we have an effective registration statement under the Securities Act covering the Class A ordinary shares issuable upon exercise of the warrants and a current prospectus relating to them is available (or we permit holders to exercise their warrants on a cashless basis under the circumstances specified in the warrant agreement) and such shares are registered, qualified or exempt from registration under the securities, or blue sky, laws of the state of residence of the holder.

 

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We are not registering the Class A ordinary shares issuable upon exercise of the warrants at this time. However, we have agreed that, as soon as practicable, but in no event later than 15 business days after the closing of our initial business combination, we will use our commercially reasonable efforts to file with the SEC a registration statement covering the Class A ordinary shares issuable upon exercise of the warrants, to cause such registration statement to become effective and to maintain a current prospectus relating to those Class A ordinary shares until the warrants expire or are redeemed, as specified in the warrant agreement.

 

If a registration statement covering the ordinary shares issuable upon exercise of the warrants is not effective by the 60th business day after the closing of our initial business combination, warrant holders may, until such time as there is an effective registration statement and during any period when we will have failed to maintain an effective registration statement, exercise warrants on a “cashless basis” in accordance with Section 3(a)(9) of the Securities Act or another exemption.

 

Notwithstanding the above, if our ordinary shares are at the time of any exercise of a warrant not listed on a national securities exchange such that it satisfies the definition of a “covered security” under Section 18(b)(1) of the Securities Act, we may, at our option, require holders of public warrants who exercise their warrants to do so on a “cashless basis” in accordance with Section 3(a)(9) of the Securities Act and, in the event we so elect, we will not be required to file or maintain in effect a registration statement, and in the event we do not so elect, we will use our best efforts to register or qualify the shares under applicable blue sky laws to the extent an exemption is not available.

   
  The warrants will expire at 5:00 p.m., New York City time, five years after the completion of our initial business combination or earlier upon redemption or liquidation and dissolution of the Company if it cannot consummate a business combination within 12 months (subject to a six month extension of time). On the exercise of any warrant, the warrant exercise price will be paid directly to us and not placed in the trust account. Public shareholders will not be offered the opportunity to vote on or redeem their shares in connection with any such extension.

 

Redemption of warrants

We may redeem the outstanding warrants in whole and not in part, at a price of $0.01 per warrant at any time after the warrants become exercisable, upon a minimum of 30 days’ prior written notice of redemption, if, and only if, the last sales price of our Class A ordinary shares equals or exceeds $18.00 per share (as adjusted for share subdivisions, share dividends, reorganizations and recapitalizations) for any 20 trading days within a 30 trading day period commencing at any time after the warrants become exercisable and ending three business days before we send the notice of redemption; and if, and only if, there is a current registration statement in effect with respect to the Class A ordinary shares underlying such warrants.

 

If the foregoing conditions are satisfied and we issue a notice of redemption, each warrant holder can exercise his, her or its warrant prior to the scheduled redemption date. However, the price of the Class A ordinary shares may fall below the $18.00 trigger price as well as the $11.50 warrant exercise price after the redemption notice is issued.

 

If we call the warrants for redemption as described above, our management will have the option to require all holders that wish to exercise warrants to do so on a “cashless basis.” In such event, each holder would pay the exercise price by surrendering the warrants for that number of Class A ordinary shares equal to the quotient obtained by dividing (x) the product of the number of Class A ordinary shares underlying the warrants, multiplied by the difference between the exercise price of the warrants and the “fair market value” (defined below) by (y) the fair market value. The “fair market value” shall mean the average reported last sale price of the Class A ordinary shares for the five trading days ending on the third trading day prior to the date on which the notice of redemption is sent to the holders of warrants.

 

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Founder shares

As of the date hereof, our sponsor holds 2,800,000 founder shares, 375,000 of which are subject to forfeiture if the underwriters’ over-allotment option is not exercised. The number of founder shares issued and outstanding was determined based on the expectation that the founder shares would represent at least 20% of the outstanding shares after this offering (excluding the placement units and underlying securities).

 

As such, our initial shareholders will collectively own 22.24% of our issued and outstanding shares after this offering (including the placement shares to be issued to the sponsor and assuming they do not purchase any units in this offering). None of our sponsor, officers or directors have expressed an intention to purchase any units in this offering. Up to an aggregate 375,000 founder shares will be subject to forfeiture by our sponsor depending on the extent to which the underwriters’ over-allotment option is exercised so that our initial shareholders will maintain ownership of at least 20% of our ordinary shares after this offering.

 

Our sponsor transferred a total of 45,000 founder shares among our Chief Financial Officer and our three independent director nominees at their original purchase price pursuant to executed securities assignment agreements, effective as of August 6, 2021. Our sponsor has also transferred a total of 30,000 founder shares among our six advisors in connection with this offering.

 

  We will effect a share capitalization or other appropriate mechanism prior to this offering should the size of the offering change, in order to maintain such percentage ownership. The founder shares are identical to the Class A ordinary shares included in the units being sold in this offering, except that:

 

 

the founder shares are Class B ordinary shares that automatically convert into Class A ordinary shares at the time of our initial business combination on a one-for-one basis, subject to adjustment pursuant to certain anti-dilution rights as described herein;

     
 

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

     
 

the founder shares are entitled to registration rights; and

     
  our sponsor, officers and directors have entered into a letter agreement with us, pursuant to which they have agreed to (i) waive their redemption rights with respect to their founder shares and public shares in connection with the completion of our initial business combination, (ii) waive their redemption rights with respect to their founder shares and public shares in connection with a shareholder vote to approve an amendment to our amended and restated memorandum and articles of association to (A) modify the substance or timing of our obligation to provide for the redemption of our public shares in connection with an initial business combination or to redeem 100% of our public shares if we do not complete our initial business combination within 12 months (subject to a six month extension of time) from the closing of this offering or (B) with respect to any other material provisions relating to shareholders’ rights or pre-initial business combination activity, (iii) waive their rights to liquidating distributions from the trust account with respect to their founder shares if we fail to complete our initial business combination within 12 months (subject to a six month extension of time) from the closing of this offering, although they will be entitled to liquidating distributions from the trust account with respect to any public shares they hold if we fail to complete our initial business combination within the prescribed time frame and (iv) vote any founder shares held by them and any public shares purchased during or after this offering (including in open market and privately-negotiated transactions) in favor of our initial business combination. Public shareholders will not be offered the opportunity to vote on or redeem their shares in connection with any such extension.

 

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  If we submit our initial business combination to our public shareholders for a vote, we will complete our initial business combination only we receive an ordinary resolution under Cayman Islands law, which requires the affirmative vote of a majority of the shareholders who attend and vote at a general meeting of the company. As a result of an agreement in which we have agreed not to enter into a definitive agreement regarding an initial business combination without the prior consent of our sponsor, our sponsor, officers and directors are expected to vote their shares in favor of our initial business combination. As a result, in the event that only the minimum number of shares representing a quorum is present at a shareholders’ meeting held to vote on our initial business combination, in addition to our initial shareholders’ founder shares and placement shares, we would need only 354,604 or 3.55% of the 10,000,000 public shares sold in this offering to be voted in favor of an initial business combination approved in favor of our initial business combination in order to have our initial business combination approved. Additionally, each public shareholder may elect to redeem its public shares irrespective of whether they vote for or against the proposed transaction or abstain from voting (subject to the limitation described in this prospectus.

 

Transfer restrictions on founder shares Our initial shareholders have agreed not to transfer, assign or sell any of their founder shares (or Class A ordinary shares issuable upon conversion thereof) until the earlier to occur of: (A) twelve (12) months after the completion of our initial business combination and (B) subsequent to our initial business combination, if the reported last sale price of our Class A ordinary shares equals or exceeds $12.00 per share (as adjusted for share subdivisions, share dividends, reorganizations, recapitalizations and the like) for any 20 trading days within any 30-trading day period commencing at least 150 days after our initial business combination, or if we complete a transaction after our initial business combination the date on which we complete a liquidation, merger, share exchange, reorganization or other similar transaction that results in all of our shareholders having the right to exchange their shares for cash, securities or other property after our initial business combination (except as described herein under “Principal Shareholders — Restrictions on Transfers of Founder Shares and placement units”). Any permitted transferees will be subject to the same restrictions and other agreements of our initial shareholders with respect to any founder shares. We refer to such transfer restrictions throughout this prospectus as the lock-up.
   
Founder shares conversion and anti-dilution rights

The founder shares are designated as Class B ordinary shares and will automatically convert into Class A ordinary shares on the first business day following the consummation of our initial business combination at a ratio such that the number of Class A ordinary shares issuable upon conversion of all founder shares will equal, in the aggregate, on an as-converted basis, 20% of the sum of (i) the total number of ordinary shares issued and outstanding upon completion of this offering, plus (ii) the total number of Class A ordinary shares issued or deemed issued or issuable upon conversion or exercise of any equity-linked securities (as defined herein) or rights issued or deemed issued, by the Company in connection with or in relation to the consummation of the initial business combination, excluding any Class A ordinary shares or equity-linked securities exercisable for or convertible into Class A ordinary shares issued, deemed issued, or to be issued, to any seller in the initial business combination and any placement units (and underlying securities) issued to our sponsor, its affiliates or any member of our management team upon conversion of working capital loans, minus the number of public shares redeemed by public shareholders in connection with our initial business combination. Any conversion of founder shares described herein will take effect as a compulsory redemption of founder shares and an issuance of Class A ordinary shares as a matter of Cayman Islands law. In no event will the founder shares convert into Class A ordinary shares at a rate of less than one-to-one.

 

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  The term “equity-linked securities” refers to any debt or equity securities that are convertible, exercisable or exchangeable for our Class A ordinary shares issued in a financing transaction in connection with our initial business combination, including but not limited to a private placement of equity or debt.

 

Voting rights; Appointment of Directors

Holders of record of the Class A ordinary shares and holders of record of the founder shares will vote together as a single class on all matters submitted to a vote of our shareholders, with each ordinary shares entitling the holder to one vote except as required by law.

 

Holders of record of our Class A ordinary shares and Class B ordinary shares are entitled to one vote for each share held on all matters to be voted on by shareholders. Unless specified in our amended and restated memorandum and articles of association or as required by the Companies Act or Nasdaq rules, an ordinary resolution under Cayman Islands law, which requires the affirmative vote of a majority of the shareholders who attend and vote at a general meeting of the company is generally required to approve any matter voted on by our shareholders. Approval of certain actions require a special resolution under Cayman Islands law, which requires the affirmative vote of a majority of at least two-thirds of the shareholders who attend and vote at a general meeting of the company, and pursuant to our amended and restated memorandum and articles of association, such actions include amending our amended and restated memorandum and articles of association and approving a statutory merger or consolidation with another company. There is no cumulative voting with respect to the appointment of directors, meaning, following our initial business combination, the holders of more than 50% of our ordinary shares voting for the appointment of directors can elect all of the directors. Only holders of founder shares will have the right to appoint directors in any election held prior to or in connection with the completion of our initial business combination. Holders of our public shares will not be entitled to vote on the appointment of directors during such time. In addition, prior to the completion of an initial business combination, holders of majority of our founder shares may remove a member of the board of directors for any reason. These provisions of our amended and restated memorandum and articles of association relating to the rights of holders of founder shares to appoint directors may be amended by a special resolution passed by a majority of at least 90% of our shares voting in a general meeting. With respect to any other matter submitted to a vote of our shareholders, including any vote in connection with our initial business combination, except as required by law, holders of the founder shares and holders of our public shares will vote together as a single class, with each share entitling the holder to one vote. If we seek shareholder approval of our initial business combination, we will complete our initial business combination only if we receive an ordinary resolution under Cayman Islands law, which requires the affirmative vote of a majority of the shareholders who attend and vote at a general meeting of the company. In such case, our sponsor, officers and directors have agreed to vote their founder shares and any public shares purchased during or after this offering (including in open market and privately-negotiated transactions) in favor of our initial business combination. As a result, in the event that only the minimum number of shares representing a quorum is present at a shareholders’ meeting held to vote on our initial business combination, in addition to our initial shareholders’ founder shares, we would need 354,604 or 3.55%, of the 10,000,000 public shares sold in this offering to be voted in favor of an initial business combination in order to have our initial business combination approved in favor of our initial business combination in order to have our initial business combination approved.

 

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Placement units

Simultaneously with the consummation of this offering, our sponsor has committed to purchase an aggregate of 360,530 placement units (or up to 398,030 placement units if the over-allotment option is exercised in full).

 

These additional placement units will be purchased in a private placement that will occur simultaneously with the purchase of units resulting from the exercise of the over-allotment option. The placement units (and underlying placement shares and placement warrants) are identical to the units and warrants sold in this offering. Our initial shareholders have agreed (A) to vote their placement shares in favor of any proposed business combination, (B) not to convert any placement shares in connection with a shareholder vote to approve a proposed initial business combination or sell any placement shares to us in a tender offer in connection with a proposed initial business combination and (C) that the placement shares shall not participate in any liquidating distribution from our trust account upon winding up if a business combination is not consummated. In the event of a liquidation prior to our initial business combination, the placement units will likely be worthless.

 

Each placement unit is identical to the units offered by this prospectus except as described below. There will be no redemption rights or liquidating distributions from the trust account with respect to the founder shares or placement shares, which will expire worthless if we do not consummate a business combination within 12 months (subject to a six month extension of time). Our initial shareholders have agreed to waive their redemption rights with respect to any founder shares or placement shares (i) in connection with the consummation of a business combination, (ii) in connection with a shareholder vote to amend our amended and restated memorandum and articles of association to modify the substance or timing of our obligation to allow redemption in connection with our initial business combination or certain amendments to our charter prior thereto, to redeem 100% of our public shares if we do not complete our initial business combination within 12 months (subject to a six month extension of time) from the closing of this offering or with respect to any other provision relating to shareholders’ rights or pre-initial business combination activity and (iii) if we fail to consummate a business combination within 12 months (subject to a six month extension of time) from the closing of this offering or if we liquidate prior to the expiration of the 12-month period. However, our initial shareholders will be entitled to redemption rights with respect to any public shares held by them if we fail to consummate a business combination or liquidate within the 12-month period. A portion of the purchase price of the placement units will be added to the proceeds from this offering to be held in the trust account such that, at the time of closing, $101,000,000 (or $116,500,000 if the underwriters exercise their over-allotment option in full) will be held in the trust account. If we do not complete our initial business combination within 12 months (subject to a six-month extension of time), the proceeds from the sale of the placement units held in the trust account will be used to fund the redemption of our public shares (subject to the requirements of applicable law) and the placement units, placement warrants and placement shares will expire worthless.

 

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Transfer restrictions on Placement Units The placement units and their component securities will not be transferable, assignable or salable until 30 days after the completion of our initial business combination (except as described under the section of this prospectus entitled “Principal Shareholders — Restrictions on Transfers of Founder Shares and Placement Units”).
   
Proceeds to be held in trust account

Nasdaq rules provide that at least 90% of the gross proceeds from this offering and the sale of the placement units be deposited in a trust account. Of the net proceeds of this offering and the sale of the placement units, $101,000,000, or $10.10 per unit ($116,150,000, or $10.10 per unit, if the underwriters’ over-allotment option is exercised in full) will be placed into a trust account in the United States at J.P. Morgan Securities LLC, with Continental Stock Transfer & Trust Company acting as trustee, and $1,105,300 will be used to pay expenses in connection with the closing of this offering and for working capital following this offering.

 

These proceeds include $3,500,000 (or $4,025,000 if the underwriters’ over-allotment option is exercised in full) in deferred underwriting commissions.

 

Except with respect to interest earned on the funds held in the trust account that may be released to us to pay our taxes, our amended and restated memorandum and articles of association will provide that the proceeds from this offering and the sale of the placement units, will not be released from the trust account until the earliest of (a) the completion of our initial business combination, (b) the redemption of any public shares properly submitted in connection with a shareholder vote to amend our amended and restated memorandum and articles of association to (i) modify the substance or timing of our obligation to provide for the redemption of our public shares in connection with an initial business combination or to redeem 100% of our public shares if we do not complete our initial business combination within 12 months (subject to a six month extension of time) or (ii) with respect to any other material provisions relating to shareholders’ rights or pre-initial business combination activity, and (c) the redemption of our public shares if we are unable to complete our initial business combination within 12 months (subject to a six month extension of time), subject to applicable law. The proceeds deposited in the trust account could become subject to the claims of our creditors, if any, which could have priority over the claims of our public shareholder. Public shareholders will not be offered the opportunity to vote on or redeem their shares in connection with any such extension.

 

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Anticipated expenses and funding sources Unless and until we complete our initial business combination, no proceeds held in the trust account will be available for our use, except the withdrawal of interest to pay our taxes and/or to redeem our public shares in connection with an amendment to our amended and restated memorandum and articles of association, as described above. The proceeds held in the trust account will be invested only in U.S. government securities with a maturity of 180 days or less or in money market funds meeting certain conditions under Rule 2a-7 under the Investment Company Act, that invest only in direct U.S. government treasury obligations. We will disclose in each quarterly and annual report filed with the SEC prior to our initial business combination whether the proceeds deposited in the trust account are invested in U.S. government treasury obligations or money market funds or a combination thereof. Assuming an interest rate of 0.1%, we estimate the trust account will generate approximately $101,000 of interest annually; however, we can provide no assurances regarding this amount. Unless and until we complete our initial business combination, we may pay our expenses only from:

 

  the net proceeds of this offering and the sale of the placement units not held in the trust account, which will be approximately $700,000 in working capital after the payment of approximately $405,300 in expenses relating to this offering; and
     
  any loans or additional investments from our sponsor, or an affiliate of our sponsor or certain of our officers and directors, although they are under no obligation to advance funds or invest in us, and provided that any such loans will not have any claim on the proceeds held in the trust account unless such proceeds are released to us upon completion of our initial business combination. Up to $3,000,000 of such loans may be convertible into units, at a price of $10.00 per unit at the option of the lender, upon consummation of our initial business combination. The units would be identical to the placement units.

 

Conditions to completing our initial business combination

Nasdaq rules require that we consummate an initial business combination with one or more operating businesses or assets with a fair market value equal to at least 80% of the net assets held in the trust account (net of amounts disbursed to management for working capital purposes, if permitted, and excluding the amount of any deferred underwriting commissions). Our board of directors will make the determination as to the fair market value of our initial business combination. If our board of directors is not able to independently determine the fair market value of our initial business combination, we will obtain an opinion from an independent investment banking firm or another independent entity that ordinarily renders valuation opinions with respect to the satisfaction of such criteria. While we consider it unlikely that our board of directors will not be able to make an independent determination of the fair market value of our initial business combination, it may be unable to do so if it is less familiar or experienced with the business of a particular target or if there is a significant amount of uncertainty as to the value of a target’s assets or prospects.

 

We anticipate structuring our initial business combination so that the post-transaction company in which our public shareholders own shares will own or acquire 100% of the equity interests or assets of the target business or businesses. However, we may structure our initial business combination so that the post-transaction company owns or acquires less than 100% of such interests or assets of the target business in order to meet certain objectives of the target management team or shareholders, or for other reasons. However, we will only complete an initial business combination if the post-transaction company owns or acquires 50% or more of the outstanding voting securities of the target or otherwise acquires a controlling interest in the target sufficient for it not to be required to register as an investment company under the Investment Company Act.

 

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  Even if the post-transaction company owns or acquires 50% or more of the voting securities of the target, our shareholders prior to the initial business combination may collectively own a minority interest in the post-transaction company, depending on valuations ascribed to the target and us in the initial business combination. For example, we could pursue a transaction in which we issue a substantial number of new shares in exchange for all of the outstanding capital stock of a target. In this case, we would acquire a 100% controlling interest in the target. However, as a result of the issuance of a substantial number of new shares, our shareholders immediately prior to our initial business combination could own less than a majority of our outstanding shares subsequent to our initial business combination. If less than 100% of the equity interests or assets of a target business or businesses are owned or acquired by the post-transaction company, the portion of such business or businesses that is owned or acquired is what will be taken into account for purposes of Nasdaq’s 80% of net assets test. If the initial business combination involves more than one target business, the 80% of net assets test will be based on the aggregate value of all of the transactions and we will treat the target businesses together as our initial business combination for purposes of seeking shareholder approval or conducting a tender offer, as applicable.

 

Permitted purchases of public shares and public warrants by our affiliates If we seek shareholder approval of our initial business combination and we do not conduct redemptions in connection with our initial business combination pursuant to the tender offer rules, our sponsor, initial shareholders, directors, officers, advisors or their affiliates may purchase public shares or public warrants in privately-negotiated transactions or in the open market either prior to or following the completion of our initial business combination. There is no limit on the number of shares or warrants our initial shareholders, directors, officers, advisors or their affiliates may purchase in such transactions, subject to compliance with applicable law and Nasdaq rules. However, they have no current commitments, plans or intentions to engage in such transactions and have not formulated any terms or conditions for any such transactions. If they engage in such transactions, they will not make any such purchases when they are in possession of any material non-public information not disclosed to the seller or if such purchases are prohibited by Regulation M under the Exchange Act. Subsequent to the consummation of this offering, we will adopt an insider trading policy which will require insiders to: (i) refrain from purchasing our securities during certain blackout periods when they are in possession of any material non-public information and (ii) clear all trades of company securities with a compliance officer prior to execution. We cannot currently determine whether our insiders will make such purchases pursuant to a Rule 10b5-1 plan, as it will be dependent upon several factors, including but not limited to, the timing and size of such purchases. Depending on such circumstances, our insiders may either make such purchases pursuant to a Rule 10b5-1 plan or determine that such a plan is not necessary. We do not currently anticipate that such purchases, if any, would constitute a tender offer subject to the tender offer rules under the Exchange Act or a going-private transaction subject to the going-private rules under the Exchange Act; however, if the purchasers determine at the time of any such purchases that the purchases are subject to such rules, the purchasers will comply with such rules. Any such purchases will be reported pursuant to Section 13 and Section 16 of the Exchange Act to the extent such purchasers are subject to such reporting requirements. None of the funds held in the trust account will be used to purchase shares or public warrants in such transactions prior to completion of our initial business combination. See “Proposed Business — Permitted Purchases of Our Securities” for a description of how our sponsor, initial shareholders, directors, officers, advisors or any of their affiliates will select which shareholders to purchase securities from in any private transaction. Our sponsor, directors, officers, advisors or any of their affiliates will not make any purchases if the purchases would violate Section 9(a)(2) of, or Rule 10b-5 under, the Exchange Act.

 

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

 

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

We will provide our public shareholders with the opportunity to redeem all or a portion of their public shares upon the completion of our initial business combination at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the trust account as of two business days prior to the consummation of our initial business combination, including interest earned on the funds held in the trust account and not previously released to us to pay our taxes, divided by the number of then outstanding public shares, subject to the limitations described herein.

 

The amount in the trust account is initially anticipated to be $10.10 per public share, however, there is no guarantee that investors will receive $10.10 per share upon redemption. The per-share amount we will distribute to investors who properly redeem their shares will not be reduced by deferred underwriting commissions we will pay to the underwriters. There will be no redemption rights upon the completion of our initial business combination with respect to our warrants. Our sponsor, officers and directors have entered into a letter agreement with us, pursuant to which they have agreed to waive their redemption rights with respect to any founder shares and placement shares held by them and any public shares they may acquire during or after this offering in connection with the completion of our initial business combination or otherwise.

 

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Limitation on redemptions

Our amended and restated memorandum and articles of association will provide that in no event will we redeem our public shares in an amount that would cause our net tangible assets to be less than $5,000,001 (so that we are not subject to the SEC’s “penny stock” rules). However, a greater net tangible asset or cash requirement may be contained in the agreement relating to our initial business combination. For example, the proposed business combination may require: (i) cash consideration to be paid to the target or its owners, (ii) cash to be transferred to the target for working capital or other general corporate purposes or (iii) the retention of cash to satisfy other conditions in accordance with the terms of the proposed business combination. Furthermore, although we will not redeem shares in an amount that would cause our net tangible assets to fall below $5,000,001, we do not have a maximum redemption threshold based on the percentage of shares sold in this offering, as many blank check companies do.

 

In the event the aggregate cash consideration we would be required to pay for all Class A ordinary shares that are validly submitted for redemption plus any amount required to satisfy cash conditions pursuant to the terms of the proposed business combination exceed the aggregate amount of cash available to us, we will not complete the business combination or redeem any shares, and all Class A ordinary shares submitted for redemption will be returned to the holders thereof.

   
Manner of conducting redemptions We will provide our public shareholders with the opportunity to redeem all or a portion of their public shares upon the completion of our initial business combination either (i) in connection with a shareholder meeting called to approve the initial business combination or (ii) by means of a tender offer. The decision as to whether we will seek shareholder approval of a proposed business combination or conduct a tender offer will be made by us, solely in our discretion, and will be based on a variety of factors such as the timing of the transaction and whether the terms of the transaction would require us to seek shareholder approval under applicable law or stock exchange listing requirements. Asset acquisitions and stock purchases would not typically require shareholder approval, while direct mergers with our company where we do not survive and any transactions where we issue more than 20% of our outstanding ordinary shares or seek to amend our amended and restated memorandum and articles of association would require shareholder approval. So long as we obtain and maintain a listing for our securities on Nasdaq, we will be required to comply with such rules.

 

  If a shareholder vote is not required and we do not decide to hold a shareholder vote for business or other reasons, we will, pursuant to our amended and restated memorandum and articles of association:

 

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

 

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

 

  Upon the public announcement of our initial business combination, if we elect to conduct redemptions pursuant to the tender offer rules, we or our sponsor will terminate any plan established in accordance with Rule 10b5-1 under the Exchange Act to purchase Class A ordinary shares in the open market, in order to comply with Rule 14e-5 under the Exchange Act.
   
  In the event that we conduct redemptions pursuant to the tender offer rules, our offer to redeem will remain open for at least 20 business days, in accordance with Rule 14e-1(a) under the Exchange Act, and we will not be permitted to complete our initial business combination until the expiration of the tender offer period. In addition, the tender offer will be conditioned on public shareholders not tendering more than a specified number of public shares, which number will be based on the requirement that we may not redeem public shares in an amount that would cause our net tangible assets to be less than $5,000,001 upon completion of our initial business combination (so that we are not subject to the SEC’s “penny stock” rules) or any greater net tangible asset or cash requirement which may be contained in the agreement relating to our initial business combination. If public shareholders tender more shares than we have offered to purchase, we will withdraw the tender offer and not complete the initial business combination.
   
  If, however, shareholder approval of the transaction is required by law or stock exchange listing requirements, or we decide to obtain shareholder approval for business or other reasons, we will:

 

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

 

  If we seek shareholder approval, we will complete our initial business combination only if a majority of the outstanding ordinary shares voted are voted in favor of the initial business combination. A quorum for such meeting will be present if the holders of a majority of issued and outstanding shares entitled to vote at the meeting are represented in person or by proxy. Our sponsor will count towards this quorum and has agreed to vote its founder shares and any public shares purchased during or after this offering in favor of our initial business combination. For purposes of seeking approval of the majority of our outstanding ordinary shares voted, non-votes will have no effect on the approval of our initial business combination once a quorum is obtained.

 

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As a result, in the event that only the minimum number of shares representing a quorum is present at a shareholders’ meeting held to vote on our initial business combination, in addition to our initial shareholders’ founder shares and placement shares, we would need 354,604 or 3.55% of the 10,000,000 public shares sold in this offering to be voted in favor of an initial business combination approved in favor of our initial business combination in order to have our initial business combination approved. Additionally, each public shareholder may elect to redeem its public shares irrespective of whether they vote for or against the proposed transaction or abstains from voting (subject to the limitation described in this prospectus). We intend to give approximately 30 days (but not less than ten days nor more than 60 days) prior written notice of any such meeting, if required, at which a vote shall be taken to approve our initial business combination. The quorum and voting thresholds, and the voting agreement of our sponsor, may make it more likely that we will consummate our initial business combination.

   
  Each public shareholder may elect to redeem its public shares irrespective of whether they vote for or against, or abstain from voting on, the proposed transaction.
   
  We may require our public shareholders seeking to exercise their redemption rights, whether they are record holders or hold their shares in “street name,” to either tender their certificates to our transfer agent prior to the date set forth in the tender offer documents or proxy materials mailed to such holders, or up to two business days prior to the vote on the proposal to approve the initial business combination in the event we distribute proxy materials, or to deliver their shares to the transfer agent electronically. We believe that this will allow our transfer agent to efficiently process any redemptions without the need for further communication or action from the redeeming public shareholders, which could delay redemptions and result in additional administrative cost. If the proposed business combination is not approved and we continue to search for a target company, we will promptly return any certificates delivered, or shares tendered electronically, by public shareholders who elected to redeem their shares.
   
  Our amended and restated memorandum and articles of association will provide that in no event will we redeem our public shares in an amount that would cause our net tangible assets to be less than $5,000,001 upon completion of our initial business combination (so that we are not subject to the SEC’s “penny stock” rules) or any greater net tangible asset or cash requirement which may be contained in the agreement relating to our initial business combination. For example, the proposed business combination may require: (i) cash consideration to be paid to the target or its owners, (ii) cash to be transferred to the target for working capital or other general corporate purposes or (iii) the retention of cash to satisfy other conditions in accordance with the terms of the proposed business combination.
   
  In the event the aggregate cash consideration we would be required to pay for all Class A ordinary shares that are validly submitted for redemption plus any amount required to satisfy cash conditions pursuant to the terms of the proposed business combination exceed the aggregate amount of cash available to us, we will not complete the initial business combination or redeem any shares, and all Class A ordinary shares submitted for redemption will be returned to the holders thereof.

 

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Limitation on redemption rights of shareholders holding 15% or more of the shares sold in this offering if we hold shareholder vote Notwithstanding the foregoing redemption rights, if we seek shareholder approval of our initial business combination and we do not conduct redemptions in connection with our initial business combination pursuant to the tender offer rules, our amended and restated memorandum and articles of association will provide that a public shareholder, together with any affiliate of such shareholder or any other person with whom such shareholder is acting in concert or as a “group” (as defined under Section 13 of the Exchange Act), will be restricted from redeeming its shares with respect to more than an aggregate of 15% of the shares sold in this offering, without our prior consent. We believe the restriction described above will discourage shareholders from accumulating large blocks of shares, and subsequent attempts by such holders to use their ability to redeem their shares as a means to force us or our management to purchase their shares at a significant premium to the then-current market price or on other undesirable terms. Absent this provision, a public shareholder holding more than an aggregate of 15% of the shares sold in this offering could threaten to exercise its redemption rights against a business combination if such holder’s shares are not purchased by us or our management at a premium to the then-current market price or on other undesirable terms.

 

  By limiting our shareholders’ ability to redeem to no more than 15% of the shares sold in this offering, we believe we will limit the ability of a small group of shareholders to unreasonably attempt to block our ability to complete our initial business combination, particularly in connection with a business combination with a target that requires as a closing condition that we have a minimum net worth or a certain amount of cash. However, we would not be restricting our shareholders’ ability to vote all of their shares (including all shares held by those shareholders that hold more than 15% of the shares sold in this offering) for or against our initial business combination.
   
Redemption rights in connection with proposed amendments to our amended and restated memorandum and articles of association Our amended and restated memorandum and articles of association provide that any of its provisions related to pre-business combination activity (including the requirement to deposit proceeds of this offering and the private placement of units into the trust account and not release such amounts except in specified circumstances, and to provide redemption rights to public shareholders as described herein) may be amended if approved by holders of 65% of our ordinary shares entitled to vote thereon, and corresponding provisions of the trust agreement governing the release of funds from our trust account may be amended if approved by holders of 65% of our ordinary shares entitled to vote thereon. In all other instances, our amended and restated memorandum and articles of association may be amended by holders of a majority of our outstanding ordinary shares entitled to vote thereon, subject to applicable provisions of the Companies Act or applicable stock exchange rules. Our amended and restated memorandum and articles of association will provide that we may not issue additional shares that would entitle the holders thereof to receive funds from the trust account or vote on any initial business combination or on matters related to our pre-initial business combination activity. Our initial shareholders, who will collectively beneficially own 20% of our outstanding ordinary shares upon the closing of this offering (assuming they do not purchase any units in this offering), will participate in any vote to amend our amended and restated memorandum and articles of association and/or trust agreement and will have the discretion to vote in any manner they choose. Our sponsor, executive officers, and directors have agreed, pursuant to a written agreement with us, that they will not propose any amendment to our amended and restated memorandum and articles of association to (A) modify the substance or timing of our obligation to provide for the redemption of our public shares in connection with an initial business combination or to redeem 100% of our public shares if we do not complete our initial business combination within 12 months (subject to a six month extension of time) or (B) with respect to any other material provisions relating to shareholders’ rights or pre-initial business combination activity, unless we provide our public shareholders with the opportunity to redeem their Class A ordinary shares upon approval of any such amendment at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the trust account, including interest (which interest shall be net of taxes payable) divided by the number of then outstanding public shares. Our sponsor, officers and directors have entered into a letter agreement with us pursuant to which they have agreed to waive their redemption rights with respect to any founder shares, placement shares and any public shares held by them in connection with the completion of our initial business combination.

 

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

On the completion of our initial business combination, all amounts held in the trust account will be disbursed directly by the trustee to pay amounts due to any public shareholders who exercise their redemption rights as described above under “Redemption rights for public shareholders upon completion of our initial business combination,” to pay the underwriters their deferred underwriting commissions, to pay all or a portion of the consideration payable to the target or owners of the target of our initial business combination and to pay other expenses associated with our initial business combination. 

   

 

 

 

 

 

If our initial business combination is paid for using equity or debt securities, or not all of the funds released from the trust account are used for payment of the consideration in connection with our initial business combination or used for redemptions of our Class A ordinary shares, we may apply the balance of the cash released to us from the trust account for general corporate purposes, including for maintenance or expansion of operations of the post-transaction businesses, the payment of principal or interest due on indebtedness incurred in completing our initial business combination, to fund the purchase of other assets, companies or for working capital.
   
Redemption of public shares and distribution and liquidation if no initial business combination

Our amended and restated memorandum and articles of association provides that we will have only 12 months (subject to a six month extension of time), to complete our initial business combination.

 

If we are unable to complete our initial business combination within such time period, we will (i) cease all operations except for the purpose of winding up, (ii) as promptly as reasonably possible but not more than ten business days thereafter, redeem the public shares, at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the trust account including interest earned on the funds held in the trust account and not previously released to us to pay our franchise and income taxes as well as expenses relating to the administration of the trust account (less up to $101,000 of interest released to us to pay taxes and potentially, dissolution expenses), 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), subject to applicable law, and (iii) as promptly as reasonably possible following such redemption, subject to the approval of our remaining shareholders and our board of directors, dissolve and liquidate, subject in each case to our obligations under the Companies Act to provide for claims of creditors and the requirements of other applicable law.

 

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

 

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

Our sponsor, officers and directors have agreed, pursuant to letter agreements with us, that they will not propose any amendment to our amended and restated memorandum and articles of association that would affect the substance or timing of our obligation to allow redemption in connection with our initial business combination or to redeem 100% of our public shares if we do not complete an initial business combination within the period to consummate the initial business combination, or with respect to any other provisions relating to shareholders’ rights or pre-initial business combination activity, unless we provide our public shareholders with the opportunity to redeem their Class A ordinary shares upon approval of any such amendment at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the trust account, including interest earned on the funds held in the trust account and not previously released to us to pay our taxes, if any (less up to $101,000 of interest to pay dissolution expenses) divided by the number of the then outstanding public shares, subject to the limitations described above under “Proposed Business — Limitations on Redemptions.”

 

For example, our board of directors may propose such an amendment if it determines that additional time is necessary to complete our initial business combination. In such event, we will conduct a proxy solicitation and distribute proxy materials pursuant to Regulation 14A of the Exchange Act seeking shareholder approval of such proposal and, in connection therewith, provide our public shareholders with the redemption rights described above upon shareholder approval of such amendment. This redemption right shall apply in the event of the approval of any such amendment, whether proposed by our sponsor, any executive officer, director or director nominee, or any other person. 

 

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Limited payments to insiders Our sponsor transferred a total of 45,000 founder shares among our Chief Financial Officer and our three independent director nominees at their original purchase price pursuant to executed securities assignment agreements, effective as of August 6, 2021. Our sponsor has transferred a total of 30,000 Class B ordinary shares among our six advisors in connection with this offering. The founder shares will be worthless if we do not complete an initial business combination. In addition, the following payments will be made to our sponsor, officers or directors, or our or their respective affiliates, none of which will be made from the proceeds of this offering held in the trust account, prior to the completion of our initial business combination:

 

 

Repayment of a loan of up to an aggregate of $300,000 if drawn from the sponsor to cover offering related and organizational expenses, unless sooner paid in accordance with the terms of the promissory note;

     
  Payment to AEI Capital SPAC Venture II LLC, our sponsor, or its affiliate of $10,000 per month, for up to 12 months (subject to a six month extension of time) from the closing of this offering, for office space, utilities and secretarial and administrative support;

 

  Reimbursement for any out-of-pocket expenses related to our formation and initial public offering and to identifying, investigating and completing an initial business combination; and
     
  Repayment of any other loans from our sponsor, an affiliate of our sponsor or certain of our officers and directors to finance transaction costs in connection with an intended initial business combination, the terms of which have not been determined, except as described below, nor have any written agreements been executed with respect thereto. Up to $3,000,000 of such loans may be convertible into units, at a price of $10.00 per unit at the option of the lender, upon consummation of our initial business combination. The units would be identical to the placement units.

 

  Additionally, in connection with the successful completion of our initial business combination, we may determine to provide a payment to our sponsor, officers, directors, advisors, or our or their respective affiliates; however, any such payment would not be made from the proceeds of this offering held in the trust account and we currently do not have any arrangement or agreement with our sponsor, officers, directors, advisors, or our or their respective affiliates, to do so. Our audit committee will review on a quarterly basis all payments that were or are to be made to our sponsor, officers or directors, or our or their respective affiliates.
   
Audit Committee We will establish and maintain an audit committee, which will be composed of at least three independent directors to, among other things, monitor compliance with the terms described above and the other terms relating to this offering. A listed company of the Nasdaq must have an audit committee with a minimum of three independent directors who satisfy the independence requirements of Nasdaq Rule 10A-3. If any noncompliance is identified, then the audit committee will be charged with the responsibility to immediately take all action necessary to rectify such noncompliance or otherwise to cause compliance with the terms of this offering. For more information, see the section of this prospectus entitled “Management — Committees of the Board of Directors — Audit Committee.”

 

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Conflicts of Interest

Certain of our officers and directors presently have, and any of them in the future may have additional, fiduciary or contractual obligations to other entities pursuant to which such officer or director is or will be required to present business combination opportunities to such entity. Accordingly, in the future, if any of our officers or directors becomes aware of a business combination opportunity which is suitable for an entity to which he or she has then-current fiduciary or contractual obligations under Cayman Islands law, he or she will honor his or her fiduciary or contractual obligations to present such opportunity to such entity. We do not believe, however, that any fiduciary duties or contractual obligations of our officers arising in the future would materially undermine our ability to complete our initial business combination.

 

In addition, our sponsor, officers, directors and advisors may participate in the formation of, or become an officer or director of, any other blank check company prior to completion of our initial business combination. As a result, our sponsor, officers, directors and advisors could have conflicts of interest in determining whether to present business combination opportunities to us or to any other blank check company with which they may become involved. However, we do not believe that any potential conflicts would materially affect our ability to complete our initial business combination

 

 

 

 

 

 

Our amended and restated memorandum and articles of association will provide that to the fullest extent permitted by applicable law: (i) no individual serving as a director or an officer shall have any duty, except and to the extent expressly assumed by contract, to refrain from engaging directly or indirectly in the same or similar business activities or lines of business as us; and (ii) we renounce any interest or expectancy in, or in being offered an opportunity to participate in, any potential transaction or matter which may be a corporate opportunity for any director or officer, on the one hand, and us, on the other.

 

Further, our amended and restated memorandum and articles of association provide that we renounce our interest in any corporate opportunity offered to any director or officer unless such opportunity is expressly offered to such person solely in his or her capacity as a director or officer of our company and such opportunity is one that we are legally and contractually permitted to undertake and would otherwise be reasonable for us to pursue.

 

Indemnity Our sponsor has agreed that it will be liable to us, if and to the extent any claims by a vendor for services rendered or products sold to us, or a prospective target business with which we have discussed entering into a transaction agreement, reduce the amounts in the trust account to below $10.10 per share (whether or not the underwriters’ over-allotment option is exercised in full), except as to any claims by a third party who executed a waiver of any and all rights to seek access to the trust account and except as to any claims under our indemnity of the underwriters of this offering against certain liabilities, including liabilities under the Securities Act. In the event that an executed waiver is deemed to be unenforceable against a third party, our sponsor will not be responsible to the extent of any liability for such third party claims. We have not independently verified whether our sponsor has sufficient funds to satisfy its indemnity obligations and believe that their only assets are securities of our company. We believe the likelihood of our sponsor having to indemnify the trust account is limited because we will endeavor to have all vendors and prospective target businesses as well as other entities execute agreements with us waiving any right, title, interest or claim of any kind in or to monies held in the trust account.

 

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  We have not requested that our sponsor reserve funds for this indemnity and we have not independently verified whether our sponsor has sufficient funds to satisfy its indemnity obligations and believe that our sponsor’s only assets are securities of our company. We have not asked our sponsor to reserve for such indemnification obligations. None of our officers will indemnify us for claims by third parties including, without limitation, claims by vendors and prospective target businesses.

 

SUMMARY OF RISK FACTORS

 

We are a newly incorporated company that has conducted no operations and has generated no revenues. Until we complete our initial business combination, we will have no operations and will generate no operating revenues. In making your decision whether to invest in our securities, you should take into account not only the background of our management team, but also the special risks we face as a blank check company. This offering is not being conducted in compliance with Rule 419 promulgated under the Securities Act. Accordingly, you will not be entitled to protections normally afforded to investors in Rule 419 blank check offerings. For additional information concerning how Rule 419 blank check offerings differ from this offering, please see the section of this prospectus entitled “Proposed Business — Comparison of This Offering to Those of Blank Check Companies Subject to Rule 419.” You should carefully consider these, and the other risks set forth in the section of this prospectus entitled “Risk Factors.” Such risks include, but are not limited to:

 

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

 

  Our public shareholders may not be afforded an opportunity to vote on our proposed initial business combination, which means we may complete our initial business combination even though a majority of our public shareholders do not support such a combination.
     
  If we seek shareholder approval of our initial business combination, our initial shareholders and members of our management team have agreed to vote in favor of such initial business combination, regardless of how our public shareholders vote.
     
  Your only opportunity to affect the investment decision regarding a potential business combination may be limited to the exercise of your right to redeem your shares from us for cash.
     
  The ability of our public shareholders to redeem their shares for cash may make our financial condition unattractive to potential business combination targets, which may make it difficult for us to enter into a business combination with a target.
     
  The ability of our public shareholders to exercise redemption rights with respect to a large number of our shares may not allow us to complete the most desirable business combination or optimize our capital structure.
     
  The ability of our public shareholders to exercise redemption rights with respect to a large number of our shares could increase the probability that our initial business combination would be unsuccessful and that you would have to wait for liquidation in order to redeem your shares.
     
  The requirement that we complete an initial business combination within the period to consummate the initial business combination may give potential target businesses leverage over us in negotiating a business combination and may limit the time we have in which to conduct due diligence on potential business combination targets as we approach our dissolution deadline, which could undermine our ability to complete our initial business combination on terms that would produce value for our shareholders.

 

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  We may not be able to complete an initial business combination within the period to consummate the initial business combination, in which case we would cease all operations except for the purpose of winding up and we would redeem our public shares and liquidate, in which case our public shareholders may only receive $10.00 per share (whether or not the underwriters’ over-allotment option is exercised in full) or potentially less than $10.00 per share on our redemption, and our rights and warrants will expire worthless.
     
  If we seek shareholder approval of our initial business combination, our initial shareholders, directors, executive officers, advisors and their respective affiliates may elect to purchase shares from public shareholders, which may influence a vote on a proposed business combination and reduce the public “float” of our Class A ordinary shares.
     
  If a shareholder fails to receive notice of our offer to redeem our public shares in connection with our initial business combination or fails to comply with the procedures for tendering its shares, such shares may not be redeemed.
     
  You will not be entitled to protections normally afforded to investors of many other blank check companies.

 

Risks Relating to the Post-Business Combination Company

 

  Subsequent to the completion of our initial business combination, we may be required to take write-downs or write-offs, restructuring and impairment or other charges that could have a significant negative effect on our financial condition, results of operations and our share price, which could cause you to lose some or all of your investment.
     
  The officers and directors of an acquisition candidate may resign upon completion of our initial business combination. The loss of a business combination target’s key personnel could negatively impact the operations and profitability of our post-combination business.
     
  Our management may not be able to maintain control of a target business after our initial business combination. Upon the loss of control of a target business, new management may not possess the skills, qualifications or abilities necessary to profitably operate such business.

 

Risks Relating to Our Management Team

 

  We are dependent upon our executive officers and directors and their loss could adversely affect our ability to operate.
     
  Our ability to successfully effect our initial business combination and to be successful thereafter will be totally dependent upon the efforts of our key personnel, some of whom may join us following our initial business combination. The loss of key personnel could negatively impact the operations and profitability of our post-combination business.

 

Risks Relating to Our Securities

 

  Nasdaq may delist our securities from trading on its exchange, which could limit investors’ ability to make transactions in our securities and subject us to additional trading restrictions.
     
  Our sponsor paid an aggregate of $25,000, or approximately $0.01 per founder share, and, accordingly, you will experience immediate and substantial dilution from the purchase of the Class A ordinary shares.
     
  Since our sponsor paid only approximately $0.01 per share for the founder shares, our officers and directors could potentially make a substantial profit even if we acquire a target business that subsequently declines in value.

 

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General Risk Factors

 

  We are a recently incorporated company with no operating history and no revenues, and you have no basis on which to evaluate our ability to achieve our business objective.
     
  Past performance by our sponsor and our management team including their affiliates and including the businesses referred to herein, may not be indicative of future performance of an investment in us or in the future performance of any business that we may acquire.

 

Risk Factors Related to a Business Combination in the PRC

 

Although we do not have any specific business combination under consideration and we have not, directly or indirectly, contacted any prospective target business or had any substantive discussions, formal or otherwise, with respect to such a transaction, we may pursue or consummate an initial business combination with a company located or doing business in the PRC, in which event we will be subject to certain legal and operational risks, including, without limitation, the following risk factors:

 

  Risks and uncertainties regarding the enforcement of laws, jurisdictional limits, and that rules and regulations in China can change quickly with little advance notice.
     
  The Chinese government may intervene or influence our operations at any time, or may exert more control over offerings conducted overseas and/or foreign investment in a China-based company, which could result in a material change in our operations and/or the value of your securities.
     
  Changes in China’s economic, political or social conditions or government policies could have a material adverse effect on our business and operations if we consummate an initial business combination with a company that operates in China.
     
  Complying with evolving PRC laws and regulations regarding cybersecurity, information security, privacy and data protection and other related laws and requirements may increase the cost of our initial business combination with a China-based business and could even result in our inability to consummate an initial business combination with a China-based business.
     
  The M&A Rules and certain other PRC regulations establish complex procedures for certain acquisitions of Chinese companies by foreign investors, which could make it more difficult for us to pursue a business combination with a China-based business.
     
  Uncertainty about any future actions of the PRC government that, if materialized, could significantly limit or completely hinder our ability to offer or continue to offer securities to investors and caused the value of such securities to significantly decline or be worthless.
     
  We may acquire control of a target business through contractual arrangements with one or more operating businesses due to the restrictions imposed by PRC laws and regulations on foreign ownership of companies engaged in certain business operations.
     
  If we enter into a business combination with a target business operating in China under a VIE structure, PRC regulation of loans to and direct investment in PRC entities by offshore holding companies and governmental control of currency conversion may delay or prevent the combined company from using the proceeds from the business combination to make loans to or make additional capital contributions to its PRC subsidiaries and VIEs, which could materially and adversely affect PRC operating companies’ liquidity and ability to fund the operations.
     
  Certain existing or future U.S. laws and regulations may restrict or eliminate our ability to complete a business combination with certain companies, particularly those target companies in China.
     
  Recent joint statement by the SEC and PCAOB, proposed rule changes submitted by Nasdaq, and the Holding Foreign Companies Accountable Act all call for additional and more stringent criteria to be applied to emerging market companies upon assessing the qualification of their auditors, especially the non-U.S. auditors who are not inspected by the PCAOB. These developments could add uncertainties to our initial business combination with a company having its primary operations in the PRC.
     
  If we have to acquire a target business through contractual arrangements with, or which results in, one or more operating businesses in China, such contracts may not be as effective in providing operational control as direct ownership of such businesses.
     
  If, due to restrictions on foreign investment in a target business, we have to acquire the business through the use of contractual arrangements and the PRC government determines that such contractual arrangements do not comply with foreign investment regulations, or if these regulations or the interpretation of existing regulations in the PRC change or new restrictive or prohibitive regulations come into force in the future, we could be subject to significant penalties or be forced to relinquish our interests in those operations, which could result in a material change in our operations and/or the value of our securities.

 

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  We may be required to obtain approvals from the PRC Authorities for the VIE’s operation given the uncertainty of interpretation and enforcement of the rules and regulations in the PRC.
     
  We may be liable for improper use or appropriation of personal information provided by our customers.
     
  We face uncertainties as to what laws and regulations in the PRC regarding privacy, data security, cybersecurity, and data protection may affect us and we may be subject to cybersecurity review will be adopted or how such regulations will affect us and our listing.
     
  We will be subject to restrictions on dividend payments following consummation of our initial business combination, which may affect our ability to pay dividends from PRC subsidiaries to us and U.S. investors and as well as the ability to settle amounts owed under the VIE agreements.
     
  Governmental control of currency conversion may affect the value of your investment and our payment of dividends.
     
  PRC regulation of loans to, and direct investments in, PRC entities by offshore holding companies may delay or prevent us from using proceeds from this offering and/or future financing activities to make loans or additional capital contributions to our PRC operating subsidiaries.
     
  The PRC governmental authorities may take the view now or in the future that an approval from them is required for an overseas offering by a company affiliated with Chinese businesses or persons or a business combination with a target business based in and primarily operating in China.
     
  Compliance with the PRC Antitrust law, the anti-monopoly guideline and other relevant regulations may limit our ability to affect our initial business combination.
     
  Our initial business combination may be subject to national security review by the PRC government and we may have to spend additional resources and incur additional time delays to complete any such business combination or be prevented from pursuing certain investment opportunities.

 

Potential Regulatory Approval by PRC Authorities

 

While we currently not required to obtain permission from any of the PRC central or local government to obtain any approval or permission in connection with this offering, as this offering will not occur in the PRC, our operations may be adversely affected in the future, directly or indirectly, by existing or future laws and regulations in connection with our continued listing and/or our initial business combination with a PRC target company.

 

Regarding any potential business combination in the PRC, foreign companies are “encouraged” to invest in and acquire Chinese renewable power projects. Renewable power projects (including wind, solar, biomass, geothermal, waste, wave, tidal, and others) do not require a Chinese person or entity serving as the majority shareholder. Wholly foreign-owned, majority foreign-owned, as well as other Chinese-foreign ventures, are all allowed equity structures in the renewable power business. Foreign investment and companies are allowed in most power projects in China, with nuclear power plants probably the only area with limitation. International companies could invest in Chinese nuclear power projects but only as minority shareholders.6 The Chinese government allows foreign companies to fully own some e-commerce businesses in the country, as it looks to bolster overseas investment and boost market competition.7 Effective in 2015, the ruling applied to online data handling and trade handling services, by China’s Ministry of Industry and Information Technology, to drive the market by relaxing cross-border trade restrictions. However, if we were to enter into a business combination in the PRC that required governmental approval in the future and such approval was denied by Chinese authorities, we will not be able to consummate an initial business combination with a PRC target company. For more detailed information, see Risk Factors Related to Acquiring or Operating a Business in China” under “Risk Factors” below.

 

 

6 Success examples include EDF, CPI, and Thailand’s Ratchaburi investing in four different NPPs.

7 https://energyiceberg.com/foreign-investment-catalog-renewable/

 

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Transfers of Cash to and from Our Potential VIE (Post Business Combination)

 

Although we do not have a specific business combination under consideration and we have not, directly or indirectly, contacted any prospective target business or had any substantive discussions, formal or otherwise, with respect to a transaction, our initial business combination target company may include a PRC target company and we may be required to conduct our operations in China primarily through our subsidiary and VIE in China. As a result, after we consummate our initial business combination, we may rely on dividends and other distributions from our subsidiary to provide us with cash flow and to meet our other obligations.

 

Current regulations in China would permit our subsidiary in China to pay dividends to us only out of its accumulated distributable profits, if any, determined in accordance with Chinese accounting standards and regulations. In addition, our PRC subsidiary will be required to set aside at least 10% of its after-tax profits each year, if any, to fund a statutory reserve until such reserve reaches 50% of its registered capital. Our PRC subsidiary, as a foreign-invested enterprise, will also be required to further set aside a portion of after-tax profits to fund the employee welfare fund, although the amount to be set aside, if any, is determined at its discretion. These reserves are not distributable as cash dividends. If our PRC subsidiary incurs debt on its own behalf in the future, the instruments governing the debt may restrict its ability to pay dividends or make other payments to us.

 

In addition, the Enterprise Income Tax Law and its implementation rules provide that a withholding tax rate of up to 10% will be applicable to dividends payable by Chinese companies to non-PRC-resident enterprises unless otherwise exempted or reduced according to treaties or arrangements between the PRC central government and governments of other countries or regions where the non-PRC resident enterprises are incorporated.

 

The PRC government imposes controls on the convertibility of the RMB (renminbi is the official currency of the PRC) into foreign currencies and, in certain cases, the remittance of currency out of China. The PRC subsidiary may receive substantially all of its revenue in the RMB. Under existing PRC foreign exchange regulations, payments of current account items, such as profit distributions and trade and service-related foreign exchange transactions, can be made in foreign currencies without prior approval from the PRC’s State Administration of Foreign Exchange (“SAFE”) by complying with certain procedural requirements. Therefore, our PRC subsidiary will be able to pay dividends in foreign currencies to us without prior approval from SAFE, subject to the condition that the remittance of such dividends outside of the PRC complies with certain procedures under PRC foreign exchange regulation, such as the overseas investment registrations by our shareholders. Approval from or registration with appropriate government authorities is, however, required where the RMB is to be converted into foreign currency and remitted out of China to pay capital expenses such as the repayment of loans denominated in foreign currencies. The PRC government may also at its discretion restrict access in the future to foreign currencies for current account transactions.

 

RMB is not a freely convertible currency. The restrictions on foreign exchange imposed by the PRC government may result in the material differences between the future exchange rate and the current exchange rate or historical exchange rate. The changes in the exchange rate of RMB currency could impose foreign exchange translation risk on the target company’s financial statements and impact our ability to carry out operations related to foreign exchange. Those changes also could adversely affect our ability to pay dividends in US dollars.

 

Government regulations relating to foreign exchange controls

 

In July 2014, SAFE promulgated the Circular on Relevant Issues Concerning Foreign Exchange Control on Domestic Residents’ Offshore Investment and Financing and Roundtrip Investment Through Special Purpose Vehicles, or SAFE Circular 37, to replace the Notice on Relevant Issues Concerning Foreign Exchange Administration for Domestic Residents’ Financing and Roundtrip Investment Through Offshore Special Purpose Vehicles, or SAFE Circular 75, which ceased to be effective upon the promulgation of SAFE Circular 37. SAFE Circular 37 requires PRC residents (including PRC individuals and PRC corporate entities) to register with SAFE or its local branches in connection with their direct or indirect offshore investment activities. SAFE Circular 37 applies to our shareholders who are PRC residents and may apply to any offshore acquisitions that we make in the future.

 

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Under SAFE Circular 37, PRC residents who make, or have prior to the implementation of SAFE Circular 37 made, direct or indirect investments in offshore special purpose vehicles (SPVs), must register such investments with SAFE or its local branches. In addition, any PRC resident who is a direct or indirect shareholder of an SPV must update its filed registration with the local branch of SAFE with respect to that SPV, to reflect any material change.

 

If our shareholders who are PRC residents or entities fail to make the required registration or to update the previously filed registration, any PRC subsidiaries may be prohibited from distributing their profits and any proceeds from any reduction in capital, share transfer or liquidation to us, and we may be restricted in our ability to contribute additional capital to any PRC subsidiaries. On February 13, 2015, SAFE promulgated a Notice on Further Simplifying and Improving Foreign Exchange Administration Policy on Direct Investment, or SAFE Notice 13, which became effective on June 1, 2015.

 

Under SAFE Notice 13, applications for foreign exchange registration of inbound foreign direct investments and outbound overseas direct investments, including those required under SAFE Circular 37, will be filed with qualified banks instead of SAFE. The qualified banks will directly examine the applications and accept registrations under the supervision of SAFE.

 

We have requested PRC residents who we know hold direct or indirect interests in us to make the necessary applications, filings and registrations as required under SAFE Circular 37. We believe that most of these shareholders have completed the initial foreign exchange registrations with relevant banks. However, these individuals may not continue to make required filings or updates in a timely manner, or at all. We may not know the identities of all PRC residents holding direct or indirect interests in our company. Any failure or inability by such individuals to comply with SAFE regulations may subject us to fines or legal sanctions, restrict our cross-border investment activities, and limit any PRC subsidiary’s ability to distribute dividends to us. As a result, our business and our ability to make distributions to you could be materially adversely affected.

 

Furthermore, as these foreign exchange regulations are still relatively new and their interpretation and implementation have been evolving, it is unclear how these regulations, and any future regulation concerning offshore or cross-border transactions, will be interpreted, amended and implemented by the relevant government authorities. For example, we may be subject to a more stringent review and approval process with respect to our foreign exchange activities, such as remittance of dividends and foreign-currency-denominated borrowings, which may adversely affect our financial condition and results of operations.

 

If we acquire a PRC domestic company, we or the owners of such company, as the case may be, may not obtain the necessary approvals or complete the necessary filings and registrations required by the foreign exchange regulations. This may restrict our ability to implement our acquisition strategy and could adversely affect our business and prospects.

 

Recent U.S. Regulatory Developments

 

The PCAOB is currently unable to conduct inspections on accounting firms in the PRC without the approval of the Chinese government authorities. The auditor and its audit work in the PRC may not be inspected fully by the PCAOB. Inspections of other auditors conducted by the PCAOB outside China have at times identified deficiencies in those auditors’ audit procedures and quality control procedures, which may be addressed as part of the inspection process to improve future audit quality. The lack of PCAOB inspections of audit work undertaken in China prevents the PCAOB from regularly evaluating the PRC auditor’s audits and its quality control procedures. As a result, shareholders may be deprived of the benefits of PCAOB inspections if we complete a business combination with such companies.

 

Future developments in U.S. laws may restrict our ability or willingness to complete certain business combinations with companies. For instance, the recently enacted Holding Foreign Companies Accountable Act (the “HFCAA”) would restrict our ability to consummate a business combination with a target business unless that business met certain standards of the PCAOB and would require delisting of a company from U.S. national securities exchanges if the PCAOB is unable to inspect its public accounting firm for three consecutive years. The HFCAA also requires public companies to disclose, among other things, whether they are owned or controlled by a foreign government, specifically, those based in China. We may not be able to consummate a business combination with a favored target business due to these laws. The documentation we may be required to submit to the SEC proving certain beneficial ownership requirements and establishing that we are not owned or controlled by a foreign government in the event that we use a foreign public accounting firm not subject to inspection by the PCAOB or where the PCAOB is unable to completely inspect or investigate our accounting practices or financial statements because of a position taken by an authority in the foreign jurisdiction could be onerous and time consuming to prepare. HFCAA mandates the SEC to identify issuers of SEC-registered securities whose audited financial reports are prepared by an accounting firm that the PCAOB is unable to inspect due to restrictions imposed by an authority in the foreign jurisdiction where the audits are performed. If such identified issuer’s auditor cannot be inspected by the PCAOB for three consecutive years, the trading of such issuer’s securities on any U.S. national securities exchanges, as well as any over-the-counter trading in the U.S., will be prohibited.

 

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On March 24, 2021, the SEC adopted interim final rules relating to the implementation of certain disclosure and documentation requirements of the HFCAA. An identified issuer will be required to comply with these rules if the SEC identifies it as having a “non-inspection” year under a process to be subsequently established by the SEC. The SEC is assessing how to implement other requirements of the HFCAA, including the listing and trading prohibition requirements described above. Future developments in respect of increase U.S. regulatory access to audit information are uncertain, as the legislative developments are subject to the legislative process and the regulatory developments are subject to the rule-making process and other administrative procedures.

 

In the event that we complete a business combination with a company with substantial operations in China and any of the legislative actions or regulatory changes discussed above were to proceed in ways that are detrimental to an issuer with substantial operations in China, it could cause us to fail to be in compliance with U.S. securities laws and regulations, we could cease to be listed on a U.S. securities exchange, and U.S. trading of our shares could be prohibited. Any of these actions, or uncertainties in the market about the possibility of such actions, could adversely affect our prospects to successfully complete a business combination with a China-based company, our access to the U.S. capital markets and the price of our shares.

 

SUMMARY FINANCIAL DATA

 

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

 

   August 8, 2021 
Balance Sheet Data:     
Working capital (deficiency)  $(88,755)
Total assets  $130,509 
Total liabilities  $114,353 
Shareholders’ equity  $16,156 

 

If no business combination is completed within the period to consummate the initial business combination, the proceeds then on deposit in the trust account including interest earned on the funds held in the trust account and not previously released to us to pay our franchise and income taxes as well as expenses relating to the administration of the trust account (less up to $101,000 of interest to pay our expenses, taxes and potentially dissolution expenses), will be used to fund the redemption of our public shares. Our sponsor, directors and each member of our management team have entered into a letter agreement with us, pursuant to which they have agreed to waive their rights to liquidating distributions from the trust account with respect to any founder shares held by them if we do not complete our initial business combination within such 12-month time period.

 

RISK FACTORS

 

An investment in our securities involves a high degree of risk. You should consider all of the risks described below carefully, together with the other information contained in this prospectus, before making a decision to invest in our public shares. If any of the following events occur, our business, financial condition and operating results may be materially adversely affected. In that event, the trading price of our securities could decline, and you could lose all or part of your investment.

 

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

 

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

 

We may choose not to hold a shareholder vote before we complete our initial business combination if the initial business combination would not require shareholder approval under applicable law or stock exchange listing requirement. For instance, if we were seeking to acquire a target business where the consideration, we were paying in the transaction was all cash, we would not be required to seek shareholder approval to complete such a transaction. Except as required by law or stock exchange, the decision as to whether we will seek shareholder approval of a proposed business combination or will allow shareholders to sell their shares to us in a tender offer will be made by us, solely in our discretion, and will be based on a variety of factors, such as the timing of the transaction and whether the terms of the transaction would otherwise require us to seek shareholder approval. Accordingly, we may complete our initial business combination even if a majority of our public shareholders do not approve of the initial business combination we complete.

 

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

 

Pursuant to a letter agreement, our sponsor, officers and directors have agreed to vote their founder shares, as well as any public shares purchased during or after this offering (including in open market and privately-negotiated transactions), in favor of our initial business combination. As a result, in the event that only the minimum number of shares representing a quorum is present at a shareholders’ meeting held to vote on our initial business combination, in addition to our initial shareholders’ founder shares and placement shares, we would need 354,604, or 3.55% of the 10,000,000 public shares sold in this offering to be voted in favor of an initial business combination approved in favor of our initial business combination in order to have our initial business combination approved. Additionally, each public shareholder may elect to redeem its public shares irrespective of whether they vote for or against the proposed transaction or abstain from voting (subject to the limitation described in this prospectus. Our initial shareholders will own shares representing 22.24% of our outstanding ordinary shares immediately following the completion of this offering (assuming they do not purchase any units in this offering and the over-allotment option is not exercised). Accordingly, if we seek shareholder approval of our initial business combination, the agreement by our initial shareholders to vote in favor of our initial business combination will increase the likelihood that we will receive the requisite shareholder approval for such initial business combination.

 

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

 

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

 

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

 

We may seek to enter into a business combination transaction agreement with a prospective target that requires as a closing condition that we have a minimum net worth or a certain amount of cash. If too many public shareholders exercise their redemption rights, we would not be able to meet such closing condition and, as a result, would not be able to proceed with the initial business combination. Furthermore, in no event will we redeem our public shares in an amount that would cause our net tangible assets to be less than $5,000,001 (so that we are not subject to the SEC’s “penny stock” rules) or any greater net tangible asset or cash requirement which may be contained in the agreement relating to our initial business combination. Consequently, if accepting all properly submitted redemption requests would cause our net tangible assets to be less than $5,000,001 or such greater amount necessary to satisfy a closing condition as described above, we would not proceed with such redemption and the related business combination and may instead search for an alternate business combination. Prospective targets will be aware of these risks and, thus, may be reluctant to enter into a business combination transaction with us.

 

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

 

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

 

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

 

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

 

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

 

Any potential target business with which we enter into negotiations concerning an initial business combination will be aware that we must complete our initial business combination within 12 months (subject to a six month extension of time). Consequently, such target business may have leverage over us in negotiating an initial business combination, knowing that if we do not complete our initial business combination with that particular target business, we may be unable to complete our initial business combination with any target business. This risk will increase as we get closer to the timeframe described above. In addition, we may have limited time to conduct due diligence and may enter into our initial business combination on terms that we would have rejected upon a more comprehensive investigation.

 

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We may not be able to complete our initial business combination within the prescribed time frame, in which case we would cease all operations except for the purpose of winding up and we would redeem our public shares and liquidate, in which case our public shareholders may receive only $10.10 per share, or less than such amount in certain circumstances, and our warrants will expire worthless.

 

Our amended and restated memorandum and articles of association will provide that we must complete our initial business combination within 12 months (subject to a six month extension of time). We may not be able to find a suitable target business and complete our initial business combination within such time period. Our ability to complete our initial business combination may be negatively impacted by general market conditions, political considerations, volatility in the capital and debt markets and the other risks described herein. If we have not completed our initial business combination within such time period, we will (i) cease all operations except for the purpose of winding up, (ii) as promptly as reasonably possible but not more than 10 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 us to pay our taxes (less up to $101,000 of interest to pay dissolution expenses), 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 (iii) as promptly as reasonably possible following such redemption, subject to the approval of our remaining shareholders and our board of directors, liquidate and dissolve, subject in the case of clauses (ii) and (iii) to our obligations under the Companies Act to provide for claims of creditors and the requirements of other applicable law. In such case, our public shareholders may receive only $10.10 per share (whether or not the underwriters’ over-allotment option is exercised in full) or potentially less than $10.10 per share on our redemption, and our rights and warrants will expire worthless. See “— If third parties bring claims against us, the proceeds held in the trust account could be reduced and the per-share redemption amount received by shareholders may be less than $10.10 per share” and other risk factors below.

 

Our search for a business combination, and any target business with which we ultimately consummate a business combination, may be materially adversely affected by the recent coronavirus (COVID-19) pandemic.

 

Our amended and restated memorandum and articles of association will provide that we must complete our initial business combination within 12 months (subject to a six month extension of time) from the closing of this offering. We may not be able to find a suitable target business and complete an initial business combination within the period to consummate the initial business combination. Our ability to complete our initial business combination may be negatively impacted by general market conditions, volatility in the capital and debt markets and the other risks described herein. For example, the outbreak of coronavirus (“COVID-19”) continues to grow both in the U.S. and globally and, while the extent of the impact of the outbreak on us will depend on future developments, it could limit our ability to complete our initial business combination, including as a result of increased market volatility, decreased market liquidity and third-party financing being unavailable on terms acceptable to us or at all.

 

Additionally, the outbreak of COVID-19 may continue to negatively impact businesses we may seek to acquire. If we have not completed an initial business combination within such applicable time period, we will (i) cease all operations except for the purpose of winding up; (ii) as promptly as reasonably possible but not more than ten business days thereafter, redeem the public shares, at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the trust account, including interest earned on the funds held in the trust account and not previously released to us to pay our taxes, if any (less up to $101,000 of interest to pay dissolution expenses), 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), subject to applicable law; and (iii) as promptly as reasonably possible following such redemption, subject to the approval of our remaining shareholders and our board of directors, liquidate and dissolve, subject in each case to our obligations under the Companies Act to provide for claims of creditors and the requirements of other applicable law.

 

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

 

If we seek shareholder approval of our initial business combination and we do not conduct redemptions in connection with our initial business combination pursuant to the tender offer rules, our sponsor, directors, officers, advisors or their affiliates may purchase shares or public warrants or a combination thereof, in privately-negotiated transactions or in the open market, either prior to or following the completion of our initial business combination, although they are under no obligation to do so. However, they have no current commitments, plans or intentions to engage in such transactions and have not formulated any terms or conditions for any such transactions. None of the funds in the trust account will be used to purchase shares or public warrants in such transactions. See “Proposed Business — Permitted Purchases of Our Securities” for a description of how our sponsor, initial shareholders, directors, officers, advisors or any of their affiliates will select which shareholders to purchase securities from in any private transaction.

 

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Such a purchase may include a contractual acknowledgement that such shareholder, although still the record holder of our shares, is no longer the beneficial owner thereof and therefore agrees not to exercise its redemption rights. In the event that our sponsor, directors, officers, advisors or their affiliates purchase shares in privately-negotiated transactions from public shareholders who have already elected to exercise their redemption rights, such selling shareholders would be required to revoke their prior elections to redeem their shares. The price per share paid in any such transactions may be different than the amount per share a public shareholder would receive if such public shareholder elected to redeem its shares in connection with our initial business combination. The purpose of such purchases could be to vote such shares in favor of the initial business combination and thereby increase the likelihood of obtaining shareholder approval of the initial business combination, or to satisfy a closing condition in an agreement with a target that requires us to have a minimum net worth or a certain amount of cash at the closing of our initial business combination, where it appears that such requirement would otherwise not be met. The purpose of any such purchases of public warrants could be to reduce the number of public warrants outstanding or to vote such warrants on any matters submitted to the warrant holders for approval in connection with our initial business combination. Any such purchases of our securities may result in the completion of our initial business combination that may not otherwise have been possible. Any such purchases will be reported pursuant to Section 13 and Section 16 of the Exchange Act to the extent such purchasers are subject to such reporting requirements.

 

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

 

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

 

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

 

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

 

Our public shareholders will be entitled to receive funds from the trust account only upon the earliest to occur of (i) our completion of an initial business combination, and then only in connection with those Class A ordinary shares that such shareholder properly elected to redeem, subject to the limitations described herein, (ii) the redemption of any public shares properly submitted in connection with a shareholder vote to amend our amended and restated memorandum and articles of association to (A) modify the substance or timing of our obligation to provide for the redemption of our public shares in connection with an initial business combination or to redeem 100% of our public shares if we do not complete our initial business combination within 12 months (subject to a six month extension of time) from the closing of this offering or (B) with respect to any other material provisions relating to shareholders’ rights or pre-initial business combination activity, and (iii) the redemption of our public shares if we are unable to complete an initial business combination within 12 months (subject to a six month extension of time) from the closing of this offering, subject to applicable law and as further described herein. In addition, if we are unable to complete an initial business combination within 12 months (subject to a six month extension of time) from the closing of this offering for any reason, and we are required to wind-up, liquidate the trust account and distribute such amount therein, pro rata, to our public shareholders, as part of any liquidation process, such winding up, liquidation and distribution must comply with the applicable provisions of the Companies Act. In that case, investors may be forced to wait beyond 12 months (subject to a six-month extension of time) from the closing of this offering before the redemption proceeds of our trust account become available to them, and they receive the return of their pro rata portion of the proceeds from our trust account. In that case, public shareholders may be forced to wait beyond 12 months (subject to a six month extension of time) from the closing of this offering before they receive funds from our trust account. In no other circumstances will a public shareholder have any right or interest of any kind in the trust account. Holders of warrants will not have any right to the proceeds held in the trust account with respect to the warrants. Accordingly, to liquidate your investment, you may be forced to sell your public shares or warrants, potentially at a loss. Public shareholders will not be offered the opportunity to vote on or redeem their shares in connection with any such extension.

 

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

 

Since the net proceeds of this offering and the sale of the placement units are intended to be used to complete an initial business combination with a target business that has not been identified, we may be deemed to be a “blank check” company under the U.S. securities laws. However, because we will have net tangible assets in excess of $5,000,001 upon the successful completion of this offering and the sale of the placement units and will file a Current Report on Form 8-K, including an audited balance sheet demonstrating this fact, we are exempt from rules promulgated by the SEC to protect investors in blank check companies, such as Rule 419. Accordingly, investors will not be afforded the benefits or protections of those rules. Among other things, this means our units will be immediately tradable and we will have a longer period of time to complete our initial business combination than companies subject to Rule 419. Moreover, if this offering were subject to Rule 419, that rule would prohibit the release of any interest earned on funds held in the trust account to us unless and until the funds in the trust account were released to us in connection with our completion of an initial business combination. For a more detailed comparison of our offering to offerings that comply with Rule 419, please see the section of this prospectus entitled “Proposed Business — Comparison of This Offering to Those of Blank Check Companies Subject to Rule 419.”

 

Because of our limited resources and the significant competition for business combination opportunities, it may be more difficult for us to complete our initial business combination. If we are unable to complete our initial business combination, our public shareholders may receive only approximately $10.10 per share on our redemption of our public shares, or less than such amount in certain circumstances, and our warrants will expire worthless.

 

We expect to encounter competition from other entities having a business objective similar to ours, including private investors (which may be individuals or investment partnerships), other blank check companies and other entities, domestic and international, competing for the types of businesses we intend to acquire. Many of these individuals and entities are well established and have extensive experience in identifying and effecting, directly or indirectly, acquisitions of companies operating in or providing services to various industries. Many of these competitors possess similar or greater technical, human and other resources to ours, and our financial resources will be relatively limited when contrasted with those of many of these competitors. While we believe there are numerous target businesses we could potentially acquire with the net proceeds of this offering and the sale of the placement units, our ability to compete with respect to the acquisition of certain target businesses that are sizable will be limited by our available financial resources. This inherent competitive limitation gives others an advantage in pursuing the acquisition of certain target businesses. Furthermore, because we are obligated to pay cash for the Class A ordinary shares that our public shareholders redeem in connection with our initial business combination, target companies will be aware that this may reduce the resources available to us for our initial business combination. Any of these obligations may place us at a competitive disadvantage in successfully negotiating an initial business combination. If we are unable to complete our initial business combination, our public shareholders may receive only approximately $10.10 per share (whether or not the underwriters’ over-allotment option is exercised in full) or potentially less than $10.10 per share on our redemption, and our rights and warrants will expire worthless. See “— If third parties bring claims against us, the proceeds held in the trust account could be reduced and the per-share redemption amount received by shareholders may be less than $10.10 per share” and other risk factors below.

 

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If the net proceeds of this offering and the sale of the placement units not being held in the trust account are insufficient to allow us to operate for at least the next 12 months (subject to a six month extension of time), we may be unable to complete our initial business combination, in which case our public shareholders may only receive $10.10 per share, or less than such amount in certain circumstances, and our warrants will expire worthless.

 

The funds available to us outside of the trust account may not be sufficient to allow us to operate for at least the next 12 months (subject to a six month extension of time) following the closing of this offering, assuming that our initial business combination is not completed during that time. We believe that, upon the closing of this offering, the funds available to us outside of the trust account will be sufficient to allow us to operate for at least the next 12 months (subject to a six month extension of time); however, we cannot assure you that our estimate is accurate. Of the funds available to us, we could use a portion of the funds available to us to pay fees to consultants to assist us with our search for a target business. We could also use a portion of the funds as a down payment or to fund a “no-shop” provision (a provision in letters of intent or merger agreements designed to keep target businesses from “shopping” around for transactions with other companies or investors on terms more favorable to such target businesses) with respect to a particular proposed initial business combination, although we do not have any current intention to do so. If we entered into a letter of intent or merger agreement where we paid for the right to receive exclusivity from a target business and were subsequently required to forfeit such funds (whether as a result of our breach or otherwise), we might not have sufficient funds to continue searching for, or conduct due diligence with respect to, a target business.

 

Of the net proceeds of this offering and the sale of the placement units, only approximately $700,000 will be available to us initially outside the trust account to fund our working capital requirements. In the event that our offering expenses exceed our estimate of $405,300, we may fund such excess with funds not to be held in the trust account. In such case, the amount of funds we intend to be held outside the trust account would decrease by a corresponding amount. Conversely, in the event that the offering expenses are less than our estimate of $405,300, the amount of funds we intend to be held outside the trust account would increase by a corresponding amount. If we are required to seek additional capital, we would need to borrow funds from our sponsor, management team or other third parties to operate or may be forced to liquidate. None of our sponsor, or any affiliate of our sponsor or any of our officers and directors is under any obligation to advance funds to us in such circumstances except with respect to the promissory note for up to $300,000 executed on July 8, 2021, between the sponsor and us. Any such advances would be repaid only from funds held outside the trust account or from funds released to us upon completion of our initial business combination. Up to $3,000,000 of such loans may be convertible into units, at a price of $10.00 per unit at the option of the lender, upon consummation of our initial business combination. The units would be identical to the placement units.

 

Prior to the completion of our initial business combination, we do not expect to seek advances or loans from parties other than our sponsor or an affiliate of our sponsor as we do not believe third parties will be willing to loan such funds and provide a waiver against any and all rights to seek access to funds in our trust account. If we are unable to obtain these loans, we may be unable to complete our initial business combination. If we are unable to complete our initial business combination, our public shareholders may receive only approximately $10.10 per share (whether or not the underwriters’ over-allotment option is exercised in full) or potentially less than $10.10 per share on our redemption, and our rights and warrants will expire worthless. See “— If third parties bring claims against us, the proceeds held in the trust account could be reduced and the per-share redemption amount received by shareholders may be less than $10.10 per share” and other risk factors below

 

If third parties bring claims against us, the proceeds held in the trust account could be reduced and the per-share redemption amount received by shareholders may be less than $10.10 per unit.

 

Our placing of funds in the trust account may not protect those funds from third-party claims against us. Although we will seek to have all vendors, service providers (other than our independent registered public accounting firm), prospective target businesses and other entities with which we do business execute agreements with us waiving any right, title, interest or claim of any kind in or to any monies held in the trust account for the benefit of our public shareholders, such parties may not execute such agreements, or even if they execute such agreements, they may not be prevented from bringing claims against the trust account, including, but not limited to, fraudulent inducement, breach of fiduciary responsibility or other similar claims, as well as claims challenging the enforceability of the waiver, in each case in order to gain advantage with respect to a claim against our assets, including the funds held in the trust account. If any third party refuses to execute an agreement waiving such claims to the monies held in the trust account, our management will perform an analysis of the alternatives available to it and will only enter into an agreement with a third party that has not executed a waiver if management believes that such third party’s engagement would be significantly more beneficial to us than any alternative. Making such a request of potential target businesses may make our acquisition proposal less attractive to them and, to the extent prospective target businesses refuse to execute such a waiver, it may limit the field of potential target businesses that we might pursue.

 

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Examples of possible instances where we may engage a third party that refuses to execute a waiver include the engagement of a third-party consultant whose particular expertise or skills are believed by management to be significantly superior to those of other consultants that would agree to execute a waiver or in cases where management is unable to find a service provider willing to execute a waiver. In addition, there is no guarantee that such entities will agree to waive any claims they may have in the future as a result of, or arising out of, any negotiations, contracts or agreements with us and will not seek recourse against the trust account for any reason. Upon redemption of our public shares, if we have not completed an initial business combination within the period to consummate the initial business combination, or upon the exercise of a redemption right in connection with our initial business combination, we will be required to provide for payment of claims of creditors that were not waived that may be brought against us within the ten years following redemption.

 

Accordingly, the per-share redemption amount received by public shareholders could be less than the $10.10 per public share initially held in the trust account, due to claims of such creditors. Pursuant to the letter agreement the form of which is filed as an exhibit to the registration statement of which this prospectus forms a part, our sponsor has agreed that it will be liable to us if and to the extent any claims by a third party (other than our independent registered public accounting firm) for services rendered or products sold to us, or a prospective target business with which we have discussed entering into a transaction agreement, reduce the amounts in the trust account to below the lesser of (i) $10.10 per public share and (ii) the actual amount per unit held in the trust account as of the date of the liquidation of the trust account if less than $10.10 per unit due to reductions in the value of the trust assets, in each case net of the interest that may be withdrawn to pay our taxes, if any, provided that such liability will not apply to any claims by a third party or prospective target business that executed a waiver of any and all rights to seek access to the trust account nor will it apply to any claims under our indemnity of the underwriters of this offering against certain liabilities, including liabilities under the Securities Act. Moreover, in the event that an executed waiver is deemed to be unenforceable against a third party, our sponsor will not be responsible to the extent of any liability for such third-party claims. However, we have not asked our sponsor to reserve for such indemnification obligations, nor have we independently verified whether our sponsor has sufficient funds to satisfy its indemnity obligations and believe that our sponsor’s only assets are securities of our company. Therefore, we cannot assure you that our sponsor would be able to satisfy those obligations. As a result, if any such claims were successfully made against the trust account, the funds available for our initial business combination and redemptions could be reduced to less than $10.10 per share (whether or not the underwriters’ over-allotment option is exercised in full). In such event, we may not be able to complete our initial business combination, and you would receive such lesser amount per unit in connection with any redemption of your public shares. None of our officers or directors will indemnify us for claims by third parties including, without limitation, claims by vendors and prospective target businesses.

 

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

 

In the event that the proceeds in the trust account are reduced below the lesser of (i) $10.10 per unit and (ii) the actual amount per unit held in the trust account as of the date of the liquidation of the trust account if less than $10.10 per unit due to reductions in the value of the trust assets, in each case net of the interest that may be withdrawn to pay our taxes, if any, and our sponsor asserts that it is unable to satisfy its obligations or that it has no indemnification obligations related to a particular claim, our independent directors would determine whether to take legal action against our sponsor to enforce its indemnification obligations. While we currently expect that our independent directors would take legal action on our behalf against our sponsor to enforce its indemnification obligations to us, it is possible that our independent directors in exercising their business judgment and subject to their fiduciary duties may choose not to do so in any particular instance. If our independent directors choose not to enforce these indemnification obligations, the amount of funds in the trust account available for distribution to our public shareholders may be reduced below $10.10 per unit.

 

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

 

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

 

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

 

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

  

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

 

Our initial business combination or related reincorporation may result in taxes imposed on shareholders.

 

We may, in connection with our initial business combination and subject to requisite shareholder approval under the Companies Act, effect a business combination with a target company in another jurisdiction, reincorporate in the jurisdiction in which the partner company or business is located or in another jurisdiction. Such transactions may require a holder of our securities to recognize taxable income in the jurisdiction in which the holder of such securities is a tax resident (or in which its members are resident if it is a tax transparent entity), in which the target company is located, or in which we reincorporate. We do not intend to make any cash distributions to holders of our securities to pay such taxes. Holders of our securities may be subject to withholding taxes or other taxes with respect to their ownership of us after the reincorporation.

 

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

 

In recent years, the number of special purpose acquisition companies that have been formed has increased substantially. Many potential targets for special purpose acquisition companies have already entered into an initial business combination, and there are still many special purpose acquisition companies seeking targets for their initial business combination, as well as many such companies currently in registration. As a result, at times, fewer attractive targets may be available, and it may require more time, more effort and more resources to identify a suitable target and to consummate an initial business combination.

 

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

 

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

 

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

 

  restrictions on the nature of our investments; and
  restrictions on the issuance of securities, each of which may make it difficult for us to complete our initial business combination.

 

In addition, we may have imposed upon us burdensome requirements, including:

 

  registration as an investment company;
  adoption of a specific form of corporate structure; and
  reporting, record keeping, voting, proxy and disclosure requirements and other rules and regulations.

 

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

 

We do not believe that our anticipated principal activities will subject us to the Investment Company Act. To this end, the proceeds held in the trust account may only be invested in United States “government securities” within the meaning of Section 2(a)(16) of the Investment Company Act having a maturity of 180 days or less or in money market funds meeting certain conditions under Rule 2a-7 promulgated under the Investment Company Act which invest only in direct U.S. government treasury obligations. Pursuant to the trust agreement, the trustee is not permitted to invest in other securities or assets. By restricting the investment of the proceeds to these instruments, and by having a business plan targeted at acquiring and growing businesses for the long term (rather than on buying and selling businesses in the manner of a merchant bank or private equity fund), we intend to avoid being deemed an “investment company” within the meaning of the Investment Company Act.

 

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This offering is not intended for persons who are seeking a return on investments in government securities or investment securities. The trust account is intended as a holding place for funds pending the earliest to occur of either: (a) the completion of our initial business combination; (b) the redemption of any public shares properly tendered in connection with a shareholder vote to amend our amended and restated memorandum and articles of association (i) to modify the substance or timing of our obligation to allow redemption in connection with our initial business combination or to redeem 100% of our public shares if we do not complete an initial business combination within the period to consummate the initial business combination or (ii) with respect to any other provisions relating to the rights of holders of our Class A ordinary shares; or (c) absent our completing an initial business combination within the period to consummate the initial business combination, our return of the funds held in the trust account to our public shareholders as part of our redemption of the public shares. If we do not invest the proceeds as discussed above, we may be deemed to be subject to the Investment Company Act. If we were deemed to be subject to the Investment Company Act, compliance with these additional regulatory burdens would require additional expenses for which we have not allotted funds and may hinder our ability to complete a business combination. If we do not complete our initial business combination, our public shareholders may only receive their pro rata portion of the funds in the trust account that are available for distribution to public shareholders.

 

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

 

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

 

The securities in which we invest the funds held in the trust account could bear a negative rate of interest, which could reduce the value of the assets held in trust such that the per-share redemption amount received by public shareholders may be less than approximately $10.10 per share.

 

The proceeds held in the trust account will be invested only in U.S. government treasury obligations with a maturity of 180 days or less or in money market funds meeting certain conditions under Rule 2a-7 under the Investment Company Act, which invest only in direct U.S. government treasury obligations. While short-term U.S. government treasury obligations currently yield a positive rate of interest, they have briefly yielded negative interest rates in recent years. Central banks in Europe and Japan pursued interest rates below zero in recent years, and the Open Market Committee of the Federal Reserve has not ruled out the possibility that it may in the future adopt similar policies in the United States. In the event that we do not to complete our initial business combination or make certain amendments to our amended and restated memorandum and articles of association, our public shareholders are entitled to receive their pro-rata share of the proceeds held in the trust account, plus any interest income, net of franchise and income tax (less, in the case we are unable to complete our initial business combination our dissolution expenses). Negative interest rates could reduce the value of the assets held in trust such that the per-share redemption amount received by public shareholders may be less than approximately $10.10 per share.

 

If we have not completed an initial business combination within 12 months (subject to a six month extension of time), our public shareholders may be forced to wait beyond such period to consummate the initial business combination before redemption from our trust account.

 

If we have not completed an initial business combination within 12 months (subject to a six-month extension of time), the proceeds then on deposit in the trust account, including interest earned on the funds held in the trust account and not previously released to us to pay our taxes, if any (less our dissolution expenses), will be used to fund the redemption of our public shares, as further described herein. Any redemption of public shareholders from the trust account will be effected automatically by function of our amended and restated memorandum and articles of association prior to any voluntary winding up. If we are required to wind-up, liquidate the trust account and distribute such amount therein, pro rata, to our public shareholders, as part of any liquidation process, such winding up, liquidation and distribution must comply with the applicable provisions of the Companies Act. In that case, investors may be forced to wait beyond the period to consummate the initial business combination before the redemption proceeds of our trust account become available to them, and they receive the return of their pro rata portion of the proceeds from our trust account. We have no obligation to return funds to investors prior to the date of our redemption or liquidation unless we complete our initial business combination prior thereto and only then in cases where investors have sought to redeem their Class A ordinary shares. Only upon our redemption or any liquidation will public shareholders be entitled to distributions if we do not complete our initial business combination.

 

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

 

If we are forced to enter an insolvent liquidation, any distributions received by shareholders could be viewed as an unlawful payment if it were proved that immediately following the date on which the distribution was made, we were unable to pay our debts as they fall due in the ordinary course of business. As a result, a liquidator could seek to recover some, or all amounts received by our shareholders. Furthermore, our directors may be viewed as having breached their fiduciary duties to us or our creditors and/or may have acted in bad faith, thereby exposing themselves and our company to claims, by paying public shareholders from the trust account prior to addressing the claims of creditors. We cannot assure you that claims will not be brought against us for these reasons. We and our directors and officers who knowingly and willfully authorized or permitted any distribution to be paid out of our share premium account while we were unable to pay our debts as they fall due in the ordinary course of business would be guilty of an offence and may be liable to a fine and imprisonment in the Cayman Islands.

 

We may not hold an annual meeting of shareholders until after the completion of our initial business combination.

 

In accordance with the Nasdaq corporate governance requirements, we are not required to hold an annual general meeting until no later than one year after our first fiscal year end following our listing on the Nasdaq. There is no requirement under the Companies Act for us to hold annual or extraordinary general meetings to appoint directors. Until we hold an annual general meeting, public shareholders may not be afforded the opportunity to appoint directors and to discuss company affairs with management.

 

The grant of registration rights to our initial shareholders may make it more difficult to complete our initial business combination, and the future exercise of such rights may adversely affect the market price of the Class A ordinary shares.

 

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

 

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

 

We may pursue business combination opportunities in any sector, except that we will not, under our amended and restated memorandum and articles of association, be permitted to effectuate our initial business combination with another blank check company or similar company with nominal operations. Because we have not yet selected or approached any specific target business with respect to a business combination, there is no basis to evaluate the possible merits or risks of any particular target business’s operations, results of operations, cash flows, liquidity, financial condition or prospects. To the extent we complete our initial business combination, we may be affected by numerous risks inherent in the business operations with which we combine. Although our officers and directors will endeavor to evaluate the risks inherent in a particular target business, we cannot assure you that we will properly ascertain or assess all of the significant risk factors or that we will have adequate time to complete due diligence.

 

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Furthermore, some of these risks may be outside of our control and leave us with no ability to control or reduce the chances that those risks will adversely impact a target business. We also cannot assure you that an investment in our public shares will ultimately prove to be more favorable to investors than a direct investment, if such opportunity were available, in a business combination target. Accordingly, any shareholders who choose to remain shareholders following our initial business combination could suffer a reduction in the value of their securities. Such shareholders are unlikely to have a remedy for such reduction in value unless they are able to successfully claim that the reduction was due to the breach by our officers or directors of a duty of care or other fiduciary duty owed to them, or if they are able to successfully bring a private claim under securities laws that the proxy solicitation or tender offer materials, as applicable, relating to the initial business combination contained an actionable material misstatement or material omission.

 

We may seek acquisition opportunities in industries or sectors which may or may not be outside of our management’s area of expertise.

 

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

 

Although we have identified general criteria and guidelines that we believe are important in evaluating prospective target businesses and our strategy will be to identify, acquire and build a company in our target investment area, we may enter into our initial business combination with a target that does not meet such criteria and guidelines, and as a result, the target business with which we enter into our initial business combination may not have attributes entirely consistent with our general criteria and guidelines.

 

Although we have identified general criteria and guidelines for evaluating prospective target businesses, it is possible that a target business with which we enter into our initial business combination will not have all of these positive attributes. If we complete our initial business combination with a target that does not meet some or all of these guidelines, such combination may not be as successful as a combination with a business that does meet all of our general criteria and guidelines. In addition, if we announce a prospective business combination with a target that does not meet our general criteria and guidelines, a greater number of shareholders may exercise their redemption rights, which may make it difficult for us to meet any closing condition with a target business that requires us to have a minimum net worth or a certain amount of cash. In addition, if shareholder approval of the transaction is required by applicable law or stock exchange requirements, or we decide to obtain shareholder approval for business or other legal reasons, it may be more difficult for us to attain shareholder approval of our initial business combination if the target business does not meet our general criteria and guidelines. If we are unable to complete our initial business combination, our public shareholders may receive only approximately $10.10 per share (whether or not the underwriters’ over-allotment option is exercised in full) or potentially less than $10.10 per share on our redemption, and our rights and warrants will expire worthless. See “— If third parties bring claims against us, the proceeds held in the trust account could be reduced and the per-share redemption amount received by shareholders may be less than $10.10 per share” and other risk factors herein.

 

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

 

To the extent we complete our initial business combination with a financially unstable business or an entity lacking an established record of revenues or earnings, we may be affected by numerous risks inherent in the operations of the business with which we combine. These risks include volatile revenues or earnings and difficulties in obtaining and retaining key personnel. Although our officers and directors will endeavor to evaluate the risks inherent in a particular target business, we may not be able to properly ascertain or assess all of the significant risk factors and we may not have adequate time to complete due diligence. Furthermore, some of these risks may be outside of our control and leave us with no ability to control or reduce the chances that those risks will adversely impact a target business.

 

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

 

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

 

Our independent registered public accounting firm’s report contains an explanatory paragraph that expresses substantial doubt about our ability to continue as a “going concern.”

 

As of August 8, 2021, we had $25,598 in cash and cash equivalents and a working capital deficiency of $88,755. Further, we expect to incur significant costs in pursuit of our acquisition plans. Management’s plans to address this need for capital through this offering are discussed in the section of this prospectus titled “Management’s Discussion and Analysis of Financial Condition and Results of Operations.” Our plans to raise capital and to consummate our initial business combination may not be successful. In addition, management is currently evaluating the impact of the COVID-19 pandemic on the industry and its effect on our financial position, results its operations and/or search for a target company. These factors, among others, raise substantial doubt about our ability to continue as a going concern. The financial statements contained elsewhere in this prospectus do not include any adjustments that might result from our inability to consummate this offering or our inability to continue as a going concern.

 

Resources could be wasted in researching business combinations that are not completed, which could materially adversely affect subsequent attempts to locate and acquire or merge with another business. If we are unable to complete our initial business combination, our public shareholders may receive only approximately $10.10 per share, or less than such amount in certain circumstances, on the liquidation of our trust account and our warrants will expire worthless.

 

We anticipate that the investigation of each specific target business and the negotiation, drafting and execution of relevant agreements, disclosure documents and other instruments will require substantial management time and attention and substantial costs for accountants, attorneys, consultants and others. If we decide not to complete a specific initial business combination, the costs incurred up to that point for the proposed transaction likely would not be recoverable. Furthermore, if we reach an agreement relating to a specific target business, we may fail to complete our initial business combination for any number of reasons including those beyond our control. Any such event will result in a loss to us of the related costs incurred which could materially adversely affect subsequent attempts to locate and acquire or merge with another business. If we are unable to complete our initial business combination, our public shareholders may receive only approximately $10.10 per share on the liquidation of our trust account and our warrants will expire worthless. In certain circumstances, our public shareholders may receive less than $10.10 per share on the redemption of their shares. See “— If third parties bring claims against us, the proceeds held in the trust account could be reduced and the per-share redemption amount received by shareholders may be less than $10.10 per share” and other risk factors herein

 

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

 

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

 

Since our sponsor, officers and directors will lose their entire investment in us if our initial business combination is not completed (except with respect to any public shares they may hold), a conflict of interest may arise in determining whether a particular business combination target is appropriate for our initial business combination.

 

On August 6, 2021, our sponsor purchased 2,875,000 founder shares. The number of founder shares issued was determined based on the expectation that such founder shares would represent approximately 20% of the outstanding shares after this offering (without giving effect to the private placement and assuming they do not purchase units in this offering). The founder shares will be worthless if we do not complete an initial business combination. In addition, our sponsor has committed to purchase an aggregate of 360,530 placement units (or up to 398,030 placement units if the over-allotment option is exercised in full) at a price of $10.00 per unit, for an aggregate purchase price of $3,605,300 (or up to $3,980,300 if the over-allotment option is exercised in full). Each placement unit consists of one Class A ordinary share and one half of one warrant. Each whole warrant is exercisable to purchase one whole Class A ordinary share at $11.50 per share. These securities will also be worthless if we do not complete an initial business combination. Holders of founder shares have agreed (A) to vote any shares owned by them in favor of any proposed initial business combination and (B) not to redeem any founder shares in connection with a shareholder vote to approve a proposed initial business combination or in connection with a shareholder vote to approve an amendment to our amended and restated memorandum and articles of association. In addition, we may obtain loans from our sponsor, affiliates of our sponsor or an officer or director. The personal and financial interests of our officers and directors may influence their motivation in identifying and selecting a target business combination, completing an initial business combination and influencing the operation of the business following the initial business combination. This risk may become more acute as the 12-month anniversary of the closing of this offering nears, which is the deadline for entering into an agreement to complete an initial business combination unless extended, as provided herein or in accordance with our amended and restated memorandum and articles of association.

 

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Since our officers and directors will share in any appreciation of the founder shares purchased at approximately $0.01 per share, a conflict of interest may arise in determining whether a particular target business is appropriate for our initial business combination.

 

Each of the officers and directors who will assist us in sourcing potential acquisition targets has an interest in the founder shares as of the date hereof. These officers and directors will not receive any cash compensation from us prior to a business combination but will share in any appreciation of the founder shares, provided that we successfully complete a business combination. We believe that this structure aligns the incentives of these officers and directors with the interests of our shareholders. However, investors should be aware that, as these officers and directors have paid approximately $0.01 per share or less for the interest in the founder shares, this structure also creates an incentive whereby our officers and directors could potentially make a substantial profit even if we complete a business combination with a target that ultimately declines in value and is not profitable for our public shareholders

 

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

 

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

 

  default and foreclosure on our assets if our operating revenues after an initial business combination are insufficient to repay our debt obligations;
     
  acceleration of our obligations to repay the indebtedness even if we make all principal and interest payments when due if we breach certain covenants that require the maintenance of certain financial ratios or reserves without a waiver or renegotiation of that covenant;
     
  our immediate payment of all principal and accrued interest, if any, if the debt security is payable on demand;
     
  our inability to obtain necessary additional financing if the debt security contains covenants restricting our ability to obtain such financing while the debt security is outstanding;
     
  our inability to pay dividends on our Class A ordinary shares;

 

  using a substantial portion of our cash flow to pay principal and interest on our debt, which will reduce the funds available for dividends on our Class A ordinary shares if declared, our ability to pay expenses, make capital expenditures and acquisitions and fund other general corporate purposes;
     
  limitations on our flexibility in planning for and reacting to changes in our business and in the industry in which we operate;
     
  increased vulnerability to adverse changes in general economic, industry and competitive conditions and adverse changes in government regulation; and

 

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

 

We may only be able to complete one business combination with the proceeds of this offering and the sale of the placement units, which will cause us to be solely dependent on a single business which may have a limited number of products or services. This lack of diversification may negatively impact our operations and profitability. Of the net proceeds from this offering and the sale of the placement units, $97,500,000 (or $112,125,000 if the underwriters’ over-allotment option is exercised in full) will be available to complete our initial business combination and pay related fees and expenses, after taking into account $3,500,000 (or $4,025,000 if the over-allotment option is exercised in full) of deferred underwriting commissions being held in the trust account and the estimated offering expenses.

 

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

 

  solely dependent upon the performance of a single business, property or asset; or
     
  dependent upon the development or market acceptance of a single or limited number of products, processes or services.

 

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

 

In evaluating a prospective target business for our initial business combination, our management will rely on the availability of all of the funds from the sale of the placement units to be used as part of the consideration to the sellers in the initial business combination. If the sale of some or all of the placement units fails to close, for any reason, we may lack sufficient funds to consummate our initial business combination.

 

Our sponsor has agreed to purchase an aggregate of up to 360,530 of the placement units (or up to 398,030 placement units if the over-allotment option is exercised in full) at a price of $10.00 per unit, for an aggregate purchase price of $3,605,300 ($3,980,300 if the over-allotment option is exercised in full), in a private placement that will close simultaneously with the closing of our initial business combination. Each placement unit consists of one Class A ordinary share and one half of one warrant. Each whole warrant is exercisable to purchase one whole Class A ordinary share at $11.50 per share. These securities will also be worthless if we do not complete an initial business combination. The funds from the sale of forward-purchase shares may be used as part of the consideration to the sellers in our initial business combination, expenses in connection with our initial business combination or for working capital in the post-transaction company. The obligations under the forward-purchase agreement do not depend on whether any public shareholders elect to redeem their shares and provide us with a minimum funding level for the initial business combination.

 

If the sale of the placement units does not close for any reason, including by reason of the failure by the sponsor to fund the purchase price for its units, we may lack sufficient funds to consummate our initial business combination. The forward-purchase investor’s obligations to purchase the units are subject to termination prior to the closing of the sale by mutual written consent of the parties.

 

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

 

Of the net proceeds from this offering and the sale of the placement units, $101,000,000 (or $116,150,000 if the underwriters’ over-allotment option is exercised in full) will be available to complete our initial business combination and pay related fees and expenses (which includes up to $3,500,000 (or $4,025,000 if the over-allotment option is exercised in full, for the payment of deferred underwriting commissions being held in the trust account). We may effectuate our initial business combination with a single target business or multiple target businesses simultaneously or within a short period of time. However, we may not be able to effectuate our initial business combination with more than one target business because of various factors, including the existence of complex accounting issues and the requirement that we prepare and file pro forma financial statements with the SEC that present operating results and the financial condition of several target businesses as if they had been operated on a combined basis. By completing our initial business combination with only a single entity, our lack of diversification may subject us to numerous economic, competitive and regulatory developments.

 

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Further, we would not be able to diversify our operations or benefit from the possible spreading of risks or offsetting of losses, unlike other entities that may have the resources to complete several business combinations in different industries or different areas of a single industry. Accordingly, the prospects for our success may be:

 

  solely dependent upon the performance of a single business, property or asset, or
     
  dependent upon the development or market acceptance of a single or limited number of products, processes or services.

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

We may seek business combination opportunities with a high degree of complexity that require significant operational improvements, which could delay or prevent us from achieving our desired results.

 

We may seek business combination opportunities with large, highly complex companies that we believe would benefit from operational improvements. While we intend to implement such improvements, to the extent that our efforts are delayed or we are unable to achieve the desired improvements, the initial business combination may not be as successful as we anticipate. To the extent we complete our initial business combination with a large complex business or entity with a complex operating structure, we may also be affected by numerous risks inherent in the operations of the business with which we combine, which could delay or prevent us from implementing our strategy. Although our management team will endeavor to evaluate the risks inherent in a particular target business and its operations, we may not be able to properly ascertain or assess all of the significant risk factors until we complete our initial business combination. If we are not able to achieve our desired operational improvements, or the improvements take longer to implement than anticipated, we may not achieve the gains that we anticipate. Furthermore, some of these risks and complexities may be outside of our control and leave us with no ability to control or reduce the chances that those risks and complexities will adversely impact a target business. Such combination may not be as successful as a combination with a smaller, less complex organization.

 

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

 

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

 

  costs and difficulties inherent in managing cross-border business operations and complying with different commercial and legal requirements of overseas markets;
     
  rules and regulations regarding currency redemption;
     
  complex corporate withholding taxes on individuals;
     
  laws governing the manner in which future business combinations may be effected;
     
  exchange listing and/or delisting requirements;
     
  tariffs and trade barriers;
     
  regulations related to customs and import/export matters;
     
  local or regional economic policies and market conditions;
     
  export limits of raw materials and related in-country value-added processing requirements
     
  unexpected changes in regulatory requirements;
     
  longer payment cycles;
     
  tax issues, such as tax law changes and variations in tax laws as compared to the United States;
     
  currency fluctuations and exchange controls, including devaluations and other exchange rate movements;
     
  rates of inflation;
     
  liquidity of domestic capital and lending markets and challenges in collecting accounts receivable;

 

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compliance with the U.S. Foreign Corrupt Practices Act of 1977, as amended (the “FCPA”), the U.K. Bribery Act 2010 (the “Bribery Act”) and similar regulations in other countries, which prohibit U.S. companies and their intermediaries from engaging in bribery or other prohibited payments to foreign officials and require companies to keep books and records that accurately and fairly reflect the transactions of the company and to maintain an adequate system of internal accounting controls;
     
  cultural and language differences;
     
  employment regulations;
     
  underdeveloped or unpredictable legal or regulatory systems;

 

  corruption;
     
  protection of intellectual property;
     
  social unrest, crime, strikes, riots and civil disturbances;
     
  regime changes and political upheaval;
     
  terrorist attacks, natural disasters and wars;
     
  deterioration of political relations with the United States; and
     
  government appropriation of assets.

 

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

 

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

 

Our amended and restated memorandum and articles of association will not provide a specified maximum redemption threshold, except that in no event will we redeem our public shares in an amount that would cause our net tangible assets to be less than $5,000,001 (such that we are not subject to the SEC’s “penny stock” rules) or any greater net tangible asset or cash requirement which may be contained in the agreement relating to our initial business combination. As a result, we may be able to complete our initial business combination even though a substantial majority of our public shareholders do not agree with the transaction and have redeemed their shares or, if we seek shareholder approval of our initial business combination and do not conduct redemptions in connection with our initial business combination pursuant to the tender offer rules, have entered into privately negotiated agreements to sell their shares to our sponsor, officers, directors, advisors or any of their respective affiliates. In the event the aggregate cash consideration we would be required to pay for all Class A ordinary shares that are validly submitted for redemption plus any amount required to satisfy cash conditions pursuant to the terms of the proposed business combination exceed the aggregate amount of cash available to us, we will not complete the initial business combination or redeem any shares, all Class A ordinary shares submitted for redemption will be returned to the holders thereof, and we instead may search for an alternate business combination.

 

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

 

In order to effectuate an initial business combination, blank check companies have, in the recent past, amended various provisions of their charters and modified governing instruments, including their warrant agreements. For example, blank check companies have amended the definition of business combination, increased redemption thresholds, changed industry focus and extended the time to consummate an initial business combination and, with respect to their warrants, amended their warrant agreements to require the warrants to be exchanged for cash and/or other securities. Amending our amended and restated memorandum and articles of association will require the approval of holders of 65% of our ordinary shares and amending our warrant agreement will require a vote of holders of at least a majority of the public warrants and, solely with respect to any amendment to the terms of the placement warrants or any provision of our warrant agreement with respect to the placement warrants, a majority of the number of the then outstanding placement warrants.

 

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In addition, our amended and restated memorandum and articles of association will require us to provide our public shareholders with the opportunity to redeem their public shares for cash if we propose an amendment to our amended and restated memorandum and articles of association to (A) modify the substance or timing of our obligation to provide for the redemption of our public shares in connection with an initial business combination or to redeem 100% of our public shares if we do not complete our initial business combination within 12 months (subject to a six month extension of time) or (B) with respect to any other material provisions relating to shareholders’ rights or pre-initial business combination activity. To the extent any such amendments would be deemed to fundamentally change the nature of any securities offered through this registration statement, we would register, or seek an exemption from registration for, the affected securities. We cannot assure you that we will not seek to amend our charter or governing instruments or extend the time to consummate an initial business combination in order to effectuate our initial business combination.

 

We may reincorporate in another jurisdiction in connection with our initial business combination and such reincorporation may result in taxes imposed on shareholders or warrant holders.

 

We may effect a business combination with a target company in another jurisdiction, reincorporate in the jurisdiction in which the target company or business is located or reincorporate in another jurisdiction. Such transactions may result in tax liability for a shareholder or warrant holder in the jurisdiction in which the shareholder or warrant holder is a tax resident (or in which its members are resident if it is a tax transparent entity), in which the target company is located, or in which we reincorporate. We do not intend to make any cash distributions to shareholders or warrant holders to pay such taxes. Shareholders and warrant holders may be subject to withholding taxes or other taxes with respect to their ownership of us after the reincorporation.

 

The provisions of our amended and restated memorandum and articles of association that relate to our pre-business combination activity (and corresponding provisions of the agreement governing the release of funds from our trust account) may be amended with the approval of holders of at least 65% of our ordinary shares, which is a lower amendment threshold than that of some other blank check companies. It may be easier for us, therefore, to amend our amended and restated memorandum and articles of association to facilitate the completion of an initial business combination that some of our shareholders may not support.

 

Our amended and restated memorandum and articles of association will provide that any of its provisions related to pre-initial business combination activity (including the requirement to deposit proceeds of this offering and the private placement of units into the trust account and not release such amounts except in specified circumstances, and to provide redemption rights to public shareholders as described herein and including to permit us to withdraw funds from the trust account such that the per share amount investors will receive upon any redemption or liquidation is substantially reduced or eliminated) may be amended if approved by holders of 65% of our ordinary shares entitled to vote thereon, and corresponding provisions of the trust agreement governing the release of funds from our trust account may be amended if approved by holders of 65% of our ordinary shares entitled to vote thereon. In all other instances, our amended and restated memorandum and articles of association may be amended by holders of a majority of our outstanding ordinary shares entitled to vote thereon, subject to applicable provisions of the Companies Act or applicable stock exchange rules. We may not issue additional securities that can vote on amendments to our amended and restated memorandum and articles of association.

 

Our initial shareholders, who will collectively beneficially own up to 20% of our ordinary shares upon the closing of this offering (assuming they do not purchase any units in this offering), will participate in any vote to amend our amended and restated memorandum and articles of association and/or trust agreement and will have the discretion to vote in any manner they choose. As a result, we may be able to amend the provisions of our amended and restated memorandum and articles of association, which govern our pre-initial business combination behavior more easily than some other blank check companies, and this may increase our ability to complete an initial business combination with which you do not agree. Our shareholders may pursue remedies against us for any breach of our amended and restated memorandum and articles of association.

 

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Our sponsor, officers and directors have agreed, pursuant to a written agreement with us, that they will not propose any amendment to our amended and restated memorandum and articles of association to (A) modify the substance or timing of our obligation to provide for the redemption of our public shares in connection with an initial business combination or to redeem 100% of our public shares if we do not complete our initial business combination within 12 months (subject to a six month extension of time) or (B) with respect to any other material provisions relating to shareholders’ rights or pre-initial business combination activity, unless we provide our public shareholders with the opportunity to redeem their Class A ordinary shares upon approval of any such amendment at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the trust account (including interest, net of taxes), divided by the number of then outstanding public shares. These agreements are contained in a letter agreement that we have entered into with our sponsor, officers and directors. Our shareholders are not parties to, or third-party beneficiaries of, these agreements and, as a result, will not have the ability to pursue remedies against our sponsor, officers or directors for any breach of these agreements. As a result, in the event of a breach, our shareholders would need to pursue a shareholder derivative action, subject to applicable law.

 

Our letter agreement with our sponsor, directors and officers may be amended without shareholder approval.

 

Our letter agreement with our sponsor, directors and officers contains provisions relating to transfer restrictions of our founder shares and sponsor warrants, indemnification of the trust account, waiver of redemption rights and participation in liquidation distributions from the trust account. This letter agreement may be amended without shareholder approval (although releasing the parties from the restriction not to transfer our founder shares for 180 days following the date of this prospectus will require the prior written consent of the underwriters). Moreover, certain other agreements relating to this offering may be amended without shareholder approval. While we do not expect our board to approve any amendment to these agreements prior to our initial business combination, it may be possible that our board, in exercising its business judgment and subject to its fiduciary duties, chooses to approve one or more amendments to this agreement. Any such amendments to the letter agreement would not require approval from our shareholders and may have an adverse effect on the value of an investment in our securities.

 

We may be unable to obtain additional financing to complete our initial business combination or to fund the operations and growth of a target business, which could compel us to restructure or abandon a particular business combination. If we do not complete our initial business combination, our public shareholders may only receive their pro rata portion of the funds in the trust account that are available for distribution to public shareholders.

 

We have not selected any specific business combination target but intend to target businesses with enterprise values that are greater than we could acquire with the net proceeds of this offering and the sale of the placement units. As a result, if the cash portion of the purchase price exceeds the amount available from the trust account, net of amounts needed to satisfy any redemption by public shareholders, we may be required to seek additional financing to complete such proposed initial business combination. We cannot assure you that such financing will be available on acceptable terms, if at all. To the extent that additional financing proves to be unavailable when needed to complete our initial business combination, we would be compelled to either restructure the transaction or abandon that particular business combination and seek an alternative target business candidate. Further, we may be required to obtain additional financing in connection with the closing of our initial business combination for general corporate purposes, including for maintenance or expansion of operations of the post-transaction businesses, the payment of principal or interest due on indebtedness incurred in completing our initial business combination, or to fund the purchase of other companies. If we are unable to complete our initial business combination, our public shareholders may receive only approximately $10.10 per share plus any pro rata interest earned on the funds held in the trust account and not previously released to us to pay our taxes on the liquidation of our trust account and our warrants will expire worthless. In addition, even if we do not need additional financing to complete our initial business combination, we may require such financing to fund the operations or growth of the target business. The failure to secure additional financing could have a material adverse effect on the continued development or growth of the target business. None of our sponsor, officers, directors or shareholders is required to provide any financing to us in connection with or after our initial business combination. Further, as described in the risk factor entitled “— If third parties bring claims against us, the proceeds held in the trust account could be reduced and the per-share redemption amount received by shareholders may be less than $10.10 per share,” under certain circumstances our public shareholders may receive less than $10.10 per share upon the liquidation of the trust account.

 

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Holders of our Class A ordinary shares will not be entitled to vote on any appointment of directors we hold prior to our initial business combination.

 

Prior to our initial business combination, only holders of our founder shares will have the right to vote on the appointment of directors. Holders of our public shares will not be entitled to vote on the appointment of directors during such time. In addition, prior to the completion of an initial business combination, holders of a majority of our founder shares may remove a member of the board of directors for any reason. Accordingly, you may not have any say in the management of our company prior to the completion of an initial business combination.

 

We are not registering the Class A ordinary shares issuable upon exercise of the warrants under the Securities Act or any state securities laws at this time, and such registration may not be in place when an investor desires to exercise warrants, thus precluding such investor from being able to exercise its warrants except on a cashless basis. If the issuance of the shares upon exercise of warrants is not registered, qualified or exempt from registration or qualification, the holder of such warrant will not be entitled to exercise such warrant and such warrant may have no value and expire worthless.

 

We are not registering the Class A ordinary shares issuable upon exercise of the warrants under the Securities Act or any state securities laws at this time. However, under the terms of the warrant agreement, we have agreed that as soon as practicable, but in no event later than 15 business days after the closing of our initial business combination, we will use our best efforts to file with the SEC a registration statement for the registration under the Securities Act of the Class A ordinary shares issuable upon exercise of the warrants and thereafter will use our best efforts to cause the same to become effective within 60 business days following our initial business combination and to maintain a current prospectus relating to the Class A ordinary shares issuable upon exercise of the warrants, until the expiration of the warrants in accordance with the provisions of the warrant agreement. We cannot assure you that we will be able to do so if, for example, any facts or events arise which represent a fundamental change in the information set forth in the registration statement or prospectus, the financial statements contained or incorporated by reference therein are not current or correct or the SEC issues a stop order. If the shares issuable upon exercise of the warrants are not registered under the Securities Act, we will be required to permit holders to exercise their warrants on a cashless basis. However, no warrant will be exercisable for cash or on a cashless basis, and we will not be obligated to issue any shares to holders seeking to exercise their warrants, unless the issuance of the shares upon such exercise is registered or qualified under the securities laws of the state of the exercising holder, or an exemption from registration is available. Further, if an exemption from registration is not available, holders would not be able to exercise on a cashless basis and would only be able to exercise their warrants for cash if a current and effective prospectus relating to the Class A ordinary shares issuable upon exercise of the warrants is available.

 

Notwithstanding the foregoing, if a registration statement covering the Class A ordinary shares issuable upon exercise of the warrants is not effective within a specified period following the consummation of our initial business combination, warrant holders may, until such time as there is an effective registration statement and during any period when we shall have failed to maintain an effective registration statement, exercise warrants on a “cashless basis” pursuant to the exemption provided by Section 3(a)(9) of the Securities Act; provided that such exemption is available. If that exemption, or another exemption, is not available, holders will not be able to exercise their warrants on a cashless basis. In no event will we be required to net cash settle any warrant, or issue securities or other compensation in exchange for the warrants in the event that we are unable to register or qualify the shares underlying the warrants under applicable state securities laws and there is no exemption available.

 

If the issuance of the shares upon exercise of the warrants is not so registered or qualified or exempt from registration or qualification, the holder of such warrant will not be entitled to exercise such warrant and such warrant may have no value and expire worthless. In such event, holders who acquired their warrants as part of a purchase of units will have paid the full unit purchase price solely for the Class A ordinary shares included in the units. If and when the warrants become redeemable by us, we may not exercise our redemption right if the issuance of ordinary shares upon exercise of the warrants is not exempt from registration or qualification under applicable state blue sky laws or we are unable to effect such registration or qualification. We will use our best efforts to register or qualify such ordinary shares under the blue-sky laws of the state of residence in those states in which the warrants were initially offered by us in this offering. However, there may be instances in which holders of our public warrants may be unable to exercise such public warrants, but holders of our placement warrants may be able to exercise such placement warrants.

  

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If you exercise your public warrants on a “cashless basis,” you will receive fewer Class A ordinary shares from such exercise than if you were to exercise such warrants for cash.

 

Under the following circumstances, the exercise of the public warrants may be required or permitted to be made on a cashless basis: (i) If a registration statement covering the Class A ordinary shares issuable upon exercise of the warrants is not effective by the 60th business day after the closing of our initial business combination, warrant holders may, until such time as there is an effective registration statement and during any period when we shall have failed to maintain an effective registration statement, exercise warrants on a “cashless basis” in accordance with Section 3(a)(9) of the Securities Act or another exemption; (ii) if our ordinary shares is at the time of any exercise of a warrant not listed on a national securities exchange such that it satisfies the definition of a “covered security” under Section 18(b)(1) of the Securities Act, we may, at our option, require holders of public warrants who exercise their warrants to do so on a “cashless basis” in accordance with Section 3(a)(9) of the Securities Act and, in the event we so elect, we will not be required to file or maintain in effect a registration statement; and in the event we do not so elect, we will use our best efforts to register or qualify the shares under applicable blue sky laws to the extent an exemption is not available; and (iii) if we call the public warrants for redemption under certain circumstances described in the warrant agreement. In the event of an exercise on a cashless basis, a holder would pay the warrant exercise price by surrendering the warrants for that number of Class A ordinary shares calculated under the applicable provision in the warrant agreement. As a result, you would receive fewer Class A ordinary shares from such exercise than if you were to exercise such warrants for cash. This will have the effect of reducing the potential “upside” of the holder’s investment in our company.

 

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

 

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

 

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

 

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

 

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Provisions in our amended and restated memorandum and articles of association and the Companies Act may inhibit a takeover of us, which could limit the price investors might be willing to pay in the future for Class A ordinary shares and could entrench management. Our amended and restated memorandum and articles of association will contain provisions that may discourage unsolicited takeover proposals that shareholders may consider to be in their best interests. These provisions will include a staggered board of directors and the ability of the board of directors to designate the terms of and issue new series of preferred shares, and the fact that prior to the completion of our initial business combination only holders of our founder shares, which have been issued to our sponsor, are entitled to vote on the appointment of directors, which may make more difficult the removal of management and may discourage transactions that otherwise could involve payment of a premium over prevailing market prices for our securities.

 

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

 

Because we are incorporated under the laws of the Cayman Islands, you may face difficulties in protecting your interests, and your ability to protect your rights through the U.S. federal courts may be limited.

 

We are an exempted company incorporated under the laws of the Cayman Islands. As a result, it may be difficult for investors to effect service of process within the United States upon our directors or officers, or enforce judgments obtained in the United States courts against our directors or officers.

 

Our corporate affairs will be governed by our amended and restated memorandum and articles of association, the Companies Act (as the same may be supplemented or amended from time to time) and the common law of the Cayman Islands. We will also be subject to the federal securities laws of the United States. The rights of shareholders to take action against the directors, actions by minority shareholders and the fiduciary responsibilities of our directors to us under Cayman Islands law are to a large extent governed by the common law of the Cayman Islands. The common law of the Cayman Islands is derived in part from comparatively limited judicial precedent in the Cayman Islands as well as from English common law, the decisions of whose courts are of persuasive authority, but are not binding on a court in the Cayman Islands. The rights of our shareholders and the fiduciary responsibilities of our directors under Cayman Islands law are different from what they would be under statutes or judicial precedent in some jurisdictions in the United States. In particular, the Cayman Islands has a different body of securities laws as compared to the United States, and certain states, such as Delaware, may have more fully developed and judicially interpreted bodies of corporate law. In addition, Cayman Islands companies may not have standing to initiate a shareholders derivative action in a Federal court of the United States.

 

We have been advised by our Cayman Islands legal counsel that there is uncertainty as to whether the courts of the Cayman Islands would (i) recognize or enforce against us judgments of courts of the United States predicated upon the civil liability provisions of the federal securities laws of the United States or any state; and (ii) in original actions brought in the Cayman Islands, impose liabilities against us predicated upon the civil liability provisions of the federal securities laws of the United States or any state, so far as the liabilities imposed by those provisions are penal in nature. We have been advised by our Cayman Islands legal counsel that the courts of the Cayman Islands would recognize as a valid judgment, a final and conclusive judgment in personam obtained in the federal or state courts of the United States against our company under which a sum of money is payable (other than a sum of money payable in respect of multiple damages, taxes or other charges of a like nature or in respect of a fine or other penalty) or, in certain circumstances, an in personam judgment for non-monetary relief, and would give a judgment based thereon provided that (a) such courts had proper jurisdiction over the parties subject to such judgment, (b) such courts did not contravene the rules of natural justice of the Cayman Islands, (c) such judgment was not obtained by fraud, (d) the enforcement of the judgment would not be contrary to the public policy of the Cayman Islands, (e) no new admissible evidence relevant to the action is submitted prior to the rendering of the judgment by the courts of the Cayman Islands, and (f) there is due compliance with the correct procedures under the laws of the Cayman Islands.

 

As a result of all of the above, public shareholders may have more difficulty in protecting their interests in the face of actions taken by management, members of the board of directors or controlling shareholders than they would as public shareholders of a United States company.

 

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Provisions in our amended and restated memorandum and articles of association may inhibit a takeover of us, which could limit the price investors might be willing to pay in the future for our Class A ordinary shares and could entrench management.

 

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

 

Risks Associated with Acquiring and Operating a Business in Foreign Countries

 

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

 

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

 

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

 

  costs and difficulties inherent in managing cross-border business operations;
     
  rules and regulations regarding currency redemption;
     
  complex corporate withholding taxes on individuals;
     
  laws governing the manner in which future business combinations may be effected;
     
  exchange listing and/or delisting requirements;
     
  tariffs and trade barriers;
     
  regulations related to customs and import/export matters;
     
  local or regional economic policies and market conditions;
     
  unexpected changes in regulatory requirements;
     
  challenges in managing and staffing international operations;
     
  longer payment cycles;
     
  tax issues, such as tax law changes and variations in tax laws as compared to the United States;
     
  currency fluctuations and exchange controls;
     
  rates of inflation;

 

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  challenges in collecting accounts receivable;
     
  cultural and language differences;
     
  employment regulations;
     
  underdeveloped or unpredictable legal or regulatory systems;
     
  corruption;
     
  protection of intellectual property;
     
  social unrest, crime, strikes, riots and civil disturbances;
     
  regime changes and political upheaval;
     
  terrorist attacks and wars; and
     
  deterioration of political relations with the United States.

 

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

 

If our management following our initial business combination is unfamiliar with United States securities laws, they may have to expend time and resources becoming familiar with such laws, which could lead to various regulatory issues.

 

Following our initial business combination, our management may resign from their positions as officers or directors of the company and the management of the target business at the time of the business combination will remain in place. Management of the target business may not be familiar with United States securities laws. If new management is unfamiliar with United States securities laws, they may have to expend time and resources becoming familiar with such laws. This could be expensive and time-consuming and could lead to various regulatory issues which may adversely affect our operations.

 

After our initial business combination, substantially all of our assets may be located in a foreign country and substantially all of our revenue will be derived from our operations in such country. Accordingly, our results of operations and prospects will be subject, to a significant extent, to the economic, political and legal policies, developments and conditions in the country in which we operate.

 

The economic, political and social conditions, as well as government policies, of the country in which our operations are located could affect our business. Economic growth could be uneven, both geographically and among various sectors of the economy and such growth may not be sustained in the future. If in the future such country’s economy experiences a downturn or grows at a slower rate than expected, there may be less demand for spending in certain industries. A decrease in demand for spending in certain industries could materially and adversely affect our ability to find an attractive target business with which to consummate our initial business combination and if we effect our initial business combination, the ability of that target business to become profitable.

 

Exchange rate fluctuations and currency policies may cause a target business’ ability to succeed in the international markets to be diminished.

 

In the event we acquire a non-U.S. target, all revenues and income would likely be received in a foreign currency, and the dollar equivalent of our net assets and distributions, if any, could be adversely affected by reductions in the value of the local currency. The value of the currencies in our target regions fluctuate and are affected by, among other things, changes in political and economic conditions. Any change in the relative value of such currency against our reporting currency may affect the attractiveness of any target business or, following consummation of our initial business combination, our financial condition and results of operations. Additionally, if a currency appreciates in value against the dollar prior to the consummation of our initial business combination, the cost of a target business as measured in dollars will increase, which may make it less likely that we are able to consummate such transaction.

 

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We may reincorporate in another jurisdiction in connection with our initial business combination, and the laws of such jurisdiction may govern some or all of our future material agreements and we may not be able to enforce our legal rights.

 

In connection with our initial business combination, we may relocate the home jurisdiction of our business from the Cayman Islands to another jurisdiction. If we determine to do this, the laws of such jurisdiction may govern some or all of our future material agreements. The system of laws and the enforcement of existing laws in such jurisdiction may not be as certain in implementation and interpretation as in the United States. The inability to enforce or obtain a remedy under any of our future agreements could result in a significant loss of business, business opportunities or capital.

 

We are subject to changing law and regulations regarding regulatory matters, corporate governance and public disclosure that have increased both our costs and the risk of non-compliance.

 

We are subject to rules and regulations by various governing bodies, including, for example, the SEC, which are charged with the protection of investors and the oversight of companies whose securities are publicly traded, and to new and evolving regulatory measures under applicable law. Our efforts to comply with new and changing laws and regulations have resulted in and are likely to continue to result in, increased general and administrative expenses and a diversion of management time and attention from revenue-generating activities to compliance activities.

 

Moreover, because these laws, regulations and standards are subject to varying interpretations, their application in practice may evolve over time as new guidance becomes available. This evolution may result in continuing uncertainty regarding compliance matters and additional costs necessitated by ongoing revisions to our disclosure and governance practices. If we fail to address and comply with these regulations and any subsequent changes, we may be subject to penalty and our business may be harmed.

 

Risk Factors Related to Acquiring and Operating a Business in China

 

While we will not be limited to a particular industry segment or geographic region, we believe our management and sponsors’ experience allows us to evaluate targets that have the potential to accelerate financial value creation while also having a measurable net positive impact on the environment and society. Thus, our efforts in identifying a prospective target business will not be limited to a particular country including the PRC. However, in the event we proceed with an acquisition in the PRC, we foresee being subject to some additional risks. Accordingly, we have set forth some of the primary risks we have identified in seeking to consummate our initial business combination with a company having its primary operations in the PRC in the following narrative.

 

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If we enter into a business combination in China, we will be dependent on its political, economic, regulatory and social conditions.

 

If we enter into a business combination with a target company located in China, we will be dependent on its political, economic, regulatory and social conditions. Accordingly, any significant slowdown in China’s economy which may cause a decline in demand for our customers in China, depending on the industry, will adversely affect our business and financial performance. Furthermore, if some portion of our operations and production facilities were located in China, any unfavorable changes in the social and/or political conditions may also adversely affect our business and operations. While the current policy of China’s government seems to be one of economic reform to encourage foreign investments and greater economic decentralization, there is no assurance that such a policy will continue to prevail in the future. There is no assurance that our operations will not be adversely affected should there be any policy changes.

 

China’s economy differs from the economies of most developed countries in many respects, including the amount of government involvement, level of development, growth rate, control of foreign exchange and allocation of resources. While the PRC economy has experienced significant growth in the past two to three decades, growth has been uneven, both geographically and among various sectors of the economy. Demand for target services and products depends, in large part, on economic conditions in China. Any slowdown in China’s economic growth may cause our potential customers to delay or cancel their plans to purchase our services and products, which in turn could reduce our net revenues.

 

Although China’s economy has been transitioning from a planned economy to a more market oriented economy since the late 1970s, the PRC government continues to play a significant role in regulating industry development by imposing industrial policies. The PRC government also exercises significant control over China’s economic growth through allocating resources, controlling the incurrence and payment of foreign currency-denominated obligations, setting monetary policy and providing preferential treatment to particular industries or companies. Changes in any of these policies, laws and regulations could adversely affect the economy in China and could have a material adverse effect on our business.

 

The PRC government has significant oversight and discretion over the conduct of a PRC company’s business and may intervene with or influence its operations at any time as the government deems appropriate to further regulatory, political and societal goals. The PRC government has recently published new policies that significantly affected certain industries such as the education and internet industries, and we cannot rule out the possibility that it will in the future release regulations or policies regarding any industry that could adversely affect the business, financial condition and results of operations of the combined company. Furthermore, the PRC government has also recently indicated an intent to exert more oversight and control over securities offerings and other capital markets activities that are conducted overseas and foreign investment in China-based companies. Any such action, once taken by the PRC government, could significantly limit or completely hinder our ability to consummate a business combination with a China-based target business, the combined company’s ability to offer or continue to offer securities to investors and cause the value of such securities to significantly decline or in extreme cases, become worthless.

 

The PRC government has implemented various measures to encourage foreign investment and sustainable economic growth and to guide the allocation of financial and other resources. However, we cannot assure you that the PRC government will not repeal or alter these measures or introduce new measures that will have a negative effect on us. China’s social and political conditions may change and become unstable. Any sudden changes to China’s political system or the occurrence of widespread social unrest could have a material adverse effect on our business and results of operations.

 

PRC’s M&A Rules and Regulations establish complex procedures for National Security Review of certain acquisitions of Chinese companies by foreign investors, which could make it more difficult for us to pursue a business combination with a China-based business.

 

The Regulations on Mergers and Acquisitions of Domestic Companies by Foreign Investors (the “M&A Rules”), adopted by six PRC regulatory agencies in 2006 and amended in 2009, and some other regulations and rules concerning mergers and acquisitions established additional procedures and requirements that could make merger and acquisition activities by foreign investors more time-consuming and complex, including requirements in some instances that the Ministry of Commerce (the “MOFCOM”) be notified in advance of any change-of-control transaction in which a foreign investor takes control of a PRC domestic enterprise.

 

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The Anti-Monopoly Law requires that the anti-monopoly enforcement agency of the State Council (currently the “Anti-Monopoly Bureau of the State Administration for Market Regulation”) shall be notified in advance of any concentration of undertaking if certain thresholds are triggered. In addition, the security review rules issued by the MOFCOM that became effective in September 2011 specify that mergers and acquisitions by foreign investors that raise “national defense and security” concerns and mergers and acquisitions through which foreign investors may acquire de facto control over domestic enterprises that raise national security concerns are subject to strict review by the MOFCOM, and the rules prohibit any activities attempting to bypass a security review, including by structuring the transaction through a proxy or contractual control arrangement.

 

On July 1, 2015, the National Security Law of China took effect, which provided that China would establish rules and mechanisms to conduct national security review of foreign investments in China that may impact national security. On March 15, 2019, the PRC National People’s Congress approved the Foreign Investment Law of China (the “Foreign Investment Law”), which came into effect on January 1, 2020, reiterates that China will establish a security review system for foreign investments. On December 19, 2020, the National Development and Reform Commission (the “NDRC”) and the MOFCOM jointly issued the Measures for the Security Review of Foreign Investments (the “New FISR Measures”), which was made according to the National Security Law and the Foreign Investment Law and became effective on January 18, 2021. The New FISR Measures further expand the scope of national security review on foreign investment compared to the existing rules, while leaving substantial room for interpretation and speculation.

 

In the future, we may pursue a business combination with a China-based business. Complying with the requirements of the above-mentioned regulations and other relevant rules to complete such transactions could be time-consuming, and any required approval processes, including obtaining approval from the MOFCOM, any other relevant PRC governmental authorities or their respective local counterparts may delay or inhibit our ability to complete such transactions, which could affect our ability to expand our business or maintain our market share.

 

Substantial uncertainties exist with respect to the interpretation and implementation of the Foreign Investment Law and how it may impact our ability to pursue a business combination with a China-based business.

 

The Foreign Investment Law replaced the trio of prior laws regulating foreign investment in the PRC, namely, the Sino-Foreign Equity Joint Venture Enterprise Law, the Sino-Foreign Cooperative Joint Venture Enterprise Law and the Wholly Foreign-Invested Enterprise Law, together with their implementation rules and ancillary regulations, and became the legal foundation for foreign investment in the PRC from January 1, 2020. Meanwhile, the Implementation Regulation of the Foreign Investment Law and the Measures for Reporting of Information on Foreign Investment came into effect as of January 1, 2020, which clarified and elaborated the relevant provisions of the Foreign Investment Law.

 

The Foreign Investment Law sets out the basic regulatory framework for foreign investments and proposes to implement a system of pre-entry national treatment with a negative list for foreign investments, pursuant to which (i) foreign entities and individuals are prohibited from investing in the areas that are not open to foreign investments, (ii) foreign investments in the restricted industries must satisfy certain requirements under the law, and (iii) foreign investments in business sectors outside of the negative list will be treated equally with domestic investments.

 

The Foreign Investment Law also sets forth necessary mechanisms to facilitate, protect and manage foreign investments and proposes to establish a foreign investment information reporting system, through which foreign investors or foreign-invested enterprises are required to submit initial report, report of changes, report of deregistration and annual report relating to their investments to the MOFCOM or its local branches. As the Foreign Investment Law is still relatively new, it is unclear how the regulations will be interpreted and implemented by the relevant government authorities.

 

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Enhanced scrutiny over acquisition transactions by the PRC tax authorities may have an adverse effect on our business combination.

 

The direct or indirect transfer of certain taxable assets is subject to enhanced scrutiny by PRC tax authorities by a non-resident enterprise by promulgating and implementing SAT Circular 59 and Circular 698, which became effective in January 2008, and a Circular 7 in replacement of some of the existing rules in Circular 698, which became effective in February 2015. Under Circular 698, where a non-resident enterprise conducts an “indirect transfer” by transferring the equity interests of a PRC “resident enterprise” indirectly by disposing of the equity interests of an overseas holding company, the non-resident enterprise, being the transferor, may be subject to PRC corporate income tax, if the indirect transfer is considered to be an abusive use of company structure without reasonable commercial purposes. As a result, gains derived from such indirect transfer may be subject to PRC tax at a rate of up to 10%. Circular 698 also provides that, where a non-PRC resident enterprise transfers its equity interests in a PRC resident enterprise to its related parties at a price lower than the fair market value, the relevant tax authority has the power to make a reasonable adjustment to the taxable income of the transaction.

 

In February 2015, the SAT issued Circular 7 to replace the rules relating to indirect transfers in Circular 698. Circular 7 has introduced a new tax regime that is significantly different from that under Circular 698. Circular 7 extends its tax jurisdiction to not only indirect transfers set forth under Circular 698 but also transactions involving transfer of other taxable assets, through the offshore transfer of a foreign intermediate holding company. In addition, Circular 7 provides clearer criteria than Circular 698 on how to assess reasonable commercial purposes and has introduced safe harbors for internal group restructurings and the purchase and sale of equity through a public securities market. Circular 7 also brings challenges to both the foreign transferor and transferee (or other person who is obligated to pay for the transfer) of the taxable assets. Where a non-resident enterprise conducts an “indirect transfer” by transferring the taxable assets indirectly by disposing of the equity interests of an overseas holding company, the non-resident enterprise being the transferor, or the transferee, or the PRC entity which directly owned the taxable assets may report to the relevant tax authority such indirect transfer. Using a “substance over form” principle, the PRC tax authority may disregard the existence of the overseas holding company if it lacks a reasonable commercial purpose and was established for the purpose of reducing, avoiding or deferring PRC tax. As a result, gains derived from such indirect transfer may be subject to PRC corporate income tax, and the transferee or other person who is obligated to pay for the transfer is obligated to withhold the applicable taxes, currently at a rate of 10% for the transfer of equity interests in a PRC resident enterprise.

 

If we consummate a business combination with a PRC-based company, we may face uncertainties on the reporting and consequences on future private equity financing transactions, share exchange or other transactions involving the transfer of shares in our company by investors that are non-PRC resident enterprises. The PRC tax authorities may pursue such non-resident enterprises with respect to a filing or the transferees with respect to withholding obligation, and request our PRC subsidiaries to assist in the filing. As a result, we and non-resident enterprises in such transactions may become at risk of being subject to filing obligations or being taxed, under Circular 59 or Circular 698 and Circular 7, and may be required to expend valuable resources to comply with Circular 59, Circular 698 and Circular 7 or to establish that we and our non-resident enterprises should not be taxed under these circulars, which may have a material adverse effect on our financial condition and results of operations.

 

The PRC tax authorities have the discretion under SAT Circular 59, Circular 698 and Circular 7 to make adjustments to the taxable capital gains based on the difference between the fair value of the taxable assets transferred and the cost of investment. Although we currently have no plans to pursue any acquisitions in China or elsewhere in the world, we may pursue acquisitions in the future that may involve complex corporate structures. If we are considered a non-resident enterprise under the PRC corporate income tax law and if the PRC tax authorities make adjustments to the taxable income of the transactions under SAT Circular 59 or Circular 698 and Circular 7, our income tax costs associated with such potential acquisitions will be increased, which may have an adverse effect on our financial condition and results of operations.

 

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In the event we successfully consummated a business combination with a target business in PRC, we may be subject to restrictions on dividend payments, which may affect our ability to pay dividends from PRC subsidiaries and to settle amounts owed under VIE agreements if our business combination is subject to a VIE structure.

 

If we close a business combination with a target business with primary operation in PRC, the combined company may conduct substantially all of its business operations in the PRC through its PRC subsidiaries and VIEs, while the combined company will not hold any direct equity interests in the VIEs, we may rely on dividends and other distributions from the PRC subsidiaries of the combined company and the VIEs to provide us with cash flow and to meet our other obligations. Current regulations in China would permit our PRC subsidiaries and our VIEs to pay dividends to the combined company only out of their accumulated distributable profits, if any, determined in accordance with Chinese accounting standards and regulations. In addition, each of our VIEs will be required to set aside at least 10% of its after-tax profits each year, if any, to fund a statutory reserve until such reserve reaches 50% of its registered capital. Our PRC subsidiaries as foreign-invested enterprises will be also required to further set aside a portion of their after-tax profits to fund the employee welfare fund, although the amount to be set aside, if any, is determined at their discretion. These reserves are not distributable as cash dividends. If our VIEs incur debt on their own behalf in the future, the instruments governing the debt may restrict their ability to pay dividends or make other payments to us. Any limitation on the ability of the PRC subsidiaries and the VIEs to distribute dividends or other payments to their respective shareholders could materially and adversely limit our ability to pay dividends or otherwise fund and conduct our business.

 

Moreover, the Enterprise Income Tax Law and its implementation rules provide that a withholding tax rate of up to 10% will be applicable to dividends payable by Chinese companies to non-PRC-resident enterprises unless otherwise exempted or reduced according to treaties or arrangements between the PRC central government and governments of other countries or regions where the non-PRC resident enterprises are incorporated. If we have to acquire the business through the use of contractual arrangements, which is not anticipated in view of the fact that asset classes in which we could consider a business combination in the PRC have been systematically eliminated from the “negative list” easing investment for foreign investors over time from 2015 to 2019. However, if applicable, if the VIEs decide to keep its profits for its business development and expansion instead of making dividends, the VIEs might not be able to pay its service fees to the PRC subsidiaries or repay any loan that the PRC subsidiaries may extend pursuant to the VIE Agreements, and the PRC subsidiaries will not be able to make dividend distribution to the Combined company, which may materially and adversely affect our ability to distribute earnings to the parent company and U.S. investors as well as the ability to settle amounts owed under the VIE agreements.

 

The PRC governmental authorities may take the view now or in the future that an approval from them is required for an overseas offering by a company affiliated with Chinese businesses or persons or a business combination with a target business based in and primarily operating in China.

 

The M&A Rules include, among other things, provisions that purport to require that an offshore special purpose vehicle formed for the purpose of an overseas listing of securities in a PRC company obtain the approval of the CSRC prior to the listing and trading of such special purpose vehicle’s securities on an overseas stock exchange. On September 21, 2006, the CSRC published on its official website procedures specifying documents and materials required to be submitted to it by special purpose vehicles seeking CSRC’s approval of overseas listings. However, substantial uncertainty remains regarding the scope and applicability of the M&A Rules and the CSRC approval requirement to offshore special purpose vehicles. Moreover, except for emphasizing the need to strengthen the administration over illegal securities activities, and the need to strengthen the supervision over overseas listings by Chinese companies, the Opinions, which was made available to the public on July 6, 2021, also provides that the State Council will revise provisions regarding the overseas issuance and listing of shares by companies limited by shares and will clarify the duties of domestic regulatory authorities.

 

Based on our understanding of the current PRC laws and regulations, no prior permission is required under the M&A Rules or the Opinions from any PRC governmental authorities (including the CSRC) for consummating this offering by our company, given that the CSRC currently has not issued any definitive rule or interpretation concerning whether offerings like ours under this prospectus are subject to the M&A Rules; and (b) our company is a blank check company newly incorporated in the State of Delaware rather than China and currently the company conducts no business in China. However, there remains some uncertainty as to how the M&A Rules and the Opinions will be interpreted or implemented in the context of an overseas offering or if we decide to consummate the business combination with a target business based in and primarily operating in China. If the CSRC or another PRC governmental authority subsequently determines that its approval is needed for this offering, or a business combination with a target business based in and primarily operating in China, we may face approval delays, adverse actions or sanctions by the CSRC or other PRC governmental authorities. In any such event, these governmental authorities may delay this offering or a potential business combination, impose fines and penalties, limit our operations in China, or take other actions that could materially adversely affect our business, financial condition, results of operations, reputation and prospects, as well as the trading price of our securities.

 

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We currently do not hold any equity interest in any PRC company or operate any business in China. Therefore, we are not required to obtain any permission from any PRC governmental authorities to operate our business as currently conducted. If we decide to consummate our business combination with a target business based in and primarily operating in China, the combined company’s business operations in China through its subsidiaries and VIEs, as applicable, are subject to relevant requirements to obtain applicable licenses from PRC governmental authorities under relevant PRC laws and regulations, as discussed throughout this prospectus.

 

In the course of completing our business combination, we may become subject to a variety of laws and regulations in the PRC regarding privacy, data security, cybersecurity, and data protection and we may be liable for improper use or appropriation of personal.

 

If we pursue a business combination with a China-based business, we may face additional burdens in connection with the PRC laws and regulations regarding cybersecurity, information security, privacy and data protection. Regulatory authorities in China have been considering a number of legislative proposals to heighten data protection and cybersecurity regulatory requirements. Since the promulgation of the PRC Cybersecurity Law, which became effective in June 2017, numerous regulations, guidelines and other measures have been and are expected to be adopted under the PRC Cybersecurity Law. In April 2020, the Cyberspace Administration of China and certain other PRC regulatory authorities promulgated the Measures for Cybersecurity Review, which requires that operators of critical information infrastructure must pass a cybersecurity review when purchasing network products and services which do or may affect national security.

 

On July 10, 2021, the Cyberspace Administration of China issued a revised draft of the Measures for Cybersecurity Review for public comments, which requires that, among others, in addition to “operator of critical information infrastructure”, any operator that possesses personal information of more than one million users would be subject to cybersecurity review by the Cybersecurity Review Office if it seeks a listing in a foreign country, and further elaborated the factors to be considered when assessing the national security risks of the relevant activities. The revised draft of the Measures for Cybersecurity Review is in the process of being formulated. The PRC Data Security Law, which took effect on September 1, 2021, imposes data security and privacy obligations on entities and individuals that carry out data activities, provides for a national security review procedure for data activities that may affect national security and imposes export restrictions on certain data and information.

 

On August 20, 2021, the Standing Committee of the People’s Congress promulgated the PRC Personal Information Protection Law (“PIPL”), which is to take effect on November 1, 2021. The PIPL sets out the regulatory framework for handling and protection of personal information and transmission of personal information overseas. If our potential future target business in China involves collecting and retaining internal or customer data, such target might be subject to the relevant cybersecurity laws and regulations, including the PRC Cybersecurity Law and the PIPL, and the cybersecurity review before effecting a busi