EDGAR 10-K Filing

Company CIK: 1841209
Filing Year: 2022
Filename: 1841209_10-K_2022_0001829126-22-007172.json

---

ITEM 1. BUSINESS
ITEM
1. BUSINESS
Company
Profile
Golden
Path Acquisition Corporation (the “Company”) is a blank check company incorporated in the Cayman Islands and formed for the
purpose of acquiring, engaging in a share exchange, share reconstruction and amalgamation with, purchasing all or substantially all of
the assets of, entering into contractual arrangements with, or engaging in any other similar business combination with one or more businesses
or entities, which we refer to throughout this report as our business combination. Our efforts in identifying prospective target businesses
will not be limited to a particular geographic region, although we intend to focus on businesses that have a connection to the Asian
market. We believe that we will add value to these businesses primarily by providing them with access to the U.S. capital markets.
On
June 24, 2021, the Company consummated the IPO of 5,000,000 units. In addition, the underwriters exercised in full the over-allotment
option for an additional 750,000 Units, resulting in the issuance and sale of an aggregate of 5,750,000 Units. Each Unit consists of
one ordinary share, par value $0.0001 per ordinary share, one redeemable warrant entitling its holder to purchase one-half of one Share
at a price of $11.50 per Share, and one right to receive one-tenth (1/10) of one Share upon the consummation of the Company’s initial
business combination.
Simultaneously
with the closing of the IPO, the Company consummated the private placement (“Private Placement”) with its sponsor, Greenland
Asset Management Corporation, a British Virgin Islands company (“Sponsor”) for the purchase of 270,500 units (the “Private
Units”) at a price of $10.00 per Private Unit, generating total proceeds of $2,705,000, pursuant to the Private Placement Unit
Purchase Agreement dated June 17, 2021.
The
Sponsor had previously advanced expenses or loaned the Company the sum of $453,364, evidenced in part by a note dated as of December
19, 2020 which loan was payable upon the earlier of completion of the IPO or December 31, 2021. In connection with the completion of
the IPO, the note was repaid in full via an offset of certain amounts due under the Private Placement subscription.
As
of June 24, 2021, a total of $58,075,000 of the net proceeds from the IPO and the Private Placement Unit Purchase Agreement transaction
completed with the Sponsor were deposited in a trust account established for the benefit of the Company’s public shareholders,
established with Wilmington Trust, National Association acting as trustee, at an account at Morgan Stanley.
As
a result of the IPO, the Private Placement and sale of units to our underwriter, assuming the units were split into its component parts,
we had: (i) 6,020,500 units, (ii) 7,458,000 ordinary shares (including 1,437,500 founder shares), (iii) 6,020,500 rights to acquire an aggregate of 602,050 ordinary shares:
and (iv) 6,020,500 warrants to acquire 3,010,250 ordinary shares issued and outstanding as of June 24, 2021. We have not issued any securities
since such date.
Prior
to the IPO, there had been no public market for our units, ordinary shares, rights or warrants. Our units are listed for trading on
the NASDAQ Capital Market, or NASDAQ, under the symbol “GPCOU”. The ordinary shares, rights and warrants comprising the units
began separate trading on July 30, 2021 and are traded on NASDAQ under the symbols “GPCO,” “GPCOR” and “GPCOW”
respectively. As our IPO registration statement and Form 8A were not declared effective by the SEC until June 21, 2021, we were not a
filing company under the Securities and exchange Act of 1934, as amended until June 21, 2021.
Since our IPO and until our execution of the merger agreement with MC Hologram Inc. and Golden Path Merger Sub Corporation in September 2021, our sole business activity has been identifying and evaluating suitable acquisition transaction candidates and engaging in non-binding discussions with potential target entities. Thereafter, our business activities have also included the preparation of a registration statement and proxy statement in connection with seeking stockholder approval of the proposed business combination with MC Hologram Inc. (the “Business Combination”). We presently have no revenue and have had losses since inception from incurring formation and operating costs since completion of our IPO. Other than as specifically discussed, this report does not assume the closing of the Business Combination.
Recent
Developments
On
September 10, 2021, we, MC Hologram Inc., a Cayman Islands exempted company (“MC”), and Golden Path Merger Sub Corporation,
a Cayman Islands exempted company and wholly-owned subsidiary of the Company (the “Merger Sub”), entered into a Merger
Agreement (the “Merger Agreement”).
Pursuant
to the Merger Agreement, upon the terms and subject to the conditions of the Merger Agreement and in accordance with the Cayman Islands
Companies Act (As Revised), the parties intend to effect a business combination transaction whereby the Merger Sub will merge with and
into MC, with MC being the surviving entity and becoming a wholly owned Subsidiary of the Company (the “Merger”). On the terms
and subject to the conditions set forth in the Merger Agreement and simultaneously with the closing of the Merger, the Company will change its name
to “MicroCloud Hologram Inc.”
The
Board of Directors of both the Company and MC and the stockholders of MC have approved the Merger Agreement and the transactions contemplated
by it.
Pursuant
to the Merger Agreement, the Merger is structured as a stock for stock transaction and is intended to be qualified as a tax-free reorganization.
The terms of the Merger provide for a valuation of MC and its subsidiaries and businesses of $450,000,000. Based upon a per share value
of $10.10 per share, the stockholders of MC will receive approximately 44,554,455 ordinary shares of the Company which will represent
approximately 84.07% of the combined outstanding shares following the closing, assuming no redemptions by our stockholders and assuming
conversion of our outstanding rights into 602,050 ordinary shares.
Consummation
of the transactions contemplated by the Merger Agreement is subject to customary conditions of the respective parties, including the
approval of the Merger Agreement by our shareholders. Other than as specifically discussed, this report does not assume the closing of
the business combination with MC.
Management
Business Combination Experience
We
will seek to capitalize on the strength of our management team. Our team consists of experienced professionals and senior operating executives.
Collectively, our officers and directors have decades of experience in mergers and acquisitions, and operating companies, in Asia. We
believe we will benefit from their accomplishments, and specifically their current and recent activities with companies that have a connection
to the Asian market, in identifying attractive acquisition opportunities. However, there is no assurance that we will complete a business
combination.
We
believe that the members of our management team and board of directors have valuable and applicable experience for sourcing and analyzing
potential acquisition candidates across various industries and on an international basis based upon their professional experience. Our
Chief Executive Officer, Mr. Cheng has advised numerous private and public companies in insurance matters and sales efforts. Among other
experience relative to sourcing and analyzing potential business combination candidates, our Chief Financial Officer, Mr. Teddy Zheng,
served as Chief Financial Officer of another SPAC entity, Longevity Acquisition Corporation, and is a managing member of Cyngus Equity,
a boutique investment banking firm. Previously, he was employed in the investment banking department at Lazard Freres and JP Morgan First
Capital in China. Hai Lin, one of our directors, has served as General Manager of Red 13 Financial Holdings (Hong Kong) Co., Ltd. since
Jan 2015, where Mr. Lin is responsible for project development, mergers and acquisition and corporate finance, including company creating
and advising on corporate presentations, investment planning and transaction structure. Mr. Lin’s career includes a long and extensive
experience in merger and acquisition transactions and sourcing and analyzing investment opportunities.
Business
Strategy
Our
efforts in identifying prospective target businesses will not be limited to a particular geographic region, although we intend to focus
on businesses that have a connection to the Asian market. We believe that we will add value to these businesses primarily by providing
them with access to the U.S. capital markets.
Acquisition
Criteria
Our
management team intends to focus on creating shareholder value by leveraging its experience in the management, operation and financing
of businesses to improve the efficiency of operations while implementing strategies to scale revenue organically and/or through acquisitions.
We have identified the following general criteria and guidelines, which we believe are important in evaluating prospective target businesses.
While we intend to use these criteria and guidelines in evaluating prospective businesses, we may deviate from these criteria and guidelines
should we see justification to do so.
● Middle-Market Growth
Business. We will primarily seek to acquire one or more growth businesses with a total enterprise
value of between $150,000,000 and $300,000,000. We believe that there are a substantial number of potential target businesses within
this valuation range that can benefit from new capital for scalable operations to yield significant revenue and earnings growth.
We currently do not intend to acquire either a start-up company (a company that has not yet established commercial operations) or
a company with negative cash flow.
● Companies in Business
Segments that are Strategically Significant to the Asian Markets. We will seek to acquire those businesses
that are currently strategically significant in the Asian markets. Such sectors include: Internet and high technology, financial
technology (including technology applied in financial services or used to help companies manage the financial aspects of their business),
clean energy, health care, consumer and retail, energy and resources, food processing, manufacturing and education.
● Business with Revenue
and Earnings Growth Potential. We will seek to acquire one or more businesses that have the potential
for significant revenue and earnings growth through a combination of both existing and new product development, increased production
capacity, expense reduction and synergistic follow-on acquisitions resulting in increased operating leverage.
● Companies with Potential
for Strong Free Cash Flow Generation. We will seek to acquire one or more businesses that have the
potential to generate strong, stable and increasing free cash flow. We intend to focus on one or more businesses that have predictable
revenue streams and definable low working capital and capital expenditure requirements. We may also seek to prudently leverage this
cash flow in order to enhance shareholder value.
● Benefit from Being
a Public Company. We intend to only acquire a business or businesses that will benefit from being
publicly traded and which can effectively utilize access to broader sources of capital and a public profile that are associated with
being a publicly traded company.
These
criteria are not intended to be exhaustive or exclusive. Any evaluation relating to the merits of a particular business combination may
be based, to the extent relevant, on these general guidelines as well as other considerations, factors and criteria that our sponsor
and management team may deem relevant. In the event that we decide to enter into a 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 business combination, which would be in the form of proxy solicitation or tender offer materials, as applicable,
that we would file with the United States Securities and Exchange Commission, or the SEC. In evaluating a prospective target business,
we expect to conduct a due diligence review which may encompass, among other things, meetings with incumbent ownership, management and
employees, document reviews, interviews of customers and suppliers, inspections of facilities, as well as reviewing financial and other
information which will be made available to us.
Past
performance by our management team, including their affiliates’ past performance, is not a guarantee either (i) of success with
respect to any business combination we may consummate or (ii) that we will be able to locate a suitable candidate for our initial business
combination. Stockholders should not rely on the historical record of our management team and their affiliates as indicative of our future
performance.
Sourcing
of Potential Business Combination Targets
Our
management team has developed a broad network of contacts and corporate relationships. We believe that the network of contacts and relationships
of our management team and our sponsor will provide us with an important source of business combination opportunities. In addition, we
anticipate that target business candidates will be brought to our attention from various unaffiliated sources, including investment banking
firms, private equity firms, consultants, accounting firms and business enterprises. We are not prohibited from pursuing an initial business
combination with a company that is affiliated with our sponsor, officers or directors, or completing the business combination through
a joint venture or other form of shared ownership with our sponsor, officers or directors.
Unless
we complete our initial business combination with an affiliated entity, or our Board of Directors cannot independently determine the
fair market value of the target business or businesses, we are not required to obtain an opinion from an independent investment banking
firm, another independent firm that commonly renders valuation opinions for the type of company we are seeking to acquire or from an
independent accounting firm that the price we are paying for a target is fair to our company from a financial point of view. If no opinion
is obtained, our shareholders will be relying on the business judgment of our Board of Directors, which will have significant discretion
in choosing the standard used to establish the fair market value of the target or targets, and different methods of valuation may vary
greatly in outcome from one another. Such standards used will be disclosed in our tender offer documents or proxy solicitation materials,
as applicable, related to our initial business combination.
Members
of our management team may directly or indirectly own our ordinary shares and/or private placement units following the IPO, and, accordingly,
may have a conflict of interest in determining whether a particular target business is an appropriate business with which to effectuate
our initial business combination. Further, each of our officers and directors may have a conflict of interest with respect to evaluating
a particular business combination if the retention or resignation of any such officers and directors was included by a target business
as a condition to any agreement with respect to our initial business combination.
Each
of our directors and officers presently has, and in the future any of our directors and our officers may have additional, fiduciary or
contractual obligations to other entities pursuant to which such officer or director is or will be required to present acquisition opportunities
to such entity. Accordingly, subject to his or her fiduciary duties under Cayman Islands law, if any of our officers or directors becomes
aware of an acquisition opportunity which is suitable for an entity to which he or she has then current fiduciary or contractual obligations,
he or she will need to honor his or her fiduciary or contractual obligations to present such acquisition opportunity to such entity,
and only present it to us if such entity rejects the opportunity. Our amended and restated memorandum and articles of association provides
that, subject to his or her fiduciary duties under Cayman Islands law, we renounce our interest in any corporate opportunity offered
to any officer or director 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 we are legally and contractually permitted to undertake and would otherwise be reasonable
for us to pursue. We do not believe, however, that any fiduciary duties or contractual obligations of our directors or officers would
materially undermine our ability to complete our business combination.
Effecting
A Business Combination
Under our amended and restated memorandum and articles of association, we have until 12 months from the closing of the IPO to consummate our initial business combination provided, however if we anticipate that we may not be able to consummate our initial business combination within 12 months, we may, by resolution of our board if requested by our sponsor, extend the period of time to consummate a business combination up to nine times, each by an additional one month (for a total of up to 21 months to complete a business combination), subject to the sponsor depositing additional funds into the trust account as set out below. Pursuant to the terms of our memorandum and articles of association and the trust agreement to be entered into between us, Wilmington Trust National Association and Vstock Transfer LLC, in order for the time available for us to consummate our initial business combination to be extended, our sponsor or its affiliates or designees, upon five days advance notice prior to the applicable deadline, must deposit into the trust account $191,667 (approximately $0.033 per public share), up to an aggregate of $1,725,000, or $0.30 per public share (for an aggregate of 9 months), on or prior to the date of the applicable deadline, for each extension. In the event that we receive notice from our sponsor five days prior to the applicable deadline of its wish for us to effect an extension, we intend to issue a press release announcing such intention at least three days prior to the applicable deadline. In addition, we intend to issue a press release the day after the applicable deadline announcing whether or not the funds had been timely deposited. Our sponsor and its affiliates or designees are not obligated to fund the trust account to extend the time for us to complete our initial business combination. If we are unable to consummate our initial business combination within the applicable time period, we will, as promptly as reasonably possible but not more than ten business days thereafter, redeem the public shares for a pro rata portion of the funds held in the trust account and 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 Cayman Islands law to provide for claims of creditors and the requirements of other applicable law. In such event, the warrants and rights will be worthless.
Our
sponsor may extend the time frame by the company to complete a business combination up to an additional nine (9) months to complete a
business combination by depositing the required amount of funds for each monthly extension. Holders of our securities will not have the
right to approve or disapprove any such monthly extension. Further, holders of our securities will not have the right to seek or obtain
redemption in connection with any extension of the time frame to complete a business combination.
Any
such payments from our sponsor to extend the time frame would be made in the form of a loan from our sponsor to the company. The final
and definitive terms of the loan in connection with any such loans have not yet been negotiated, but any such loan would be interest
free and not repaid unless and until we complete a business combination. If we complete our initial business combination, we would expect
to repay such loaned amounts out of the proceeds of the trust account released to us or from funds which may be raised in any subsequent
capital financing transaction which may be undertaken in connection with the completion of a business combination.
The
NASDAQ rules require that our initial business combination must be with one or more target businesses that together have an aggregate
fair market value equal to at least 80% of the balance in the trust account (less any deferred underwriting commissions and taxes payable
on interest earned) at the time of our signing a definitive agreement in connection with our initial business combination. If our Board
of Directors is not able to independently determine the fair market value of the target business or businesses, we will obtain an opinion
from an independent investment banking firm or another independent firm that commonly renders valuation opinions for the type of company
we are seeking to acquire or an independent accounting firm. We do not intend to purchase multiple businesses in unrelated industries
in conjunction with our initial business combination. If we are delisted from NASDAQ prior to completion of the business combination,
the NASDAQ 80% requirement would no longer be applicable.
We
shall either (1) seek shareholder approval of our initial business combination at a meeting called for such purpose at which shareholders
may seek to redeem their shares, regardless of whether they vote for or against the proposed business combination, into their pro rata
share of the aggregate amount then on deposit in the trust account, including interest (which interest shall be net of taxes payable)
or (2) provide our public shareholders with the opportunity to tender their shares to us by means of a tender offer (and thereby avoid
the need for a shareholder vote) for an amount equal to their pro rata share of the aggregate amount then on deposit in the trust account,
including interest (which interest shall be net of taxes payable) in each case subject to the limitations described herein.
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 the law or stock exchange listing requirement. In the
case of a tender offer, we will file tender offer documents with the SEC prior to completing our initial business combination which contain
substantially the same financial and other information about the initial business combination and the redemption rights as is required
under Regulation 14A of the Exchange Act, which regulates the solicitation of proxies. In either case, we will consummate our initial
business combination only if we have net tangible assets of at least $5,000,001 upon such consummation and, if we seek stockholder approval,
a majority of the outstanding shares of common stock voted are voted in favor of the business combination.
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. The determination of whether or not
to acquire less than 100% of the equity interests or assets will be dependent upon numerous factors, including satisfaction certain objectives
of the target management team or target’s shareholders, the costs of any such proposed acquisition or for other reasons, many of
which we cannot determine at this time and will be contingent upon negotiations with prospective targets. We may, however, structure
our initial business combination such that the post-transaction company owns or acquires less than 100% of such interests or assets of
the target business in order to meet certain objectives of the target management team or shareholders or for other reasons, but we will
only complete a business combination for equity interests 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 or in the event of an Assets Acquisition,
an Acquisition which results in an Operating business line, sufficient for it not to be required to register as an investment company
under the Investment Company Act of 1940, as amended, or the Investment Company Act. In considering an asset transaction, we would acquire
such assets only if we could constitute from such assets a stand-alone operating business. Even if the post-transaction 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-transaction company, depending on valuations ascribed to the target and us in the business combination
transaction. For example, we could pursue a transaction in which we issue a substantial number of new shares in exchange for all of the
outstanding capital stock of a target. In this case, we would acquire a 100% controlling interest in the target. However, as a result
of the issuance of a substantial number of new shares, our 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 valued for purposes of the 80% of Nasdaq net assets test. If our initial business combination
involves more than one target business or assets from different business, the 80% of net assets test will be based on the aggregate value
of all of the target businesses.
Status
as a Public Company and Financial Considerations
We
believe our structure will make us an attractive business combination partner to target businesses. As an existing public company, we
offer a target business an alternative to the traditional initial public offering through a merger or other business combination. In
this situation, the owners of the target business would exchange their shares of stock in the target business for our shares or for a
combination of our shares and cash, allowing us to tailor the consideration to the specific needs of the sellers. Although there are
various costs and obligations associated with being a public company, we believe target businesses will find this method a more certain
and cost effective method to becoming a public company than the typical initial public offering. In a typical initial public offering,
there are additional expenses incurred in marketing, road show and public reporting efforts that may not be present to the same extent
in connection with a business combination with us. Furthermore, once a proposed business combination is completed, the target business
will have effectively become public, whereas an initial public offering is always subject to the underwriters’ ability to complete
the offering, as well as general market conditions, which could delay or prevent the offering from occurring. Once public, we believe
the target business would then have greater access to capital and an additional means of providing management incentives consistent with
shareholders’ interests. It can offer further benefits by augmenting a company’s profile among potential new customers and
vendors and aid in attracting talented employees.
While
we believe that our structure and our management team’s backgrounds will make us an attractive business partner, some potential
target businesses may have a negative view of us since we are a blank check company, without an operating history, and there is uncertainty
relating to our ability to obtain shareholder approval of our proposed initial business combination and retain sufficient funds in our
trust account in connection therewith.
With
funds available for a business combination initially in the amount of $56,637,500 assuming no redemptions and after payment of up to
$1,437,500 of deferred underwriting fees, in each case before fees and expenses associated with our initial business combination, we
offer a target business a variety of options such as creating a liquidity event for its owners, providing capital for the potential growth
and expansion of its operations or strengthening its balance sheet by reducing its debt ratio. Because we are able to complete our initial
business combination using our cash, debt or equity securities, or a combination of the foregoing, we have the flexibility to use the
most efficient combination that will allow us to tailor the consideration to be paid to the target business to fit its needs and desires.
However, we have not taken any steps to secure third party financing and there can be no assurance it will be available to us. We may
seek to raise additional funds through a private offering of debt or equity securities in connection with the completion of our initial
business combination, and we may effectuate our initial business combination using the proceeds of such offering rather than using the
amounts held in the trust account.
Summary
Information Related to Our Securities, Redemption Rights and Liquidation
We
are a Cayman Islands exempted company (company number 1-336881) and our affairs are governed by our amended and restated memorandum and
articles of association, the Companies Act and common law of the Cayman Islands. Pursuant to our amended and restated memorandum and
articles of association which was adopted upon the consummation of the IPO, we are authorized to issue 500,000,000 ordinary shares, par
value $0.0001 per share. The information provided below is a summary only and we refer you to our prospectus dated as of June 22, 2021,
our amended and restated memorandum and articles of association and our warrant agreement and rights agreement with Vstock Transfer LLC
as warrant and rights agent for additional important and material information.
Upon
completion of our IPO and as of March 8, 2022, we had and have 7,458,000 ordinary shares issued and outstanding. Ordinary shareholders
of record are entitled to one vote for each share held on all matters to be voted on by shareholders and vote together as a single class,
except as required by law. Unless specified in the Cayman Islands Companies Act, our amended and restated memorandum and articles of
association or applicable stock exchange rules, the affirmative vote of a majority of our ordinary shares that are voted is required
to approve any such matter voted on by our shareholders. Approval of certain actions will require a special resolution under Cayman Islands
law 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. Directors are elected
for a term of two years. There is no cumulative voting with respect to the election of directors, with the result that the holders of
more than 50% of the founder shares voted for the election of directors can elect all of the directors. Our shareholders are entitled
to receive ratable dividends when, as and if declared by the Board of Directors out of funds legally available therefor.
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 (which interest shall be net
of taxes payable) divided by the number of then issued and 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 (subject to increase of up to an additional $0.033
per public share in the event that our sponsor elects to extend the period of time to consummate a business combination). The per-share
amount we will distribute to investors who properly redeem their shares will not be reduced by the deferred underwriting commissions
we will pay to the underwriters. There will be no redemption rights upon the completion of our initial business combination with respect
to our warrants or rights. 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 their founder shares, private placement shares and any public shares they may
acquire during or after the IPO in connection with the completion of our IPO.
If
a shareholder vote is not required by law and we do not decide to hold a shareholder vote for business or other legal reasons, we will,
pursuant to our amended and restated memorandum and articles of association, conduct the redemptions pursuant to the tender offer rules
of the SEC, and file tender offer documents with the SEC prior to completing our initial business combination. Our amended and restated
memorandum and articles of association will require these tender offer documents to contain substantially the same financial and other
information about the initial business combination and the redemption rights as is required under the SEC’s proxy rules. If, however,
a shareholder approval of the transaction is required by law, or we decide to obtain shareholder approval for business or other legal
reasons, we will, like many blank check companies, offer to redeem shares in conjunction with a proxy solicitation pursuant to the proxy
rules and not pursuant to the tender offer rules. If we seek shareholder approval, we will complete our initial business combination
only if a majority of the issued and outstanding ordinary shares voted are voted in favor of the business combination. However, the participation
of our sponsor, officers, directors or their affiliates in privately-negotiated transactions, if any, could result in the approval of
our initial business combination even if a majority of our public shareholders vote, or indicate their intention to vote, against such
business combination. For purposes of seeking approval of the majority of our issued and outstanding ordinary shares, non-votes will
have no effect on the approval of our initial business combination once a quorum is obtained. We intend to give approximately 30 days
(but not less than 10 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.
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 ordinary shares sold in the IPO, which we refer to as the “Excess Shares.” However,
we would not be restricting our shareholders’ ability to vote all of their shares (including Excess Shares) for or against our
initial business combination.
Our
shareholders’ inability to redeem the Excess Shares will reduce their influence over our ability to complete our initial business
combination, and such shareholders could suffer a material loss in their investment if they sell such Excess Shares on the open market.
Additionally, such shareholders will not receive redemption distributions with respect to the Excess Shares if we complete the business
combination. And, as a result, such shareholders will continue to hold that number of shares exceeding 15% and, in order to dispose such
shares would be required to sell their shares in open market transactions, potentially at a loss.
If
we are unable to complete our initial business combination within such 12-month (or up to 21-month) 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 (which interest shall be net of taxes payable, and less up to $50,000 of interest to pay dissolution expenses) divided
by the number of then issued and outstanding public shares, which redemption will completely extinguish public shareholders’ rights
as shareholders (including the right to receive further liquidation distributions, if any), subject to applicable law, and (iii) as promptly
as reasonably possible following such redemption, subject to the approval of our remaining shareholders and our Board of Directors, liquidate
and dissolve, subject in each case to our obligations under Cayman Islands law to provide for claims of creditors and the requirements
of other applicable law.
In
connection with our IPO and consummation of the private placement with our sponsor we issued an aggregate of 6,020,500 rights to acquire
an aggregate of 602,050 ordinary shares.
If
we enter into a definitive agreement for a business combination in which we will be the surviving entity, each holder of a right will
receive one-tenth (1/10) of one ordinary share upon consummation of our initial business combination, even if the holder of such right
redeemed all ordinary shares held by him, her or it in connection with the initial business combination or an amendment to our memorandum
and articles of association with respect to our pre-business combination activities. No additional consideration will be required to
be paid by a holder of rights in order to receive his, her or its additional ordinary shares upon consummation of an initial business
combination as the consideration related thereto has been included in the unit purchase price paid for by investors in the IPO. The shares
issuable upon exchange of the rights will be freely tradable (except to the extent held by affiliates of ours).
If
we are unable to complete a business combination within the required time period and we liquidate the funds held in the trust account,
holders of rights will not receive any of such funds with respect to their rights, nor will they receive any distribution from our assets
held outside of the trust account with respect to such rights, and the rights will expire worthless.
In
connection with our IPO and consummation of the private placement with our sponsor we issued an aggregate of 6,020,500 warrants to acquire
an aggregate of 3,010,250 ordinary shares. The warrants purchased in our IPO have been issued in registered form under a warrant agreement
between Vstock Transfer LLC, as warrant agent, and us. Each warrant entitles the registered holder to purchase one-half of one ordinary
share at a price of $11.50 per share, subject to adjustment as discussed below, at any time commencing on the later of 12 months from
the date of the closing of the IPO or thirty (30) days after the completion of our business combination. Because the warrants may only be exercised for whole numbers of shares,
only an even number of warrants may be exercised at any given time. Pursuant to the warrant agreement, a warrant holder may exercise
its warrants only for a whole number of shares. This means that only an even number of warrants may be exercised at any given time by
a warrant holder. The warrants will expire five years after the completion of our initial business combination, at 5:00 p.m., New York
City time, or earlier upon redemption or liquidation.
We
will not be obligated to deliver any ordinary shares pursuant to the exercise of a warrant and will have no obligation to settle such
warrant exercise unless a registration statement under the Securities Act with respect to the ordinary shares underlying the warrants
is then effective and a prospectus relating thereto is current, subject to our satisfying our obligations described below with respect
to registration. 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, and within 60 business days following our initial business combination to
have declared effective, a registration statement covering the ordinary shares issuable upon exercise of the warrants.
Once
the warrants become exercisable, we may redeem the outstanding warrants (except as described herein with respect to the private placement
warrants):
● in
whole and not in part;
● at
a price of $0.01 per warrant;
● upon
a minimum of 30 days’ prior written notice of redemption, which we refer to as the 30-day redemption period; and
● if,
and only if, the last sale price of our ordinary shares equals or exceeds $18.00 per share (as adjusted for share splits, share capitalizations,
rights issuances, subdivisions, reorganizations, recapitalizations and the like) for any 20 trading days within a 30-trading day
period ending on the third trading day prior to the date on which we send the notice of redemption to the warrant holders.
If
and when the warrants become redeemable by us, we may not exercise our redemption right if the issuance of 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.
If
and when the warrants become redeemable by us, we may not exercise our redemption right if the issuance of 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.
Holders
of warrants are not entitled to voting rights or any right to redemption in the event that we consummate a business combination.
Corporate
Information
We
are an “emerging growth company,” as defined in Section 2(a) of the Securities Act of 1933, as amended, or the Securities
Act, as modified by the Jumpstart Our Business Startups Act of 2012, or the JOBS Act. As such, we are eligible to take advantage of certain
exemptions from various reporting requirements that are applicable to other public companies that are not “emerging growth companies”
including, but not limited to, not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley
Act of 2002, or the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in our periodic reports and proxy
statements, and exemptions from the requirements of holding a non-binding advisory vote on executive compensation and 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 the IPO, (b) in which we have total annual gross revenue of at least $1.07 billion, or (c) in which we are deemed to
be a large accelerated filer, which means the market value of our ordinary shares that is held by non-affiliates exceeds $700 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” shall have the meaning associated with
it in the JOBS Act.
We
are a Cayman Islands exempted company incorporated on May 9, 2018. Our executive offices are located at 100 Park Avenue, New York, NY
10017, and our telephone number is 917-267-4569.

---

ITEM 1A. RISK FACTORS
ITEM
1A. RISK FACTORS
An
investment in our securities involves a high degree of risk. You should consider carefully all of the risks described below, together
with the other information contained in this report, before making a decision to invest in our units. 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. For risk factors related to the Business Combination,
see the Registration Statement on Form S-4 filed by the Company on September 30, 2021, and as subsequently amended.
Risk
Factor Summary
● We are a blank-check company with no operating history and no revenues, and you have no basis on which to evaluate our ability to achieve our business objective.
● Our
public shareholders may not be afforded an opportunity to vote on our proposed 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.
● Your
only opportunity to affect the investment decision regarding a potential business combination will be limited to the exercise of your
right to redeem your shares from us for cash, unless we seek shareholder approval of the business combination.
● If
we seek shareholder approval of our initial business combination, our sponsor, officers and directors have agreed to vote in favor of
such initial business combination, regardless of how our public shareholders vote.
● 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
requirement that we complete our initial business combination within the prescribed time frame may give potential target businesses leverage
over us in negotiating a business combination and may decrease our ability 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.
● 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 COVID-19 outbreak and the status of debt and equity markets.
● We
may only be able to complete one business combination with the proceeds of the IPO and the sale of the private 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.
● If
we seek shareholder approval of our initial business combination, our sponsor, directors, officers, advisors and their 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 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 have any rights or interests in funds from the trust account, except under certain limited circumstances. To liquidate your
investment, therefore, you may be forced to sell your public shares, rights or warrants, potentially at a loss.
● If
we are unable to complete our initial business combination, our public shareholders may receive only approximately $10.10 per share,
or less in certain circumstances, on our redemption, and our rights and warrants will expire worthless.
● If
the net proceeds of the IPO not being held in the trust account are insufficient to allow us to operate for at least for 12 months or
up to 21 months from the closing of the IPO if we extend the period of time to consummate a business combination, we may be unable to
complete our initial business combination.
● Past
performance by our management team and their respective affiliates may not be indicative of future performance of an investment in us.
● You
will not have any rights or interests in funds from the trust account, except under certain limited circumstances. To liquidate your
investment, therefore, you may be forced to sell your public shares, rights or warrants, potentially at a loss.
● NASDAQ
may delist our securities from trading on its exchange, which could limit investors’ ability to make transactions in our securities
and subject us to additional trading restrictions or reduce protections under NASDAQ rules available to them.
● If
we effect our initial business combination with a business located in the People’s Republic of China, the laws applicable to such
business will likely govern all of our material agreements and we may not be able to enforce our legal rights.
● If
we effect our initial business combination with a business located in the PRC, we may be subject to certain risks associated with acquiring
and operating businesses in the PRC.
● 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.
● PRC
laws and regulations governing our post-combination entity’s business operations are sometimes vague and uncertain and any changes
in such laws and regulations may impair our ability to operate profitably.
● The
recent joint statement by the SEC and the 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, including companies based in China,
upon assessing the qualification of their auditors, especially the non-U.S. auditors who are not inspected by the PCAOB.
General
Risks Factors in Investing in a SPAC Entity and Completing a Business Combination
We
have no operating history and no revenues, and you have no basis on which to evaluate our ability to achieve our business objective.
We
were incorporated in 2018 under the laws of the Cayman Islands and to date have had no operating results, and we did not commence operations
until obtaining funding through the IPO. Because we lack an operating history, you have no basis upon which to evaluate our ability to
achieve our business objective of completing our initial business combination with one or more target businesses. Although we have entered
into an agreement for a business combination as described above, consummation of the transactions contemplated by such agreements are
subject to customary conditions of respective parties including the approval of the Merger Agreement by our shareholders. Accordingly,
we may be unable to complete our business combination. If we fail to complete our initial business combination, we will never generate
any operating revenues.
Our working capital position and the requirement that we consummate an initial business combination within 21 months after the closing of our IPO give rise to substantial doubt about our ability to continue as a going concern.
At December 31, 2021, we had approximately $48,955 in cash outside of our trust account. We have incurred and we expect to continue to incur significant costs in pursuit of a business combination. Further, we need to consummate our business combination within 12 months (or up to 21 months from the closing of our IPO if we extend the period of time to consummate a business combination) of the closing of our IPO, and it is uncertain that we will be able to consummate a business combination within the applicable time period. If a business combination is not consummated within the applicable time period, we will commence a mandatory liquidation and subsequent dissolution. These conditions raise substantial doubt about our ability to continue as a going concern for a period of time within one year after the date of our financial statements included in this report. Our financial statements do not include any adjustments that might result from the outcome of this uncertainty.
Our
public shareholders may not be afforded an opportunity to vote on our proposed 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 not hold a shareholder vote to approve our initial business combination unless the business combination would require shareholder
approval under applicable Cayman Islands law or the rules of the NASDAQ or if we decide to hold a shareholder vote for business or other
reasons. Examples of transactions that would not ordinarily require shareholder approval include asset acquisitions and share purchases,
while transactions such as direct mergers with our company or transactions where we issue more than 20% of our outstanding shares would
require shareholder. For instance, the NASDAQ rules currently allow us to engage in a tender offer in lieu of a shareholder meeting but
would still require us to obtain shareholder approval if we were seeking to issue more than 20% of our outstanding shares to a target
business as consideration in any business combination. Therefore, if we were structuring a business combination that required us to issue
more than 20% of our outstanding shares, we would seek shareholder approval of such business combination. Except as required by law or
NASDAQ rules, 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 consummate our initial business combination even if holders of a majority of the issued and outstanding ordinary
shares do not approve of the business combination we consummate.
If
we seek shareholder approval of our initial business combination, our sponsor, officers and directors have agreed to vote in favor of
such initial business combination, regardless of how our public shareholders vote.
Unlike
other blank check companies in which the initial shareholders agree to vote their founder shares in accordance with the majority of the
votes cast by the public shareholders in connection with an initial business combination, our sponsor, officers and directors have agreed
(and their permitted transferees will agree), pursuant to the terms of a letter agreement entered into with us, to vote any founder shares
and private placement shares held by them, as well as any public shares purchased during or after the IPO, in favor of our initial business
combination. We expect that our sponsor and its permitted transferees will own approximately 22.90 % of our issued and outstanding ordinary
shares at the time of any such shareholder vote (taking into account ownership of the private placement units). As a result, in addition
to our initial shareholder’s founder shares, we would need only approximately 27.1% of the 5,750,000 public shares sold in the
IPO to be voted in favor of a transaction (assuming all outstanding shares are voted) in order to have our initial business combination
approved. Accordingly, if we seek shareholder approval of our initial business combination, it is more likely that the necessary shareholder
approval will be received than would be the case if such persons agreed to vote their founder shares in accordance with the majority
of the votes cast by our public shareholders.
Our
sponsor has the right to extend the term we have to consummate our initial business combination, without providing our stockholders with
redemption rights.
We initial had until 12 months from the closing of the IPO to consummate our initial business combination. However, if we anticipate that we may not be able to consummate our initial business combination within 12 months, we may, by resolution of our board of directors if requested by our sponsor, extend the period of time to consummate a business combination up to nine (9) times, each by an additional one month (for a total of up to 21 months to complete a business combination), subject to the deposit of additional funds into the trust account by our sponsor or its affiliates or designees as set out elsewhere in this report. Our stockholders will not be entitled to vote or redeem their shares in connection with any such extension. In order for the time available for us to consummate our initial business combination to be extended, our sponsors or their affiliates or designees must deposit into the trust account.
Any
such payments would be made in the form of a non-interest-bearing loan from our sponsor or its affiliates or designees and would be repaid,
if at all, from funds released to us upon completion of our initial business combination. The obligation to repay any such loans may
reduce the amount available to us to pay as purchase price in our initial business combination, and/or may reduce the amount of funds
available to the combined company following the initial business combination. This feature is different than the traditional special
purpose acquisition company structure, in which any extension of the company’s period to complete a business combination requires
a vote of the company’s stockholders and stockholders have the right to redeem their public shares in connection with such vote,
and which do not provide the sponsor with the right to loan funds to the company to fund extension payments. In order to extend the time
frame, our sponsor (or its affiliates or designees) must deposit into the trust account $191,667 (approximately $0.033 per public share)
per month, up to an aggregate of $1,725,000, or $0.30 per public share (representing the entire 9 months’ extension), on or prior
to the date of the applicable deadline, for each extension.
Your
only opportunity to affect the investment decision regarding a potential business combination will be limited to the exercise of your
right to redeem your shares from us for cash, unless we seek shareholder approval of the business combination.
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 business combination, unless we seek such shareholder approval. Accordingly, if
we do not seek shareholder approval, 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 business combination. Furthermore, in
no event will we redeem our public shares in an amount that would cause our net tangible assets, after payment of the deferred underwriting
commissions, to be less than $5,000,001 upon consummation 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. Consequently, if accepting all properly submitted redemption requests would cause our net tangible
assets to be less than $5,000,001 upon consummation of our initial business combination 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.
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 we 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. The above considerations may limit our ability to complete the most desirable business
combination available to us or optimize our capital structure.
The
ability of our public 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.
If
our initial business combination agreement requires us to use a portion of the cash in the trust account to pay the purchase price, or
requires us to have a minimum amount of cash at closing, the probability that our initial business combination would be unsuccessful
is increased. If our initial business combination is unsuccessful, you would not receive your pro rata portion of the trust account until
we liquidate the trust account. If you are in need of immediate liquidity, you could attempt to sell your shares in the open market;
however, at such time our shares may trade at a discount to the pro rata amount per share in the trust account. In either situation,
you may suffer a material loss on your investment or lose the benefit of funds expected in connection with our redemption until we liquidate
or you are able to sell your shares in the open market.
The
requirement that we complete our initial business combination within the prescribed time frame may give potential target businesses leverage
over us in negotiating a business combination and may decrease our ability 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 a business combination will be aware that we must complete
our initial business combination within 12 months from the closing of the IPO (or up to 21 months from the closing of the IPO if we extend
the period of time to consummate a business combination). Consequently, such target business may obtain leverage over us in negotiating
a business combination, knowing that if we do not complete our initial business combination with that particular target business, we
may be unable to complete our initial business combination with any target business. This risk will increase as we get closer to the
timeframe described above. In addition, we may have limited time to conduct due diligence and may enter into our initial business combination
on terms that we would have rejected upon a more comprehensive investigation.
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 only
receive $10.10 per share, or less than such amount in certain circumstances, and our rights and warrants will expire worthless.
Our
sponsor, officers and directors have agreed that we must complete our initial business combination within 12 months from the closing
of the IPO (or up to 21 months from the closing of the IPO if we extend the period of time to consummate a business combination). We
may not be able to find a suitable target business and complete our initial business combination within such time period. 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 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 (which interest shall
be net of taxes payable, and less up to $50,000 of interest to pay dissolution expenses) divided by the number of then issued and outstanding
public shares, which redemption will completely extinguish public shareholders’ rights as shareholders (including the right to
receive further liquidation distributions, if any), subject to applicable law, and (iii) as promptly as reasonably possible following
such redemption, subject to the approval of our remaining shareholders and our Board of Directors, liquidate and dissolve, subject in
each case to our obligations under Cayman Islands law to provide for claims of creditors and the requirements of other applicable law.
In such case, our public shareholders may only receive $10.10 per share, and our rights and warrants will expire worthless. In certain
circumstances, our public shareholders may receive less than $10.10 per share on the redemption of their shares. 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.
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 COVID-19 outbreak and the status of debt and equity markets.
In
December 2019, a novel strain of coronavirus was reported to have surfaced, which has and is continuing to spread throughout the world.
On January 30, 2020, the World Health Organization declared the outbreak of COVID-19 a “Public Health Emergency of International
Concern.” On January 31, 2020, U.S. Health and Human Services Secretary Alex M. Azar II declared a public health emergency for
the United States to aid the U.S. healthcare community in responding to COVID-19, and on March 11, 2020 the World Health Organization
characterized the outbreak as a “pandemic.” The COVID-19 outbreak has resulted in a widespread health crisis that has adversely
affected economies and financial markets worldwide, business operations and the conduct of commerce generally, and the business of any
potential target business with which we consummate a business combination could be, or may already have been, materially and adversely
affected. Furthermore, we may be unable to complete a business combination if concerns relating to COVID-19 continue to restrict travel
or limit the ability to have meetings with potential investors, or the target company’s personnel, vendors and services providers
are unavailable to negotiate and consummate a transaction in a timely manner. The extent to which COVID-19 impacts our search for a business
combination will depend on future developments, which are highly uncertain and cannot be predicted, including new information which may
emerge concerning the severity of COVID-19 and the actions to contain COVID-19 or treat its impact, among others. If the disruptions
posed by COVID-19 or other matters of global concern continue for an extensive period of time, our ability to consummate a business combination,
or the operations of a target business with which we ultimately consummate a business combination, may be materially adversely affected.
In
addition, our ability to consummate a transaction may be dependent on the ability to raise equity and debt financing which may be impacted
by COVID-19 and other events, including as a result of increased market volatility and decreased market liquidity and third-party financing
being unavailable on terms acceptable to us or at all.
Our
sponsor may decide not to extend the term we have to consummate our 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, and the warrants and rights will be worthless.
We will have until 12 months from the closing of the IPO to consummate our initial business combination. However, if we anticipate that we may not be able to consummate our initial business combination within 12 months, we may, by resolution of our board if requested by our sponsor, extend the period of time to consummate a business combination up to nine times, each by an additional one month (for a total of up to 21 months to complete a business combination), subject to the sponsor depositing additional funds into the trust account as set out below. In order for the time available for us to consummate our initial business combination to be extended, our sponsor or its affiliates or designees must deposit into the trust account $191,667 (approximately $0.033 per public share), up to an aggregate of $1,725,000, or $0.30 per public share, on or prior to the date of the applicable deadline, for each extension. Any such payments would be made in the form of a loan made from our sponsor or its affiliates or designees to us. The terms of the promissory note to be issued in connection with any such loans have not yet been negotiated other than that any such loan would be interest free and not be repaid unless we consummate a business combination. Consequently, such loans might not be made on the terms described in this report. Our sponsor and its affiliates or designees are not obligated to fund the trust account to extend the time for us to complete our initial business combination. Our sponsor and its affiliates or designees may not be financially capable of further funding the cash we need in order to make the extension. If we are unable to consummate our initial business combination within the applicable time period, we will, as promptly as reasonably possible but not more than ten business days thereafter, redeem the public shares for a pro rata portion of the funds held in the trust account and 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 Cayman Islands law to provide for claims of creditors and the requirements of other applicable law. In such event, the warrants and rights will be worthless.
If
we seek shareholder approval of our initial business combination, our sponsor, directors, officers, advisors and their 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 ordinary shares.
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 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. 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 transaction may be different than the amount
per share a public shareholder would receive if it 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 business combination and thereby increase the likelihood of
obtaining shareholder approval of the business combination or to satisfy a closing condition in an agreement with a target that requires
us to have a minimum net worth or a certain amount of cash at the closing of our initial business combination, where it appears that
such requirement would otherwise not be met. This 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 ordinary shares and the number of beneficial holders of our
securities may be reduced, possibly making it difficult to maintain or obtain 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 tender offer rules or proxy 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 tender offer or proxy materials, as applicable,
such shareholder may not become aware of the opportunity to redeem its shares. In addition, the tender offer documents or proxy materials,
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 redeem public shares. In the event that a shareholder
fails to comply with these procedures, its shares may not be redeemed.
You
will not have any rights or interests in funds from the trust account, except under certain limited circumstances. To liquidate your
investment, therefore, you may be forced to sell your public shares, rights or warrants, potentially at a loss.
Our
public shareholders will be entitled to receive funds from the trust account only upon the earlier to occur of: (i) the completion of
our initial business combination, (ii) 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 to (A) modify the substance or timing of our obligation to redeem
100% of our public shares if we do not complete our initial business combination within 12 months from the closing of the IPO (or up
to 21 months from the closing of the IPO if we extend the period of time to consummate a business combination) or (B) with respect to
any other provision relating to shareholders’ rights or pre-business combination activity and (iii) the redemption of all of our
public shares if we are unable to complete our initial business combination within 12 months from the closing of the IPO (or up to 21
months from the closing of the IPO if we extend the period of time to consummate a business combination), subject to applicable law and
as further described herein. In no other circumstances will a public shareholder have any right or interest of any kind in the trust
account. Accordingly, to liquidate your investment, you may be forced to sell your public shares, rights or warrants, potentially at
a loss.
NASDAQ
may delist our securities from trading on its exchange, which could limit investors’ ability to make transactions in our securities
and subject us to additional trading restrictions or reduce protections under NASDAQ rules available to them.
Our
securities are listed on the NASDAQ. We cannot assure you that our securities will continue to be listed on NASDAQ in the future
or prior to our initial business combination. In order to continue listing our securities on NASDAQ prior to our initial business combination,
we must maintain certain financial, distribution and stock price levels. Generally, we must maintain a minimum amount in shareholders’
equity (generally $2,500,000) and a minimum number of holders of our securities (generally 300 public holders). Additionally, following
closing of our initial business combination, we will be required to demonstrate compliance with NASDAQ’s initial listing requirements
on a post-closing basis, which are more rigorous than NASDAQ’s continued listing requirements, in order to continue to maintain
the listing of our securities on NASDAQ. For instance, after closing, our stock price would generally be required to be at least $4.00
per share, our shareholders’ equity would generally be required to be at least $5.0 million and we would be required to have a
minimum of 300 round lot holders of our securities. We cannot assure you that we will be able to meet those initial listing requirements
at that time.
If
NASDAQ delists our securities prior to closing of any business combination, we and our investors could be subject to the following adverse
consequences:
● a
limited availability of market quotations for our securities;
● reduced
liquidity for our securities;
● a
determination that our ordinary shares is a “penny stock” which will require brokers trading in our ordinary shares to adhere
to more stringent rules and possibly result in a reduced level of trading activity in the secondary trading market for our securities;
and
● the
lack of protection afforded under NASDAQ rules that requires any business combination have a fair market value of at least 80% of the
assets held in trust.
If
NASDAQ delists our securities from trading on its exchange following the closing of our business combination and we are not able to list
our securities on another national securities exchange, we expect our securities could be quoted on an over-the-counter market. If this
were to occur, we could face significant material adverse consequences, including:
● a
limited availability of market quotations for our securities;
● reduced
liquidity for our securities;
● a
determination that our ordinary shares is a “penny stock” which will require brokers trading in our ordinary shares to adhere
to more stringent rules and possibly result in a reduced level of trading activity in the secondary trading market for our securities;
● a
limited amount of news and analyst coverage; and
● a
decreased ability to issue additional securities or obtain additional financing in the future.
The
National Securities Markets Improvement Act of 1996, which is a federal statute, prevents or preempts the states from regulating the
sale of certain securities, which are referred to as “covered securities.” Because we expect that our units and eventually
our ordinary shares, rights and warrants will be listed on NASDAQ, our units, ordinary shares, rights and warrants will be covered securities.
Although the states are preempted from regulating the sale of our securities, the federal statute does allow the states to investigate
companies if there is a suspicion of fraud, and, if there is a finding of fraudulent activity, then the states can regulate or bar the
sale of covered securities in a particular case. While we are not aware of a state having used these powers to prohibit or restrict the
sale of securities issued by blank check companies, other than the State of Idaho, certain state securities regulators view blank check
companies unfavorably and might use these powers, or threaten to use these powers, to hinder the sale of securities of blank check companies
in their states. Further, if we were no longer listed on NASDAQ, our securities would not be covered securities and we would be subject
to regulation in each state in which we offer our securities, including in connection with our initial business combination.
You
will not be entitled to protections normally afforded to investors of many other blank check companies.
Since
the net proceeds of the IPO and the sale of the private 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 United States
securities laws. However, because we will have net tangible assets in excess of $5,000,000 upon the successful completion of the IPO
and the sale of the private 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 may have a longer period of time to complete our initial business combination than do companies subject to Rule 419.
Moreover, if the IPO 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.
If
we seek shareholder approval of our initial business combination and we do not conduct redemptions pursuant to the tender offer rules,
and if you or a “group” of shareholders are deemed to hold in excess of 15% of our ordinary shares, you will lose the ability
to redeem all such shares in excess of 15% of our ordinary shares.
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 seeking redemption rights with respect
to more than an aggregate of 15% of the shares sold in the IPO, which we refer to as the “Excess Shares.” However, we would
not be restricting our shareholders’ ability to vote all of their shares (including Excess Shares) for or against our initial business
combination. Your inability to redeem the Excess Shares will reduce your influence over our ability to complete our initial business
combination and you could suffer a material loss on your investment in us if you sell Excess Shares in open market transactions. Additionally,
you will not receive redemption distributions with respect to the Excess Shares if we complete our initial business combination. And
as a result, you will continue to hold that number of shares exceeding 15% and, in order to dispose of such shares, would be required
to sell your shares in open market transactions, potentially at a loss.
If
we are unable to complete our initial business combination, our public shareholders may receive only approximately $10.10 per share,
or less in certain circumstances, on our redemption, and our rights and warrants will expire worthless.
We
expect to encounter intense 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 greater technical, human and other resources or more local industry knowledge than we do and our financial
resources will be relatively limited when contrasted with those of many of these competitors. While we believe there are numerous target
businesses we could potentially acquire with the net proceeds of the IPO and the sale of the private 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,
if we are obligated to pay cash for the ordinary shares redeemed and, in the event we seek shareholder approval of our initial business
combination, we make purchases of our ordinary shares, potentially reducing the resources available to us for our initial business combination.
Any of these obligations may place us at a competitive disadvantage in successfully negotiating a business combination. If we are unable
to complete our initial business combination, our public shareholders may receive only approximately $10.10 per share (or less in certain
circumstances) on the liquidation of our trust account and our rights and warrants will expire worthless. In certain circumstances, our
public shareholders may receive less than $10.10 per share on the redemption of their shares.
If the net proceeds of the IPO not being held in the trust account are insufficient to allow us to operate for at least for 12 months or up to 21 months from the closing of the IPO if we extend the period of time to consummate a business combination, we may be unable to complete our initial business combination.
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 (or up
to 21 months from the closing of the IPO if we extend the period of time to consummate a business combination), assuming that our initial
business combination is not completed during that time. We expect to incur significant costs in pursuit of our acquisition plans. However,
our affiliates are not obligated to make loans to us in the future, and we may not be able to raise additional financing from unaffiliated
parties necessary to fund our expenses. Any such event in the future may negatively impact the analysis regarding our ability to continue
as a going concern at such time.
We
believe that, upon the closing of the IPO, 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 (or up to 21 months from the closing of the IPO if we extend the period of time
to consummate a business combination); 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 designed to keep target businesses from “shopping” around for transactions with other companies on terms
more favorable to such target businesses) with respect to a particular proposed business combination, although we do not have
any current intention to do so. If we entered into a letter of intent 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. If we are unable
to complete our initial business combination, our public shareholders may receive only approximately $10.10 per share (or less
in certain circumstances) on the liquidation of our trust account and our rights and warrants will expire worthless. In such case,
our public shareholders may only receive $10.10 per share, and our rights and warrants will expire worthless. In certain circumstances,
our public shareholders may receive less than $10.10 per share on the redemption of their shares. 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.
If
the net proceeds of the IPO and the sale of the private placement units not being held in the trust account are insufficient, it could
limit the amount available to fund our search for a target business or businesses and complete our initial business combination and we
will depend on loans from our sponsor or management team to fund our search, to pay our taxes and to complete our initial business combination.
Of
the net proceeds of the IPO and the sale of the private placement units and after payment of estimated offering expenses, only approximately
$500,000 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 $480,000, we may fund such excess with funds not to be held in the trust account. In such case,
the amount of funds we intend to be held outside the trust account would decrease by a corresponding amount. Conversely, in the event
that the offering expenses are less than our estimate of $480,000, 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. Neither our sponsor, members of our management team
nor any of their affiliates is under any obligation to advance funds to us in such circumstances. Any such advances would be repaid only
from funds held outside the trust account or from funds released to us upon completion of our initial business combination. If we are
unable to complete our initial business combination because we do not have sufficient funds available to us, we will be forced to cease
operations and liquidate the trust account. Consequently, our public shareholders may only receive approximately $10.10 per share (or
less in certain circumstances) on our redemption of our public shares, and our rights and warrants will expire worthless. In such case,
our public shareholders may only receive $10.10 per share, and our rights and warrants will expire worthless. In certain circumstances,
our public shareholders may receive less than $10.10 per share on the redemption of their shares. 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.
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.
Even
if we conduct extensive due diligence on a target business with which we combine, we cannot assure you that this diligence will surface
all material issues that may be present inside a particular target business, that it would be possible to uncover all material issues
through a customary amount of due diligence, or that factors outside of the target business and outside of our control will not later
arise. As a result of these factors, we may be forced to later write-down or write-off assets, restructure our operations, or incur impairment
or other charges that could result in our reporting losses. Even if our due diligence successfully identifies certain risks, unexpected
risks may arise and previously known risks may materialize in a manner not consistent with our preliminary risk analysis. Even though
these charges may be non-cash items and not have an immediate impact on our liquidity, the fact that we report charges of this nature
could contribute to negative market perceptions about us or our securities. In addition, charges of this nature may cause us to violate
net worth or other covenants to which we may be subject as a result of assuming pre-existing debt held by a target business or by virtue
of our obtaining post-combination debt financing. Accordingly, any shareholders who choose to remain shareholders following the 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.
Our private placement warrants are classified as a liability; we will have to incur significant expense in valuing such liabilities
on a quarterly and annual basis, and the resulting liability is and will be reflected on our financial statements, and such classification
may make it more difficult for us to complete an initial business combination.
On
April 12, 2021, the staff of the SEC issued a public statement entitled “Staff Statement on Accounting and Reporting Considerations
for Warrants issued by Special Purpose Acquisition Companies (“SPACs”). In the statement, the SEC staff expressed its view
that certain terms and conditions common to SPAC warrants may require the warrants to be classified as liabilities on the SPAC’s
balance sheet as opposed to equity. If applicable, the warrants should be classified as a liability measured at fair value, with changes
in fair value required to be reflected in the SPACs quarterly and annual financial statements. We have determined to classify our private placement warrants as a liability on our financial statements. We will have to incur significant expense in valuing
such liabilities on a quarterly and annual basis, and such liability is and will be reflected on our financial statements, and such classification
and ongoing expense may make it more difficult for us to complete an initial business combination.
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.
Our
placing of funds in the trust account may not protect those funds from third-party claims against us. Although we will seek to have all
vendors, service providers, prospective target businesses or other entities with which we do business execute agreements with us waiving
any right, title, interest or claim of any kind in or to any monies held in the trust account 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.
Examples
of possible instances where we may engage a third party that refuses to execute a waiver include the engagement of a third party consultant
whose particular expertise or skills are believed by management to be significantly superior to those of other consultants that would
agree to execute a waiver or in cases where management is unable to find a service provider willing to execute a waiver. In addition,
there is no guarantee that such entities will agree to waive any claims they may have in the future as a result of, or arising out of,
any negotiations, contracts or agreements with us and will not seek recourse against the trust account for any reason. Upon redemption
of our public shares, if we are unable to complete our initial business combination within the prescribed timeframe, or upon the exercise
of a redemption right in connection with our initial business combination, we will be required to provide for payment of claims of creditors
that were not waived that may be brought against us within the 10 years following redemption. Accordingly, the per-share redemption amount
received by public shareholders could be less than the $10.10 per share initially held in the trust account, due to claims of such creditors.
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 amount of funds in
the trust account to below (i) $10.10 per public share or (ii) such lesser amount per public share held in the trust account as
of the date of the liquidation of the trust account due to reductions in the value of the trust assets, in each case net of the interest
which may be withdrawn to pay taxes, 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 the IPO 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. We have not independently verified
whether our sponsor has sufficient funds to satisfy their indemnity obligations and believe that our sponsor’s only assets are
securities of our company. Our sponsor may not have sufficient funds available to satisfy those obligations. We have not asked our sponsor
to reserve for such obligations, and therefore, no funds are currently set aside to cover any such 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 public share. In such event, we may not be able to complete our initial business combination, and
you would receive such lesser amount per share in connection with any redemption of your public shares. None of our officers or directors
will indemnify us for claims by third parties including, without limitation, claims by vendors and prospective target businesses.
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 public share or (ii) such lesser amount
per share held in the trust account as of the date of the liquidation of the trust account due to reductions in the value of the trust
assets, in each case net of the interest which may be withdrawn to pay taxes, 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 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 share.
If,
after we distribute the proceeds in the trust account to our public shareholders, we file a bankruptcy petition or an involuntary bankruptcy
petition is filed against us that is not dismissed, a bankruptcy court may seek to recover such proceeds, and the members of our Board
of Directors may be viewed as having breached their fiduciary duties to our creditors, thereby exposing the members of our Board of Directors
and us to claims of punitive damages.
If,
after we distribute the proceeds in the trust account to our public shareholders, we file a bankruptcy petition or an involuntary bankruptcy
petition is filed against us that is not dismissed, any distributions received by shareholders could be viewed under applicable debtor/creditor
and/or bankruptcy laws as either a “preferential transfer” or a “fraudulent conveyance.” As a result, a bankruptcy
court could seek to recover 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 petition or an involuntary bankruptcy
petition is filed against us that is not dismissed, the claims of creditors in such proceeding may have priority over the claims of our
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 petition or an involuntary bankruptcy
petition is filed against us that is not dismissed, the proceeds held in the trust account could be subject to applicable bankruptcy
law, and may be included in our bankruptcy estate and subject to the claims of third parties with priority over the claims of our 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.
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 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.
We
do not believe that our anticipated principal activities will subject us to the Investment Company Act. The proceeds held in the trust
account may be invested by the trustee only in United States government treasury bills with a maturity of 180 days or less or in money
market funds investing solely in United States Treasuries and meeting certain conditions under Rule 2a-7 under the Investment Company
Act. Because the investment of the proceeds will be restricted to these instruments, we believe we will meet the requirements for the
exemption provided in Rule 3a-1 promulgated under 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 are unable to complete our initial business combination, our public shareholders
may receive only approximately $10.10 per share, or less in certain circumstances, on the liquidation of our trust account and our rights
and warrants will expire worthless.
Changes
in laws or regulations, or a failure to comply with any laws and regulations, may adversely affect our business, investments 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 and results
of operations.
If
we are unable to consummate our initial business combination within 12 months (or up to 21 months from the closing of the IPO if we extend
the period of time to consummate a business combination) of the closing of the IPO, our public shareholders may be forced to wait beyond
such 12 months (or up to 21 months) before redemption from our trust account.
If
we are unable to consummate our initial business combination within 12 months from the closing of the IPO (or up to 21 months from the
closing of the IPO if we extend the period of time to consummate a business combination), we will distribute the aggregate amount then
on deposit in the trust account (less the net interest earned thereon to pay dissolution expenses), pro rata to our public shareholders
by way of redemption and cease all operations except for the purposes of winding up of our affairs. Any redemption of public shareholders
from the trust account shall 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 windup, 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 Law. In that case, investors may be forced to wait beyond the initial 12 months (or up to
21 months) 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 consummate our initial business combination prior thereto and only then in cases where investors have sought
to redeem their ordinary shares. Only upon our redemption or any liquidation will public shareholders be entitled to distributions if
we are unable to complete our initial business combination.
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 into an insolvent liquidation, any distributions received by shareholders could be viewed as an unlawful payment
if it was 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 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, and
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 of $18,292.68
and to imprisonment for five years in the Cayman Islands.
We
may not hold an annual meeting of shareholders until after the consummation of our initial business combination.
In
accordance with NASDAQ corporate governance requirements, we are not required to hold an annual meeting until no later than one year
after our first fiscal year end following our listing on NASDAQ. In connection with completion of any business combination, we would
expect to hold a special meeting of shareholders to obtain consent of our shareholders. Therefore, we may complete a business combination
without holding an annual meeting of shareholders. There is no requirement under the Companies Law for us to hold annual or general meetings
or elect directors. Until we hold an annual meeting of shareholders, public shareholders may not be afforded the opportunity to discuss
company affairs with management.
We have not registered the ordinary shares issuable upon exercise of the warrants sold in our IPO 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 and potentially causing such warrants to expire worthless.
We did not register the ordinary shares issuable upon exercise of the warrants under the Securities Act or any state securities laws at the time of completion of the IPO. 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, and within 60 business days following our initial business combination to have declared effective, a registration statement covering such shares and maintain a current prospectus relating to the 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 is available. Notwithstanding the foregoing, if a registration statement covering the 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. 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. 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 no exemption is 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 shall 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 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 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 shares under the blue sky laws of the state of residence in those states in which the warrants were offered by us in the IPO.
In
the event that we are not the surviving entity upon the consummation of our initial business combination, and there is no effective registration
statement for the offering of the shares underlying the rights, the rights may expire worthless.
If
we enter into a definitive agreement for a business combination in which we will not be the surviving entity, the definitive agreement
will provide for the holders of rights to receive the same per share consideration the holders of the ordinary shares will receive in
the transaction on an as-converted into ordinary share basis, and each holder of a right will be required to affirmatively convert his,
her or its rights in order to receive the 1/10 share underlying each right (without paying any additional consideration) upon consummation
of the business combination. More specifically, the right holder will be required to indicate his, her or its election to convert the
rights into underlying shares as well as to return the original rights certificates to us. In the event that we are not the surviving
entity upon the consummation of our initial business combination, and there is no effective registration statement for the offering of
the shares underlying the rights, the rights may expire worthless.
The
grant of registration rights to our sponsor and holders of our private placement units may make it more difficult to complete our initial
business combination, and the future exercise of such rights may adversely affect the market price of our ordinary shares.
Pursuant
to an agreement to be entered into concurrently with the issuance and sale of the securities in the IPO, our sponsor and its permitted
transferees can demand that we register their founder shares. In addition, holders of our private placement units and their permitted
transferees can demand that we register the private placement units and their underlying securities, and holders of units that may be
issued upon conversion of working capital loans, may demand that we register such units and their underlying securities. 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 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 ordinary shares that is expected when the ordinary shares owned by our sponsor, holders of our private placement
units or holders of our working capital loans or their respective permitted transferees are registered.
Because
we are not limited to a particular industry or 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 seek to complete a business combination with an operating company in any industry or sector. However, 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 identified 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. For example, if we combine
with a financially unstable business or an entity lacking an established record of sales or earnings, we may be affected by the risks
inherent in the business and operations of a financially unstable entity. Although our officers and directors will endeavor to evaluate
the risks inherent in a particular target business, we cannot assure you that we will properly ascertain or assess all of the significant
risk factors or that we will have adequate time to complete due diligence. Furthermore, some of these risks may be outside of our control
and leave us with no ability to control or reduce the chances that those risks will adversely impact a target business. We also cannot
assure you that an investment in our units will ultimately prove to be more favorable to investors than a direct investment, if such
opportunity were available, in a business combination target. Accordingly, any shareholders who choose to remain shareholders following
the 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.
Past
performance by our management team and their respective affiliates may not be indicative of future performance of an investment in us.
Information
regarding performance by, or businesses associated with, our management team and their affiliates is presented for informational purposes
only. Past performance by our management team, including their affiliates’ past performance, is not a guarantee either (i) of success
with respect to any business combination we may consummate or (ii) that we will be able to locate a suitable candidate for our initial
business combination. You should not rely on the historical record of our management team and their affiliates as indicative of our future
performance. Additionally, in the course of their respective careers, members of our management team have been involved in businesses
and deals that were unsuccessful. Except for Mr. Jun Liu and Teddy Zheng, none of our officers or directors has had experience operating
a blank check company in the past.
We
may seek acquisition opportunities in industries or sectors that may be outside of our management’s areas of expertise.
We
will consider a business combination outside of our management’s areas of expertise if a business combination candidate is presented
to us and we determine that such candidate offers an attractive acquisition opportunity for our company. 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 report 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 shareholders 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, 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 law, 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 on the liquidation of our trust
account and our rights and warrants will expire worthless.
We
may seek acquisition opportunities with a financially unstable business or an entity lacking an established record of revenue or earnings.
To
the extent we complete our initial business combination with a financially unstable business or an entity lacking an established record
of sales 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 investment banking or from an independent accounting 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 company from a financial
point of view.
Unless
we complete our initial business combination with an affiliated entity, or our Board of Directors cannot independently determine the
fair market value of the target business or businesses, we are not required to obtain an opinion from an independent investment banking
firm, another independent firm that commonly renders valuation opinions for the type of company we are seeking to acquire or from an
independent accounting firm that the price we are paying for a target is fair to our company from a financial point of view. If no opinion
is obtained, our shareholders will be relying on the business judgment of our Board of Directors, which will have significant discretion
in choosing the standard used to establish the fair market value of the target or targets, and different methods of valuation may vary
greatly in outcome from one another. Such standards used will be disclosed in our tender offer documents or proxy solicitation materials,
as applicable, related to our initial business combination. However, if our Board of Directors is unable to determine the fair value
of an entity with which we seek to complete an initial business combination based on such standards, we will be required to obtain an
opinion as described above.
We
may issue additional ordinary or preference shares to complete our initial business combination or under an employee incentive plan after
completion of our initial business combination. Any such issuances would dilute the interest of our shareholders and likely present other
risks.
Our amended and restated memorandum and articles of association authorizes the issuance of up to 500,000,000 ordinary shares, par value $0.0001 per share. Immediately after the IPO, there will be 488,929,700 authorized but unissued ordinary shares available for issuance, which amount takes into account shares reserved for issuance upon exercise of outstanding warrants and conversion of outstanding rights.
We
may issue a substantial number of additional ordinary shares, and may issue preference shares, in order to complete our initial business
combination or under an employee incentive plan after completion of our initial business combination. However, our amended and restated
memorandum and articles of association provides, among other things, that prior to our initial business combination, we may not issue
additional ordinary shares that would entitle the holders thereof to (i) receive funds from the trust account or (ii) vote on any initial
business combination. The issuance of additional ordinary shares or preference shares:
● may
significantly dilute the equity interest of investors in our IPO;
● may
subordinate the rights of holders of ordinary shares if preference shares are issued with rights senior to those afforded our ordinary
shares;
● could
cause a change in control if a substantial number of ordinary shares are issued, which may affect, among other things, our ability to
use our net operating loss carry forwards, if any, and could result in the resignation or removal of our present officers and directors;
and
● may
adversely affect prevailing market prices for our units, ordinary shares and/or warrants.
We
may be a passive foreign investment company, or “PFIC,” which could result in adverse U.S. federal income tax consequences
to U.S. investors.
If
we are a PFIC for any taxable year (or portion thereof) that is included in the holding period of a U.S. holder of our ordinary shares,
rights or warrants, the U.S. holder may be subject to adverse U.S. federal income tax consequences and may be subject to additional reporting
requirements. Our PFIC status for our current and subsequent taxable years may depend on whether we qualify for the PFIC start-up exception.
Depending on the particular circumstances the application of the start-up exception may be subject to uncertainty, and there cannot be
any assurance that we will qualify for the start-up exception. Accordingly, there can be no assurances with respect to our status as
a PFIC for our current taxable year or any subsequent taxable year. Our actual PFIC status for any taxable year, however, will not be
determinable until after the end of such taxable year. Moreover, if we determine we are a PFIC for any taxable year, we will endeavor
to provide to a U.S. holder such information as the Internal Revenue Service (“IRS”) may require, including a PFIC annual
information statement, in order to enable the U.S. holder to make and maintain a “qualified electing fund” election, but
there can be no assurance that we will timely provide such required information, and such election would be unavailable with respect
to our warrants in all cases. We urge U.S. holders to consult their own tax advisors regarding the possible application of the PFIC rules
to holders of our ordinary shares, rights and warrants.
We
may reincorporate in another jurisdiction in connection with our initial business combination and such 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 Cayman Islands Companies
Act, reincorporate in the jurisdiction in which the target company or business is located. The transaction may require a shareholder
to recognize taxable income in the jurisdiction in which the shareholder is a tax resident or in which its members are resident if it
is a tax transparent entity. We do not intend to make any cash distributions to shareholders to pay such taxes. Shareholders may be subject
to withholding taxes or other taxes with respect to their ownership of us after the reincorporation.
Resources
could be wasted in researching acquisitions 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 rights and warrants will expire worthless.
We
anticipate that the investigation of each specific target business and the negotiation, drafting and execution of relevant agreements,
disclosure documents and other instruments will require substantial management time and attention and substantial costs for accountants,
attorneys and others. If we decide not to complete a specific initial business combination, the costs incurred up to that point for the
proposed transaction likely would not be recoverable. Furthermore, if we reach an agreement relating to a specific target business, we
may fail to complete our initial business combination for any number of reasons including those beyond our control. Any such event will
result in a loss to us of the related costs incurred which could materially adversely affect subsequent attempts to locate and acquire
or merge with another business. If we are unable to complete our initial business combination, our public shareholders may receive only
approximately $10.10 per share on the liquidation of our trust account and our rights and warrants will expire worthless.
We
are dependent upon our officers and directors and their departure could adversely affect our ability to operate.
Our
operations are dependent upon a relatively small group of individuals and, in particular, Mr. Liu and our other officers and directors.
We believe that our success depends on the continued service of our officers and directors, at least until we have completed our initial
business combination. In addition, our 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. We do not have an employment agreement with, or key-man insurance
on the life of, any of our directors or officers. The unexpected loss of the services of one or more of our directors or officers could
have a detrimental effect on us.
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.
Our
ability to successfully effect our initial business combination is dependent upon the efforts of our key personnel. The role of our key
personnel in the target business, however, cannot presently be ascertained. Although some of our key personnel may remain with the target
business in senior management or advisory positions following our initial business combination, it is likely that some or all of the
management of the target business will remain in place. While we intend to closely scrutinize any individuals we engage after our initial
business combination, we cannot assure you that our assessment of these individuals will prove to be correct. These individuals may be
unfamiliar with the requirements of operating a company regulated by the SEC, which could cause us to have to expend time and resources
helping them become familiar with such requirements.
Our
key personnel may negotiate employment or consulting agreements with a target business in connection with a particular business combination.
These agreements may provide for them to receive compensation following our initial business combination and as a result, may cause them
to have conflicts of interest in determining whether a particular business combination is the most advantageous.
Our
key personnel may be able to remain with the company after the completion of our initial business combination only if they are able to
negotiate employment or consulting agreements in connection with the business combination. Such negotiations would take place simultaneously
with the negotiation of the business combination and could provide for such individuals to receive compensation in the form of cash payments
and/or our securities for services they would render to us after the completion of the business combination. The personal and financial
interests of such individuals may influence their motivation in identifying and selecting a target business, subject to his or her fiduciary
duties under Cayman Islands law. However, we believe the ability of such individuals to remain with us after the completion of our initial
business combination will not be the determining factor in our decision as to whether or not we will proceed with any potential business
combination. There is no certainty, however, that any of our key personnel will remain with us after the completion of our initial business
combination. We cannot assure you that any of our key personnel will remain in senior management or advisory positions with us. The determination
as to whether any of our key personnel will remain with us will be made at the time of our initial business combination.
We
may have a limited ability to assess the management of a prospective target business and, as a result, may affect our initial business
combination with a target business whose management may not have the skills, qualifications or abilities to manage a public company.
When
evaluating the desirability of effecting our initial business combination with a prospective target business, our ability to assess the
target business’s management may be limited due to a lack of time, resources or information. Our assessment of the capabilities
of the target’s management, therefore, may prove to be incorrect and such management may lack the skills, qualifications or abilities
we suspected. Should the target’s management not possess the skills, qualifications or abilities necessary to manage a public company,
the operations and profitability of the post-combination business may be negatively impacted. Accordingly, any shareholders who choose
to remain shareholders following the 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.
The
officers and directors of an acquisition candidate may resign upon completion of our initial business combination. The departure of a
business combination target’s key personnel could negatively impact the operations and profitability of our post-combination business.
The role of an acquisition candidates’ key personnel upon the completion of our initial business combination cannot be ascertained
at this time. Although we contemplate that certain members of an acquisition candidate’s management team will remain associated
with the acquisition candidate following our initial business combination, it is possible that members of the management of an acquisition
candidate will not wish to remain in place.
Our
officers and directors will allocate their time to other businesses thereby causing conflicts of interest in their determination as to
how much time to devote to our affairs. This conflict of interest could have a negative impact on our ability to complete our initial
business combination.
Our
officers and directors are not required to, and will not, commit their full time to our affairs, which may result in a conflict of interest
in allocating their time between our operations and our search for a business combination and their other businesses. We do not intend
to have any full-time employees prior to the completion of our initial business combination. Each of our officers is engaged in several
other business endeavors for which he or she may be entitled to substantial compensation and our officers are not obligated to contribute
any specific number of hours per week to our affairs. Our independent directors also serve as officers and board members for other entities.
If our officers’ and directors’ other business affairs require them to devote substantial amounts of time to such affairs
in excess of their current commitment levels, it could limit their ability to devote time to our affairs which may have a negative impact
on our ability to complete our initial business combination.
Certain
of our officers and directors are now, and all of them may in the future become, affiliated with entities engaged in business activities
similar to those intended to be conducted by us and, accordingly, may have conflicts of interest in determining to which entity a particular
business opportunity should be presented.
Following
the completion of the IPO and until we consummate our initial business combination, we intend to engage in the business of identifying
and combining with one or more businesses. Our sponsor and officers and directors are, or may in the future become, affiliated with other
blank check companies like ours or other entities (such as operating companies or investment vehicles) that are engaged in making and
managing investments in a similar business.
Our
officers and directors also may become aware of business opportunities which may be appropriate for presentation to us and the other
entities to which they owe certain fiduciary or contractual duties. Accordingly, they may have conflicts of interest in determining to
which entity a particular business opportunity should be presented. These conflicts may not be resolved in our favor and a potential
target business may be presented to other entities prior to its presentation to us, subject to his or her fiduciary duties under Cayman
Islands law.
Our
officers, directors, security holders and their respective affiliates may have competitive pecuniary interests that conflict with our
interests.
We
have not adopted a policy that expressly prohibits our directors, officers, security holders or affiliates from having a direct or indirect
pecuniary or financial interest in any investment to be acquired or disposed of by us or in any transaction to which we are a party or
have an interest. In fact, we may enter into a business combination with a target business that is affiliated with our sponsor, our directors
or officers, although we do not intend to do so. Nor do we have a policy that expressly prohibits any such persons from engaging for
their own account in business activities of the types conducted by us. Accordingly, such persons or entities may have a conflict between
their interests and ours.
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, officers, directors or existing holders which may raise potential conflicts of interest.
In
light of the involvement of our sponsor, officers and directors with other entities, we may decide to acquire one or more businesses
affiliated with our sponsor, officers and directors. Our officers and directors also serve as officers and board members for other entities.
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 preliminary 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 and such transaction was approved by a majority of our disinterested
directors. Despite our agreement to obtain an opinion from an independent investment banking firm or another independent firm that commonly
renders valuation opinions for the type of company we are seeking to acquire or 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 officers, directors or existing holders, potential conflicts of interest still may exist and, as a result, the terms of the
business combination may not be as advantageous to our public 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, a conflict
of interest may arise in determining whether a particular business combination target is appropriate for our initial business combination.
On
January 6, 2021, our sponsor purchased an aggregate of 1,150,000 founder shares for an aggregate purchase price of $25,000, or approximately
$0.02 per share. On March 26, 2021, we issued an additional 287,500 in connection with a recapitalization of the Company. The Company
has had no operations to date and was minimally capitalized with a minimal amount of funds from our sponsor in the period ended March
31, 2021. The founder shares will be worthless if we do not complete an initial business combination. In addition, our sponsor has purchased
an aggregate of 270,500 private placement units, for a purchase price of $2,705,000 in the aggregate, or $10.00 per unit, that will also
be worthless if we do not complete a business combination.
Each
private placement unit consists of one private placement share, one private placement right, granting the holder thereof the right to
receive one-tenth (1/10) of an ordinary share upon the consummation of an initial business combination, and one private placement warrant.
Each private placement warrant may be exercised for one-half of one ordinary share at a price of $11.50 per whole share, subject to adjustment
as provided herein.
The
founder shares are identical to the ordinary shares included in the units being sold in the IPO except that (i) the founder shares are
subject to certain transfer restrictions and (ii) our sponsor, officers and directors have entered into a letter agreement with us, pursuant
to which they have agreed (A) to waive their redemption rights with respect to their founder shares, private placement shares and public
shares in connection with the completion of our initial business combination, (B) to waive their redemption rights with respect to any
founder shares, private placement shares and public shares held by them in connection with a stockholder vote to approve an amendment
to our amended and restated memorandum and articles of association (x) to modify the substance or timing of our obligation to provide
for the redemption of our public shares in connection with an initial business combination or to redeem 100% of our public shares if
we have not consummated our initial business combination within the timeframe set forth therein or (y) with respect to any other provision
relating to stockholders’ rights or pre-initial business combination activity and (C) to waive their rights to liquidating distributions
from the trust account with respect to their founder shares and private placement shares if we fail to complete our initial business
combination within 12 months from the closing of the IPO (or up to 21 months from the closing of the IPO if we extend the period of time
to consummate a business combination) (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).
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.
Since
our sponsor, officers and directors may not be eligible to be reimbursed for their out-of-pocket expenses if our initial business combination
is not completed, a conflict of interest may arise in determining whether a particular business combination target is appropriate for
our initial business combination.
At
the closing of our initial business combination, our sponsor, officers and directors, or any of their respective affiliates, will be
reimbursed for any out-of-pocket expenses incurred in connection with activities on our behalf such as identifying potential target businesses
and performing due diligence on suitable business combinations. There is no cap or ceiling on the reimbursement of out-of-pocket expenses
incurred in connection with activities on our behalf. These financial interests of our sponsor, officers and directors may influence
their motivation in identifying and selecting a target business combination and completing an initial business combination.
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 report to issue any notes or other debt securities, or to otherwise incur outstanding debt
following the IPO, we may choose to incur substantial debt to complete our initial business combination. We 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 a 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 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 ordinary shares if declared, expenses, capital expenditures, acquisitions and other general corporate purposes;
● limitations
on our flexibility in planning for and reacting to changes in our business and in the industry in which we operate;
● increased
vulnerability to adverse changes in general economic, industry and competitive conditions and adverse changes in government regulation;
and
● limitations
on our ability to borrow additional amounts for expenses, capital expenditures, acquisitions, debt service requirements, execution
of our strategy and other purposes and other disadvantages compared to our competitors who have less debt.
We
may only be able to complete one business combination with the proceeds of the IPO and the sale of the private 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 the IPO and the sale of the private placement units, $58,075,000 were available to complete our business combination
and pay related fees and expenses (which includes up to approximately up to $1,437,500 for the payment of deferred underwriting commissions.)
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 risks. 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 business combination.
We
may attempt to simultaneously complete business combinations with multiple prospective targets, which may hinder our ability to complete
our initial business combination and give rise to increased costs and risks that could negatively impact our operations and profitability.
If
we determine to simultaneously acquire several businesses that are owned by different sellers, we will need for each of such sellers
to agree that our purchase of its business is contingent on the simultaneous closings of the other business combinations, which may make
it more difficult for us, and delay our ability, to complete our initial business combination. With multiple business combinations, we
could also face additional risks, including additional burdens and costs with respect to possible multiple negotiations and due diligence
investigations (if there are multiple sellers) and the additional risks associated with the subsequent assimilation of the operations
and services or products of the acquired companies in a single operating business. If we are unable to adequately address these risks,
it could negatively impact our profitability and results of operations.
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. 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.
Our
management may not be able to maintain control of a target business after our initial business combination. We cannot provide assurance
that, upon loss of control of a target business, new management will possess the skills, qualifications or abilities necessary to profitably
operate such business.
We
may structure a business combination so that the post-transaction company in which our public shareholders own shares will own
less than 100% of the equity interests or assets of a target business, but we will only complete such business combination if
the post-transaction company owns or acquires 50% or more of the outstanding voting securities of the target or otherwise acquires
a controlling interest in the target sufficient for us not to be required to register as an investment company under the Investment
Company Act. In the event that we acquire assets, we would expect to acquire assets that allow us to constitute an operating business.
We will not consider any transaction that does not meet such criteria. Even if the post-transaction company owns 50% or more of
the voting securities of the target, our 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 transaction.
For example, we could pursue a transaction in which we issue a substantial number of new ordinary shares in exchange for all of
the outstanding capital stock of a target. In this case, we would acquire a 100% interest in the target. However, as a result
of the issuance of a substantial number of new ordinary shares, our shareholders immediately prior to such transaction could own
less than a majority of our issued and outstanding ordinary shares subsequent to such transaction. In addition, other minority
shareholders may subsequently combine their holdings resulting in a single person or group obtaining a larger share of the company’s
stock than we initially acquired. Accordingly, this may make it more likely that our management will not be able to maintain our
control of the target business.
We
do not have a specified maximum redemption threshold. The absence of such a redemption threshold may make it possible for us to complete
a business combination with which a substantial majority of our shareholders do not agree.
Our
amended and restated memorandum and articles of association does not provide a specified maximum redemption threshold, except that in
no event will we redeem our public shares in an amount that would cause our net tangible assets, after payment of the deferred underwriting
commissions, to be less than $5,000,001 upon consummation of our initial business combination (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 their affiliates. In the event the aggregate cash consideration we would be required to pay for all 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, all ordinary
shares submitted for redemption will be returned to the holders thereof, and we instead may search for an alternate business combination.
Investors
may view our units as less attractive than those of other blank check companies.
Unlike
other blank check companies that sell units comprised of shares and warrants each to purchase one full share in their initial public
offerings, we are selling units comprised of ordinary shares, rights entitling the holder to receive one-tenth (1/10) of one ordinary
share, and warrants to purchase one-half (½) of one ordinary share. The rights and warrants will not have any voting rights and
will expire and be worthless if we do not consummate an initial business combination. Furthermore, no fractional shares will be issued
upon exercises of the warrants and it is not our intent to issue fractional shares upon conversion of any rights. As a result, unless
you acquire at least two warrants, you will not be able to receive a share upon exercise of your warrants and if you acquire less than
ten rights, you may, in our discretion, not receive one whole share. Any rounding down and extinguishment may be done with or without
any in lieu cash payment or other compensation being made to the holder of the relevant rights. Accordingly, investors in the IPO will
not be issued the same securities as part of their investment as they may have in other blank check company offerings, which may have
the effect of limiting the potential upside value of your investment in our company.
Because
each unit contains one-half of one redeemable warrant and only a whole warrant may be exercised, the units may be worth less than units
of other blank check companies.
Each
unit contains one-half of one redeemable warrant. 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. This is different
from other offerings similar to ours whose units include one share and one warrant to purchase one whole share. We have established the
components of the units in this way in order to reduce the dilutive effect of the warrants upon completion of a business combination
since the warrants will be exercisable in the aggregate for one half of the number of shares compared to units that each contain a warrant
to purchase one whole share, thus making us, we believe, a more attractive merger partner for target businesses. Nevertheless, this unit
structure may cause our units to be worth less than if they included a warrant to purchase one whole share.
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. 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 a business combination, blank check companies have, in the past, amended various provisions of their charters and
modified governing instruments. For example, blank check companies have amended the definition of business combination, increased redemption
thresholds and extended the period of time in which it had to consummate a business combination. We cannot assure you that we will not
seek to amend our amended and restated memorandum and articles of association or governing instruments or extend the time in which we
have to consummate a business combination through amending our amended and restated memorandum and articles of association, each of which
will require a special resolution of our shareholders as a matter of Cayman Islands law, meaning a resolution passed by holders of at
least two thirds of our ordinary shares who are eligible to vote and attend and vote in a general meeting of the company’s shareholders.
The
provisions of our amended and restated memorandum and articles of association that relate to our pre-initial business combination activity
(and corresponding provisions of the agreement governing the release of funds from our trust account), including an amendment 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 with the approval of holders of at least two-thirds of our ordinary shares who
attend and vote in a general meeting, 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 and the trust agreement to facilitate the
completion of an initial business combination that some of our shareholders may not support.
Some
other blank check companies have a provision in their charter which prohibits the amendment of certain of its provisions, including those
which relate to a company’s pre-initial business combination activity, without approval by a certain percentage of the company’s
shareholders. In those companies, amendment of these provisions requires approval by between 90% and 100% of the company’s public
shareholders. Our amended and restated memorandum and articles of association provides that any of its provisions, including those related
to pre-initial business combination activity (including the requirement to deposit proceeds of the IPO and the private placement of warrants
into the trust account and not release such amounts except in specified circumstances, and to provide redemption rights to public shareholders
as described herein and in our amended and restated memorandum and articles of association or an amendment 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 at least two-thirds of our ordinary shares who attend and vote in a general
meeting, 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. We may not issue additional securities that can vote on amendments to our amended
and restated memorandum and articles of association. Our sponsor, which will beneficially own approximately 22.90% of our ordinary shares
upon the closing of the IPO (assuming it does not purchase units in the IPO and taking into account ownership of the private placement
units), 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 it chooses. 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-business combination behavior more easily than some other blank
check companies, and this may increase our ability to complete a 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.
Certain
agreements related to the IPO may be amended without shareholder approval.
Certain
agreements, including the underwriting agreement relating to the IPO, the investment management trust agreement between us, Wilmington
Trust, National Association and Vstock Transfer LLC, the letter agreement among us and our sponsor, officers, directors and director
nominees, the registration rights agreement among us and our sponsor and the administrative services agreement between us and our sponsor,
may be amended without shareholder approval. These agreements contain various provisions that our public shareholders might deem to be
material. For example, the underwriting agreement related to the IPO contains a covenant that the target company that we acquire must
have a fair market value equal to at least 80% of the balance in the trust account at the time of signing the definitive agreement for
the transaction with such target business (excluding the deferred underwriting commissions and taxes payable on the income earned on
the trust account) so long as we obtain and maintain a listing for our securities on the NASDAQ. While we do not expect our board to
approve any amendment to any of 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 any such agreement in connection
with the consummation of our initial business combination. Any such amendment 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.
Although
we believe that the net proceeds of the IPO and the sale of the private placement units will be sufficient to allow us to complete our
initial business combination, we cannot ascertain the capital requirements for any particular transaction. If the net proceeds of the
IPO and the sale of the private placement units prove to be insufficient, either because of the size of our initial business combination,
the depletion of the available net proceeds in search of a target business, the obligation to redeem for cash a significant number of
shares from shareholders who elect redemption in connection with our initial business combination or the terms of negotiated transactions
to purchase shares in connection with our initial business combination, we may be required to seek additional financing or to abandon
the proposed 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.
In addition, even if we do not need additional financing to complete our initial business combination, we may require such financing
to fund the operations or growth of the target business. The failure to secure additional financing could have a material adverse effect
on the continued development or growth of the target business. None of our officers, directors or shareholders is required to provide
any financing to us in connection with or after our initial business combination. If we are unable to complete our initial business combination,
our public shareholders may only receive approximately $10.10 per share on the liquidation of our trust account, and our rights and warrants
will expire worthless. In certain circumstances, our public shareholders may receive less than $10.10 per share on the redemption of
their shares.
Our
sponsor paid an aggregate of $25,000, or approximately $0.02 per founder share, and, accordingly, you will experience immediate and substantial
dilution upon the purchase of our ordinary shares.
The
difference between the public offering price per share (allocating all of the unit purchase price to the ordinary shares, including the
ordinary shares underlying the rights included in the units, and none to the warrants included in the units) and the pro forma net tangible
book value per ordinary share after the IPO constitutes the dilution to you and the other investors in the IPO. Our sponsor acquired
the founder shares at a nominal price, significantly contributing to this dilution. Upon the closing of the IPO, and assuming no value
is ascribed to the warrants included in the units, you and the other public shareholders will incur an immediate and substantial dilution
of approximately 83.60% (or $7.60 per share, assuming no exercise of the underwriters’ over-allotment option), the difference between
the pro forma net tangible book value per share of $1.49 and the initial offering price of $9.09 per unit.
We
may amend the terms of the warrants in a manner that may be adverse to holders of public warrants with the approval by the holders of
a majority of the then issued and outstanding warrants.
Our
warrants have been issued in registered form under a warrant agreement between Vstock Transfer LLC, as warrant agent, and us. The warrant
agreement provides that the terms of the warrants may be amended without the consent of any holder to cure any ambiguity or correct any
defective provision, but requires the approval by the holders of a majority of the then issued and outstanding warrants (including private
warrants) to make any change that adversely affects the interests of the registered holders of warrants. Accordingly, we may amend the
terms of the warrants in a manner adverse to a holder if holders of a majority of the then issued and outstanding warrants (including
private warrants) approve of such amendment. Although our ability to amend the terms of the public warrants with the consent of a majority
of the then issued and outstanding warrants is unlimited, examples of such amendments could be amendments to, among other things, increase
the exercise price of the warrants, shorten the exercise period or decrease the number of ordinary shares purchasable upon exercise of
a warrant.
Our
warrant agreement and rights agreement with our transfer agent designate the courts of the State of New York or the United States District
Court for the Southern District of New York as the sole and exclusive forum for certain types of actions and proceedings that may be
initiated by holders of our warrants, which could limit the ability of warrant holders or rights holders to obtain a favorable judicial
forum for disputes with our company.
Our
warrant agreement and rights agreement with our transfer agent, which govern the terms of the warrants and rights, respectively, provide
that, subject to applicable law, (i) any action, proceeding or claim against us or the warrant agent arising out of or relating in any
way to the warrant agreement shall be brought and enforced in the courts of the State of New York or the United States District Court
for the Southern District of New York, and (ii) that we and the warrant agent and rights agent irrevocably submit to such jurisdiction,
which jurisdiction shall be the exclusive forum for any such action, proceeding or claim. We and the warrant agent and rights agent will
waive any objection to such exclusive jurisdiction and that such courts represent an inconvenient forum.
Notwithstanding
the foregoing, this exclusive forum provision shall not apply to suits brought to enforce a duty or liability created by the Exchange
Act, any other claim for which the federal courts have exclusive jurisdiction or any complaint asserting a cause of action arising under
the Securities Act against us or any of our directors, officers, other employees or agents. Section 27 of the Exchange Act creates exclusive
federal jurisdiction over all suits brought to enforce any duty or liability created by the Exchange Act or the rules and regulations
thereunder. In addition, stockholders cannot waive compliance with the federal securities laws and the rules and regulations thereunder.
Notwithstanding
the foregoing limitations on venue, such provisions are not applicable with respect to claims under the United States’ Securities
Act or Exchange Act. With respect to other types of claims these choice-of-forum provisions may limit a warrant holder’s or right’s
holder’s ability to bring a claim in a judicial forum that it finds favorable for disputes with our company, which may discourage
such lawsuits. Alternatively, if a court were to find this provision of our warrant agreement inapplicable or unenforceable with respect
to one or more of the specified types of actions or proceedings, we may incur additional costs associated with resolving such matters
in other jurisdictions, which could materially and adversely affect our business, financial condition and results of operations and result
in a diversion of the time and resources of our management and board of directors.
We
may amend the terms of the rights in a manner that may be adverse to holders of public rights with the approval by the holders of a majority
of the then issued and outstanding rights.
Our
rights have been issued in registered form under a rights agreement between Vstock Transfer LLC, as rights agent, and us. The rights
agreement provides that the terms of the rights may be amended without the consent of any holder to cure any ambiguity or correct any
defective provision, but requires the approval by the holders of a majority of the then issued and outstanding rights (including private
rights) to make any change that adversely affects the interests of the registered holders of rights. Accordingly, we may amend the terms
of the rights in a manner adverse to a holder if holders of a majority of the then issued and outstanding rights (including private rights)
approve of such amendment.
We
may redeem your unexpired warrants prior to their exercise at a time that is disadvantageous to you, thereby making your warrants worthless.
We
have the ability to redeem outstanding warrants at any time after they become exercisable and prior to their expiration, at a price of
$0.01 per warrant, provided that the last reported sales price of our ordinary shares equal or exceed $18.00 per share (as adjusted for
share splits, share capitalizations, rights issuances, subdivisions, reorganizations, recapitalizations and the like) for any 20 trading
days within a 30 trading-day period ending on the third trading day prior to the date we send the notice of redemption to the warrant
holders. If and when the warrants become redeemable by us, we may not exercise our redemption right if the issuance of 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 shares under the blue sky laws of the state of
residence in those states in which the warrants were offered by us in the IPO. Redemption of the outstanding warrants could force you
(i) to exercise your warrants and pay the exercise price therefor at a time when it may be disadvantageous for you to do so, (ii) to
sell your warrants at the then-current market price when you might otherwise wish to hold your warrants or (iii) to accept the nominal
redemption price which, at the time the outstanding warrants are called for redemption, is likely to be substantially less than the market
value of your warrants. None of the private placement warrants will be redeemable by us so long as they are held by our sponsor or its
permitted transferees.
Our
management’s ability to require holders of our warrants to exercise such warrants on a cashless basis will cause holders to receive
fewer ordinary shares upon their exercise of the warrants than they would have received had they been able to exercise their warrants
for cash.
If
we call our public warrants for redemption after the redemption criteria described elsewhere in this report have been satisfied, our
management will have the option to require any holder that wishes to exercise his warrant (including any warrants held by our sponsor,
officers or directors, other purchasers of our founders’ units, or their permitted transferees) to do so on a “cashless basis.”
If our management chooses to require holders to exercise their warrants on a cashless basis, the number of ordinary shares received by
a holder upon exercise will be fewer than it would have been had such holder exercised his warrant for cash. This will have the effect
of reducing the potential “upside” of the holder’s investment in our company.
Our
rights, warrants and founder shares may have an adverse effect on the market price of our ordinary shares and make it more difficult
to effectuate our initial business combination.
We
have issued rights to acquire 602,050 ordinary shares and warrants to purchase 3,010,250 ordinary shares, as part of the units offered
in our IPO and, simultaneously with the closing of the IPO, an aggregate of 270,500 private placement units in a private placement, each
unit consisting of one private placement share, one private placement right, granting the holder thereof the right to receive one-tenth
(1/10) of an ordinary share upon the consummation of an initial business combination, and one private placement warrant. In each case,
the warrants are exercisable to purchase one-half of one ordinary share at a price of $11.50 per whole share, subject to adjustment as
provided herein. Prior to the IPO, our sponsor purchased an aggregate of 1,437,500 founder shares in a private placement. In addition,
if our sponsor makes any working capital loans, up to $1,500,000 of such loans may be converted into units, at the price of $10.00 per
unit (which, for example, would result in the holders being issued 165,000 ordinary shares if $1,500,000 of notes were so converted (including
15,000 shares upon the closing of our initial business combination in respect of 150,000 rights included in such units), as well as 150,000
warrants to purchase 75,000 shares) at the option of the lender. Such units would be identical to the private placement units. To the
extent we issue ordinary shares to effectuate a business transaction, the potential for the issuance of a substantial number of additional
ordinary shares upon exercise of these warrants or conversion rights could make us a less attractive acquisition vehicle to a target
business. Any such issuance will increase the number of issued and outstanding ordinary shares and reduce the value of the ordinary shares
issued to complete the business transaction. Therefore, our rights, warrants and founder shares may make it more difficult to effectuate
a business combination or increase the cost of acquiring the target business.
The
private placement units are identical to the units sold in the IPO except that, so long as the private placement warrants are held by
our sponsor, or its permitted transferees, (i) they will not be redeemable by us, (ii) they (including the ordinary shares issuable
upon exercise of these warrants) may not, subject to certain limited exceptions, be transferred, assigned or sold by the sponsor until
30 days after the completion of our initial business combination and (iii) they may be exercised by the holders on a cashless basis.
The
determination of the offering price of our units and the size of the IPO is more arbitrary than the pricing of securities and size of
an offering of an operating company in a particular industry. You may have less assurance, therefore, that the offering price of our
units properly reflects the value of such units than you would have in a typical offering of an operating company.
Prior
to the IPO there has been no public market for any of our securities. The public offering price of the units and the terms of the warrants
and rights were negotiated between us and the underwriters. In determining the size of the IPO, management held customary organizational
meetings with representatives of the underwriters, both prior to our inception and thereafter, with respect to the state of capital markets,
generally, and the amount the underwriters believed they reasonably could raise on our behalf. Factors considered in determining the
size of the IPO, prices and terms of the units, including the ordinary shares, rights and warrants underlying the units, include:
● the
history and prospects of companies whose principal business is the acquisition of other companies;
● prior
offerings of those companies;
● our
prospects for acquiring an operating business at attractive values;
● a
review of debt to equity ratios in leveraged transactions;
● our
capital structure;
● an
assessment of our management and their experience in identifying operating companies;
● general
conditions of the securities markets at the time of our IPO; and
● other
factors as were deemed relevant.
Although
these factors were considered, the determination of our offering price is more arbitrary than the pricing of securities of an operating
company in a particular industry since we have no historical operations or financial results.
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, or U.S. GAAP, or international financing reporting standards as issued by the International Accounting Standards Board,
or 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.
We
are an emerging growth company within the meaning of the Securities Act, and if we take advantage of certain exemptions from disclosure
requirements available to emerging growth companies, this could make our securities less attractive to investors and may make it more
difficult to compare our performance with other public companies.
We
are an “emerging growth company” within the meaning of the Securities Act, as modified by the JOBS Act, and we may take advantage
of certain exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth
companies including, but not limited to, not being required to comply with the auditor attestation requirements of Section 404 of the
Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements, and
exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and shareholder approval of any golden
parachute payments not previously approved. As a result, our shareholders may not have access to certain information they may deem important.
We could be an emerging growth company for up to five years, although circumstances could cause us to lose that status earlier, including
if the market value of our ordinary shares held by non-affiliates exceeds $700 million as of any June 30 before that time, in which case
we would no longer be an emerging growth company as of the following December 31. We cannot predict whether investors will find our securities
less attractive because we will rely on these exemptions. If some investors find our securities less attractive as a result of our reliance
on these exemptions, the trading prices of our securities may be lower than they otherwise would be, there may be a less active trading
market for our securities and the trading prices of our securities may be more volatile.
Further,
Section 102(b)(1) of the JOBS Act exempts emerging growth companies from being required to comply with new or revised financial accounting
standards until private companies (that is, those that have not had a Securities Act registration statement declared effective or do
not have a class of securities registered under the Exchange Act) are required to comply with the new or revised financial accounting
standards. The JOBS Act provides that a company can elect to opt out of the extended transition period and comply with the requirements
that apply to non-emerging growth companies but any such an election to opt out is irrevocable. We have elected not to opt out of such
extended transition period which means that when a standard is issued or revised and it has different application dates for public or
private companies, we, as an emerging growth company, can adopt the new or revised standard at the time private companies adopt the new
or revised standard. This may make comparison of our financial statements with another public company which is neither an emerging growth
company nor an emerging growth company which has opted out of using the extended transition period difficult or impossible because of
the potential differences in accountant standards used.
Compliance
obligations under the Sarbanes-Oxley Act may make it more difficult for us to effectuate our initial business combination, require substantial
financial and management resources, and increase the time and costs of completing an 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, 2021. Only in the event we are deemed to be a large accelerated filer or an accelerated
filer 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 company 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.
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 are governed by our amended and restated memorandum and articles of association, the Cayman Islands Companies Act (as
the same may be supplemented or amended from time to time) and the common law of the Cayman Islands. 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 the courts of the Cayman Islands are unlikely (i) to 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, to 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. In those circumstances, although there is no statutory enforcement in the Cayman Islands of
judgments obtained in the United States, the courts of the Cayman Islands will recognize and enforce a foreign money judgment of a foreign
court of competent jurisdiction without retrial on the merits based on the principle that a judgment of a competent foreign court imposes
upon the judgment debtor an obligation to pay the sum for which judgment has been given provided certain conditions are met. For a foreign
judgment to be enforced in the Cayman Islands, such judgment must be final and conclusive and for a liquidated sum, and must not be in
respect of taxes or a fine or penalty, inconsistent with a Cayman Islands judgment in respect of the same matter, impeachable on the
grounds of fraud or obtained in a manner, or be of a kind the enforcement of which is, contrary to natural justice or the public policy
of the Cayman Islands (awards of punitive or multiple damages may well be held to be contrary to public policy). A Cayman Islands Court
may stay enforcement proceedings if concurrent proceedings are being brought elsewhere.
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.
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 ordinary shares and could entrench management.
Our
amended and restated memorandum and articles of association contains provisions that may discourage unsolicited takeover proposals that
shareholders may consider to be in their best interests. These provisions include two-year director terms and the ability of the Board
of Directors to designate the terms of and issue new series of preference shares, 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.
After
our initial business combination, it is possible that a majority of our directors and officers will live outside the United States and
all of our assets will be located outside the United States; therefore investors may not be able to enforce federal securities laws or
their other legal rights.
It
is possible that after our initial business combination, a majority of our directors and officers will reside outside of the United States
and all of our assets will be located outside of the United States. As a result, it may be difficult, or in some cases not possible,
for investors in the United States to enforce their legal rights, to effect service of process upon all of our directors or officers
or to enforce judgments of United States courts predicated upon civil liabilities and criminal penalties on our directors and officers
under United States laws.
In
particular, investors should be aware that there is uncertainty as to whether the courts of the Cayman Islands or any other applicable
jurisdictions would recognize and enforce judgments of U.S. courts obtained against us or our directors or officers predicated upon the
civil liability provisions of the securities laws of the United States or any state in the United States or entertain original actions
brought in the Cayman Islands or any other applicable jurisdiction’s courts against us or our directors or officers predicated
upon the securities laws of the United States or any state in the United States.
Risks
Associated with Acquiring and Operating a Business Outside of the United States
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 negatively impact our operations.
If
we effect our initial business combination with a company located outside of the United States, we would be subject to any special considerations
or risks associated with companies operating in the target business’ home jurisdiction, including any of the following:
● rules
and regulations or currency redemption or corporate withholding taxes on individuals;
● laws
governing the manner in which future business combinations may be effected;
● tariffs
and trade barriers;
● regulations
related to customs and import/export matters;
● 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;
● challenges
in collecting accounts receivable;
● cultural
and language differences;
● employment
regulations;
● crime,
strikes, riots, civil disturbances, terrorist attacks and wars; and
● deterioration
of political relations with the United States which could result in any number of difficulties, both normal course such as above or extraordinary
such as sanctions being imposed. We may not be able to adequately address these additional risks. If we were unable to do so, our operations
might suffer.
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, any or all of our management could resign from their positions as officers 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.
If
we effect a business combination with a company located outside of the United States, the laws applicable to such company will likely
govern all of our material agreements and we may not be able to enforce our legal rights.
If
we effect a business combination with a company located outside of the United States, the laws of the country in which such company operates
will govern almost all of the material agreements relating to its operations. We cannot assure you that the target business will be able
to enforce any of its material agreements or that remedies will be available in this new jurisdiction. 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. Additionally, if we acquire a company located outside of the United States, it is likely that substantially all of our assets
would be located outside of the United States and some of our officers and directors might reside outside of the United States. As a
result, it may not be possible for investors in the United States to enforce their legal rights, to effect service of process upon
our directors or officers or to enforce judgments of United States courts predicated upon civil liabilities and criminal penalties of
our directors and officers under Federal securities laws.
Because
of the costs and difficulties inherent in managing cross-border business operations after we acquire it, our results of operations may
be negatively impacted following a business combination.
Managing
a business, operations, personnel or assets in another country is challenging and costly. Management of the target business that we may
hire (whether based abroad or in the U.S.) may be inexperienced in cross-border business practices and unaware of significant differences
in accounting rules, legal regimes and labor practices. Even with a seasoned and experienced management team, the costs and difficulties
inherent in managing cross-border business operations, personnel and assets can be significant (and much higher than in a purely domestic
business) and may negatively impact our financial and operational performance.
Many
countries, and especially those in emerging markets, have difficult and unpredictable legal systems and underdeveloped laws and regulations
that are unclear and subject to corruption and inexperience, which may adversely impact our results of operations and financial condition.
Our
ability to seek and enforce legal protections, including with respect to intellectual property and other property rights, or to defend
ourselves with regard to legal actions taken against us in a given country, may be difficult or impossible, which could adversely impact
our operations, assets or financial condition.
Rules
and regulations in many countries, including some of the emerging markets within the regions we will initially focus, are often ambiguous
or open to differing interpretation by responsible individuals and agencies at the municipal, state, regional and federal levels. The
attitudes and actions of such individuals and agencies are often difficult to predict and inconsistent.
Delay
with respect to the enforcement of particular rules and regulations, including those relating to customs, tax, environmental and labor,
could cause serious disruption to operations abroad and negatively impact our results.
After
our initial business combination, substantially all of our assets may be located in a foreign country and substantially all of our revenue
may 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. The economies in developing markets we will initially focus on differ from the economies of most developed countries in
many respects. Such economic growth has been 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, 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.
Because
our business objective includes the possibility of acquiring one or more operating businesses with primary operations in emerging markets
we will focus on, changes in the exchange rate between the U.S. dollar and the currency of any relevant jurisdiction may affect our ability
to achieve such objective. For instance, the exchange rates between the Turkish lira or the Indian rupee and the U.S. dollar has changed
substantially in the last two decades and may fluctuate substantially in the future. If the U.S. dollar declines in value against the
relevant currency, any business combination will be more expensive and therefore more difficult to complete. Furthermore, we may incur
costs in connection with conversions between U.S. dollars and the relevant currency, which may make it more difficult to consummate a
business combination.
Because
foreign law could govern almost all of our material agreements, we may not be able to enforce our rights within such jurisdiction or
elsewhere, which could result in a significant loss of business, business opportunities or capital.
Foreign
law could govern almost all of our material agreements. The target business may not be able to enforce any of its material agreements
or that remedies will be available outside of such foreign jurisdiction’s legal system. The system of laws and the enforcement
of existing laws and contracts in such jurisdiction may not be as certain in implementation and interpretation as in the United States.
Judiciaries in such jurisdiction may also be relatively inexperienced in enforcing corporate and commercial law, leading to a higher
than usual degree of uncertainty as to the outcome of any litigation. As a result, the inability to enforce or obtain a remedy under
any of our future agreements could result in a significant loss of business and business opportunities.
Corporate
governance standards in foreign countries may not be as strict or developed as in the United States and such weakness may hide issues
and operational practices that are detrimental to a target business.
General
corporate governance standards in some countries are weak in that they do not prevent business practices that cause unfavorable related
party transactions, over-leveraging, improper accounting, family company interconnectivity and poor management. Local laws often do not
go far to prevent improper business practices. Therefore, shareholders may not be treated impartially and equally as a result of poor
management practices, asset shifting, conglomerate structures that result in preferential treatment to some parts of the overall company,
and cronyism. The lack of transparency and ambiguity in the regulatory process also may result in inadequate credit evaluation and weakness
that may precipitate or encourage financial crisis. In our evaluation of a business combination we will have to evaluate the corporate
governance of a target and the business environment, and in accordance with United States laws for reporting companies take steps to
implement practices that will cause compliance with all applicable rules and accounting practices. Notwithstanding these intended efforts,
there may be endemic practices and local laws that could add risk to an investment we ultimately make and that result in an adverse effect
on our operations and financial results.
Companies
in foreign countries may be subject to accounting, auditing, regulatory and financial standards and requirements that differ, in some
cases significantly, from those applicable to public companies in the United States, which may make it more difficult or complex
to consummate a business combination. In particular, the assets and profits appearing on the financial statements of a foreign company
may not reflect its financial position or results of operations in the way they would be reflected had such financial statements been
prepared in accordance with U.S. GAAP and there may be substantially less publicly available information about companies in certain
jurisdictions than there is about comparable United States companies. Moreover, foreign companies may not be subject to the same degree
of regulation as are United States companies with respect to such matters as insider trading rules, tender offer regulation, shareholder
proxy requirements and the timely disclosure of information.
Legal
principles relating to corporate affairs and the validity of corporate procedures, directors’ fiduciary duties and liabilities
and shareholders’ rights for foreign corporations may differ from those that may apply in the U.S., which may make the consummation
of a business combination with a foreign company more difficult. We therefore may have more difficulty in achieving our business objective.
Because
a foreign judiciary may determine the scope and enforcement of almost all of our target business’ material agreements under the
law of such foreign jurisdiction, we may be unable to enforce our rights inside and outside of such jurisdiction.
The
law of a foreign jurisdiction, may govern almost all of our target business’ material agreements, some of which may be with governmental
agencies in such jurisdiction. We cannot assure you that the target business or businesses will be able to enforce any of their material
agreements or that remedies will be available outside of such jurisdiction. The inability to enforce or obtain a remedy under any of
our future agreements may have a material adverse impact on our future operations.
A
slowdown in economic growth in the markets that our business target operates in may adversely affect our business, financial condition,
results of operations, the value of its equity shares and the trading price of our shares following our business combination.
Following
the business combination, our results of operations and financial condition may be dependent on, and may be adversely affected by, conditions
in financial markets in the global economy, and, particularly in the markets where the business operates. The specific economy could
be adversely affected by various factors such as political or regulatory action, including adverse changes in liberalization policies,
business corruption, social disturbances, terrorist attacks and other acts of violence or war, natural calamities, interest rates, inflation,
commodity and energy prices and various other factors which may adversely affect our business, financial condition, results of operations,
value of our equity shares and the trading price of our shares following the business combination.
Regional
hostilities, terrorist attacks, communal disturbances, civil unrest and other acts of violence or war may result in a loss of investor
confidence and a decline in the value of our equity shares and trading price of our shares following our business combination.
Terrorist
attacks, civil unrest and other acts of violence or war may negatively affect the markets in which we may operates our business following
our business combination and also adversely affect the worldwide financial markets. In addition, the countries we will focus on, have
from time to time experienced instances of civil unrest and hostilities among or between neighboring countries. Any such hostilities
and tensions may result in investor concern about stability in the region, which may adversely affect the value of our equity shares
and the trading price of our shares following our business combination. Events of this nature in the future, as well as social and civil
unrest, could influence the economy in which our business target operates, and could have an adverse effect on our business, including
the value of equity shares and the trading price of our shares following our business combination.
The
occurrence of natural disasters may adversely affect our business, financial condition and results of operations following our business
combination.
The
occurrence of natural disasters, including hurricanes, floods, earthquakes, tornadoes, fires and pandemic disease may adversely affect
our business, financial condition or results of operations following our business combination. The potential impact of a natural disaster
on our results of operations and financial position is speculative, and would depend on numerous factors. The extent and severity of
these natural disasters determines their effect on a given economy. Although the long term effect of diseases such as the H5N1 “avian
flu,” or H1N1, the swine flu, cannot currently be predicted, previous occurrences of avian flu and swine flu had an adverse effect
on the economies of those countries in which they were most prevalent. An outbreak of a communicable disease in our market could adversely
affect our business, financial condition and results of operations following our business combination. We cannot assure you that natural
disasters will not occur in the future or that its business, financial condition and results of operations will not be adversely affected.
Any
downgrade of credit ratings of the country in which the company we acquire does business may adversely affect our ability to raise debt
financing following our business combination.
No
assurance can be given that any rating organization will not downgrade the credit ratings of the sovereign foreign currency long-term
debt of the country in which our business target operates, which reflect an assessment of the overall financial capacity of the government
of such country to pay its obligations and its ability to meet its financial commitments as they become due. Any downgrade could cause
interest rates and borrowing costs to rise, which may negatively impact both the perception of credit risk associated with our future
variable rate debt and our ability to access the debt markets on favorable terms in the future. This could have an adverse effect on
our financial condition following our business combination.
Returns
on investment in foreign companies may be decreased by withholding and other taxes.
Our
investments will incur tax risk unique to investment in developing economies. Income that might otherwise not be subject to withholding
of local income tax under normal international conventions may be subject to withholding of income tax in a developing economy. Additionally,
proof of payment of withholding taxes may be required as part of the remittance procedure. Any withholding taxes paid by us on income
from our investments in such country may or may not be creditable on our income tax returns. We intend to seek to minimize any withholding
tax or local tax otherwise imposed. However, there is no assurance that the foreign tax authorities will recognize application of such
treaties to achieve a minimization of such tax. We may also elect to create foreign subsidiaries to effect the business combinations
to attempt to limit the potential tax consequences of a business combination.
Risks
Related to Our Possible Business Combination in China
We
may consummate our initial Business Combination with a target company in PRC, or a company with its operations conducted through its
subsidiary in the PRC or through contractual arrangements with a variable interest entity (“VIE”) in the PRC.
Under
a VIE structure, we do not own any direct equity interest in the VIE, and control and receive the economic benefits of the VIE’s
business operations through certain contractual arrangements in lieu of direct equity ownership by us or any of our subsidiaries.
A VIE is an entity that has either a total equity investment that is insufficient to permit the entity to finance its activities without
additional subordinated financial support, or whose equity investors lack the characteristics of a controlling financial interest, such
as through voting rights, right to receive the expected residual returns of the entity or obligation to absorb the expected losses of
the entity. All the agreements under our contractual arrangements with the VIE and its equity owners are governed by PRC law
and provide for the resolution of disputes through arbitration in China. Accordingly, these contracts would be interpreted in accordance
with PRC law and any disputes would be resolved in accordance with PRC legal procedures. As of the date hereof, the agreements governed
by PRC law that serve as the basis for a VIE arrangement have not been tested in a court of law. As a result, uncertainties in the PRC
legal system may limit our ability to enforce these contractual arrangements. Currently, there are very few precedents and little formal
guidance as to how contractual arrangements in the context of a VIE should be interpreted or enforced under PRC law. There remain significant
uncertainties regarding the ultimate outcome of such arbitration should legal action become necessary. In the event we are unable to
enforce these contractual arrangements, or if we suffer significant delay or other obstacles in the process of enforcing these contractual
arrangements, we may not be able to exert effective control over the VIE. These uncertainties or an adverse outcome of an arbitration
may adversely affect our operations and could render our securities worthless.
If
we merge with a target company with major operation in PRC through the VIE structure, after the completion of the Business Combination,
our ordinary shares will not represent equity interest of the VIE or its subsidiary in the PRC. As a result of our corporate structure
after the consummation of the Business Combination, investors in our ordinary shares are subject to unique risks affecting our business
due to uncertainty of the interpretation and application of the PRC laws and regulations, including but not limited to, limitations on
foreign ownership and investment in certain areas, regulatory review of overseas listing of PRC companies through a special purpose vehicle,
and the validity and enforcement of the contractual agreements with the VIE.
Our
target company, MC, operates its business through its subsidiaries in the PRC in which MC owns equity interests. MC does not operate
through any VIE structure. However, because it has operations in the PRC, in light of the recent statements and regulatory actions by
the PRC government, such as those related to the use of data security and anti-monopoly concerns, MC may be subject to the risks of uncertainty
of any future actions of the PRC government in this regard, which may result in a material change in MC’s operations, including
the ability of MC to carry on its current business or accept foreign investments, and the resulting adverse change in value to our ordinary
shares. MC may also be subject to penalties and sanctions imposed by the PRC regulatory agencies, including the Chinese Securities
Regulatory Commission (“CSRC”), if it fails to comply with such rules and regulations, which could adversely affect the ability
of MC to list on Nasdaq or another foreign exchange, which may cause the value of our securities to significantly decline or become worthless.
For a detailed description of the risks facing MC, please refer to the Registration Statement on Form S-4 filed by the Company on September
30, 2021, and as subsequently amended.
In
light of the recent statements and regulatory actions by the PRC government, such as those related to the use of variable interest entities,
data security, and anti-monopoly concerns, we may be subject to the risks of uncertainty of any future actions of the PRC government
in this regard, which may result in a material change in our operations, including the ability of us to carry on our current business
or accept foreign investments, and the resulting adverse change in value to our ordinary shares. We may also be subject to penalties
and sanctions imposed by the PRC regulatory agencies, including CSRC, if we fail to comply with such rules and regulations, which could
adversely affect the ability of us to continue to be listed for trading on Nasdaq or another foreign exchange, which may cause the value
of our securities to significantly decline or become worthless. The Holding Foreign Companies Accountable Act (“HFCAA”) and
related regulations call for additional and more stringent criteria to be applied to emerging market companies upon assessing the qualification
of their auditors and could add uncertainties to us that trading in our securities may be prohibited under the HFCAA. Currently, our
auditor is registered with PCAOB. Therefore, it is not subject to the determinations announced by the PCAOB on December 16, 2021.
If
we effect our initial business combination with a business located in the People’s Republic of China, the laws applicable to such
business will likely govern all of our material agreements and we may not be able to enforce our legal rights.
If
we effect our initial business combination with a business located in the PRC, the laws of the country in which such business operates
will govern almost all of the material agreements relating to its operations, including any contractual arrangements through which we
acquire control of target business as described above. We cannot assure you that we or the target business will be able to enforce any
of its material agreements or that remedies will be available in this jurisdiction. 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. In addition, the judiciary
in the PRC is relatively inexperienced compared to others in enforcing corporate and commercial law, leading to a higher than usual degree
of uncertainty as to the outcome of any litigation. In addition, to the extent that our target business’s material agreements are
with governmental agencies in the PRC, we may not be able to enforce or obtain a remedy from such agencies due to sovereign immunity,
in which the government is deemed to be immune from civil lawsuit or criminal prosecution. 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.
If
we effect our initial business combination with a business located in the PRC, we may be subject to certain risks associated with acquiring
and operating businesses in the PRC.
We
may be subject to certain risks associated with acquiring and operating business in the PRC in our search for a business combination
and operation of any target business with which we ultimately consummate a business combination.
First,
certain rules and regulations concerning mergers and acquisitions by foreign investors in the PRC may make merger and acquisition activities
by foreign investors more complex and time consuming, including, among others:
● the
requirement that the MOFCOM be notified in certain circumstances in advance of any change-of-control transaction in which a foreign investor
takes control of a PRC domestic enterprise or any concentration of undertaking if certain thresholds are triggered;
● the
authority of certain government agencies to have scrutiny over the economics of an acquisition transaction and requirement for consideration
in a transaction to be paid within stated time limits; and
● the
requirement for 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 to be subject to strict review by the MOFCOM.
As
disclosed above, our current business combination target, MC, operates its business through its PRC Subsidiaries in the PRC. Accordingly,
our proposed business combination is subject to these risks.
Complying
with these and other requirements could be time-consuming, and any required approval processes, including obtaining approval from the
MOFCOM or its local counterparts, may delay or inhibit our ability to complete such transactions, which could affect our ability to acquire
PRC-based businesses. A business combination we propose may not be able to be completed if the terms of the transaction do not satisfy
aspects of the approval process and may not be completed, even if approved, if they are not consummated within the time permitted by
the approvals granted.
In
addition, the PRC currently prohibits and/or restricts foreign ownership in certain “important industries,” including telecommunications,
food production and heavy equipment. There are uncertainties under certain regulations whether obtaining a majority interest through
contractual arrangements will comply with regulations prohibiting or restricting foreign ownership in certain industries. There is no
assurance that the PRC government will not apply restrictions in other industries. In addition, there can be restrictions on the foreign
ownership of businesses that are determined from time to time to be in “important industries” that may affect the national
economic security or those having “famous brand names” or “well-established brand names.” Subject to the review
and approval requirements of the relevant agencies and the various percentage ownership limitations that exist from time to time, acquisitions
involving foreign investors and parties in the various restricted categories of assets and industries may nonetheless sometimes be consummated
using contractual arrangements with permitted local parties. If we choose to effect a business combination that employs the use of these
types of contractual arrangements, these arrangements may not be as effective in providing us with the same economic benefits, accounting
consolidation or control over a target business as would direct ownership due to limited implementation guidance provided with respect
to such regulations. If the government of the PRC finds that the agreements we entered into to acquire control of a target business through
contractual arrangements with one or more operating businesses do not comply with local governmental restrictions on foreign investment,
or if these regulations or the interpretation of existing regulations change in the future, we could be subject to significant penalties
or be forced to relinquish our interests in those operations. If, for example, our potential initial business combination is with a target
company operating in the PRC in “important industries”, the transaction may be subject to the PRC government’s review,
and we may have to spend additional resources and incur additional time delays to complete any such business combination. There is no
guarantee that we can receive such approval in a timely manner, and we may also be prevented from pursuing certain investment opportunities
if the PRC government considers that the potential investments will result in a significant national security issue. Since our business
combination period is 12 months from the closing of the IPO (or up to 21 months from the closing of IPO if we extend the period of time
to consummate a business combination), and the approval process may take a period longer than we expect before we enter into a definitive
agreement with a target company, we may be unable to complete a business combination within 12 months from the closing of the IPO (or
up to 21 months from the closing of the IPO if we extend the period of time to consummate a business combination).
If
we effect our initial business combination with a business located in the PRC, a substantial portion of our operations may be conducted
in the PRC, and a significant portion of our net revenues maybe derived from customers where the contracting entity is located in the
PRC. Accordingly, our business, financial condition, results of operations, prospects and certain transactions we may undertake may be
subject, to a significant extent, to economic, political and governmental and legal developments, laws and regulations in the PRC. For
instance, all or most of our material agreements may be governed by PRC law and we may have difficulty in enforcing our legal rights
because the system of laws and the enforcement of existing laws in the PRC may not be as certain in implementation and interpretation
as in the United States. In addition, contractual arrangements we enter into with potential future subsidiaries and affiliated entities
or acquisitions of offshore entities that conduct operations through affiliates in the PRC may be subject to a high level of scrutiny
by the relevant PRC tax authorities. We may also be subject to restrictions on dividend payments after we consummate a business combination
and if we rely on dividends and other distributions from our operating company to provide us with cash flow and to meet our other obligations.
Contractual
arrangements we enter into with potential future subsidiaries and affiliated entities or acquisitions of offshore entities that conduct
operations through affiliates in the PRC may be subject to a high level of scrutiny by the relevant tax authorities.
Under
the laws of the PRC, arrangements and transactions among related parties may be subject to audit or challenge by the relevant tax authorities.
If any of the transactions we enter into with potential future subsidiaries and affiliated entities are found not to be on an arm’s-length
basis, or to result in an unreasonable reduction in tax under local law, the relevant tax authorities may have the authority to disallow
any tax savings, adjust the profits and losses of such potential future local entities and assess late payment interest and penalties.
A finding by the relevant tax authorities that we are ineligible for any such tax savings, or that any of our possible future affiliated
entities are not eligible for tax exemptions, would substantially increase our possible future taxes and thus reduce our net income and
the value of a shareholder’s investment. In addition, in the event that in connection with an acquisition of an offshore entity
that conducted its operations through affiliates in the PRC, the sellers of such entities failed to pay any taxes required under local
law, the relevant tax authorities could require us to withhold and pay the tax, together with late-payment interest and penalties. The
occurrence of any of the foregoing could have a negative impact on our operating results and financial condition.
If
the government of the PRC finds that the agreements we entered into to acquire control of a target business through contractual arrangements
with one or more operating businesses, or VIE Agreements, do not comply with local governmental restrictions on foreign investment, or
if these regulations or the interpretation of existing regulations change in the future, we could be subject to significant penalties
or be forced to relinquish our interests in those operations or we could be unbale to assert our contractual control rights over the
assets of the post-combination target company, which could cause the value of our common stock to depreciate significantly or become
worthless.
The
PRC currently prohibits and/or restricts foreign ownership in certain “important industries” or businesses, including telecommunications,
food production and heavy equipment, or those having “famous brand names” or “well-established brand names.”
There are uncertainties under certain regulations whether obtaining a majority interest through contractual arrangements will comply
with regulations prohibiting or restricting foreign ownership in certain industries. Moreover, the PRC may apply restrictions in other
industries in the future. In addition, there can be restrictions on the foreign ownership of businesses that are determined from time
to time to be in “important industries” that may affect the national economic security.
If
we or any of our potential future target businesses are found to be in violation of any existing or future local laws or regulations
(for example, if we are deemed to be holding equity interests in certain of our affiliated entities in which direct foreign ownership
is prohibited), the relevant regulatory authorities might have the discretion to:
● revoke
the business and operating licenses of the potential future target business;
● confiscate
relevant income and impose fines and other penalties;
● discontinue
or restrict the operations of the potential future target business;
● require
us or the potential future target business to restructure the relevant ownership structure or operations;
● restrict
or prohibit our use of funds to finance our businesses and operations in the relevant jurisdiction; or
● impose
conditions or requirements with which we or the potential future target business may not be able to comply.
If
we acquire control of a target business through contractual arrangements with one or more operating businesses in the PRC, such contracts
may not be as effective in providing operational control as direct ownership of such business and may be difficult to enforce.
PRC
regulations relating to offshore investment activities by PRC residents may limit our ability to inject capital in our Chinese subsidiaries
and Chinese subsidiaries’ ability to change their registered capital or distribute profits to us or otherwise expose us or our
PRC resident beneficial owners to liability and penalties under PRC laws.
In
July 2014, The State Administration of Foreign Exchange of the PRC, or the State Administration of Foreign Exchange (“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. SAFE Circular 37 requires PRC residents (including
PRC individuals and PRC corporate entities as well as foreign individuals that are deemed as PRC residents for foreign exchange administration
purpose) to register with SAFE or its local branches in connection with their direct or indirect offshore investment activities. SAFE
Circular 37 is applicable to our shareholders who are PRC residents and may be applicable to any offshore acquisitions that we make in
the future.
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, or SPVs, will be required to register such investments with SAFE or its local branches. In addition,
any PRC resident who is a direct or indirect shareholder of an SPV, is required to update its filed registration with the local branch
of SAFE with respect to that SPV, to reflect any material change, including, among other things, any major change of a PRC resident shareholder,
name or term of operation of the SPVs, or any increase or reduction of the SPVs’ registered capital, share transfer or swap, merger
or division. Moreover, any subsidiary of such SPV in China is required to urge the PRC resident shareholders to update their registration
with the local branch of SAFE. If any PRC shareholder of such SPV fails to make the required registration or to update the previously
filed registration, the subsidiary of such SPV in China may be prohibited from distributing its profits or the proceeds from any capital
reduction, share transfer or liquidation to the SPV, and the SPV may also be prohibited from making additional capital contributions
into its subsidiary in China. 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 or its branches. The qualified banks will directly examine the applications
and accept registrations under the supervision of SAFE.
We
cannot provide assurance that our shareholders that are PRC residents comply with all of the requirements under SAFE Circular 37 or other
related rules. Failure or inability of our PRC resident shareholders to comply with the registration procedures set forth in these regulations
may subject us to fines and legal sanctions, restrict our cross-border investment activities, limit the ability of our wholly foreign-owned
subsidiary in China to distribute dividends and the proceeds from any reduction in capital, share transfer or liquidation to us, and
we may also be prohibited from injecting additional capital into the subsidiary. Moreover, failure to comply with the various foreign
exchange registration requirements described above could result in liability under PRC law for circumventing applicable foreign exchange
restrictions. As a result, our business operations and our ability to distribute profits to you could be materially and adversely affected.
Furthermore,
as these foreign exchange regulations are still relatively new and their interpretation and implementation has been constantly 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. In addition, if we decide to acquire a PRC domestic company,
we cannot assure you that we or the owners of such company, as the case may be, will be able to 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.
Though
we expressly exclude any target whose financial statements are audited by an accounting firm that is not subject to PCAOB inspection,
we cannot assure you that 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.
The
Public Company Accounting Oversight Board, or 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.
Further,
future developments in U.S. laws may restrict our ability or willingness to complete certain business combinations with companies. For
instance, the recently enacted 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, specifically,
those based in China, to disclose, among other things, whether they are owned or controlled by a foreign government, specifically, those
based in China. As a result, we expressly exclude any target if the PCAOB is not able to inspect its auditor for three consecutive years
and thus, we may not be able to consummate a business combination with a favored target business due to these laws.
Additionally,
other developments in U.S. laws and regulatory environment, including but not limited to executive orders such as Executive Order (E.O.)
13959, “Addressing the Threat from Securities Investments That Finance Communist Chinese Military Companies,” may further
restrict our ability to complete a business combination with certain China-based businesses.
As
a result of merger and acquisition regulations implemented on September 8, 2006 (amended on June 22, 2009) relating to acquisitions of
assets and equity interests of Chinese companies by foreign persons, it is expected that acquisitions will take longer and be subject
to economic scrutiny by the PRC government authorities such that we may not be able to complete a transaction.
On
September 8, 2006, the Ministry of Commerce, together with several other government agencies, promulgated the Regulations on Merger and
Acquisition of Domestic Enterprises by Foreign Investors (the “M&A Regulations”, including its amendment on June 22,
2009), which implemented a comprehensive set of regulations governing the approval process by which a Chinese company may participate
in an acquisition of its assets or its equity interests and by which a Chinese company may obtain public trading of its securities on
a securities exchange outside the PRC. Although there was a complex series of regulations in place prior to September 8, 2006 for approval
of Chinese enterprises that were administered by a combination of provincial and centralized agencies, the M&A Regulations have largely
centralized and expanded the approval process to the Ministry of Commerce, the State Administration of Industry and Commerce (“SAIC”),
SAFE or its branch offices, the State Asset Supervision and Administration Commission (“SASAC”), and the CSRC. Depending
on the structure of the transaction, these M&A Regulations will require the Chinese parties to make a series of applications and
supplemental applications to one or more of the aforementioned agencies, some of which must be made within strict time limits and depending
on approvals from one or the other of the aforementioned agencies. The application process has been supplemented to require the presentation
of economic data concerning a transaction, including appraisals of the business to be acquired and evaluations of the acquirer which
will permit the government to assess the economics of a transaction in addition to the compliance with legal requirements. If obtained,
approvals will have expiration dates by which a transaction must be completed. Also, completed transactions must be reported to the Ministry
of Commerce and some of the other agencies within a short period after closing or be subject to an unwinding of the transaction. Therefore,
acquisitions in China may not be able to be completed because the terms of the transaction may not satisfy aspects of the approval process
and may not be completed, even if approved, if they are not consummated within the time permitted by the approvals granted.
Compliance
with the PRC Antitrust law may limit our ability to effect our initial business combination.
The
PRC Antitrust Law became effective on August 1, 2008. The government authorities in charge of antitrust matters in China are the Antitrust
Commission and other antitrust authorities under the State Council.
The
PRC Antitrust Law regulates (1) monopoly agreements, including decisions or actions in concert that preclude or impede competition, entered
into by business operators; (2) abuse of dominant market position by business operators; and (3) concentration of business operators
that may have the effect of precluding or impeding competition. To implement the Antitrust Law, in 2008, the State Council formulated
the regulations that require filing of concentration of business operators, pursuant to which concentration of business operators refers
to (1) merger with other business operators; (2) gaining control over other business operators through acquisition of equity interest
or assets of other business operators; and (3) gaining control over other business operators through exerting influence on other business
operators through contracts or other means. In 2009, the Ministry of Commerce, to which the Antitrust Commission is affiliated, promulgated
the Measures for Filing of Concentration of Business Operators (amended by the Guidelines for Filing of Concentration of Business Operators
in 2014), which set forth the criteria of concentration and the requirement of miscellaneous documents for the purpose of filing. The
business combination we contemplate may be considered the concentration of business operators, and to the extent required by the Antitrust
Law and the criteria established by the State Council, we must file with the antitrust authority under the PRC State Council prior to
conducting the contemplated business combination. If the antitrust authority decides not to further investigate whether the contemplated
business combination has the effect of precluding or impeding competition or fails to make a decision within 30 days from receipt of
relevant materials, we may proceed to consummate the contemplated business combination. If antitrust authority decides to prohibit the
contemplated business combination after further investigation, we must terminate such business combination and would then be forced to
either attempt to complete a new business combination prior to the end of 21 months from the closing of the IPO or we would be required
to return any amounts which were held in the trust account to our stockholders. When we evaluate a potential business combination, we
will consider the need to comply with the Antitrust Law and other relevant regulations which may limit our ability to effect an acquisition
or may result in our modifying or not pursuing a particular transaction.
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.
On
February 3, 2011, the PRC government issued a Notice Concerning the Establishment of Security Review Procedure on Mergers and Acquisitions
of Domestic Enterprises by Foreign Investors, or Security Review Regulations, which became effective on March 5, 2011. The Security Review
Regulations cover acquisitions by foreign investors of a broad range of PRC enterprises if such acquisitions could result in de facto
control by foreign investors and the enterprises are relating to military, national defense, important agriculture products, important
energy and natural resources, important infrastructures, important transportation services, key technologies and important equipment
manufacturing. The scope of the review includes whether the acquisition will impact the national security, economic and social stability,
and the research and development capabilities on key national security related technologies. Foreign investors should submit a security
review application to the Department of Commerce for its initial review for contemplated acquisition. If the acquisition is considered
to be within the scope of the Security Review Regulations, the Department of Commerce will transfer the application to a joint security
review committee within five business days for further review. The joint security review committee, consisting of members from various
PRC government agencies, will conduct a general review and seek comments from relevant government agencies. The joint security review
committee may initiate a further special review and request the termination or restructuring of the contemplated acquisition if it determines
that the acquisition will result in significant national security issue.
The
Security Review Regulations will potentially subject a large number of mergers and acquisitions transactions by foreign investors in
China to an additional layer of regulatory review. Currently, there is significant uncertainty as to the implication of the Security
Review Regulations. Neither the Department of Commerce nor other PRC government agencies have issued any detailed rules for the implementation
of the Security Review Regulations. If, for example, our potential initial business combination is with a target company operating in
the PRC in any of the sensitive sectors identified above, the transaction will be subject to the Security Review Regulations, and we
may have to spend additional resources and incur additional time delays to complete any such acquisition. We may also be prevented from
pursuing certain investment opportunities if the PRC government considers that the potential investments will result in a significant
national security issue.
In
light of recent events indicating greater oversight by the CAC over data security, particularly for companies seeking to list on a foreign
exchange, companies with more than one million users’ personal information in China, especially some internet and technology companies,
may not be willing to list on a U.S. exchange or enter into a definitive business combination agreement with us. Further, we may also
avoid conduct a business combination with a company with more than one million users’ personal information in China due to the
limited timeline for us to complete a business combination.
Our
initial business combination may be subject to PRC laws relating to the collection, use, sharing, retention, security, and transfer of
confidential and private information, such as personal information and other data. These laws continue to develop, and the PRC government
may adopt other rules and restrictions in the future. Non-compliance could result in penalties or other significant legal liabilities.
Companies
in China are subject to various risks and costs associated with the collection, use, sharing, retention, security, and transfer of confidential
and private information, such as personal information and other data. This data is wide ranging and relates to our investors, employees,
contractors and other counterparties and third parties. If we decide to initiate a business combination with a company in China, our
compliance obligations include those relating to the Data Protection Act (As Revised) of the Cayman Islands and the relevant PRC laws
in this regard. These PRC laws apply not only to third-party transactions, but also to transfers of information between a holding company
and its subsidiaries. These laws continue to develop, and the PRC government may adopt other rules and restrictions in the future. Non-compliance
could result in penalties or other significant legal liabilities.
Pursuant
to the PRC Cybersecurity Law, which was promulgated by the Standing Committee of the National People’s Congress on November 7,
2016 and took effect on June 1, 2017, personal information and important data collected and generated by a critical information infrastructure
operator in the course of its operations in China must be stored in China, and if a critical information infrastructure operator purchases
internet products and services that affects or may affect national security, it should be subject to cybersecurity review by the CAC.
Due to the lack of further interpretations, the exact scope of “critical information infrastructure operator” remains unclear.
On July 10, 2021, the CAC publicly issued the Measures for Cybersecurity Censorship (Revised Draft for Comments) aiming to, upon its
enactment, replace the existing Measures for Cybersecurity Censorship. The draft measures extend the scope of cybersecurity reviews to
data processing operators engaging in data processing activities that affect or may affect national security, including listing in a
foreign country. The draft measures require a company holding more than one million personal information to submit its IPO materials
prepared for submission for cybersecurity review before listing on a foreign exchange.
It
is unclear whether the draft measures will apply to a company planning to list on a U.S. exchange by business combination with a special
purpose acquisition corporation like us. If cybersecurity review applies to our business combination with a company holding more than
one million personal information in China, we cannot guarantee that we will receive such approval in a timely manner. Further, due to
limited business combination period that we have, we may avoid searching for a target and completing an initial business combination
that will be subject to Chinese cybersecurity review. Therefore, we may avoid searching for a company with one million personal information
in China or a company operating critical information infrastructure in China.
Furthermore,
if we were found to be in violation of applicable laws and regulations in China during such review, we could be subject to administrative
penalties, such as warnings, fines, or service suspension. Therefore, cybersecurity review could materially and adversely affect our
business, financial condition, and results of operations.
In
addition, the PRC Data Security Law, which was promulgated by the Standing Committee of the National People’s Congress on June
10, 2021 and takes effect on September 1, 2021, requires data collection to be conducted in a legitimate and proper manner, and stipulates
that, for the purpose of data protection, data processing activities must be conducted based on data classification and hierarchical
protection system for data security. After the Data Security Law takes effect, if our post-combination entity’s data processing
activities were found to be not in compliance with this law, our post-combination entity could be ordered to make corrections, and under
certain serious circumstances, such as severe data divulgence, we and post- combination entity could be subject to penalties, including
the revocation of our business licenses or other permits. As a result, we and post-combination entity may be required to suspend our
relevant businesses, shut down our website, take down our operating applications, or face other penalties, which may materially and adversely
affect our business, financial condition, and results of operations.
If,
for example, our potential initial business combination is with a target business operating in the PRC and if the enacted version of
the draft measures mandates clearance of cybersecurity review and other specific actions to be completed by the target business, we may
face uncertainty as to whether such clearance can be timely obtained, or at all, and incur additional time delays to complete any such
acquisition. Cybersecurity review could also result in negative publicity with respect to our initial business combination and diversion
of our managerial and financial resources. We may also be prevented from pursuing certain investment opportunities if the PRC government
considers that the potential investments will result in a significant national security issue.
In
the event we successfully consummate a business combination with a target business with primary operations in the PRC, we will be subject
to restrictions on dividend payments following consummation of our initial business combination.
After
we consummate our initial business combination, we may rely on dividends and other distributions from our operating company to provide
us with cash flow and to meet our other obligations. Current regulations in China would permit our operating company 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 operating company in China will be required to set aside at least 10% (up to an aggregate amount equal
to half of its registered capital) of its accumulated profits each year. Such cash reserve may not be distributed as cash dividends.
In addition, if our operating company in China 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.
If
we make equity compensation grants to persons who are PRC citizens, they may be required to register with SAFE. We may also face regulatory
uncertainties that could restrict our ability to adopt equity compensation plans for our directors and employees and other parties under
PRC laws.
On
April 6, 2007, SAFE issued the “Operating Procedures for Administration of Domestic Individuals Participating in the Employee Stock
Ownership Plan or Stock Option Plan of An Overseas Listed Company, also known as “Circular 78.” It is not clear whether Circular
78 covers all forms of equity compensation plans or only those which provide for the granting of shares options. For any plans which
are so covered and are adopted by a non-PRC listed company, such as our company, after April 6, 2007, Circular 78 requires all participants
who are PRC citizens to register with and obtain approvals from SAFE prior to their participation in the plan. In addition, Circular
78 also requires PRC citizens to register with SAFE and make the necessary applications and filings if they participated in an overseas
listed company’s covered equity compensation plan prior to April 6, 2007. We believe that the registration and approval requirements
contemplated in Circular 78 will be burdensome and time consuming.
Upon
consummation of business combination with a target business with primary operations in the PRC, we may adopt an equity incentive plan
and make shares option grants under the plan to our officers, directors and employees, whom may be PRC citizens and be required to register
with SAFE. If it is determined that any of our equity compensation plans are subject to Circular 78, failure to comply with such provisions
may subject us and participants of our equity incentive plan who are PRC citizens to fines and legal sanctions and prevent us from being
able to grant equity compensation to our PRC employees. In that case, our ability to compensate our employees and directors through equity
compensation would be hindered and our business operations may be adversely affected.
Enhanced
scrutiny over acquisition transactions by the PRC tax authorities may have a negative impact on potential acquisitions we may pursue
in the future.
The
PRC tax authorities have enhanced their scrutiny over the direct or indirect transfer of certain taxable assets, including, in particular,
equity interests in a PRC resident enterprise, 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.
We
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. 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.
The
Chinese government may exert substantial interventions and influences over the manner in which our post-combination entity must conduct
its business activities that we cannot expect when we enter into a definitive agreement with a target company with major operation in
China. If the Chinese government establish some new policies, regulations, rules, or laws in the industries where our post-combination
entity is in, our post-combination entity may subject to material changes in its operations and the value of our common stock.
The
Chinese government has exercised and continues to exercise substantial control over virtually every sector of the Chinese economy through
regulation and state ownership. Our post-combination entity’s ability to operate in China may be harmed by changes in its laws
and regulations, including those relating to taxation, environmental regulations, land use rights, property and other matters. The central
or local governments of these jurisdictions may impose new, stricter regulations or interpretations of existing regulations that would
require additional expenditures and efforts on our part to ensure our compliance with such regulations or interpretations. Accordingly,
government actions in the future, including any decision not to continue to support recent economic reforms and to return to a more centrally
planned economy or regional or local variations in the implementation of economic policies, could have a significant effect on economic
conditions in China or particular regions thereof, and could require us to divest ourselves of any interest we then hold in Chinese properties.
For
example, the Chinese cybersecurity regulator announced on July 2, 2021, that it had begun an investigation of Didi Global Inc. (NYSE:
DIDI) and two days later ordered that the company’s app be removed from smartphone app stores. On July 24, 2021, the General Office
of the Communist Party of China Central Committee and the General Office of the State Council jointly released the Guidelines for Further
Easing the Burden of Excessive Homework and Off-campus Tutoring for Students at the Stage of Compulsory Education, pursuant to which
foreign investment in such firms via mergers and acquisitions, franchise development, and variable interest entities are banned from
this sector.
As
such, the post-combination entity’s business segments may be subject to various government and regulatory interference in the provinces
in which they operate. The post-combination entity could be subject to regulation by various political and regulatory entities, including
various local and municipal agencies and government sub-divisions. We and our post-combination entity may incur increased costs necessary
to comply with existing and newly adopted laws and regulations or penalties for any failure to comply.
Furthermore,
it is uncertain when and whether we and our post-combination entity will be required to obtain permission from the PRC government to
list on U.S. exchanges or enter into VIE Agreements in the future, and even when such permission is obtained, whether it will be denied
or rescinded. Although we are currently not required to obtain permission from any of the PRC federal or local government and have not
received any denial to list on the U.S. exchange or to enter into VIE Agreements, our post-combination operations could be adversely
affected, directly or indirectly, by existing or future laws and regulations relating to our business or industry.
PRC
laws and regulations governing our post-combination entity’s business operations are sometimes vague and uncertain and any changes
in such laws and regulations may impair our ability to operate profitably.
There
are substantial uncertainties regarding the interpretations and application of PRC laws and regulations including, but not limited to,
the laws and regulations governing our business and the enforcement and performance of our arrangements with customers in certain circumstances.
The laws and regulations are sometimes vague and may be subject to future changes, and their official interpretation and enforcement
may involve substantial uncertainty. The effectiveness and interpretation of newly enacted laws or regulations, including amendments
to existing laws and regulations, may be delayed, and our business may be affected if we rely on laws and regulations which are subsequently
adopted or interpreted in a manner different from our understanding of these laws and regulations. New laws and regulations that affect
existing and proposed future businesses may also be applied retroactively. We cannot predict what effect the interpretation of existing
or new PRC laws or regulations may have on our post-combination entity’s business.
The
PRC legal system is a civil law system based on written statutes. Unlike the common law system, prior court decisions under the civil
law system may be cited for reference but have limited precedential value. Since these laws and regulations are relatively new and the
PRC legal system continues to rapidly evolve, the interpretations of many laws, regulations and rules are not always uniform and the
enforcement of these laws, regulations and rules involves uncertainties.
In
1979, the PRC government began to promulgate a comprehensive system of laws and regulations governing economic matters in general. The
overall effect of legislation over the past three decades has significantly enhanced the protections afforded to various forms of foreign
investments in China. However, China has not developed a fully integrated legal system, and recently enacted laws and regulations may
not sufficiently cover all aspects of economic activities in China. In particular, the interpretation and enforcement of these laws and
regulations involve uncertainties. Since PRC administrative and court authorities have significant discretion in interpreting and implementing
statutory provisions and contractual terms, it may be difficult to evaluate the outcome of administrative and court proceedings and the
level of legal protection we enjoy. These uncertainties may affect our judgment on the relevance of legal requirements and our ability
to enforce our contractual rights or tort claims. In addition, the regulatory uncertainties may be exploited through unmerited or frivolous
legal actions or threats in attempts to extract payments or benefits from us.
Furthermore,
the PRC legal system is based in part on government policies and internal rules, some of which are not published on a timely basis or
at all and may have retroactive effect. As a result, we may not be aware of our violation of any of these policies and rules until sometime
after the violation. In addition, any administrative and court proceedings in China may be protracted, resulting in substantial costs
and diversion of resources and management attention.
From
time to time, our post-combination entity may have to resort to administrative and court proceedings to enforce our legal rights. However,
since PRC administrative and court authorities have significant discretion in interpreting and implementing statutory and contractual
terms, it may be more difficult to evaluate the outcome of administrative and court proceedings and the level of legal protection our
post-combination entity enjoys than in more developed legal systems. Furthermore, the PRC legal system is based in part on government
policies and internal rules (some of which are not published in a timely manner or at all) that may have retroactive effect. As a result,
we and our post-combination entity may not be aware of our violation of these policies and rules until sometime after the violation.
Such uncertainties, including uncertainty over the scope and effect of our contractual, property (including intellectual property) and
procedural rights, and any failure to respond to changes in the regulatory environment in China could materially and adversely affect
our business and impede our post-combination entity’s ability to continue its operations.
Changes
in the policies, regulations, rules, and the enforcement of laws of the PRC government may be quick with little advance notice and could
have a significant impact upon our ability to operate profitably in the PRC.
Our
post-combination entity may conduct most of our operations and most of our revenue is generated in the PRC. Accordingly, economic, political
and legal developments in the PRC will significantly affect our post- combination entity’s business, financial condition, results
of operations and prospects. Policies, regulations, rules, and the enforcement of laws of the PRC government can have significant effects
on economic conditions in the PRC and the ability of businesses to operate profitably. Our post-combination entity’s ability to
operate profitably in the PRC may be adversely affected by changes in policies by the PRC government, including changes in laws, regulations
or their interpretation, particularly those dealing with the Internet, including censorship and other restriction on material which can
be transmitted over the Internet, security, intellectual property, money laundering, taxation and other laws that affect our post-combination
entity’s ability to operate its business.
China
Securities Regulatory Commission and other Chinese government agencies may exert more oversight and control over foreign investment in
China-based issuers. Additional compliance procedures may be required in connection with our business combination process, and, if required,
we cannot predict whether we will be able to obtain such approval. As a result, both you and us face uncertainty about future actions
by the PRC government that could significantly affect our ability to continue to offer securities to investors and cause the value of
our securities to significantly decline or be worthless.
On
July 6, 2021, the General Office of the Communist Party of China Central Committee and the General Office of the State Council jointly
issued a document to crack down on illegal activities in the securities market and promote the high-quality development of the capital
market, which, among other things, requires the relevant governmental authorities to strengthen cross-border oversight of law-enforcement
and judicial cooperation, to enhance supervision over China-based companies listed overseas, and to establish and improve the system
of extraterritorial application of the PRC securities laws. Since this document is relatively new, uncertainties still exist in relation
to how soon legislative or administrative regulation making bodies will respond and what existing or new laws or regulations or detailed
implementations and interpretations will be modified or promulgated, if any, and the potential impact such modified or new laws and regulations
will have on our future business combination with a company with major operation in China. Therefore, China Securities Regulatory Commission
and other Chinese government agencies may exert more oversight and control over foreign investment in China-based issuers. Additional
compliance procedures may be required in connection with our business combination process, and, if required, we cannot predict whether
we will be able to obtain such approval. As a result, both you and us face uncertainty about future actions by the PRC government that
could significantly affect our ability to continue to offer securities to investors and cause the value of our securities to significantly
decline or be worthless.
The
recent joint statement by the SEC and the 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, including companies based in China,
upon assessing the qualification of their auditors, especially the non-U.S. auditors who are not inspected by the PCAOB.
On
April 21, 2020, SEC Chairman Jay Clayton and PCAOB Chairman William D. Duhnke III, along with other senior SEC staff, released a joint
statement highlighting the risks associated with investing in companies based in or have substantial operations in emerging markets including
China. The joint statement emphasized the risks associated with lack of access for the PCAOB to inspect auditors and audit work papers
in China and higher risks of fraud in emerging markets.
On
May 18, 2020, Nasdaq filed three proposals with the SEC to (i) apply minimum offering size requirement for companies primarily operating
in “Restrictive Market”, (ii) adopt a new requirement relating to the qualification of management or board of director
for Restrictive Market companies, and (iii) apply additional and more stringent criteria to an applicant or listed company based
on the qualifications of the company’s auditors.
On
May 20, 2020, the U.S. Senate passed the HFCAA requiring a foreign company to certify it is not owned or controlled by a foreign government
if the PCAOB is unable to audit specified reports because the company uses a foreign auditor not subject to the PCAOB inspection. If
the PCAOB is unable to inspect the company’s auditors for three consecutive years, the issuer’s securities are prohibited
to trade on a national exchange. On December 2, 2020, the U.S. House of Representatives approved the Holding Foreign Companies Accountable
Act. On December 18, 2020, the HFCAA was signed into law. On June 22, 2021, the U.S. Senate passed the Accelerating Holding Foreign Companies
Accountable Act. The bill, if enacted, would shorten the three-consecutive-year compliance period under the HFCAA to two consecutive
years. As of March 24, 2021, the SEC adopted interim final amendments to implement congressionally mandated submission and disclosure
requirements of the HFCAA. On November 5, 2021, the SEC approved the PCAOB Rule 6100, which will establish a framework for the PCAOB’s
determinations under the HFCAA that the PCAOB is unable to inspect or investigate completely registered public accounting firms located
in a foreign jurisdiction because of a position taken by an authority in that jurisdiction. On December 2, 2021, the SEC adopted final
amendments implementing congressionally mandated submission and disclosure requirements of the HFCAA.
The
lack of access to the PCAOB inspection in China prevents the PCAOB from fully evaluating audits and quality control procedures of the
auditors based in China. As a result, the investors may be deprived of the benefits of such PCAOB inspections. The inability of the PCAOB
to conduct inspections of auditors in China makes it more difficult to evaluate the effectiveness of these accounting firms’ audit
procedures or quality control procedures as compared to auditors outside of China that are subject to the PCAOB inspections.
MC’s
auditor, the independent registered public accounting firm that issues the audit report included elsewhere in this prospectus/proxy statement,
as an auditor of companies that are traded publicly in the United States and a firm registered with the PCAOB, is subject to laws
in the United States pursuant to which the PCAOB conducts regular inspections to assess MC’s auditor’s compliance with
the applicable professional standards. MC’s auditor is headquartered in Manhattan, New York, and has been inspected by the
PCAOB on a regular basis with the last inspection in June 2018. Therefore, it is not subject to the Determination announced by the
PCAOB on December 16, 2021. Moreover, the PCAOB currently has access to inspect the audit workpapers of MC’s PRC subsidiaries or
any PRC-based subsidiary post-business combination. Notwithstanding the foregoing, in the future, if there is any regulatory change or
steps taken by the PRC regulators that do not permit Friedman LLP to provide audit documentation located in China or Hong Kong to the
PCAOB for inspection or investigation, or the PCAOB expands the scope of the Determination so that MC is subject to the HFCAA, as the
same may be amended, you may be deprived of the benefits of such inspection which could result in limitation or restriction to MC access
to the U.S. capital markets and trading of MC’s securities, including trading on the national exchange and trading on “over-the-counter”
markets, may be prohibited under the HFCAA. However, in the event the PRC authorities would further strengthen regulations over auditing
work of Chinese companies listed on the U.S. stock exchanges, which would prohibit MC’s current auditor to perform work in China,
then MC would need to change its auditor and the audit workpapers prepared by MC’s new auditor may not be inspected by the PCAOB
without the approval of the PRC authorities, in which case the PCAOB may not be able to fully evaluate the audit or the auditors’
quality control procedures. Furthermore, due to the recent developments in connection with the implementation of the HFCAA, MC cannot
assure you whether the SEC, Nasdaq or other regulatory authorities would apply additional and more stringent criteria to MC after considering
the effectiveness of MC’s auditor’s audit procedures and quality control procedures, adequacy of personnel and training,
or sufficiency of resources, geographic reach or experience as it relates to the audit of MC’s financial statements. The requirement
in the HFCAA that the PCAOB be permitted to inspect the issuer’s public accounting firm within three years, may result in the delisting
of MC in the future if the PCAOB is unable to inspect MC’s accounting firm at such future time.

---

ITEM 1B. UNRESOLVED STAFF COMMENTS
ITEM
1B. UNRESOLVED STAFF COMMENTS
Not
applicable.

---

ITEM 2. PROPERTIES
ITEM
2. PROPERTIES
We do not own any real estate or other physical properties materially important to our operations. The Company entered into short-term agreements for temporary office space expiring through June 30, 2021. We entered an agreement to pay our Sponsor a monthly fee of $10,000 for general and administrative services, including office space, utilities and administrative services to the Company. We began incurring these fees on June 24, 2021 and will continue to incur these fees monthly until the earlier of the completion of the business combination and the Company’s liquidation. For the years ended December 31, 2021 and 2020, the Company incurred rent expense of $11,936 and $14,405, respectively.

---

ITEM 3. LEGAL PROCEEDINGS
ITEM
3. LEGAL PROCEEDINGS
We
are not currently a party to any material litigation or other legal proceedings brought against us. We are also not aware of any legal
proceeding, investigation or claim, or other legal exposure that has a more than remote possibility of having a material adverse effect
on our business, financial condition, or results of operations.

---

ITEM 4. MINE SAFETY DISCLOSURE
ITEM
4. MINE SAFETY DISCLOSURES
Not
applicable.
PART
II

---

ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY
ITEM
5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED SHAREHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES
Our
units are currently traded on The Nasdaq Capital Market under the symbol “GPCOU” and started trading on The Nasdaq Capital
Market on June 22, 2021. The ordinary shares, rights and warrants comprising the units began separate trading on July 30, 2021 and are
traded on NASDAQ under the symbols “GPCO,” “GPCOR” and “GPCOW”, respectively.
Holders
of Record
At March 8, 2022, there were 749,650 of our units issued and outstanding held by 2 holders of record. Assuming all united are separated into ordinary shares, rights and warrants, at March 8, 2022, there were 6,020,500 rights issued and outstanding held by 2 holders of record (assuming all of the units were separated into their component parts on such date). At March 8, 2022, there were 6,020,500 warrants issued and outstanding held by 2 holders of record (assuming all of the units were separated into their component parts on such date). At March 8, 2022, there were 7,458,000 ordinary shares issued and outstanding and 2 holders of record (assuming all of the units were separated into their component parts on such date).
The
number of record holders was determined from the records of our transfer agent and does not include beneficial owners of any of our securities
whose securities are held in the names of various security brokers, dealers, and registered clearing agencies.
The
transfer agent for our units and ordinary shares and warrant agent for our warrants and the rights agent for our rights is Vstock Transfer
LLC. We have agreed to indemnify Vstock Transfer LLC in its roles as transfer agent and warrant agent, its agents and each of its shareholders,
directors, officers and employees against all liabilities, including judgments, costs and reasonable counsel fees that may arise out
of acts performed or omitted for its activities in that capacity, except for any liability due to any gross negligence, willful misconduct
or bad faith of the indemnified person or entity.
Dividends
We
have not paid any cash dividends on our ordinary shares to date and do not intend to pay cash dividends prior to the completion of our
initial business combination. The payment of cash dividends in the future will be dependent upon our revenues and earnings, if any, capital
requirements and general financial condition subsequent to completion of our initial business combination. The payment of any cash dividends
subsequent to our initial business combination will be within the discretion of our Board of Directors at such time and we will only
pay such dividend out of our profits or share premium (subject to solvency requirements) as permitted under Cayman Islands law. Further,
if we incur any indebtedness in connection with our initial business combination, our ability to declare dividends may be limited by
restrictive covenants we may agree to in connection therewith.
Sales
of Unregistered Securities
Subsequent
to December 31, 2020, our sponsor purchased a total 1,437,500 founder shares for an aggregate purchase price of $25,000, or approximately
$0.02 per share. Such securities were issued in connection with our organization pursuant to the exemption from registration contained
in Section 4(a)(2) of the Securities Act. Our sponsor is an accredited investor for purposes of Rule 501 of Regulation D.
In
addition, at the time of our IPO complete on June 24, 2021, our sponsor purchased an aggregate of 270,500 private placement units, at
a price of $10.00 per unit for an aggregate purchase price of $2,705,000. Each unit consists of one private placement ordinary share,
one private placement right granting the holder thereof the right to receive one-tenth (1/10) of an ordinary share upon the consummation
of a business combination, and one private placement warrant. Each private placement warrant is exercisable to purchase one-half of one
ordinary share at a price of $11.50 per whole share, in a private placement that closed simultaneously with the closing of the offering.
These purchases took place on a private placement basis simultaneously with the completion of our public offering. These issuances were
made pursuant to the exemption from registration contained in Section 4(a)(2) of the Securities Act. No underwriting discounts or commissions
were paid with respect to such sales.
Securities
Authorized for Issuance Under Equity Compensation Plans
None.
Use
of Proceeds
On
June 24, 2021, we consummated our initial public offering of 5,750,000 units, inclusive of the over-allotment option of 750,000 Units. Each Unit
consists of one ordinary share, par value $0.0001 per share, one warrant entitling its holder to purchase one-half of one ordinary share
at a price of $11.50 per ordinary share, and one right to receive one-tenth (1/10) of one ordinary share upon the consummation of the
Company’s initial business combination.
The
Units were sold at an offering price of $10.00 per Unit, generating gross proceeds of $57,500,000.
Simultaneously with the closing of the IPO, the Company consummated the Private Placement with its sponsor, Greenland Asset Management Corporation, a British Virgin Islands company for the purchase of 270,500 Private Units at a price of $10.00 per Private Unit, generating total proceeds of $ $2,705,000, pursuant to the Private Placement Unit Purchase Agreement, a copy of which was filed as an exhibit to the Registration Statement for the IPO as filed with the Commission.
The
Sponsor had previously advanced expenses or loaned the Company the sum of $453,364, evidenced in part by a note dated as of December
19, 2020 which loan was payable upon the earlier of completion of the IPO or December 31, 2021. In connection with the completion of
the IPO, the note was repaid in full via an offset of certain amounts due under the Private Placement subscription.
A total of $58,075,000 of the net proceeds from the IPO and the Private Placement were deposited in a trust account established for the benefit of the Company’s public shareholders, established with Wilmington Trust, National Association acting as trustee, at an account at Morgan Stanley.
The Company incurred transaction costs for its IPO of $2,887,500, consisting of $1,150,000 of underwriting fees, $1,437,500 of deferred underwriting fees and $300,000 of other offering costs. In addition, at June 30, 2021, cash of $509,568 and cash held in escrow of $9,000 were held outside of the Trust Account and was available for the payment of offering costs and for working capital purposes.
The
rules of the NASDAQ provide that at least 90% of the gross proceeds from the IPO and the private placement be deposited in a trust account.
Of the net proceeds of the IPO and the sale of the private placement units, $58,075,000, including $1,437,500 of deferred underwriting
commissions, upon the consummation of the IPO, were invested only in U.S. government treasury bills 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. We will not be permitted to withdraw any of the principal or interest held in the trust account
except for the withdrawal of interest to pay taxes, if any, the proceeds from the IPO and the sale of the private placement units will
not be released from the trust account until the earliest of (i) the completion of our initial business combination, (ii) 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 to (A) modify the substance or timing of our obligation to redeem 100% of our public shares if we do not complete our
initial business combination within 12 months from the closing of the IPO (or up to 21 months from the closing of the IPO if we extend
the period of time to consummate a business combination) or (B) with respect to any other provision relating to shareholders’ rights
or pre-business combination activity and (iii) the redemption of all of our public shares if we are unable to complete our initial business
combination within 12 months from the closing of the IPO (or up to 21 months from the closing of the IPO if we extend the period of time
to consummate a business combination), subject to applicable law.
Officers,
directors and founders will receive reimbursement for any out-of-pocket expenses incurred by them related to identifying, investigating
and completing an initial business combination. Our audit committee will review on a quarterly basis all payments that were made to our
sponsor, officers or directors, or our or their affiliates.
The net proceeds from our IPO available to us out of trust for our working capital requirements in searching for a business combination and for working capital requirements are currently approximately $48,955. We intend to use the proceeds for legal, accounting, due diligence, travel, and other expenses in connection with any business combination, legal and accounting fees related to regulatory reporting obligations, payment for office space, administrative and support services, NASDAQ continued listing fees, and Director and Officer liability insurance premiums.

---

ITEM 6. SELECTED FINANCIAL DATA
ITEM 6. RESERVED

---

ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS
ITEM
7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following discussion and analysis of the financial condition and results of operations should be read in conjunction with our audited consolidated 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-K. Certain information contained in the discussion and analysis set forth below includes forward-looking statements.
Special
Note Regarding Forward-Looking Statements
All
statements other than statements of historical fact included in this Form 10-K including, without limitation, statements under “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. When used in this Form 10-K,
words such as “anticipate,” “believe,” “estimate,” “expect,” “intend” and
similar expressions, as they relate to us or the Company’s management, identify forward-looking statements. Such forward-looking
statements are based on the beliefs of management, as well as assumptions made by, and information currently available to, the Company’s
management. Actual results could differ materially from those contemplated by the forward-looking statements as a result of certain factors
detailed in our filings with the SEC.
The
following discussion and analysis of our financial condition and results of operations should be read in conjunction with the financial
statements and the notes thereto contained elsewhere in this Report. Certain information contained in the discussion and analysis set
forth below includes forward-looking statements that involve risks and uncertainties.
Overview
We are a blank check company incorporated in the Cayman Islands on May 9, 2018. We are formed for the purpose of effecting a merger, share exchange, asset acquisition, stock purchase, reorganization, or similar business combination with one or more businesses in a Business Combination. Although we are not limited to a particular industry or geographic region for purposes of consummating a Business Combination, we intend to focus on businesses that have a connection to the Asian market. We are an early stage and emerging growth company and, as such, we are subject to all of the risks associated with early stage and emerging growth companies. We intend to effectuate our initial business combination using cash from the proceeds of the IPO and the private placement of the private placement units, the proceeds of the sale of our securities in connection with our initial business combination (pursuant to backstop agreements we may enter into following the consummation of the IPO or otherwise), our shares, debt or a combination of cash, stock and debt.
The
issuance of additional shares in a Business Combination:
● may
significantly dilute the equity interest of investors in the IPO;
● may subordinate
the rights of holders of ordinary shares if preference shares are issued with rights senior to those afforded our ordinary shares;
● could cause a change of
control if a substantial number of our ordinary shares are issued, which may affect, among other things, our ability to use our net
operating loss carry forwards, if any, and could result in the resignation or removal of our present officers and directors;
● may have the effect of
delaying or preventing a change of control of us by diluting the share ownership or voting rights of a person seeking to obtain control
of us; and
● may adversely affect prevailing
market prices for our ordinary shares and/or warrants.
Similarly,
if we issue debt securities, it could result in:
● default and
foreclosure on our assets if our operating revenues after an initial business combination are insufficient to repay our debt obligations;
● acceleration of our obligations
to repay the indebtedness even if we make all principal and interest payments when due if we breach certain covenants that require
the maintenance of certain financial ratios or reserves without a waiver or renegotiation of that covenant;
● our immediate payment of
all principal and accrued interest, if any, if the debt 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 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 ordinary shares
if declared, expenses, capital expenditures, acquisitions and other general corporate purposes;
● limitations on our flexibility
in planning for and reacting to changes in our business and in the industry in which we operate;
● increased vulnerability
to adverse changes in general economic, industry and competitive conditions and adverse changes in government regulation; and
● limitations on our ability
to borrow additional amounts for expenses, capital expenditures, acquisitions, debt service requirements, execution of our strategy
and other purposes and other disadvantages compared to our competitors who have less debt.]
Recent
Developments
On September 10, 2021, we, MC and the Merger Sub, entered into the Merger Agreement.
Pursuant
to the Merger Agreement, upon the terms and subject to the conditions of the Merger Agreement and in accordance with the Cayman Islands
Companies Act (As Revised), the parties intend to effect a business combination transaction whereby the Merger Sub will merge with and
into MC, with MC being the surviving entity and becoming a wholly owned Subsidiary of the Company on the terms and subject to the conditions
set forth in the Merger Agreement and simultaneously with the closing, the Company will change its name to “MicroCloud Hologram
Inc.”
The
Board of Directors of both the Company and MC and the stockholders of MC have approved the Merger Agreement and the transactions contemplated
by it.
Pursuant
to the Merger Agreement, the Merger is structured as a stock for stock transaction and is intended to be qualified as a tax-free reorganization.
The terms of the Merger provide for a valuation of MC and its subsidiaries and businesses of $450,000,000. Based upon a per share value
of $10.10 per share, the stockholders of MC will receive approximately 44,554,455 ordinary shares of the Company which will represent
approximately 84.07% of the combined outstanding shares following the closing, assuming no redemptions by our stockholders and assuming
conversion of our outstanding rights into 602,050 ordinary shares.
Consummation
of the transactions contemplated by the Merger Agreement are subject to customary conditions of the respective parties, including the
approval of the Merger Agreement by our shareholders. Other than as specifically discussed, this report does not assume the closing of
the business combination with MC.
Results
of Operations
Our
entire activity from inception up to June 24, 2021 was in preparation for the initial public offering. Since the initial public offering,
our activity has been limited to the evaluation of business combination candidates and activities in connection with the proposed acquisition of MC, and we will not be generating any operating revenues
until the closing and completion of our initial business combination. We expect to incur increased expenses as a result of being a public
company (for legal, financial reporting, accounting and auditing compliance), as well as for due diligence expenses. We expect our expenses
to increase substantially after this period.
For
the year ended December 31, 2021, we had a net loss of $740,299, which was comprised of change in fair value of warrant liabilities,
dividend income and general and administrative expenses.
For the year ended December 31, 2020, we had a net loss of $32,267, which consists of formation and operating costs.
Liquidity
and Capital Resources
On June 24, 2021, we consummated the Initial Public Offering of 5,750,000 ordinary units (the “Public Units”), which includes the full exercise by our underwriter of its over-allotment option in the amount of 750,000 Public Units, at $10.00 per Public Unit, generating gross proceeds of $57,500,000. Simultaneously with the closing of the Initial Public Offering, we consummated the sale of 270,500 units (the “Private Units”) at a price of $10.00 per Private Unit in a private placement to Greenland Asset Management Corporation (the “Sponsor”), generating gross proceeds of $2,705,000.
Transaction
costs amounted to $2,887,500, consisting of $1,150,000 of underwriting fees, $1,437,500 of deferred underwriting fees and $300,000 of
other offering costs.
As
of December 31, 2021, cash of $48,955 was held outside of the Trust Account and is available for the payment of offering costs and for
working capital purposes. We intend to use the funds held outside the Trust Account primarily to identify and evaluate prospective acquisition
candidates, perform business due diligence on prospective target businesses, travel to and from the offices, plants or similar locations
of prospective target businesses, review corporate documents and material agreements of prospective target businesses, select the target
business to acquire and structure, negotiate and consummate a Business Combination.
The
Sponsor had previously advanced expenses or loaned the Company the sum of $453,364, evidenced in part by a note dated as of December
19, 2020 which loan was payable upon the earlier of completion of the IPO or December 31, 2021. In connection with the completion of
the IPO, the note was repaid in full via an offset of certain amounts due under the Private Placement subscription.
In
addition, in order to finance transaction costs in connection with an intended initial business combination, our sponsor or an affiliate
of our sponsor or certain of our officers and directors may, but are not obligated to, loan us funds as may be required. If we complete
our initial business combination, we would repay such loaned amounts out of the proceeds of the trust account released to us. Otherwise,
such loans would be repaid only out of funds held outside the trust account. In the event that our initial business combination does
not close, we may use a portion of the working capital held outside the trust account to repay such loaned amounts but no proceeds from
our trust account would be used to repay such loaned amounts. Up to $1,500,000 of such loans may be convertible into units at a price
of $10.00 per unit at the option of the lender.
As of December 31, 2021 and 2020, we had temporary advances of $164,740 and $36,784 from a related party for the payment of costs related to our business combination transaction and the Initial Public Offering respectively. The balance is unsecured, interest-free and has no fixed terms of repayment.
Other
than potential loans from our sponsor we do not believe we will need to raise additional funds following the IPO 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 complete 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.
If the Company is unable to raise additional capital, it may be required to take additional measures to conserve liquidity, which could include, but not necessarily be limited to, curtailing operations, suspending the pursuit of a potential transaction, and reducing overhead expenses. The Company cannot provide any assurance that new financing will be available to it on commercially acceptable terms, if at all. These conditions raise substantial doubt about the Company’s ability to continue as a going concern through one year from the date of these financial statements if a Business Combination is not consummated. These consolidated financial statements do not include any adjustments relating to the recovery of the recorded assets or the classification of the liabilities that might be necessary should the Company be unable to continue as a going concern.
Off-balance
sheet financing arrangements
We
have no obligations, assets or liabilities, which would be considered off-balance sheet arrangements as of December 31, 2021. We do not
participate in transactions that create relationships with unconsolidated entities or financial partnerships, often referred to as variable
interest entities, which would have been established for the purpose of facilitating off-balance sheet arrangements. We have not entered
into any off-balance sheet financing arrangements, established any special purpose entities, guaranteed any debt or commitments of other
entities, or purchased any non-financial assets.
Contractual
obligations
At
December 31, 2021, we have long-term liabilities, other than an agreement to pay an affiliate of our sponsor a monthly fee of $10,000
for office space, administrative and support services provided to the Company. We began incurring these fees on June 24, 2021 and will
continue to incur these fees monthly until the earlier of the completion of the business combination and the Company’s liquidation.
We
did not have any long-term debt, capital lease obligations or operating lease obligations. However, we are committed to the below:
Registration
Rights
Pursuant
to a registration rights agreement entered into on June 24, 2021 the holders of the Founder Shares, Private Units (and their underlying
securities) and any Units that may be issued upon conversion of the Working Capital Loans (and underlying securities) are entitled to
registration rights. The holders of these securities are entitled to make up to three demands, excluding short form demands, that we
register such securities. In addition, the holders have certain “piggy-back” registration rights with respect to registration
statements filed subsequent to the consummation of a Business Combination and rights to require us to register for resale such securities
pursuant to Rule 415 under the Securities Act. We will bear the expenses incurred in connection with the filing of any such registration
statements.
Underwriting
Agreement
We
have an agreement to pay the underwriters a deferred fee of two and one-half percent (2.5%) of the gross proceeds of the initial public
offering, or $1,437,500.
Critical
Accounting Policies
The
preparation of financial statements and related disclosures in conformity with accounting principles generally accepted in the United
States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure
of contingent assets and liabilities at the date of the financial statements, and income and expenses during the years reported. Actual
results could materially differ from those estimates. We have identified the following critical accounting policies:
Warrant
liabilities
We account for warrants (Public Warrants or Private Warrants) as either equity-classified or liability-classified instruments based on an assessment of the warrant’s specific terms and applicable authoritative guidance in Financial Accounting Standards Board (“FASB”) ASC 480 and ASC 815, “Derivatives and Hedging” (“ASC 815”). The assessment considers whether the warrants are freestanding financial instruments pursuant to ASC 480, meet the definition of a liability pursuant to ASC 480, and whether the warrants meet all of the requirements for equity classification under ASC 815, including whether the warrants are indexed to our own ordinary shares and whether the warrant holders could potentially require “net cash settlement” in a circumstance outside of our control, among other conditions for equity classification. This assessment, which requires the use of professional judgment, is conducted at the time of warrant issuance and as of each subsequent quarterly period end date while the warrants are outstanding.
For issued or modified warrants that meet all of the criteria for equity classification, the warrants are required to be recorded as a component of equity at the time of issuance. For issued or modified warrants that do not meet all the criteria for equity classification, the warrants are required to be recorded as liabilities at their initial fair value on the date of issuance, and each balance sheet date thereafter. Changes in the estimated fair value of the warrants are recognized as a non-cash gain or loss on the statements of operations. We have elected to account for its Public Warrants as equity and the Private Warrants as liabilities.
Ordinary
shares subject to possible redemption
We
account for its ordinary shares subject to possible redemption in accordance with the guidance in ASC Topic 480, Distinguishing Liabilities
from Equity. Ordinary share subject to mandatory redemption (if any) is classified as a liability instrument and is measured at fair
value. Conditionally redeemable ordinary shares (including ordinary shares that feature redemption rights that are either within the
control of the holder or subject to redemption upon the occurrence of uncertain events not solely within our control) are classified
as temporary equity. At all other times, ordinary shares are classified as shareholders’ equity. As of December 31, 2021, our ordinary
shares feature certain redemption rights that are considered to be outside of our control. 5,750,000 ordinary shares subject to possible
redemption are presented as temporary equity, outside of the shareholders’ equity section of our balance sheet.
Net
loss per share
We
calculate net loss per share in accordance with ASC Topic 260, Earnings per Share. In order to determine the net income (loss)
attributable to both the redeemable shares and non-redeemable shares, we first considered the undistributed income (loss) allocable to
both the redeemable ordinary shares and non-redeemable ordinary shares and the undistributed income (loss) is calculated using the total
net loss less any dividends paid. We then allocated the undistributed income (loss) ratably based on the weighted average number of shares
outstanding between the redeemable and non-redeemable ordinary shares. Any remeasurement of the accretion to redemption value of the
ordinary shares subject to possible redemption was considered to be dividends paid to the public stockholders. As of December 31, 2021,
we have not considered the effect of the warrants sold in the Initial Public Offering to purchase an aggregate of 1,454,000 shares in
the calculation of diluted net loss per share, since the exercise of the warrants is contingent upon the occurrence of future events
and the inclusion of such warrants would be anti-dilutive and we did not have any other dilutive securities and other contracts that
could, potentially, be exercised or converted into ordinary share and then share in our earnings. As a result, diluted loss per share
is the same as basic loss per share for the years presented.
The
net loss per share presented in the consolidated statement of operations is based on the following:
For the Years Ended
December 31,
Net loss $ (740,299 ) $ (32,267 )
Accretion of carrying value to redemption value (4,083,064 ) -
Net profit $ (4,823,363 ) $ (32,267 )
For the Year Ended
December 31, 2021 For the Year Ended
December 31, 2020
Redeemable Ordinary shares Non-Redeemable Ordinary shares Redeemable Ordinary shares Non-Redeemable Ordinary shares
Basic and diluted net loss per share:
Numerators:
Allocation of net loss including carrying value to redemption value $ (3,158,084 ) $ (1,665,279 ) $ - $ (32,267 )
Accretion of carrying value to redemption value 4,083,064 - - -
Allocation of net income (loss) $ 924,980 $ (1,665,279 ) $ - $ (32,267 )
Denominators:
Weighted-average shares outstanding 2,993,151 1,578,308 -
Basic and diluted net income (loss) per share $ 0.31 $ (1.06 ) $ - $ (3,227 )
Recent
accounting pronouncements
Management
does not believe that any other recently issued, but not yet effective, accounting standards, if currently adopted, would have a material
effect on our financial statements.

---

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Item
7A. Quantitative and Qualitative Disclosures About Market Risk
As
of December 31, 2021, we were not subject to any market or interest rate risk. The net proceeds of our initial public offering completed
June 24, 2021, including amounts in the Trust Account, have been invested in U.S. government treasury bills, notes or bonds with a maturity
of 180 days or less or in certain money market funds that invest solely in U.S. treasuries. Due to the short-term nature of these investments,
we believe there will be no associated material exposure to interest rate risk.

---

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
Item
8. Financial Statements and Supplemental Data
This information appears following Item 15 of this Report and is included herein by reference.

---

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS
Item
9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
None.

---

ITEM 9A. CONTROLS AND PROCEDURES
Item
9A. Controls and Procedures Evaluation of Disclosure Controls and Procedures
Disclosure controls are procedures that are designed with the objective of ensuring that information required to be disclosed in our reports filed under the Exchange Act, such as this Report, is recorded, processed, summarized, and reported within the time period specified in the SEC’s rules and forms. Disclosure controls are also designed with the objective of ensuring that such information is accumulated and communicated to our management, including the chief executive officer and chief financial officer, as appropriate to allow timely decisions regarding required disclosure. Our management evaluated, with the participation of our principal executive officer and principal financial and accounting officer (our “Certifying Officers”), the effectiveness of our disclosure controls and procedures as of December 31, 2021, pursuant to Rule 13a-15(b) under the Exchange Act. Based upon that evaluation, our Certifying Officers concluded that, solely due to the events that led to the Company’s restatement of its financial statements to reclassify the Company’s Public Warrants, as well as the revision for the temporary equity subject to possible redemption, as described in Form 8-K filed on January 20, 2022, our disclosure controls and procedures were not effective.
We
do not expect that our disclosure controls and procedures will prevent all errors and all instances of fraud. Disclosure controls and
procedures, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the
disclosure controls and procedures are met. Further, the design of disclosure controls and procedures must reflect the fact that there
are resource constraints, and the benefits must be considered relative to their costs. Because of the inherent limitations in all disclosure
controls and procedures, no evaluation of disclosure controls and procedures can provide absolute assurance that we have detected all
our control deficiencies and instances of fraud, if any. The design of disclosure controls and procedures also is based partly on certain
assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated
goals under all potential future conditions.
Our internal control over financial reporting did not result in the proper classification of our warrants. Since their issuance on June 24, 2021, our warrants have been accounted for as liabilities within our balance sheet. On April 12, 2021, the SEC Staff issued the SEC Staff Statement in which the SEC Staff expressed its view that certain terms and conditions common to SPAC warrants may require the Public warrants to be classified as equity on the SPAC’s balance sheet as opposed to liabilities. After discussion and evaluation, taking into consideration the SEC Staff Statement, including with our independent auditors, we have concluded that our Public warrants should be classified as equity with no subsequent fair value remeasurement is required.
In addition, as previously disclosed, the Company concluded it should classify all ordinary shares subject to possible redemption in temporary equity. In accordance with the SEC and its staff’s guidance on redeemable equity instruments, ASC Topic 480, Distinguishing Liabilities from Equity (ASC 480), paragraph 10-S99, redemption provisions not solely within the control of the Company require ordinary shares subject to redemption to be classified outside of permanent equity. The Company had previously classified a portion of its ordinary shares in permanent equity. Although the Company did not specify a maximum redemption threshold, its charter provides that currently, the Company will not redeem its public shares in an amount that would cause its net tangible assets to be less than $5,000,001. The Company considered that the threshold would not change the nature of the underlying shares as redeemable and thus would be required to be disclosed outside equity. As a result, the Company restated its previously filed financial statements to classify ordinary shares subject to redemption as temporary equity and to recognize accretion from the initial book value to redemption value at the time of its Initial Public Offering and in accordance with ASC 480. The change in the carrying value of redeemable shares of ordinary shares resulted in charges against additional paid-in capital and accumulated deficit. As a result, management identified these material weaknesses in our internal control over financial reporting related to the accounting for warrants and ordinary shares subject to possible redemption.
On January 20, 2022, the Company revised its prior position on accounting for warrants and concluded that the Company’s previously issued (i) audited balance sheet as of June 24, 2021 included in the Company’s Current Report on Form 8-K filed with the SEC on June 30, 2021 and (ii) audited interim financial statements as of June 30, 2021 and for the three and six months ended June 30, 2021 included in the Company’s Quarterly Report on Form 10-Q filed with the SEC on August 16, 2021 (collectively, the “Affected Periods”), in each case, should be corrected to classify public warrants as equity and all of the public shares as temporary equity and should no longer be relied upon. On January 20, 2022, the Company filed a Form 8-K to disclose non-reliance on previously issued financial statements. On the same day, the Company filed a Form 8K/A to restate its balance sheet as of June 24, 2021 and a Form 10Q/A to restate its quarterly report for the quarter ended June 30, 2021. However, the non-cash adjustments to the balance do not impact the amounts previously reported for the Company’s cash and cash equivalents, and total assets.
To remediate these material weaknesses, we developed a remediation plan with assistance from our accounting advisors and have dedicated significant resources and efforts to the remediation and improvement of our internal control over financial reporting. While we have processes to identify and appropriately apply applicable accounting requirements, we plan to enhance our system of evaluating and implementing the complex accounting standards that apply to our financial statements. Our plans at this time include providing enhanced access to accounting literature, research materials and documents and increased communication among our personnel and third-party professionals with whom we consult regarding complex accounting applications. The elements of our remediation plan can only be accomplished over time, and we can offer no assurance that these initiatives will ultimately have the intended effects.
Management’s
Report on Internal Controls Over Financial Reporting
This
Annual Report on Form 10-K does not include a report of management’s assessment regarding internal control over financial reporting
or an attestation report of our independent registered public accounting firm due to a transition period established by rules of the
SEC for newly public companies.
Changes
in Internal Control over Financial Reporting
Other than the remedial activities undertaken following the restatement of our financial statements, as described above, there
were no changes in our internal control over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) of the Exchange
Act) during the most recent fiscal quarter that have materially affected, or are reasonably likely to materially affect, our internal
control over financial reporting.

---

ITEM 9B. OTHER INFORMATION
Item
9B. Other Information
None

---

ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
Item
10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE.
Our
current directors and executive officers are as follows:
Name Age Position
Shaosen Cheng Chairman and Chief Executive Officer
Teddy Zheng Chief Financial Officer
Jun Liu Director
Hai Lin Director
Xu Zhang Director
Shaosen
Cheng is the Chairman of our Board of Directors and also serves as our Chief Executive Officer. Since October 2019,
Mr. Cheng has been employed as a senior advisor at Forest Hill Financial Group of New York where he advised clients on asset allocation
and protection. During 2019, Mr. Cheng was a member of the Board of EverTrust Insurance Brokers Co., Ltd. Beijing and from January 2016
to December 2018, Mr. Cheng was the President of Fosun Zhongheng Insurance Brokers, Co., Ltd. in Shanghai China, which is an insurance
brokerage firm. During the period from July 2013 to December 2015, Mr. Cheng was the territory manager for the New York Combined Insurance
of New York. Prior to his employment with Combined Insurance, Mr. Cheng was the President of NY Eastar LLC, the United States’
subsidiary of China Eastar Group Holding Co. Ltd., a Shandong Province, China based private company. From 1995 to 2008 Mr. Cheng served
in various capacities in insurance and other similar firms such as Aon Risk Services, Inc., Marsh USA Inc, and Johnson & Higgins.
Mr. Cheng earned his college degree in political science at Shangdong University located in Jinan, China and his Master of Arts in International
Relations from Remin University of China located in Beijing, China. He has also obtained a master of business administration in insurance
and risk management from St. John’s University.
Teddy
Zheng has served as our Chief Financial Officer since January 2021. He served as Chief Financial Officer for Longevity Acquisition
Corporation (LOAC) from July 2018 to October 2020. Mr. Zheng has served as Managing Director of Cygnus Equity, a boutique investment
banking firm in China, since October 2015. From April 2014 to October 2015, Mr. Zheng worked in the investment banking division of Lazard
in China. From November 2010 to March 2014, Mr. Zheng worked in the investment banking division of JP Morgan First Capital in China.
From June 2009 to October 2010, Mr. Zheng worked in the M&A and corporate finance division of UBS Investment Bank in China. Mr. Zheng
received a bachelor degree in management information systems from Beijing Information Technology Institute and a master degree in management
science and engineering from the School of Economics and Management of Tsinghua University.
Xu
Zhang is a member of our Board and Directors. He has served as founder and Chief Executive Officer of Beijing Bochuang Education
Co., Ltd. since 2010. Mr. Zhang is also an accredited independent counselor and founder for the Beijing NiuXueShe, an online platform
for innovative courses since March 2017. From May 2009 to May 2010, Mr. Zhang served as Vice President of Aoji Education Company, one
of the largest education service and consulting companies in China, where Mr. Zhang directly supervised the US Education Service and
Counsel Division, the Essay and Exam Division, the Sales Division works for Aoji. From July 2007 to January 2008, Mr. Zhang served as
a corporate finance law attorney for the Hahn and Hessen LLP in New York City, where he mainly worked on equity formation, corporate
finance, hedge fund and private re-financing deals. From February 2008 to May 2009, Mr. Zhang served as a corporate lawyer with the Morrison
Foerster LLP based in San Francisco and Hong Kong. Mr. Zhang received a Bachelor in Economics degree from Renmin University of China
in 2000, and a Master of Arts in Political Economics at Columbia University in 2004, a Juris Doctor Degree from the Fordham University
Law School in 2007, and Law Studies in Taxation Certificate from New York University in 2007. We believe Mr. Zhang is well qualified
to serve on our board of directors because of his extensive knowledge and experience in business and law in the U.S. and China.
Hai Lin has served as General Manager of Red 13 Financial Holdings (Hong Kong) Co., Ltd. since January 2015, where Mr. Lin is responsible for project development, M&A and corporate financing, including company presentation, investment plan and transaction structure. During Oct 2010 and Dec 2014, Mr. Lin served as Director and Vice President of Goral Sky Investment Co., Ltd., where Mr. Lin was responsible for assisting Chinese companies going public in US market, including a refractory company with over $10 million net income. During January 2007 and September 2010, Mr. Lin served as General Manager of Longtou Investment (China) Limited, where Mr. Lin was responsible for assisting Chinese companies going public in US market, including a hydraulic company and an agriculture company. Meanwhile Mr. Lin assisted a US software public company for routine maintenance and investor relationship. During January 2004 and December 2006, Mr. Lin served as Vice President of Pacific Net Inc. (Nasdaq: PACT), where Mr. Lin was responsible for investor relationship, public filings under the Securities and Exchange Act, mergers and acquisitions related activity and corporate finance.
Jun
Liu is a member of our board of directors and the chair of audit committee. He has been one of the board of directors of Longevity
Acquisition Corporation (LOAC) since August 2018. Mr. Liu has served as the president of Beijing Wanfeng Xingye Investment Management
Co., Ltd., an investment company in China, since January 2014. From 2004 to January 2014, he served as the president of Zhongansheng
Investment Consulting Co., Ltd. From 2002 to 2004, Mr. Liu served as the vice president of Beijing Xingyun Co., Ltd. From 1999 to 2002,
Mr. Liu served as the CEO of Weixin (China) Venture Investment Co., Ltd. and the director of Venture Capital Research Center of Renmin
University. From 1993 to 1996, Mr. Liu served as government official in the State Auditing Administration. Mr. Liu received his bachelor
degree of Finance and Accounting from Wuhan University in 1989 and received his masters of business administration degree from Renmin
University located in China in 1999. His investment portfolios cover wide range of sectors, including TMT, education, clean energy, technology,
and chemical industries. We believe Mr. Liu is qualified to serve as a director because of his extensive financial, investment and mergers
and acquisition experience and the extensive network he has established throughout his career.
Director
Independence
The
Nasdaq listing standards require that a majority of our Board of Directors be independent. An “independent director” is defined
generally as a person who has no material relationship with the listed company (either directly or as a partner, shareholder or officer
of an organization that has a relationship with the company). Upon the effectiveness of the registration statement, we have two “independent
directors” as defined in the Nasdaq listing standards and applicable SEC rules prior to completion of the IPO. Our board has determined
that each of Messrs. Xu Zhang and Hai Lin and Jun Liu are independent directors under applicable SEC and Nasdaq rules. Following the
completion of our initial public offering, our independent directors had regularly scheduled meetings at which only independent directors
are present.
Committees
of the Board of Directors
Our
Board of Directors has three standing committees: an audit committee and a compensation committee and a nominating committee. Each committee
operate under a charter that has been approved by our board and have the composition and responsibilities described below. Subject to
phase-in rules and a limited exception, the Nasdaq rules and Rule 10A-3 of the Exchange Act require that the audit committee of a listed
company be comprised solely of independent directors, and the Nasdaq rules require that the compensation committee of a listed company
be comprised solely of independent directors.
Audit
Committee
We
have established an audit committee of the Board of Directors. The members of our audit committee are Messrs. Jun Liu, Hai Lin and Xu
Zhang. Mr. Jun Liu serves as chairman of the audit committee.
Each
member of the audit committee is financially literate and our Board of Directors has determined that Mr. Liu qualifies as an “audit
committee financial expert” as defined in applicable SEC rules.
We
adopted an audit committee charter, which detailed the principal functions of the audit committee, including:
● the
appointment, compensation, retention, replacement, and oversight of the work of the independent auditors and any other independent registered
public accounting firm engaged by us;
● pre-approving
all audit and non-audit services to be provided by the independent auditors or any other registered public accounting firm engaged by
us, and establishing pre-approval policies and procedures;
● reviewing
and discussing with the independent auditors all relationships the auditors have with us in order to evaluate their continued independence;
● setting
clear hiring policies for employees or former employees of the independent auditors;
● setting
clear policies for audit partner rotation in compliance with applicable laws and regulations;
● obtaining
and reviewing a report, at least annually, from the independent auditors describing (i) the independent auditor’s internal quality-control
procedures and (ii) any material issues raised by the most recent internal quality-control review, or peer review, of the audit firm,
or by any inquiry or investigation by governmental or professional authorities, within, the preceding five years respecting one or more
independent audits carried out by the firm and any steps taken to deal with such issues;
● reviewing
and approving any related party transaction required to be disclosed pursuant to Item 404 of Regulation S-K promulgated by the SEC prior
to us entering into such transaction; and
● reviewing
with management, the independent auditors, and our legal advisors, as appropriate, any legal, regulatory or compliance matters, including
any correspondence with regulators or government agencies and any employee complaints or published reports that raise material issues
regarding our financial statements or accounting policies and any significant changes in accounting standards or rules promulgated by
the Financial Accounting Standards Board, the SEC or other regulatory authorities.
Compensation
Committee
We
have established a compensation committee of the Board of Directors. The members of our Compensation Committee are Messrs. Xu Zhang and
Hai Lin and Jun Liu. Mr. Hai Lin serves as chairman of the compensation committee. We adopted a compensation committee charter, which
detail the principal functions of the compensation committee, including:
● reviewing
and approving on an annual basis the corporate goals and objectives relevant to our Chief Executive Officer’s compensation, evaluating
our Chief Executive Officer’s performance in light of such goals and objectives and determining and approving the remuneration
(if any) of our Chief Executive Officer’s based on such evaluation;
● reviewing
and approving the compensation of all of our other officers;
● reviewing
our executive compensation policies and plans;
● implementing
and administering our incentive compensation equity-based remuneration plans;
● assisting
management in complying with our proxy statement and annual report disclosure requirements;
● approving
all special perquisites, special cash payments and other special compensation and benefit arrangements for our officers and employees;
● producing
a report on executive compensation to be included in our annual proxy statement; and
● reviewing,
evaluating and recommending changes, if appropriate, to the remuneration for directors.
The
charter also provide that the compensation committee may, in its sole discretion, retain or obtain the advice of a compensation consultant,
legal counsel or other adviser and is directly responsible for the appointment, compensation and oversight of the work of any such adviser.
However, before engaging or receiving advice from a compensation consultant, external legal counsel or any other adviser, the compensation
committee shall consider the independence of each such adviser, including the factors required by the Nasdaq and the SEC.
Nominating
Committee
We
have also established a nominating committee of the board of directors, which consist of Messrs. Xu Zhang, Hai Lin and Jun Liu. Mr. Xu
Zhang serves as chairman of the Nomination committee. The nominating committee is responsible for overseeing the selection of persons
to be nominated to serve on our board of directors. The nominating committee considers persons identified by its members, management,
shareholders, investment bankers and others.
Guidelines
for Selecting Director Nominees
The
guidelines for selecting nominees, which are specified in the Nominating Committee Charter, generally provide that persons to be nominated:
● should
have demonstrated notable or significant achievements in business, education or public service;
● should
possess the requisite intelligence, education and experience to make a significant contribution to the board of directors and bring a
range of skills, diverse perspectives and backgrounds to its deliberations; and
● should
have the highest ethical standards, a strong sense of professionalism and intense dedication to serving the interests of the stockholders.
The
Nominating Committee will consider a number of qualifications relating to management and leadership experience, background and integrity
and professionalism in evaluating a person’s candidacy for membership on the board of directors. The nominating committee may require
certain skills or attributes, such as financial or accounting experience, to meet specific board needs that arise from time to time and
will also consider the overall experience and makeup of its members to obtain a broad and diverse mix of board members. The nominating
committee does not distinguish among nominees recommended by stockholders and other persons.
Compensation
Committee Interlocks and Insider Participation
None of our officers currently serves, and in the past year has not served, (i) as a member of the compensation committee or Board of Directors of another entity, one of whose executive officers served on our compensation committee, or (ii) as a member of the compensation committee of another entity, one of whose executive officers served on our Board of Directors.
Code
of Ethics
We have adopted a Code of Ethics applicable to our directors, officers and employees. We have filed a copy of our form of Code of Ethics and the charters of the audit committee, compensation committee and nominating committee as exhibits to the registration statement filed in connection with our IPO prior to its effectiveness. You will be able to review these documents by accessing our public filings at the SEC’s web site at www.sec.gov. In addition, a copy of the Code of Ethics will be provided without charge upon request from us. We intend to disclose any amendments to or waivers of certain provisions of our Code of Ethics in a Current Report on Form 8-K.
Conflicts of Interest
Under Cayman Islands law, directors and officers owe the following fiduciary duties:
● duty to act in good faith in what the director or officer believes to be in the best interests of the company as a whole;
● duty to exercise powers for the purposes for which those powers were conferred and not for a collateral purpose;
● directors should not improperly fetter the exercise of future discretion;
● duty not to put themselves in a position in which there is a conflict between their duty to the company and their personal interests; and
● duty to exercise independent judgment.
In addition to the above, directors also owe a duty of care which is not fiduciary in nature. This duty has been defined as a requirement to act as a reasonably diligent person having both the general knowledge, skill and experience that may reasonably be expected of a person carrying out the same functions as are carried out by that director in relation to the company and the general knowledge skill and experience which that director has.
As set out above, directors have a duty not to put themselves in a position of conflict and this includes a duty not to engage in self-dealing, or to otherwise benefit as a result of their position. However, in some instances what would otherwise be a breach of this duty can be forgiven and/or authorized in advance by the shareholders provided that there is full disclosure by the directors. This can be done by way of permission granted in the amended and restated memorandum and articles of association or alternatively by shareholder approval at general meetings.
Each of our directors and officers presently has, and in the future any of our directors and our officers may have additional, fiduciary or contractual obligations to other entities pursuant to which such officer or director is or will be required to present acquisition opportunities to such entity. Accordingly, subject to his or her fiduciary duties under Cayman Islands law, if any of our officers or directors becomes aware of an acquisition opportunity which is suitable for an entity to which he or she has then current fiduciary or contractual obligations, he or she will need to honor his or her fiduciary or contractual obligations to present such acquisition opportunity to such entity, and only present it to us if such entity rejects the opportunity. Our amended and restated memorandum and articles of association provides that, subject to his or her fiduciary duties under Cayman Islands law, we renounce our interest in any corporate opportunity offered to any officer or director 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 we are legally and contractually permitted to undertake and would otherwise be reasonable for us to pursue. We do not believe, however, that any fiduciary duties or contractual obligations of our directors or officers would materially undermine our ability to complete our business combination.
Potential investors should also be aware of the following other potential conflicts of interest:
● None of our officers or directors is required to commit his or her full time to our affairs and, accordingly, may have conflicts of interest in allocating his or her time among various business activities.
● In the course of their other business activities, our officers and directors may become aware of investment and business opportunities which may be appropriate for presentation to us as well as the other entities with which they are affiliated. Our management may have conflicts of interest in determining to which entity a particular business opportunity should be presented.
● Our sponsor, officers and directors have agreed to waive their redemption rights with respect to our founder shares, private placement shares and public shares in connection with the consummation of our initial business combination. Additionally, our sponsor, officers and directors have agreed to waive their redemption rights with respect to their founder shares and private placement shares if we fail to consummate our initial business combination within 12 months from the closing of the IPO (or up to 21 months from the closing of the IPO if we extend the period of time to consummate a business combination). If we do not complete our initial business combination within such applicable time period, the proceeds of the sale of the private placement units held in the trust account will be used to fund the redemption of our public shares, and the private placement units and underlying securities will be worthless. With certain limited exceptions, 50% of the founder shares will not be transferable, assignable or salable by our sponsor until the earlier of (i) six months after the date of the consummation of our initial business combination or (ii) the date on which the closing price of our ordinary shares equals or exceeds $12.50 per share (as adjusted for share splits, share dividends, reorganizations and recapitalizations) for any 20 trading days within any 30-trading day period commencing after our initial business combination and the remaining 50% of the founder shares may not be transferred, assigned or sold until six months after the date of the consummation of our initial business combination, or earlier, in either case, if, subsequent to our initial business combination, we consummate a subsequent liquidation, merger, stock exchange or other similar transaction which results in all of our shareholders having the right to exchange their ordinary shares for cash, securities or other property. With certain limited exceptions, the private placement units and underlying securities will not be transferable, assignable or salable by our sponsor until 30 days after the completion of our initial business combination. Since our sponsor and officers and directors may directly or indirectly own ordinary shares, rights and warrants following the IPO, our officers and directors may have a conflict of interest in determining whether a particular target business is an appropriate business with which to effectuate our initial business combination.
● Our officers and directors may have a conflict of interest with respect to evaluating a particular business combination if the retention or resignation of any such officers and directors was included by a target business as a condition to any agreement with respect to our initial business combination.
The conflicts described above may not be resolved in our favor. Accordingly, as a result of multiple business affiliations, our officers and directors may have similar legal obligations relating to presenting business opportunities meeting the above-listed criteria to multiple entities. Below is a table summarizing the entities to which our officers and directors currently have fiduciary duties or contractual obligations:
Individual(1)
Entity
Entity’s Business
Affiliation
Shaosen Cheng
Forest Hill Financial Group
Financial Group
Senior Advisor
Teddy Zheng
Cyngus Equity
Investment Banking
Managing Director
Jun Liu
Beijing Wanfeng Xingye Investment Management Co., Ltd
Private Equity
Managing Partner
Hai Lin
Red 13 Financial Holdings (Hong Kong) Co., Ltd.
Private Equity
General Manager
Xu Zhang
Beijing Bochuang Education Co., Ltd.
Education Services
CEO
(1) Each of the entities listed in this table has priority and preference relative to our company with respect to the performance by each individual listed in this table of his obligations and the presentation by each such individual of business opportunities.
Accordingly, if any of the above officers or directors become aware of a business combination opportunity which is suitable for any of the above entities to which he or she has then-current fiduciary or contractual obligations, he or she will honor his or her fiduciary or contractual obligations to present such business combination opportunity to such entity, and only present it to us if such entity rejects the opportunity, subject to his or her fiduciary duties under Cayman Islands law. We do not believe, however, that any of the foregoing fiduciary duties or contractual obligations will materially affect our ability to complete our initial business combination, because the specific focuses of a majority of these entities differ from our focus and the type or size of the transaction that such companies would most likely consider are of a size and nature substantially different than what we are targeting.
We are not prohibited from pursuing an initial business combination with a company that is affiliated with our sponsor, officers or directors. In the event we seek to complete our initial business combination with such a company, we, or a committee of independent directors, would obtain an opinion from an independent investment banking firm or another independent firm that commonly renders valuation opinions for the type of company we are seeking to acquire or an independent accounting firm, that such an initial business combination is fair to our company from a financial point of view.
In the event that we submit our initial business combination to our public shareholders for a vote, our sponsor, officers and directors have agreed, pursuant to the terms of a letter agreement entered into with us, to vote any founder shares and private placement shares held by them (and their permitted transferees will agree) and any public shares purchased during or after the offering in favor of our initial business combination.
Limitation
on Liability and Indemnification of Officers and Directors
Cayman
Islands law does not limit the extent to which a company’s memorandum and articles of association may provide for indemnification
of officers and directors, except to the extent any such provision may be held by the Cayman Islands courts to be contrary to public
policy, such as to provide indemnification against willful default, fraud or the consequences of committing a crime. Our amended and
restated memorandum and articles of association provides for indemnification of our officers and directors to the maximum extent permitted
by law, including for any liability incurred in their capacities as such, except through their own actual fraud or willful default. We
may purchase a policy of directors’ and officers’ liability insurance that insures our officers and directors against the
cost of defense, settlement or payment of a judgment in some circumstances and insures us against our obligations to indemnify our officers
and directors.
Insofar
as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers or persons controlling us
pursuant to the foregoing provisions, we have been informed that in the opinion of the SEC such indemnification is against public policy
as expressed in the Securities Act and is therefore unenforceable.
Section
16(a) Beneficial Ownership Reporting Compliance
Section
16(a) of the Securities Exchange Act of 1934, as amended, or the Exchange Act, requires our executive officers, directors, and persons
who beneficially own more than 10% of a registered class of our equity securities to file with the Securities and Exchange Commission
initial reports of ownership and reports of changes in ownership of our common stock and other equity securities. These executive officers,
directors, and greater than 10% beneficial owners are required by SEC regulation to furnish us with copies of all Section 16(a) forms
filed by such reporting persons.
Based solely on our review of such forms furnished to us and written representations from certain reporting persons, we believe that, during 2021, our directors, executive officers, and ten percent stockholders complied with all Section 16(a) filing requirements except that the Form 3s for all our directors and officers were filed late due to administrative delays. Such Form 3s were filed on July 2, 2021.

---

ITEM 11. EXECUTIVE COMPENSATION
Item 11.
EXECUTIVE COMPENSATION.
None
of our officers or directors have received any cash or non-cash compensation for services rendered to us. No compensation or fees of any kind, including finder’s, consulting fees and other similar fees, will be paid to our founders, members of our management team or their respective affiliates, for services rendered prior to, or in order to effectuate the consummation of, our initial business combination (regardless of the type of transaction that it is). Commencing on the date that
our securities are first listed on the NASDAQ through the earlier of consummation of our initial business combination and our liquidation,
we will pay an affiliate of our sponsor a total of $10,000 per month for office space, administrative and support services. Our sponsor,
officers and directors, or any of their respective affiliates, will be reimbursed for any out-of-pocket expenses incurred in connection
with activities on our behalf such as identifying potential target businesses and performing due diligence on suitable business combinations.
Our audit committee will review on a quarterly basis all payments that were made to our sponsor, officers, directors or our or their
affiliates.
After
the completion of our initial business combination, directors or members of our management team who remain with us may be paid consulting,
management or other fees from the combined company. All of these fees will be fully disclosed to shareholders, to the extent then known,
in the tender offer materials or proxy solicitation materials furnished to our shareholders in connection with a proposed business combination.
It is unlikely the amount of such compensation will be known at the time such materials are distributed, because the directors of the
post-combination business will be responsible for determining officer and director compensation. Any compensation to be paid to our officers
will be determined by a compensation committee constituted solely by independent directors.
We
do not intend to take any action to ensure that members of our management team maintain their positions with us after the consummation
of our initial business combination, although it is possible that some or all of our officers and directors may negotiate employment
or consulting arrangements to remain with us after the initial business combination. The existence or terms of any such employment or
consulting arrangements to retain their positions with us may influence our management’s motivation in identifying or selecting
a target business but we do not believe that the ability of our management to remain with us after the consummation of our initial business
combination will be a determining factor in our decision to proceed with any potential business combination. We are not party to any
agreements with our officers and directors that provide for benefits upon termination of employment.

---

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
Item 12.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS.
The
following table sets forth information regarding the beneficial ownership of our shares of common stock as of March 8, 2022 by:
● each
person known by us to be the beneficial owner of more than 5% of our outstanding shares of common stock;
● each
of our officers and directors; and
● all
of our officers and directors as a group.
Unless otherwise indicated, we believe that all persons named in the table have sole voting and investment power with respect to all shares of common stock beneficially owned by them. The following table does not reflect beneficial ownership of the warrants or rights offered in the IPO or the private warrants and private rights included in the private placement as the warrants are not exercisable and the rights are not convertible within 60 days of the date of this Form 10-K. As our IPO registration statement and Form 8A were not declared effective by the SEC until June 21, 2021, we were not a filing company under the Securities and Exchange Act of 1934, as amended until June 21, 2021. As of March 8, 2022, there were 7,458,000 ordinary shares (assuming all of the ordinary shares are separated from the units) issued and outstanding and upon which we base the information in the table below.
Name and Address of Beneficial Owner(1) Amount
and
Nature of
Beneficial
Ownership (2)(3) Approximate
Percentage of
Outstanding
Shares (2)(3)
Greenland Asset Management Corporation(4) 1,708,000 22.90 %
Shaosen Cheng(5) 918,000 12.31 %
Zhiguo Zhang(5) 639,285 8.57 %
Shifang Wan(5) 125,715 1.69 %
Teddy Zheng(5) 10,000 0.07 %
Jun Liu(5) 5,000 0.07 %
Hai Lin(5) 5,000 0.07 %
Xu Zhang(5) 5,000 0.07 %
All directors and officers as a group (5 individuals) 1,708,000 22.90 %
Karpus Investment Management(6) 574,237 7.70 %
Lighthouse Investment Partners, LLC(7) 434,075 5.82 %
ATW SPAC MANAGEMENT LLC(8) 400,000 5.36 %
Boothbay Fund Management, LLC(9) 400,000 5.36 %
WEISS ASSET MANAGEMENT LP(10) 707,890 9.49 %
Space Summit Capital LLC(11) 450,073 7.8 %
(1) Unless
otherwise indicated, the business address of each of the individuals is 100 Park Avenues, New York, NY 10017.
(2) Based
on an aggregate of 7,458,000 ordinary shares which would be issued and outstanding upon the split of the Company’s units into its
component parts.
(3) Includes
the 270,500 private shares underlying the private placement units purchased by the Company’s sponsor simultaneously with the consummation of the Company’s
IPO.
(4) Represents
shares held by our sponsor. Each of our officers and directors is a shareholder of our sponsor; however, only our Chairman and Chief
Financial Officer have voting securities in our sponsor and are the sole directors of our sponsor. The address for our sponsor is No.
1203, Unit 3, building 10, Yangzhuangbeili, Tongzhou district, Beijing, China.
(5) Such
individual does not beneficially own any of the Company’s ordinary shares. However, such individual has a pecuniary interest in
the Company’s ordinary shares through his ownership of shares of the Company’s sponsor.
(6) Based
on a Schedule 13G filed with the SEC on February 14, 2022. The entity’s address is 183 Sully’s Trail, Pittsford, New York
14534.
(7) Based
on a Schedule 13G filed with the SEC on February 14, 2022. The entity’s address is 3801 PGA Boulevard, Suite 500, Palm Beach Gardens,
FL 33410.
(8) Based
on a Schedule 13G filed with the SEC on February 14, 2022. The entity’s address is 7969 NW 2nd Street, #401, Miami, Florida 33126.
(9) Based
on a Schedule 13G filed with the SEC on February 4, 2022. The entity’s address is 140 East 45th Street, 14th Floor, New York, NY
10017.
(10) Based
on a Schedule 13G filed with the SEC on September 17, 2021. The entity’s address is 222 Berkeley St., 16th floor, Boston, Massachusetts
02116.
(11) Based
on a Schedule 13G/A filed with the SEC on June 29, 2021. The entity’s address is 15455 Albright Street, Pacific Palisades, CA 90272.
The
Company’s sponsor, officers and Mr. Tiger Zhang are deemed to be the Company’s “promoters” as such term is defined
under the federal securities laws. Mr. Zhang is a member of the Company’s sponsor and has provided services related to the Company’s
formation and its IPO. Mr. Zhang received membership interests in the Company’s sponsor, as compensation for such services, such
membership interests reflect pecuniary interest in approximately 50,000 founder shares.

---

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Item 13.
CERTAIN RELATIONSHIPS, AND RELATED TRANSACTIONS AND DIRECTOR INDEPENDENCE
On
January 6, 2021, our sponsor purchased 1,150,000 founder shares for an aggregate purchase price of $25,000, or approximately $0.02 per
share. We issued an additional 287,500 founder shares (at $.0.02 per share) to our sponsor as adjustment of the founder shares in anticipation
of the increased offering size from $40,000,000 to $50,000,000 of gross proceeds.
Our
sponsor has purchased an aggregate of 270,500 units at a price of $10.00 per unit (consisting of 270,500 units in a private placement
that will close simultaneously with the closing of the initial public offering). Each unit consists of one private placement share, one
private placement right granting the holder thereof the right to receive one-tenth (1/10) of an ordinary share upon the consummation
of an initial business combination, and one private placement warrant. Each private placement warrant entitles the holder upon exercise
to purchase one-half of one ordinary share at a price of $11.50 per whole share. The private placement units (including the underlying
securities) may not, subject to certain limited exceptions, be transferred, assigned or sold by it until 30 days after the completion
of our initial business combination.
We
entered into an Administrative Services Agreement with Greenland Asset Management Corporation, an affiliate of our sponsor, pursuant
to which we will pay a total of $10,000 per month for office space, administrative and support services to such affiliate. Upon completion
of our initial business combination or our liquidation, we will cease paying these monthly fees. Accordingly, in the event the consummation
of our initial business combination takes the maximum 21 months, an affiliate of our sponsor will be paid a total of $210,000 ($10,000
per month) for office space, administrative and support services and will be entitled to be reimbursed for any out-of-pocket expenses.
Our
sponsor, officers and directors, or any of their respective affiliates, will be reimbursed for any out-of-pocket expenses incurred in
connection with activities on our behalf such as identifying potential target businesses and performing due diligence on suitable business
combinations. Our audit committee will review on a quarterly basis all payments that were made to our sponsor, officers, directors or
our or their affiliates and will determine which expenses and the amount of expenses that will be reimbursed. There is no cap or ceiling
on the reimbursement of out-of-pocket expenses incurred by such persons in connection with activities on our behalf.
Our
sponsor had previously advanced expenses or loaned the Company the sum of $453,364, evidenced in part by a note dated as of December
19, 2020 which loan was payable upon the earlier of completion of the IPO or December 31, 2021. In connection with the completion of
the IPO, the note was repaid in full via an offset of certain amounts due under the Private Placement subscription. As of December 31,
2021, the note was fully repaid with no outstanding balance.
In
addition, in order to finance transaction costs in connection with an intended initial business combination, our sponsor or an affiliate
of our sponsor or certain of our officers and directors may, but are not obligated to, loan us funds as may be required. If we complete
an initial business combination, we would repay such loaned amounts. In the event that the initial business combination does not close,
we may use a portion of the working capital held outside the trust account to repay such loaned amounts but no proceeds from our trust
account would be used for such repayment. Up to $1,500,000 of such loans may be convertible into units at a price of $10.00 per unit
(which, for example, would result in the holders being issued 165,000 ordinary shares if $1,500,000 of notes were so converted (including
15,000 shares upon the closing of our initial business combination in respect of 150,000 rights included in such units), as well as 150,000
warrants to purchase 75,000 shares) at the option of the lender. The units would be identical to the placement units issued to the initial
holder. The terms of such loans by our officers and directors, if any, have not been determined and no written agreements exist with
respect to such loans. We do not expect to seek loans from parties other than our sponsor or an affiliate of our sponsor as we do not
believe third parties will be willing to loan such funds and provide a waiver against any and all rights to seek access to funds in our
trust account.
As of December 31, 2021 and 2020, we had temporary advances of $164,740 and $36,784 from a related party, respectively. The balance is unsecured, interest-free and has no fixed terms of repayment.
Related
Party Policy
We
have adopted a code of ethics requiring us to avoid, wherever possible, all conflicts of interests, except under guidelines or resolutions
approved by our Board of Directors (or the appropriate committee of our board) or as disclosed in our public filings with the SEC. Under
our code of ethics, conflict of interest situations will include any financial transaction, arrangement or relationship (including any
indebtedness or guarantee of indebtedness) involving the company. A form of the code of ethics was filed as an exhibit to the registration
statement for our IPO as filed with the SEC.
In
addition, our audit committee, pursuant to a written charter, will be responsible for reviewing and approving related party transactions
to the extent that we enter into such transactions. An affirmative vote of a majority of the members of the audit committee present at
a meeting at which a quorum is present will be required in order to approve a related party transaction. A majority of the members of
the entire audit committee will constitute a quorum. Without a meeting, the unanimous written consent of all of the members of the audit
committee will be required to approve a related party transaction. A form of the audit committee charter was filed as an exhibit to the
registration statement for our IPO. We also require each of our directors and executive officers to complete a directors’ and officers’
questionnaire that elicits information about related party transactions.
Director
Independence
The NASDAQ listing standards require that a majority of our Board of Directors be independent. An “independent director” is defined generally as a person who has no material relationship with the listed company (either directly or as a partner, shareholder or officer of an organization that has a relationship with the company). Upon the effectiveness of the registration statement for our IPO, we have two “independent directors” as defined in the NASDAQ listing standards and applicable SEC rules prior to completion of the IPO. Our board has determined that each of Messrs. Xu Zhang and Hai Lin and Jun Liu are independent directors under applicable SEC and NASDAQ rules. Our independent directors will have regularly scheduled meetings at which only independent directors are present.

---

ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES
Item 14.
PRINCIPAL ACCOUNTING FEES AND SERVICES.
The
following is a summary of fees paid or to be paid to Friedman LLP, for services rendered.
Audit
Fees. Audit fees consist of fees billed for professional services rendered for the audit of our year-end financial statements and
services that are normally provided by Friedman LLP in connection with regulatory filings. The aggregate fees billed by Friedman LLP
for professional services rendered for the audit of our annual financial statements, review of the financial information and other required
filings with the SEC for the year ended December 31, 2021 totaled $65,000. The above amounts include interim procedures and audit fees,
as well as attendance at audit committee meetings.
Audit-Related
Fees. Audit-related services consist of fees billed for assurance and related services that are reasonably related to performance
of the audit or review of our financial statements and are not reported under “Audit Fees.” These services include attest
services that are not required by statute or regulation and consultations concerning financial accounting and reporting standards. We
did not pay Friedman LLP for consultations concerning financial accounting and reporting standards for the year ended December 31, 2021.
Tax
Fees. We did not pay Friedman LLP for tax planning and tax advice for year ended December 31, 2021.
All
Other Fees. We did not pay Friedman LLP for other services for the year ended December 31, 2021.
Pre-Approval
Policy
Our
audit committee was formed upon the consummation of our IPO on June 24, 2021. As a result, the audit committee did not pre-approve all
of the foregoing services, although any services rendered prior to the formation of our audit committee were approved by our board of
directors. Since the formation of our audit committee, and on a going-forward basis, the audit committee has and will pre-approve all
auditing services and permitted non-audit services to be performed for us by our auditors, including the fees and terms thereof (subject
to the de minimis exceptions for non-audit services described in the Exchange Act which are approved by the audit committee prior to
the completion of the audit).
PART
IV

---

ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES
ITEM
15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K
(a) The
following documents are filed as part of this Form 10-K:
(1) Financial
Statements:
Page
Report of Independent Registered Public Accounting Firm - Friedman LLP
Consolidated Balance Sheets
Consolidated Statement of Operations
Consolidated Statements of Changes in Shareholders’ Deficit
Consolidated Statements of Cash Flows
Notes to Consolidated Financial Statements
-
(2) Financial
Statement Schedules:
None.
(3) Exhibits
Exhibit
No.
Description
1.1
Underwriting Agreement, dated June 21, 2021, by and between the Registrant and Ladenburg Thalmann & Co., Inc., as representative of the underwriters***
2.1
Merger Agreement dated as of September 10, 2021 by and among MC Hologram Inc., Golden Path Acquisition Corporation and Golden Path Merger Sub Corp.****
3.1
Amended and Restated Memorandum of Association.**
3.2
Amended and Restated Articles of Association.**
4.5
Warrant Agreement, dated June 21, 2021, by and between Vstock Transfer LLC and the Registrant.***
4.6
Rights Agreement, dated June 21, 2021, by and between Vstock Transfer LLC and the Registrant.***
4.7*
Description of Securities
10.1
Amended and Restated Promissory Note, dated as of December 19, 2020, issued to Greenland Asset Management Corporation.**
10.2
Insider Letter Agreement, dated June 21, 2021, by and between the Registrant, Ladenburg Thalmann & Co., Inc. and each of the initial stockholders, officers and directors of the Registrant.***
10.3
Investment Management Trust Agreement, dated June 21, 2021, by and between Wilmington Trust, National Association and the Registrant.***
10.4
Registration Rights Agreement, dated June 21, 2021, by and between the Registrant and the Sponsor, Greenland Asset Management Corporation, a British Virgin Islands company.***
10.5
Securities Subscription Agreement, dated December 18, 2020, between the Registrant and Greenland Asset Management Corporation.**
10.6
Private Placement Unit Subscription dated as of June 16, 2022 between Golden Path Acquisition Corporation and Greenland Asset Management Corporation.***
10.7
Form of Indemnity Agreement.**
10.8
Form of Administrative Services Agreement, by and between the Registrant and Greenland Asset Management Corporation.**
10.9
Registration Rights Agreement dated as of September 10, 2021 by and among Golden Path Acquisition Corporation and the Holders named therein.****
31.1*
Certification of Principal Executive Officer Pursuant to Securities Exchange Act Rules 13a-14(a) and 15(d)-14(a), as adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2*
Certification of Principal Financial Officer Pursuant to Securities Exchange Act Rules 13a-14(a) and 15(d)-14(a), as adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.1*
Certification of Principal Executive Officer Pursuant to 18 U.S.C. Section 1350, as adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
32.2*
Certification of Principal Financial Officer Pursuant to 18 U.S.C. Section 1350, as adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
* Filed
with this Form 10-K
** Previously
filed with the Securities and Exchange Commission as an exhibit to our Form S-1 as filed on June 11, 2021 and declared effective on June
21, 2021
*** Previously
filed as an exhibit to our Form 8-K as filed with the Securities and Exchange Commission on June 24, 2021
**** Previously
filed as an exhibit to our Form 8-K as filed with the Securities and Exchange Commission on September 13, 2021
GOLDEN
PATH ACQUISITION CORPORATION
Page
Report of Independent Registered Public Accounting Firm
Consolidated Balance Sheets
Consolidated Statements of Operations and Comprehensive Loss
Consolidated Statements of Changes in Shareholders’ Deficit
Consolidated Statements of Cash Flows
Notes to Consolidated Financial Statements
-
REPORT
OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To
the Board of Directors and Shareholders of
Golden
Path Acquisition Corporation
Opinion
on the Financial Statements
We have audited the accompanying consolidated balance sheets of Golden Path Acquisition Corporation (the “Company”) as of December 31, 2021, and the related consolidated statements of operations and comprehensive loss, changes in shareholders’ deficit, and cash flows ended December 31, 2021 and related notes (collectively referred to as the “financial statements”). In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of the Company as of December 31, 2021, and the results of its operations and its cash flows for each of the years in the two-year period ended December 31, 2021, in conformity with accounting principles generally accepted in the United States of America.
Basis
for Opinion
These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audit. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform an audit of its internal control over financial reporting. As part of our audit we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.
Our audit included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.
/s/
Friedman LLP
Friedman LLP
We
have served as the Company’s auditor since 2021.
New
York, New York
March 31, 2022
GOLDEN
PATH ACQUISITION CORPORATION
CONSOLIDATED
BALANCE SHEETS
(Currency
expressed in United States Dollars (“US$”), except for number of shares)
As of
December 31,
ASSETS
Current assets:
Cash $ 48,955 $ 18,117
Prepayments, deposits, and other receivables 95,167 -
Total current assets 144,122 18,117
Cash and investments held in trust account 58,077,063 -
Deferred offering costs - 29,540
TOTAL ASSETS $ 58,221,185 $ 47,657
LIABILITIES, TEMPORARY EQUITY AND SHAREHOLDERS’ DEFICIT
Current liabilities:
Accrued liabilities $ 41,000 $ 540
Promissory note-related party - 50,000
Amount due to a related party 164,740 36,784
Total current liabilities 205,740 87,324
Warrant liabilities 639,990 -
Deferred underwriting compensation 1,437,500 -
TOTAL LIABILITIES 2,283,230 87,324
Commitments and contingencies
Ordinary shares, subject to redemption: 5,750,000 and 0 as of December 31, 2021 and 2020, respectively (at redemption value of $10.10 and $0 per share) 58,077,063 -
Shareholders’ Deficit:
Ordinary shares, $0.0001 par value; 500,000,000 shares authorized; 1,708,000 and 10 shares issued and outstanding (excluding 5,750,000 and 0 shares subject to possible redemption) -
Accumulated other comprehensive income -
Accumulated deficit (2,139,700 ) (39,667 )
Total Shareholders’ Deficit (2,139,108 ) (39,667 )
TOTAL LIABILITIES, TEMPORARY EQUITY AND SHAREHOLDERS’ DEFICIT $ 58,221,185 $ 47,657
See
accompanying notes to consolidated financial statements.
GOLDEN
PATH ACQUISITION CORPORATION
CONSOLIDATED
STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS
(Currency
expressed in United States Dollars (“US$”), except for number of shares)
Years ended
December 31,
Formation, general and administrative expenses $ 726,949 $ 32,267
Total operating expenses (726,949 ) (32,267 )
Other income (expense):
Change in fair value of warrant liabilities (14,990 ) -
Dividend income 1,640 -
Total other expense, net (13,350 ) -
Loss before income taxes (740,299 ) (32,267 )
Income taxes - -
NET LOSS $ (740,299 ) $ (32,267 )
Other comprehensive income:
Change in unrealized gain on available-for-sales securities -
COMPREHENSIVE LOSS $ (739,878 ) $ (32,267 )
Basic and diluted weighted average shares outstanding, ordinary share subject to possible redemption 2,993,151
Basic and diluted net income (loss) per share, ordinary share subject to possible redemption $ 0.31 $ (3,227 )
Basic and diluted weighted average shares outstanding, ordinary share attributable to Golden Path Acquisition Corporation 1,578,308
Basic and diluted net loss per share, ordinary share attributable to Golden Path Acquisition Corporation $ (1.06 ) $ (3,227 )
See
accompanying notes to consolidated financial statements.
GOLDEN
PATH ACQUISITION CORPORATION
CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS’ DEFICIT
(Currency
expressed in United States Dollars (“US$”), except for number of shares)
Ordinary shares Additional paid-in Accumulated
other comprehensive Accumulated Total shareholders’
No. of shares Amount
capital
income
deficit
deficit
Balance as of January 1, 2020 $ - $ - $ - $ (7,400 ) $ (7,400 )
Net loss for the year - - - - (32,267 ) (32,267 )
Balance as of December 31, 2020 - - - (39,667 ) (39,667 )
Redemption of shares (10 ) - - - - -
Issuance of shares to the founders 1,437,500 24,856 - - 25,000
Sale of units in initial public offering 5,750,000 57,499,425 - - 57,500,000
Sale of units to the founder in private placement 270,500 2,704,973 - - 2,705,000
Offering costs - - (2,887,500 ) - - (2,887,500 )
Warrant liabilities - - (625,000 ) - - (625,000 )
Initial classification of ordinary shares subject to possible redemption (5,750,000 ) (575 ) (56,848,222 ) - - (56,848,797 )
Allocation of offering costs to ordinary share subject to possible redemption - - 2,854,798 - - 2,854,798
Accretion of carrying value to redemption value - - (2,723,330 ) - (1,359,734 ) (4,083,064 )
Unrealized holding gain on available-for-sales securities - - -
Net loss for the year - - - - (740,299 ) (740,299 )
Balance as of December 31, 2021 1,708,000 $ 171 $ - $ 421 $ (2,139,700 ) $ (2,139,108 )
See
accompanying notes to consolidated financial statements.
GOLDEN
PATH ACQUISITION CORPORATION
CONSOLIDATED
STATEMENTS OF CASH FLOWS
(Currency
expressed in United States Dollars (“US$”), except for number of shares)
Years ended
December 31,
Cash flows from operating activities
Net loss $ (740,299 ) $ (32,267 )
Adjustments to reconcile net loss to net cash used in operating activities
Change in fair value of warrant liabilities 14,990 -
Change in operating assets and liabilities:
Increase in prepayments, deposit, and other receivables (95,167 ) -
Increase in accrued liabilities 41,000 -
Net cash used in operating activities (779,476 ) (32,267 )
Cash flows from investing activities
Proceeds deposited in Trust Account (58,076,642 ) -
Net cash used in investing activities (58,076,642 ) -
Cash flows from financing activities
Proceeds from issuance of shares to founders 25,000 -
Proceeds from public offering 57,500,000 -
Proceeds from private placements to a related party 2,705,000 -
Payment of offering costs (1,421,000 ) (29,000 )
Repayment of promissory note (50,000 ) -
Advances from a related party 127,956 29,284
Proceeds from promissory note - 50,000
Net cash provided by financing activities 58,886,956 50,284
NET CHANGE IN CASH AND CASH EQUIVALENT 30,838 18,017
Cash and cash equivalent, beginning of year 18,117
Cash and cash equivalent, end of year $ 48,955 $ 18,117
SUPPLEMENTAL DISCLOSURE OF NON-CASH FINANCING ACTIVITIES:
Initial classification of ordinary shares subject to possible redemption $ 56,848,797 $ -
Allocation of offering costs to ordinary share subject to redemption $ 2,854,798 $ -
Accretion of carrying value to redemption value $ 4,083,064 $ -
Initial recognition of warrant liabilities $ 625,000 $ -
Accrued underwriting compensation $ 1,437,500 $ -
Deferred offering costs included in accrued offering costs $ - $ 540
See
accompanying notes to consolidated financial statements.
GOLDEN
PATH ACQUISITION CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Currency expressed in United States Dollars (“US$”), except for number of shares)
NOTE
1 - ORGANIZATION AND BUSINESS BACKGROUND
Golden
Path Acquisition Corporation (“Golden Path” or the “Company”) is a blank check company incorporated in the Cayman
Islands on May 9, 2018. The Company was formed for the purpose of effecting a merger, share exchange, asset acquisition, stock purchase,
reorganization, or similar business combination with one or more businesses (“Business Combination”). Although the Company
is not limited to a particular industry or geographic region for purposes of consummating a Business Combination, the Company intends
to focus on businesses that have a connection to the Asian market. The Company is an early stage and emerging growth company and, as
such, the Company is subject to all of the risks associated with early stage and emerging growth companies.
The
Company’s entire activity from inception up to June 24, 2021 was in preparation for the initial public offering. Since the consummation
of initial public offering, the Company’s activity has been limited to the evaluation of business combination candidates. The Company
has selected December 31 as its fiscal year end.
Golden
Path Merger Sub Corporation (“Merger Sub”) is a company incorporated in the Cayman Islands for the purpose of effecting the
Business Combination and to serve as the vehicle for, and be subsumed by, MC Hologram Inc. (“MC”), pursuant to the Merger
with MC, Merger Sub is wholly owned by Golden Path.
Financing
The
registration statement for the Company’s initial public offering (the “Initial Public Offering” as described in Note
4) was declared effective by the United States Securities and Exchange Commission (the “SEC”) on June 21, 2021. On June 24,
2021, the Company consummated the Initial Public Offering of 5,750,000 ordinary units (the “Public Units”), which includes
the full exercise by the underwriter of its over-allotment option in the amount of 750,000 Public Units, at $10.00 per Public Unit, generating
gross proceeds of $57,500,000.
Simultaneously
with the closing of the Initial Public Offering, the Company consummated the sale of 270,500 units (the “Private Units”)
at a price of $10.00 per Private Unit in a private placement to Greenland Asset Management Corporation (the “Sponsor”), generating
gross proceeds of $2,705,000, which is described in Note 5.
Transaction
costs amounted to $2,887,500, consisting of $1,150,000 of underwriting fees, $1,437,500 of deferred underwriting fees and $300,000 of
other offering costs. In addition, at December 31, 2021, cash of $48,955 was held outside of the Trust Account and is available for the
payment of offering costs and for working capital purposes.
Trust
Account
Upon
the closing of the Initial Public Offering and the private placement, $58,075,962 was placed in a trust account (the “Trust Account”)
with Wilmington Trust, National Association acting as trustee. The funds held in the Trust Account can be invested in United States government
treasury bills, bonds or notes, having a maturity of 185 days or less or in money market funds meeting certain conditions under Rule
2a-7 promulgated under the Investment Company Act until the earlier of (i) the consummation of the Company’s initial Business Combination
and (ii) the Company’s failure to consummate a Business Combination within 21 months from the closing of the Public Offering. Placing
funds in the Trust Account may not protect those funds from third party claims against the Company. Although the Company will seek to
have all vendors, service providers, prospective target businesses or other entities it engages, execute agreements with the Company
waiving any claim of any kind in or to any monies held in the Trust Account, there is no guarantee that such persons will execute such
agreements. The remaining net proceeds (not held in the Trust Account) may be used to pay for business, legal and accounting due diligence
on prospective acquisitions and continuing general and administrative expenses. Additionally, the interest earned on the Trust Account
balance may be released to the Company to pay the Company’s tax obligations.
GOLDEN
PATH ACQUISITION CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Currency expressed in United States Dollars (“US$”), except for number of shares)
Business
Combination
The
Company’s management has broad discretion with respect to the specific application of the net proceeds of the Initial Public Offering
and sale of the Private Units, although substantially all of the net proceeds are intended to be applied generally toward consummating
a Business Combination. NASDAQ rules provide that the Business Combination must be with one or more target businesses that together have
a fair market value equal to at least 80% of the balance in the Trust Account (as defined below) (less any deferred underwriting commissions
and taxes payable on interest earned) at the time of the signing of an agreement to enter into a Business Combination. The Company will
only complete a Business Combination if the post-Business Combination 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”). There is no
assurance that the Company will be able to successfully effect a Business Combination.
The
Company will provide its shareholders with the opportunity to redeem all or a portion of their Public Shares upon the completion of a
Business Combination either (i) in connection with a shareholder meeting called to approve the Business Combination or (ii) by means
of a tender offer. In connection with an Initial Business Combination, the Company may seek shareholder approval of a Business Combination
at a meeting called for such purpose at which shareholders may seek to redeem their shares, regardless of whether they vote for or against
a Business Combination. The Company will proceed with a Business Combination only if the Company has net tangible assets of at least
$5,000,001 upon such consummation of a Business Combination and, if the Company seeks shareholder approval, a majority of the outstanding
shares voted are voted in favor of the Business Combination.
Notwithstanding
the foregoing, if the Company seeks shareholder approval of a Business Combination and it does not conduct redemptions pursuant to the
tender offer rules, the Company’s Amended and Restated Memorandum and Articles of Association provides 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 Securities Exchange Act of 1934, as amended (the “Exchange Act”)), will be restricted
from seeking redemption rights with respect to 15% or more of the Public Shares without the Company’s prior written consent.
If
a shareholder vote is not required and the Company does not decide to hold a shareholder vote for business or other legal reasons, the
Company will, pursuant to its Amended and Restated Memorandum and Articles of Association, offer such redemption pursuant to the tender
offer rules of the Securities and Exchange Commission, and file tender offer documents containing substantially the same information
as would be included in a proxy statement with the SEC prior to completing a Business Combination.
The
shareholders will be entitled to redeem their Public Shares for a pro rata portion of the amount then in the Trust Account (initially
$10.10 per Public Share, subject to increase of up to an additional $0.30 per Public Share in the event that the Sponsor elects to extend
the period of time to consummate a Business Combination (see below), plus any pro rata interest earned on the funds held in the Trust
Account and not previously released to the Company to pay its tax obligations). The per-share amount to be distributed to shareholders
who redeem their Public Shares will not be reduced by the deferred underwriting commissions the Company will pay to the underwriter (as
discussed in Note 10). There will be no redemption rights upon the completion of a Business Combination with respect to the Company’s
rights or warrants. The ordinary shares will be recorded at redemption value and classified as temporary equity upon the completion of
the Initial Public Offering, in accordance with Accounting Standards Codification (“ASC”) Topic 480 “Distinguishing
Liabilities from Equity.”
The
Sponsor and any of the Company’s officers or directors that may hold Founder Shares (as defined in Note 6) (the “shareholders”)
and the underwriters will agree (a) to vote their Founder Shares, the ordinary shares included in the Private Units (the “Private
Shares”) and any Public Shares purchased during or after the Initial Public Offering in favor of a Business Combination, (b) not
to propose an amendment to the Company’s Amended and Restated Memorandum and Articles of Association with respect to the Company’s
pre-Business Combination activities prior to the consummation of a Business Combination unless the Company provides dissenting public
shareholders with the opportunity to redeem their Public Shares in conjunction with any such amendment; (c) not to redeem any shares
(including the Founder Shares) and Private Shares into the right to receive cash from the Trust Account in connection with a shareholder
vote to approve a Business Combination (or to sell any shares in a tender offer in connection with a Business Combination if the Company
does not seek shareholder approval in connection therewith) or a vote to amend the provisions of the Amended and Restated Memorandum
and Articles of Association relating to shareholders’ rights of pre-Business Combination activity and (d) that the Founder Shares
and Private Shares shall not participate in any liquidating distributions upon winding up if a Business Combination is not consummated.
However, the shareholders will be entitled to liquidating distributions from the Trust Account with respect to any Public Shares purchased
during or after the Initial Public Offering if the Company fails to complete its Business Combination.
GOLDEN
PATH ACQUISITION CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Currency expressed in United States Dollars (“US$”), except for number of shares)
On
September 10, 2021, Golden Path entered into a merger agreement (the “Merger Agreement”), which provides for a Business Combination
between Golden Path and MC Hologram Inc. Pursuant to the Merger Agreement, the Business Combination will be effected as a stock transaction
and is intended to be qualified as a tax-free reorganization. The Merger Agreement is by and among Golden Path, Merger Sub, and MC, a
Cayman Islands limited liability company as the representative of MC’s stockholders. The aggregate consideration for the Acquisition
Merger is $450,000,000, payable in the form of 44,554,455 newly issued shares of ordinary share of Merger Sub (“Merger Sub Ordinary
Share”) valued at $10.10 per share.
Upon
the closing of the Business Combination, the former Golden Path shareholders will receive the consideration specified below and the former
MC stockholders will receive an aggregate of 44,554,455 shares of Merger Sub Ordinary Share.
Liquidation
The
Company will have until June 23, 2022 to consummate a Business Combination. However, if the Company anticipates that it may not be able
to consummate a Business Combination within 12 months, the Company may extend the period of time to consummate a Business Combination
up to nine times, each by an additional month (for a total of 21 months to complete a Business Combination (the “Combination Period”).
In order to extend the time available for the Company to consummate a Business Combination, the Sponsor or its affiliate or designees
must deposit into the Trust Account $191,667 (approximately $0.033 per Public Share), up to an aggregate of $1,725,000, or $0.30 per
Public Share, on or prior to the date of the applicable deadline, for each one month extension. Any funds which may be provided to extend
the time frame will be in the form of a loan to us from our sponsor. The terms of any such loan have not been definitely negotiated,
provided, however, any loan will be interest free and will be repayable only if we compete a business combination.
If
the Company is unable to complete a Business Combination within the Combination Period, the Company will (i) cease all operations except
for the purpose of winding up, (ii) as promptly as reasonably possible but no more than ten business days thereafter, redeem 100% of
the outstanding 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 (net of taxes payable and less interest to pay dissolution expenses up to $50,000), 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 liquidation distributions, if any), subject to applicable law, and (iii) as promptly as reasonably possible
following such redemption, subject to the approval of the remaining shareholders and the Company’s board of directors, proceed
to commence a voluntary liquidation and thereby a formal dissolution of the Company, subject in each case to its obligations to provide
for claims of creditors and the requirements of applicable law. The underwriter has agreed to waive its rights to the deferred underwriting
commission held in the Trust Account in the event the Company does not complete a Business Combination within the Combination Period
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 the Public Shares. In the event of such distribution, it is possible that the per share value of the assets remaining available for
distribution will be less than the Initial Public Offering price per Unit ($10.00).
The
Sponsor has agreed that it will be liable to the Company, if and to the extent any claims by a vendor for services rendered or products
sold to the Company, or a prospective target business with which the Company has discussed entering into a transaction agreement, reduce
the amounts in the Trust Account to below (i) $10.10 per share or (ii) such lesser amount per Public Share held in the Trust Account
as of the date of the liquidation of the Trust Account due to reductions in the value of the trust assets, except as to any claims by
a third party who executed a waiver of any and all rights to seek access to the Trust Account and except as to any claims under the Company’s
indemnity of the underwriters of the Initial Public Offering against certain liabilities, including liabilities under the Securities
Act of 1933, as amended (the “Securities Act”). In the event that an executed waiver is deemed to be unenforceable against
a third party, the Sponsor will not be responsible to the extent of any liability for such third-party claims. The Company will seek
to reduce the possibility that the Sponsor will have to indemnify the Trust Account due to claims of creditors by endeavoring to have
all vendors, service providers, prospective target businesses or other entities with which the Company does business, execute agreements
with the Company waiving any right, title, interest or claim of any kind in or to monies held in the Trust Account.
GOLDEN PATH ACQUISITION CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Currency expressed in United States Dollars (“US$”), except for number of shares)
NOTE
2 - SIGNIFICANT ACCOUNTING POLICIES
● Basis
of presentation
These
accompanying consolidated financial statements have been prepared in U.S. Dollars in conformity with generally accepted accounting principles
in the United States of America (“U.S. GAAP”) for financial information pursuant to the rules and regulations of the Securities
and Exchange Commission. In the opinion of management, all adjustments (consisting of normal recurring adjustments) have been made that
are necessary to present fairly the financial position, and the results of its operations and its cash flows.
● Principles
of consolidation
The
consolidated financial statements include the financial statements of the Company and its subsidiary. All significant intercompany transactions
and balances between the Company and its subsidiary are eliminated upon consolidation.
Subsidiaries
are those entities in which the Company, directly or indirectly, controls more than one half of the voting power; or has the power to
govern the financial and operating policies, to appoint or remove the majority of the members of the board of directors, or to cast a
majority of votes at the meeting of directors.
The
accompanying consolidated financial statements reflect the activities of the Company and the following entity:
Schedule of accompanying consolidated financial statements
Name
Background
Ownership
Golden Path Merger Sub
Corp.
A Cayman Islands company
Incorporated on August 19, 2021
100% Owned by Golden Path
GOLDEN
PATH ACQUISITION CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Currency expressed in United States Dollars (“US$”), except for number of shares)
● Emerging
growth company
The
Company is an “emerging growth company,” as defined in Section 2(a) of the Securities Act, as modified by the Jumpstart Our
Business Startups Act of 2012 (the “JOBS Act”), and it may take advantage of certain exemptions from various reporting requirements
that are applicable to other public companies that are not emerging growth companies including, but not limited to, not being required
to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act, reduced disclosure obligations regarding
executive compensation in its periodic reports and proxy statements, and exemptions from the requirements of holding a nonbinding advisory
vote on executive compensation and shareholder approval of any golden parachute payments not previously approved.
Further,
Section 102(b)(1) of the JOBS Act exempts emerging growth companies from being required to comply with new or revised financial accounting
standards until private companies (that is, those that have not had a Securities Act registration statement declared effective or do
not have a class of securities registered under the Exchange Act) are required to comply with the new or revised financial accounting
standards. The JOBS Act provides that a company can elect to opt out of the extended transition period and comply with the requirements
that apply to non-emerging growth companies but any such election to opt out is irrevocable. The Company has elected not to opt out of
such extended transition period which means that when a standard is issued or revised and it has different application dates for public
or private companies, the Company, as an emerging growth company, can adopt the new or revised standard at the time private companies
adopt the new or revised standard. This may make comparison of the Company’s consolidated financial statements with another public
company which is neither an emerging growth company nor an emerging growth company which has opted out of using the extended transition
period difficult or impossible because of the potential differences in accounting standards used.
● Use
of estimates
The
preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect
the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial
statements and the reported amounts of revenues and expenses during the reporting period.
Making
estimates requires management to exercise significant judgment. It is at least reasonably possible that the estimate of the effect of
a condition, situation or set of circumstances that existed at the date of the consolidated financial statements, which management considered
in formulating its estimate, could change in the near term due to one or more future confirming events. Accordingly, the actual results
could differ significantly from those estimates.
● Cash
and cash equivalents
The
Company considers all short-term investments with an original maturity of three months or less when purchased to be cash equivalents.
The Company did not have any cash equivalents as of December 31, 2021 or 2020.
● Cash
and investments held in trust account
At December 31, 2021, the assets held in the Trust Account are US Treasury securities. Investment securities in the Company’s Trust Account consisted of $58,077,063 and $0 in United States Treasury Bills as of December 31, 2021 and 2020, respectively.
The
Company classified investments that are directly invested in U.S. Treasuries as available for sales and money market funds are classified
in accordance with the trading method. All marketable securities are recorded at their estimated fair value. Unrealized gains and losses
for available-for-sale securities are recorded in other comprehensive income (loss). The Company evaluates its investments to assess
whether those with unrealized loss positions are other than temporarily impaired. Impairments are considered other than temporary if
they are related to deterioration in credit risk or if it is likely the Company will sell the securities before the recovery of the cost
basis. Realized gains and losses and declines in value determined to be other than temporary are determined based on the specific identification
method and are reported in other income (expense), net in the statements of operations and comprehensive (income) loss.
GOLDEN
PATH ACQUISITION CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Currency expressed in United States Dollars (“US$”), except for number of shares)
● Deferred
offering costs
Deferred
offering costs consist of underwriting, legal, accounting and other expenses incurred through the balance sheet date that are directly
related to the Initial Public Offering and that were charged to shareholders’ equity upon the completion of the Initial Public
Offering.
● Warrant
liabilities
The Company accounts for warrants (Public Warrants or Private Warrants) as either equity-classified or liability-classified instruments based on an assessment of the warrant’s specific terms and applicable authoritative guidance in Financial Accounting Standards Board (“FASB”) ASC 480 and ASC 815, “Derivatives and Hedging” (“ASC 815”). The assessment considers whether the warrants are freestanding financial instruments pursuant to ASC 480, meet the definition of a liability pursuant to ASC 480, and whether the warrants meet all of the requirements for equity classification under ASC 815, including whether the warrants are indexed to the Company’s own ordinary shares and whether the warrant holders could potentially require “net cash settlement” in a circumstance outside of the Company’s control, among other conditions for equity classification. This assessment, which requires the use of professional judgment, is conducted at the time of warrant issuance and as of each subsequent quarterly period end date while the warrants are outstanding.
For issued or modified warrants that meet all of the criteria for equity classification, the warrants are required to be recorded as a component of equity at the time of issuance. For issued or modified warrants that do not meet all the criteria for equity classification, the warrants are required to be recorded as liabilities at their initial fair value on the date of issuance, and each balance sheet date thereafter. Changes in the estimated fair value of the warrants are recognized as a non-cash gain or loss on the consolidated statements of operations. The Company has elected to account for its Public Warrants as equity and the Private Warrants as liabilities.
● Ordinary
shares subject to possible redemption
The
Company accounts for its ordinary shares subject to possible redemption in accordance with the guidance in ASC 480. Ordinary shares subject
to mandatory redemption (if any) is classified as a liability instrument and is measured at fair value. Conditionally redeemable ordinary
shares (including ordinary shares that feature redemption rights that are either within the control of the holder or subject to redemption
upon the occurrence of uncertain events not solely within the Company’s control) are classified as temporary equity. At all other
times, ordinary shares are classified as shareholders’ equity. As of December 31, 2021, the Company’s ordinary shares feature
certain redemption rights that are considered to be outside of the Company’s control. 5,750,000 ordinary shares subject to possible
redemption are presented as temporary equity, outside of the shareholders’ equity section of the Company’s balance sheet.
● Offering
costs
The
Company complies with the requirements of the ASC 340-10-S99-1 and SEC Staff Accounting Bulletin (“SAB”) Topic 5A -
“Expenses of Offering”. Offering costs consist principally of professional and registration fees incurred through the balance
sheet date that are related to the Initial Public Offering and that were charged to shareholders’ equity upon the completion of
the Initial Public Offering.
● Fair
value of financial instruments
ASC
Topic 820 “Fair Value Measurements and Disclosures” defines fair value, the methods used to measure fair value and the expanded
disclosures about fair value measurements. Fair value is the price that would be received to sell an asset or paid to transfer a liability
in an orderly transaction between the buyer and the seller at the measurement date. In determining fair value, the valuation techniques
consistent with the market approach, income approach and cost approach shall be used to measure fair value. ASC Topic 820 establishes
a fair value hierarchy for inputs, which represent the assumptions used by the buyer and seller in pricing the asset or liability. These
inputs are further defined as observable and unobservable inputs. Observable inputs are those that buyer and seller would use in pricing
the asset or liability based on market data obtained from sources independent of the Company. Unobservable inputs reflect the Company’s
assumptions about the inputs that the buyer and seller would use in pricing the asset or liability developed based on the best information
available in the circumstances.
GOLDEN
PATH ACQUISITION CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Currency expressed in United States Dollars (“US$”), except for number of shares)
The
fair value hierarchy is categorized into three levels based on the inputs as follows:
Level 1
- Valuations based on unadjusted quoted prices in active markets for identical assets or liabilities that the Company has the ability to access. Valuation adjustments and block discounts are not being applied. Since valuations are based on quoted prices that are readily and regularly available in an active market, valuation of these securities does not entail a significant degree of judgment.
Level 2
- Valuations based on (i) quoted prices in active markets for similar assets and liabilities, (ii) quoted prices in markets that are not active for identical or similar assets, (iii) inputs other than quoted prices for the assets or liabilities, or (iv) inputs that are derived principally from or corroborated by market through correlation or other means.
Level 3
- Valuations based on inputs that are unobservable and significant to the overall fair value measurement.
The fair value of the Company’s certain assets and liabilities, which qualify as financial instruments under ASC 820, “Fair Value Measurements and Disclosures,” approximates the carrying amounts represented in the balance sheet. The fair values of cash and cash equivalents, and other current assets, accrued expenses, due to sponsor are estimated to approximate the carrying values as of December 31, 2021 and 2020 due to the short maturities of such instruments. See Note 8 for the disclosure of the Company’s assets and liabilities that were measured at fair value on a recurring basis.
● Concentration
of credit risk
Financial
instruments that potentially subject the Company to concentration of credit risk consist of cash and trust accounts in a financial institution
which, at times may exceed the Federal depository insurance coverage of $250,000. The Company has not experienced losses on these accounts
and management believes the Company is not exposed to significant risks on such accounts.
● Income
taxes
Income
taxes are determined in accordance with the provisions of ASC Topic 740, “Income Taxes” (“ASC 740”). Under this
method, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial
statement carrying amounts of existing assets and liabilities and their respective tax basis. Deferred tax assets and liabilities are
measured using enacted income tax rates expected to apply to taxable income in the years in which those temporary differences are expected
to be recovered or settled. Any effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the
period that includes the enactment date.
ASC
Topic 740 prescribes a recognition threshold and a measurement attribute for the financial statement recognition and measurement of tax
positions taken or expected to be taken in a tax return. For those benefits to be recognized, a tax position must be more-likely-than-not
to be sustained upon examination by taxing authorities. The Company’s management determined that the British Virgin Islands is
the Company’s major tax jurisdiction. The Company recognizes accrued interest and penalties related to unrecognized tax benefits,
if any, as income tax expense. There were no unrecognized tax benefits and no amounts accrued for interest and penalties as of June 30,
2021. The Company is currently not aware of any issues under review that could result in significant payments, accruals or material deviation
from its position.
The
Company may be subject to potential examination by foreign taxing authorities in the area of income taxes. These potential examinations
may include questioning the timing and amount of deductions, the nexus of income among various tax jurisdictions and compliance with
foreign tax laws.
The
Company’s tax provision is zero for the year ended December 31, 2021.
The
Company is considered to be an exempted Cayman Islands Company, and is presently not subject to income taxes or income tax filing requirements
in the Cayman Islands or the United States.
GOLDEN
PATH ACQUISITION CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Currency expressed in United States Dollars (“US$”), except for number of shares)
● Net
loss per share
The Company calculates net loss per share in accordance with ASC Topic 260, “Earnings per Share.” In order to determine the net income (loss) attributable to both the redeemable shares and non-redeemable shares, the Company first considered the undistributed income (loss) allocable to both the redeemable ordinary shares and non-redeemable ordinary shares and the undistributed income (loss) is calculated using the total net loss less any dividends paid. The Company then allocated the undistributed income (loss) ratably based on the weighted average number of shares outstanding between the redeemable and non-redeemable ordinary shares. Any remeasurement of the accretion to redemption value of the ordinary shares subject to possible redemption was considered to be dividends paid to the public stockholders. As of December 31, 2021, the Company has not considered the effect of the warrants sold in the Initial Public Offering to purchase an aggregate of 1,454,000 shares in the calculation of diluted net loss per share, since the exercise of the warrants is contingent upon the occurrence of future events and the inclusion of such warrants would be anti-dilutive and the Company did not have any other dilutive securities and other contracts that could, potentially, be exercised or converted into ordinary share and then share in the earnings of the Company. As a result, diluted loss per share is the same as basic loss per share for the period presented.
The
net loss per share presented in the consolidated statement of operations is based on the following:
Schedule of unaudited condensed consolidated statement of operations
For the Years Ended
December 31,
Net loss $ (740,299 ) $ (32,267 )
Accretion of carrying value to redemption value (4,083,064 ) -
Net profit $ (4,823,363 ) $ (32,267 )
For the Year Ended
December 31,
For the Year Ended
December 31,
Redeemable
Ordinary
shares Non-Redeemable
Ordinary
shares Redeemable
Ordinary
shares Non-Redeemable
Ordinary
shares
Basic and diluted net loss per share:
Numerators:
Allocation of net loss including carrying value to redemption value $ (3,158,084 ) $ (1,665,279 ) $ - $ (32,267 )
Accretion of carrying value to redemption value 4,083,064 - - -
Allocation of net income (loss) $ 924,980 $ (1,665,279 ) $ - $ (32,267 )
Denominators:
Weighted-average shares outstanding 2,993,151 1,578,308 -
Basic and diluted net income (loss) per share $ 0.31 $ (1.06 ) $ - $ (3,227 )
● Related
parties
Parties,
which can be a corporation or individual, are considered to be related if the Company has the ability, directly or indirectly, to control
the other party or exercise significant influence over the other party in making financial and operational decisions. Companies are also
considered to be related if they are subject to common control or common significant influence.
● Recent
accounting pronouncements
The
Company has considered all new accounting pronouncements and has concluded that there are no new pronouncements that may have a material
impact on the results of operations, financial condition, or cash flows, based on the current information.
GOLDEN
PATH ACQUISITION CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Currency expressed in United States Dollars (“US$”), except for number of shares)
NOTE
3 - CASH AND INVESTMENT HELD IN TRUST ACCOUNT
As
of December 31, 2021, investment securities in the Company’s Trust Account consisted of $58,077,063 in United States Treasury Bills. The Company classifies its United States Treasury securities as available-for-sale. Available-for-sale marketable securities
are recorded at their estimated fair value on the accompanying December 31, 2021 balance sheet. The carrying value, including gross unrealized
holding gain as other comprehensive income and fair value of held to marketable securities on December 31, 2021 are as follows:
Schedule of including gross unrealized holding gain as other comprehensive income and fair value
Carrying Value as of
December 31,
Gross Unrealized
Holding loss Fair Value as of
December 31,
Available-for-sale marketable securities
U.S. Treasury Securities $ 58,077,063 $ - $ 58,077,063
NOTE
4 - PUBLIC OFFERING
On
June 24, 2021, the Company sold 5,750,000 units at a price of $10.00 per Public Unit in the Public Offering. Each Public Unit consists
of one ordinary share of the Company, $0.0001 par value per share (the “Public Shares”), one right (the “Public Rights”)
and one redeemable warrant (the “Public Warrant”). Each Public Right entitles the holder to receive one-tenth (1/10) of an
ordinary share upon consummation of an initial Business Combination. Each Public Warrant entitles the holder to purchase one-half (1/2)
of an ordinary share at an exercise price of $11.50 per whole share (see Note 8).
The
Company paid an upfront underwriting discount of $1,150,000, equal to 2% of the gross offering proceeds to the underwriter at the closing
of the Initial Public Offering, with an additional fee of $1,437,500 (the “Deferred Underwriting Discount”) or 2.5% of the
gross offering proceeds payable upon the Company’s completion of the Business Combination. The Deferred Underwriting Discount will
become payable to the underwriter from the amounts held in the Trust Account solely in the event the Company completes its Business Combination.
In the event that the Company does not close the Business Combination, the underwriter has waived its right to receive the Deferred Underwriting
Discount. The underwriter is not entitled to any interest accrued on the Deferred Underwriting Discount.
NOTE
5 - PRIVATE PLACEMENT
Simultaneously
with the closing of the Initial Public Offering, the Company consummated a private placement of 270,500 Private Units at $10.00 per unit,
purchased by the sponsor.
The
Private Units are identical to the units sold in the Initial Public Offering except that the warrants included in the Private Units (the
“Private Warrants”) are non-redeemable and may be exercised on a cashless basis so long as the Private Warrants continue
to be held by the initial purchasers of the Placement Units or their permitted transferees.
GOLDEN
PATH ACQUISITION CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Currency expressed in United States Dollars (“US$”), except for number of shares)
NOTE
6 - RELATED PARTY TRANSACTIONS
Founder
Shares
In
May 2018, the Company issued one ordinary share to the Sponsor for no consideration. In January 2021, the Company effected a 10 for 1
share split, resulting in an aggregate of 10 ordinary shares outstanding. All share and per-share amounts have been retroactively restated
to reflect the share split. On January 6, 2021, the Sponsor purchased an aggregate of 1,150,000 founder shares for an aggregate purchase
price of $25,000, or approximately $0.02 per share. On March 26, 2021, the Company issued an additional 287,500 founder shares to the
Sponsor in connection with a recapitalization.
The
founders and our officers and directors have agreed not to transfer, assign or sell any of the Founder Shares (except to certain permitted
transferees) until, with respect to 50% of the Founder Shares, the earlier of (i) six months after the date of the consummation of a
Business Combination, or (ii) the date on which the closing price of the Company’s ordinary shares equals or exceeds $12.50 per
share (as adjusted for stock splits, stock dividends, reorganizations and recapitalizations) for any 20 trading days within any 30-trading
day period commencing after a Business Combination, with respect to the remaining 50% of the Founder Shares, upon six months after the
date of the consummation of a Business Combination, or earlier, in each case, if, subsequent to a Business Combination, the Company consummates
a subsequent liquidation, merger, stock exchange or other similar transaction which results in all of the Company’s shareholders
having the right to exchange their ordinary shares for cash, securities or other property.
Administrative
Services Agreement
An
affiliate of the Sponsor agreed, commencing on June 24, 2021 through the earlier of the Company’s consummation of a Business Combination
and its liquidation, to make available to the Company certain general and administrative services, including office space, utilities
and administrative services, as the Company may require from time to time. The Company has agreed to pay the affiliate of the Sponsor
$10,000 per month for these services. For the years ended December 31, 2021 and 2020, the aggregated administrative services charge was $60,000 and $0, respectively.
Related
Party Loans
In
order to finance transaction costs in connection with a Business Combination, the Company’s Sponsor or an affiliate of the Sponsor,
or the Company’s officers and directors may, but are not obligated to, loan the Company funds as may be required (“Working
Capital Loans”). Such Working Capital Loans would be evidenced by promissory notes. The notes would either be repaid upon consummation
of a Business Combination, without interest, or, at the lender’s discretion, up to $1,500,000 of notes may be converted upon consummation
of a Business Combination into additional Private Units at a price of $10.00 per Unit. In the event that a Business Combination does
not close, the Company may use a portion of proceeds held outside the Trust Account to repay the Working Capital Loans but no proceeds
held in the Trust Account would be used to repay the Working Capital Loans.
Related
Party Extensions Loan
As
discussed in Note 1, the Company may extend the period of time to consummate a Business Combination up to nine times, each by an additional
month (for a total of 21 months to complete a Business Combination). In order to extend the time available for the Company to consummate
a Business Combination, the Sponsor or its affiliates or designees must deposit into the Trust Account $191,667 (approximately $0.033
per Public Share), up to an aggregate of $1,725,000, or $0.30 per Public Share, on or prior to the date of the applicable deadline, for
each one month extension. Any such payments would be made in the form of a loan. The terms of the promissory note to be issued in connection
with any such loans have not yet been negotiated. If the Company completes a Business Combination, the Company would repay such loaned
amounts out of the proceeds of the Trust Account released to the Company. If the Company does not complete a Business Combination, the
Company will not repay such loans. Furthermore, the letter agreement with the shareholders contains a provision pursuant to which the
Sponsor has agreed to waive its right to be repaid for such loans in the event that the Company does not complete a Business Combination.
The Sponsor and its affiliates or designees are not obligated to fund the Trust Account to extend the time for the Company to complete
a Business Combination.
Related
Party Advances
In
the event the Sponsor pays for any expense or liability on behalf of the Company, then such payments would be accounted for as loan to
the Company by the Sponsor, Greenland Asset Management Corporation.
As
of December 31, 2021 and 2020, the Company owed a balance of $164,740 and $36,784 to Greenland Asset Management Corporation.
GOLDEN
PATH ACQUISITION CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Currency expressed in United States Dollars (“US$”), except for number of shares)
NOTE
7 - SHAREHOLDER’S EQUITY
Ordinary
Shares
The
Company is authorized to issue 500,000,000 ordinary shares, with a par value of $0.0001 per share. Holders of the ordinary shares are
entitled to one vote for each ordinary share.
In
January 2021, the Company effected a 10 for 1 share split, resulting in an aggregate of 10 ordinary shares outstanding. All share and
per-share amounts have been retroactively restated to reflect the share split.
On
January 6, 2021, the Company issued an aggregate of 1,150,000 founder shares to the Sponsor for an aggregate purchase price of $25,000
in cash.
On
March 26, 2021, the Company issued an additional 287,500 founder shares to the Sponsor in connection with a recapitalization.
On
June 24, 2021, the Company sold 5,750,000 units at a price of $10.00 per Public Unit in the Initial Public Offering.
Simultaneously
on June 24, 2021, the Company issued 270,500 ordinary shares under the private placement of 270,500 private units at $10 per unit, to
the Sponsor.
As
of December 31, 2021 and 2020, 1,708,000 and 10 ordinary shares issued and outstanding excluding 5,750,000 and 0 shares are subject to
possible-redemption.
Rights
Each
holder of a right will receive one-tenth (1/10) of one ordinary share upon consummation of a Business Combination, even if the holder
of such right redeemed all shares held by it in connection with a Business Combination. No fractional shares will be issued upon exchange
of the rights. No additional consideration will be required to be paid by a holder of rights in order to receive its additional shares
upon consummation of a Business Combination as the consideration related thereto has been included in the Unit purchase price paid for
by investors in the Initial Public Offering. If the Company enters into a definitive agreement for a Business Combination in which the
Company will not be the surviving entity, the definitive agreement will provide for the holders of rights to receive the same per share
consideration the holders of the ordinary shares will receive in the transaction on an as-converted into ordinary share basis and each
holder of a right will be required to affirmatively convert its rights in order to receive 1/10 share underlying each right (without
paying additional consideration). The shares issuable upon exchange of the rights will be freely tradable (except to the extent held
by affiliates of the Company).
If
the Company is unable to complete a Business Combination within the Combination Period and the Company liquidates the funds held in the
Trust Account, holders of rights will not receive any of such funds with respect to their rights, nor will they receive any distribution
from the Company’s assets held outside of the Trust Account with respect to such rights, and the rights will expire worthless.
Further, there are no contractual penalties for failure to deliver securities to the holders of the rights upon consummation of a Business
Combination. Additionally, in no event will the Company be required to net cash settle the rights. Accordingly, the rights may expire
worthless.
GOLDEN
PATH ACQUISITION CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Currency expressed in United States Dollars (“US$”), except for number of shares)
NOTE
8 - WARRANTS
Each
public warrant entitles the holder thereof to purchase one-half (1/2) of one ordinary share at a price of $11.50 per full share, subject
to adjustment. Pursuant to the warrant agreement, a warrant holder may
exercise its warrants only for a whole number of shares. This means that only an even number of warrants may be exercised at any given
time by a warrant holder.
No
public warrants will be exercisable for cash unless the Company has an effective and current registration statement covering the ordinary
shares issuable upon exercise of the warrants and a current prospectus relating to such ordinary shares. It is the Company’s current
intention to have an effective and current registration statement covering the ordinary shares issuable upon exercise of the warrants
and a current prospectus relating to such ordinary shares in effect promptly following consummation of an initial business combination.
The
Public Warrants will become exercisable on the later of (a) the consummation of a Business Combination or (b) 12 months from the effective
date of the registration statement relating to the Initial Offering. No Public Warrants will be exercisable for cash unless the Company
has an effective and current registration statement covering the ordinary shares issuable upon exercise of the Public Warrants and a
current prospectus relating to such ordinary shares. The Company has agreed that as soon as practicable, but in no event later than 15
business days after the closing of a Business Combination, the Company will use its best efforts to file, and within 60 business days
following a Business Combination to have declared effective, a registration statement covering the ordinary shares issuable upon exercise
of the warrants. Notwithstanding the foregoing, if a registration statement covering the ordinary shares issuable upon the exercise of
the Public Warrants is not effective within 60 days, the holders may, until such time as there is an effective registration statement
and during any period when the Company shall have failed to maintain an effective registration statement, exercise the Public Warrants
on a cashless basis pursuant to an available exemption from registration under the Securities Act. If an exemption from registration
is not available, holders will not be able to exercise their Public Warrants on a cashless basis. The Public Warrants will expire five
years from the consummation of a Business Combination or earlier upon redemption or liquidation.
The
Company may call the warrants for redemption (excluding the Private Warrants), in whole and not in part, at a price of $0.01 per warrant:
● at
any time while the Public Warrants are exercisable,
● upon
not less than 30 days’ prior written notice of redemption to each Public Warrant holder,
● if,
and only if, the reported last sale price of the ordinary shares equals or exceeds $16.50 per share, for any 20 trading days within a
30 trading day period ending on the third trading day prior to the notice of redemption to Public Warrant holders, and
● if,
and only if, there is a current registration statement in effect with respect to the issuance of the ordinary shares underlying such
warrants at the time of redemption and for the entire 30-day trading period referred to above and continuing each day thereafter until
the date of redemption.
The
Private Warrants will be identical to the Public Warrants underlying the Units being sold in the Initial Public Offering, except that
the Private Warrants and the ordinary shares issuable upon the exercise of the Private Warrants will not be transferable, assignable
or salable until after the completion of a Business Combination, subject to certain limited exceptions. Additionally, the Private Warrants
will be exercisable on a cashless basis and will be non-redeemable so long as they are held by the initial purchasers or their permitted
transferees. If the Private Warrants are held by someone other than the initial purchasers or their permitted transferees, the Private
Warrants will be redeemable by the Company and exercisable by such holders on the same basis as the Public Warrants.
If
the Company calls the Public Warrants for redemption, management will have the option to require all holders that wish to exercise the
Public Warrants to do so on a “cashless basis,” as described in the warrant agreement. The exercise price and number of ordinary
shares issuable upon exercise of the warrants may be adjusted in certain circumstances including in the event of a share dividend, extraordinary
dividend or recapitalization, reorganization, merger or consolidation. However, the warrants will not be adjusted for issuances of ordinary
shares at a price below its exercise price. Additionally, in no event will the Company be required to net cash settle the warrants. If
the Company is unable to complete a Business Combination within the Combination Period and the Company liquidates the funds held in the
Trust Account, holders of warrants will not receive any of such funds with respect to their warrants, nor will they receive any distribution
from the Company’s assets held outside of the Trust Account with respect to such warrants. Accordingly, the warrants may expire
worthless.
GOLDEN
PATH ACQUISITION CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Currency expressed in United States Dollars (“US$”), except for number of shares)
NOTE
9 - FAIR VALUE MEASUREMENTS
The
fair value of the Company’s financial assets and liabilities reflects management’s estimate of amounts that the Company would
have received in connection with the sale of the assets or paid in connection with the transfer of the liabilities in an orderly transaction
between market participants at the measurement date. In connection with measuring the fair value of its assets and liabilities, the Company
seeks to maximize the use of observable inputs (market data obtained from independent sources) and to minimize the use of unobservable
inputs (internal assumptions about how market participants would price assets and liabilities). The following fair value hierarchy is
used to classify assets and liabilities based on the observable inputs and unobservable inputs used in order to value the assets and
liabilities:
Level
1: Quoted
prices in active markets for identical assets or liabilities. An active market for an asset or liability is a market in which transactions
for the asset or liability occur with sufficient frequency and volume to provide pricing information on an ongoing basis.
Level
2: Observable
inputs other than Level 1 inputs. Examples of Level 2 inputs include quoted prices in active markets for similar assets or liabilities
and quoted prices for identical assets or liabilities in markets that are not active.
Level
3: Unobservable
inputs based on the assessment of the assumptions that market participants would use in pricing the asset or liability.
The
following table presents information about the Company’s assets and liabilities that were measured at fair value on a recurring
basis as of December 31, 2021, and indicates the fair value hierarchy of the valuation techniques the Company utilized to determine such
fair value.
Schedule of fair value hierarchy of valuation techniques
December 31, Quoted Prices In
Active Markets Significant Other
Observable Inputs Significant Other
Unobservable Inputs
Description (Level 1) (Level 2) (Level 3)
Assets:
U.S. Treasury Securities held in Trust Account* $ 58,077,063 $ 58,077,063 $ - $ -
Liabilities:
Warrant liabilities $ 639,990 $ - $ - $ 639,990
* included
in cash and investments held in trust account on the Company’s balance sheet.
The
private warrants are accounted for as liabilities in accordance with ASC 815-40 and are presented within warrant liabilities on the consolidated
balance sheets.
The
Company established the initial fair value for the private warrants at $625,000 on June 24, 2021, the date of the Company’s Initial
Public Offering, using a Black-Scholes model. The Company allocated the proceeds received from the sale of Private Units, first to the
private warrants based on their fair values as determined at initial measurement, with the remaining proceeds recorded as ordinary shares
subject to possible redemption, and ordinary shares based on their relative fair values recorded at the initial measurement date. The
warrants were classified as Level 3 at the initial measurement date due to the use of unobservable inputs.
GOLDEN
PATH ACQUISITION CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Currency expressed in United States Dollars (“US$”), except for number of shares)
The
key inputs into the binomial model and Black-Scholes model were as follows at their measurement dates:
Schedule of binomial model and Black-Scholes model
December 31,
June 24,
(Initial measurement)
Input
Share price $ 9.96 $ 10.00
Risk-free interest rate 1.26 % 0.90 %
Volatility 59.80 % 58.40 %
Exercise price $ 11.50 $ 11.50
Warrant life 5 years 5 years
As
of December 31, 2021, the aggregate value of the Private Warrants was $0.64 million. The change in fair value from June 24, 2021 to December
31, 2021 was approximately $14,990.
To
the extent that valuation is based on models or inputs that are less observable or unobservable in the market, the determination of fair
value requires more judgment. Because of the inherent uncertainty of valuation, those estimated values may be materially higher or lower
than the values that would have been used had a ready market for the investments existed. Accordingly, the degree of judgment exercised
by the Company in determining fair value is greatest for investments categorized in Level 3. Level 3 financial liabilities consist of
the Private Warrant liability for which there is no current market for these securities such that the determination of fair value requires
significant judgment or estimation. Changes in fair value measurements categorized within Level 3 of the fair value hierarchy are analyzed
each period based on changes in estimates or assumptions and recorded as appropriate.
NOTE
10 - COMMITMENTS AND CONTINGENCIES
Risks
and Uncertainties
Management
is currently evaluating the impact of the COVID-19 pandemic on the industry and has concluded that while it is reasonably possible that
the virus could have a negative effect on the Company’s future financial position, results of its operations and/or search for
a target company, there has been a significant impact as of the date of these financial statements. The financial statements do not include
any adjustments that might result from the future outcome of this uncertainty.
Registration
Rights
Pursuant
to a registration rights agreement entered into on June 24, 2021 the holders of the Founder Shares, Private Units (and their underlying
securities) and any Units that may be issued upon conversion of the Working Capital Loans (and underlying securities) are entitled to
registration rights. 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 the consummation of a Business Combination and rights to require the Company to register
for resale such securities pursuant to Rule 415 under the Securities Act. The Company will bear the expenses incurred in connection with
the filing of any such registration statements.
GOLDEN
PATH ACQUISITION CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Currency expressed in United States Dollars (“US$”), except for number of shares)
Underwriting
Agreement
The
underwriters are entitled to a deferred fee of two and one-half percent (2.5%) of the gross proceeds of the Initial Public Offering,
or $1,437,500, of which the Company will have the right to pay up to 40% of such amount to other advisors retained by the Company to
assist it in connection with a Business Combination. The deferred fee will be paid in cash upon the closing of a Business Combination
from the amounts held in the Trust Account, subject to the terms of the underwriting agreement.
Merger
Agreement
On
September 10, 2021, we, MC, and the Merger Sub entered into the Merger Agreement.
Pursuant
to the Merger Agreement, upon the terms and subject to the conditions of the Merger Agreement and in accordance with the Cayman Islands
Companies Act (As Revised), the parties intend to effect a business combination transaction whereby the Merger Sub will merge with and
into MC, with MC being the surviving entity and becoming a wholly owned Subsidiary of the Company (the “Merger”) on the terms
and subject to the conditions set forth in the Merger Agreement and simultaneously with the closing, the Company will change its name
to “MicroCloud Hologram Inc.”
The
Board of Directors of both the Company and MC and the stockholders of MC have approved the Merger Agreement and the transactions contemplated
by it.
Pursuant
to the Merger Agreement, the Merger is structured as a stock for stock transaction and is intended to be qualified as a tax-free reorganization.
The terms of the Merger provide for a valuation of MC and its subsidiaries and businesses of $450,000,000. Based upon a per share value
of $10.10 per share, the stockholders of MC will receive approximately 44,554,455 ordinary shares of the Company which will represent
approximately 84.07% of the combined outstanding shares following the closing, assuming no redemptions by our stockholders and assuming
conversion of our outstanding rights into 602,050 ordinary shares.
Consummation
of the transactions contemplated by the Merger Agreement is subject to customary conditions of the respective parties, including the
approval of the Merger Agreement by our shareholders. Other than as specifically discussed, this report does not assume the closing of
the business combination with MC.
NOTE
11 - SUBSEQUENT EVENTS
In accordance with ASC Topic 855, “Subsequent Events”, which establishes general standards of accounting for and disclosure of events that occur after the balance sheet date but before financial statements are issued, the Company has evaluated all events or transactions that occurred after December 31, 2021, up through March 31, 2022, the date the Company issued the financial statements.