The following discussion and analysis of the Company's financial condition and
results of operations should be read in conjunction with our audited financial
statements and the notes related thereto which are included in "Item 8.
Financial Statements and Supplementary Data" of this Annual Report on Form 10-
Special Note Regarding Forward-Looking Statements
This Annual Report includes "forward-looking statements" that are not historical
facts and involve risks and uncertainties that could cause actual results to
differ materially from those expected and projected. All statements, other than
statements of historical fact included in this Annual Report including, without
limitation, statements in this "Management's Discussion and Analysis of
Financial Condition and Results of Operations" regarding the Company's financial
position, business strategy and the plans and objectives of management for
future operations, are forward-looking statements. Words such as "expect,"
"believe," "anticipate," "intend," "estimate," "seek" and variations and similar
words and expressions are intended to identify such forward-looking statements.
Such forward-looking statements relate to future events or future performance,
but reflect management's current beliefs, based on information currently
available. A number of factors could cause actual events, performance or results
to differ materially from the events, performance and results discussed in the
forward-looking statements. For information identifying important factors that
could cause actual results to differ materially from those anticipated in the
forward-looking statements, please refer to "Cautionary Note Regarding
Forward-Looking Statements," "Summary of Risk Factors," "Item 1A. Risk Factors"
and elsewhere in this Annual Report on Form 10-K. The Company's securities
filings can be accessed on the EDGAR section of the
Overview
We are a blank check company incorporated on
Results of Operations
We have neither engaged in any operations nor generated any revenues to date.
Our only activities for the period from
For the period from
Liquidity and Capital Resources
For the period from
44 Table of Contents
unrealized gain on investments in the Trust Account of
For the period from
For the period from
As of
On
Simultaneously with the closing of the Public Offering, the Company consummated
the sale of 7,150,000 warrants (the "Private Placement Warrants") at a price of
Upon the closing of the Public Offering on
We intend to use substantially all of the funds held in the Trust Account, including any amounts representing interest earned on the Trust Account (less taxes payable and deferred underwriting commissions), to complete our initial business combination. We may withdraw interest income (if any) to pay income taxes, if any. Our annual income tax obligations will depend on the amount of interest and other income earned on the amounts held in the Trust Account. We expect the interest income earned on the amount in the Trust Account (if any) will be sufficient to pay our income taxes. To the extent that our equity or debt is used, in whole or in part, as consideration to complete our initial business combination, the remaining proceeds held in the Trust Account will be used as working capital to finance the operations of the target business or businesses, make other acquisitions and pursue our growth strategies.
Prior to the completion of our initial business combination and subsequent to the Public Offering, we will use the proceeds from the Public Offering held outside the Trust Account, as well as have access to certain funds from loans from our sponsor, its affiliates or members of our management team. We will use these funds primarily to identify and evaluate target businesses, perform business due diligence on prospective target businesses, travel to and from the offices, plants or similar locations of prospective target businesses or their representatives or owners, review corporate documents and material agreements of prospective target businesses, and structure, negotiate and complete a business combination.
We do not believe we will need to raise additional funds following the Public Offering in order to meet the expenditures required for operating our business. However, if our estimates of the costs of identifying a target business, undertaking in-depth due diligence and negotiating an initial business combination are less than the actual amount necessary to do so, we may have insufficient funds available to operate our business prior to our initial business combination. Moreover, we may need to obtain additional financing either to consummate our initial business combination or because we become obligated to redeem a significant number of our public shares upon completion of our initial business combination, in which case we may issue additional securities or incur debt in connection with such business combination.
45 Table of Contents Going Concern
As of
Off-Balance Sheet Arrangements
We did not have any off-balance sheet arrangements as of
Contractual Obligations
Registration and Shareholder Rights Agreement
The holders of the Founder Shares, Private Placement Warrants and public warrants that may be issued upon conversion of working capital loans (and any Class A ordinary shares issuable upon the exercise of the Private Placement Warrants and warrants issued upon conversion of the working capital loans) are entitled to registration rights pursuant to a registration rights agreement signed on the effective date of the registration statement for the Public Offering. The holders of these securities are entitled to make up to three demands, excluding short form demands, that the Company register such securities. In addition, the holders have certain "piggy-back" registration rights with respect to registration statements filed subsequent to consummation of a business combination. We have granted Cantor and Odeon or their designees or affiliates certain registration rights relating to these securities. The underwriters may not exercise their demand and "piggyback" registration rights after five and seven years, respectively, after the effective date of the registration statement relating to the Public Offering and may not exercise demand rights on more than one occasion. The Company bears the expenses incurred in connection with the filing of any such registration statements.
Promissory Note -
On
Underwriting Agreement
In connection with the Public Offering, the underwriters were granted a 45-day
option from the date of the prospectus to purchase up to 3,000,000 additional
units to cover over-allotments. On
The underwriters were paid a cash underwriting discount of
Administrative Support Agreement
The Company has entered into an agreement with
46
Table of Contents
Critical Accounting Policies and Estimates
The preparation of financial statements and related disclosures in conformity
with accounting principles generally accepted in
Warrant Liabilities
The Company evaluated the public warrants and Private Placement Warrants, in accordance with ASC 480, "Distinguishing Liabilities from Equity", and ASC 815-40, "Derivatives and Hedging - Contracts in Entity's Own Equity", and concluded that a provision in the warrant agreement related to certain tender or exchange offers precludes the public warrants and Private Placement Warrants from being accounted for as components of equity. As the public warrants and Private Placement Warrants meet the definition of a derivative as contemplated in ASC 815, they are recorded as derivative liabilities on the balance sheet and measured at fair value at inception (on the date of the Public Offering) and at each reporting date in accordance with ASC 820, "Fair Value Measurement", with changes in fair value recognized in the statement of operations in the period of change. The determination of fair value for the warrant liabilities represents a significant estimate within the financial statements.
Class A Ordinary Shares Subject to Possible Redemption
All of the 23,000,000 Class A ordinary shares sold as part of the units in the
Public Offering and subsequent exercise of the underwriters' over-allotment
option contain a redemption feature which allows for the redemption of such
public shares in connection with the Company's liquidation, if there is a
shareholder vote or tender offer in connection with the business combination and
in connection with certain amendments to the Memorandum and Articles of
Association. In accordance with
The Company recognizes changes in redemption value immediately as they occur and adjusts the carrying value of redeemable ordinary shares to equal the redemption value at the end of each reporting period. Increases or decreases in the carrying amount of redeemable ordinary shares are affected by charges against additional paid in capital and accumulated deficit.
Net Income Per Ordinary Share
Net income per ordinary share is computed by dividing net income by the weighted-average number of ordinary shares outstanding during the period. Remeasurement associated with the redeemable Class A ordinary shares is excluded from net income per share as the redemption value approximates fair value. Therefore, the income per share calculation allocates income shared pro rata between Class A and Class B ordinary shares. As a result, the calculated net income per share is the same for Class A and Class B ordinary shares. Class B ordinary shares subject to forfeiture are included in the calculation of basic income per share beginning at the Public Offering date, as the over-allotment option was exercised in full and no Founder Shares remained subject to forfeiture. Class B ordinary shares subject to forfeiture are included in the calculation of diluted income per share at the date that the Founder Shares were issued. The Company has not considered the effect of the exercise of the public warrants and Private Placement Warrants to purchase an aggregate of 18,650,000 shares in the calculation of diluted income per share, since the exercise of the warrants is contingent upon the occurrence of future events.
Derivative Financial Instruments
The Company evaluates its financial instruments to determine if such instruments are derivatives or contain features that qualify as embedded derivatives in accordance with ASC Topic 815, "Derivatives and Hedging" ("ASC 815"). Derivative instruments are initially recorded at fair value on the grant date and re-valued at each reporting date, with changes in the fair value reported in the statements of operations. Derivative assets and liabilities are classified in the balance sheet as current or non-current based on whether or not net-cash settlement or conversion of the instrument could be required within 12 months of the balance sheet date.
47 Table of Contents
Founder Shares Attributable to
A total of eight anchor investors purchased 1,980,000 units in the Public
Offering at the offering price of
Each anchor investor entered into separate investment agreements with the
Company and the sponsor pursuant to which each anchor investor purchased a
specified number of Founder Shares, or an aggregate of 1,747,879 Founder Shares,
from the sponsor for
The Company estimated the fair value of the Founder Shares attributable to the
anchor investors to be
Recent Accounting Standards
In
Management does not believe that any other recently issued, but not yet effective, accounting standards, if currently adopted, would have a material effect on the Company's financial statements.
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