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Item 1A. Risk Factors

2024-04-01 compared with 2023-03-31 · 605 added, 1932 removed, 1 unchanged (100% of the section changed)

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 Annual Report on Form 10-K, the prospectus associated with our public offering and the Registration Statement, before making a

decision to invest in our securities.

If any of the following events occur, our business, financial condition and operating results may

be materially adversely affected.

RISKS RELATING TO OUR SEARCH FOR, AND CONSUMMATION

OF OR INABILITY TO CONSUMMATE,

A BUSINESS COMBINATION

Our public shareholders may not be afforded

an opportunity to vote on our proposed initial business combination, and even if we hold a vote, holders of our founder shares will participate

in such vote, which means we may complete our initial business combination even though a majority of our public shareholders do not support

such a combination.

We may choose not to hold

a shareholder vote to approve our initial business combination unless the business combination would require shareholder approval under

applicable law or stock exchange listing requirements.

In such case, 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.

Even if we seek shareholder approval, the holders of our founder shares will

participate in the vote on such approval.

Accordingly, we may complete our initial business combination even if holders of a majority

of our ordinary shares do not approve of the business combination we complete.

If we seek shareholder approval of our initial

business combination, our initial shareholders and management team have agreed to vote in favor of such initial business combination,

regardless of how our public shareholders vote.

Our initial shareholders own

70.5% of our issued and outstanding ordinary shares following the redemptions in connection with the EGM, excluding the private placement

shares underlying the private placement units.

Our initial shareholders and management team also may from time to time purchase Class

A ordinary shares prior to our initial business combination.

Our Articles provide that, if we seek shareholder approval of an initial

business combination, such initial business combination will be approved if we receive an ordinary resolution under Cayman Islands law,

which requires the affirmative vote of a majority of our ordinary shares which are represented in person or by proxy and are voted at

a general meeting of the company, including the founder shares.

As a result, in addition to our initial shareholders’ founder shares

and private placement shares, we would not need any of the public shares sold in the Public Offering to be voted in favor of an initial

business combination in order to have our initial business combination approved (assuming all outstanding shares are voted).

if our initial business combination is structured as a statutory merger or consolidation with another company under Cayman Islands law,

the approval of our initial business combination will require a special resolution passed by the affirmative vote of at least two-thirds

of our ordinary shares which are represented in person or by proxy and are voted at a general meeting of the company.

Accordingly, if

we seek shareholder approval of our initial business combination, the agreement by our initial shareholders and management team to vote

in favor of our initial business combination will determine the likelihood that we will receive an ordinary resolution, being the requisite

shareholder approval for such initial business combination.

Your only opportunity to effect your investment

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

At the time of your investment

in us, you will not be provided with an opportunity to evaluate the specific merits or risks of our initial business combination.

our Board 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 vote.

Accordingly, your only opportunity to effect your investment

decision regarding our initial business combination may be limited to exercising your redemption rights within the period of time (which

will be at least 20 business days) set forth in our tender offer documents mailed to our public 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 minimum cash requirement for (i) cash consideration to be paid to the target or its

owners, (ii) cash for working capital or other general corporate purposes or (iii) the retention of cash to satisfy other conditions.

If too many public 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 to be less than $5,000,001.

Consequently, if accepting all properly submitted redemption requests

would cause our net tangible assets to be less than $5,000,001 or such greater amount necessary to satisfy a 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

will need to structure the transaction based on our expectations as to the number of shares that will be submitted for redemption.

our initial business combination agreement requires us to use a portion of the cash in the trust account to pay the purchase price, or

requires us to have a minimum amount of cash at closing, we will need to reserve a portion of the cash in the trust account to meet such

requirements, or arrange for third party financing.

In addition, if a larger number of shares are submitted for redemption than we initially

expected, we may need to restructure the transaction to reserve a greater portion of the cash in the trust account or arrange for third

party financing.

Raising additional third party financing may involve dilutive equity issuances or the incurrence of indebtedness at higher

than desirable levels.

Furthermore, this dilution would increase to the extent that the anti-dilution provision of the Class B ordinary

shares results in the issuance of Class A ordinary shares on a greater than one-to-one basis upon conversion of the Class B ordinary shares

at the time of our initial business combination.

In addition, the amount of the deferred underwriting commissions payable to the underwriters

will not be adjusted for any shares that are redeemed in connection with an initial business combination.

The per-share amount we will

distribute to shareholders who properly exercise their redemption rights will not be reduced by the deferred underwriting commission and

after such redemptions, the amount held in trust will continue to reflect our obligation to pay the entire deferred underwriting commissions.

The above considerations may limit our ability to complete the most desirable business combination available to us or optimize our capital

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.

you are in need of immediate liquidity, you could attempt to sell your shares in the open market;

however, at such time our shares may

trade at a discount to the pro rata amount per share in the trust account.

In either situation, you may suffer a material loss on your

investment or lose the benefit of funds expected in connection with your exercise of redemption rights until we liquidate or you are able

to sell your shares in the open market.

The requirement that we complete our initial

business combination by the Extended Date may give potential target businesses leverage over us in negotiating a business combination

and may limit the time we have in which to conduct due diligence on potential business combination targets, in particular as we approach

our dissolution deadline, which could undermine our ability to complete our initial business combination on terms that would produce value

for our 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

by the Extended Date.

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.

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.

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 coronavirus

(COVID-19) outbreak and the status of debt and equity markets.

In March 2020, the World Health

Organization declared the outbreak of COVID-19 a global pandemic.

This outbreak of COVID-19 has resulted in, and a significant outbreak

of other infectious diseases could result in, a widespread health crisis that has and may continue to materially adversely affect the

economies and financial markets worldwide and the business of any potential target business with which we may consummate a business combination.

Furthermore, we may be unable to complete a business combination if concerns relating to COVID-19 continue to restrict travel and limit

the ability to have in-person meetings with potential investors or the target company’s personnel, or if 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 and

ability to consummate 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, and result in protectionist

sentiments and legislation in our target markets, 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, decreased market liquidity in third-party financing being unavailable on terms acceptable

to us or at all.

Finally, the outbreak of COVID-19 may also have the effect of heightening many of the other risks described in this “Risk

Factors” section, such as those related to the market for our securities and cross-border transactions.

We may not be able to complete our initial

business combination by the Extended Date, in which case we would cease all operations except for the purpose of winding up and we would

redeem our public shares and liquidate.

We may not be able to find

a suitable target business and complete our initial business combination by the Extended Date.

Our ability to complete our initial business

combination may be negatively impacted by general market conditions, volatility in the capital and debt markets and the other risks described

For example, the outbreak of COVID-19 continues to grow both in the U.S.

and globally and, while the extent of the impact of the

outbreak on us will depend on future developments, it could limit our ability to complete our initial business combination, including

as a result of increased market volatility, decreased market liquidity and third-party financing being unavailable on terms acceptable

to us or at all.

Furthermore, we may be unable to complete a business combination if continued concerns relating to COVID-19 restrict

travel, limit the ability to have meetings with potential investors or the target company’s personnel, vendors and services providers

are unavailable to negotiate and consummate a transaction in a timely manner.

Additionally, the outbreak of COVID-19 may negatively impact

businesses we may seek to acquire.

If we have not completed our initial business combination within such time period, we will:

all operations except for the purpose of winding up, (ii) as promptly as reasonably possible but not more than ten business days thereafter,

redeem the public shares, at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the trust account, including

interest earned on the funds held in the trust account (less taxes payable and up to $100,000 of interest to pay dissolution expenses),

divided by the number of then outstanding public shares, which redemption will completely extinguish public shareholders’ rights

as shareholders (including the right to receive further liquidation distributions, if any) and (iii) as promptly as reasonably possible

following such redemption, subject to the approval of our remaining shareholders and our Board, liquidate and dissolve, subject in each

case to our obligations under Cayman Islands law to provide for claims of creditors and in all cases subject to the other requirements

of applicable law.

Our Articles provide that, if we wind up for any other reason prior to the consummation of our initial business combination,

we will follow the foregoing procedures with respect to the liquidation of the trust account as promptly as reasonably possible but not

more than ten business days thereafter, subject to applicable Cayman Islands law.

In either such case, our public shareholders may receive

only $10.00 per public share, or less than $10.00 per public share, on the redemption of their shares, and our warrants will expire worthless.

See “— If third parties bring claims against us, the proceeds held in the trust account could be reduced and the per-share

redemption amount received by shareholders may be less than $10.00 per public share” and other risk factors herein.

If we seek shareholder approval of our initial

business combination, our sponsor, initial shareholders, directors, officers, advisors and their affiliates may elect to purchase shares

or public warrants from public shareholders, which may influence a vote on a proposed business combination and reduce the public “float”

of our Class A ordinary shares or public warrants.

If we seek shareholder approval

of our initial business combination and we do not conduct redemptions in connection with our initial business combination pursuant to

the tender offer rules, our sponsor, directors, officers, advisors or their affiliates may purchase shares or public warrants in privately

negotiated transactions or in the open market either prior to or following the completion of our initial business combination, although

they are under no obligation to do so.

There is no limit on the number of shares our initial shareholders, directors, officers, advisors

or their affiliates may purchase in such transactions, subject to compliance with applicable law and Nasdaq rules.

However, they have

no current commitments, plans or intentions to engage in such transactions and have not formulated any terms or conditions for any such

transactions.

None of the funds in the trust account will be used to purchase shares or public warrants in such transactions.

Such purchases

may include a contractual acknowledgment 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 purpose of any such purchases of shares could be to vote such shares in favor of the business combination and thereby

increase the likelihood of obtaining 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.

The purpose of any such purchases of public warrants could be to reduce

the number of public warrants outstanding or to vote such warrants on any matters submitted to the warrantholders for approval in connection

with our initial business combination.

Any such purchases of our securities may result in the completion of our initial business combination

that may not otherwise have been possible.

Any such purchases will be reported pursuant to Section 13 and Section 16 of the Exchange Act

to the extent such purchasers are subject to such reporting requirements.

In addition, if such purchases

are made, the public “float” of our Class A ordinary shares or public warrants and the number of beneficial holders of our

securities may be reduced, possibly making it difficult to obtain or maintain the quotation, listing or trading of our securities on a

national securities exchange.

If a shareholder fails to receive notice of

our offer to redeem our public shares in connection with our initial business combination, or fails to comply with the procedures for

submitting or tendering its shares, such shares may not be redeemed.

We will comply with the proxy

rules or tender offer rules, as applicable, when conducting redemptions in connection with our initial business combination.

compliance with these rules, if a shareholder fails to receive our proxy materials or tender offer documents, as applicable, such shareholder

may not become aware of the opportunity to redeem its shares.

In addition, proxy materials or tender offer documents, as applicable, that

we will furnish to holders of our public shares in connection with our initial business combination will describe the various procedures

that must be complied with in order to validly tender or submit public shares for redemption.

For example, we intend to require our public

shareholders seeking to exercise their redemption rights, whether they are record holders or hold their shares in “street name,”

to, at the holder’s option, either deliver their share certificates to our transfer agent, or to deliver their shares to our transfer

agent electronically prior to the date set forth in the proxy materials or tender offer documents, as applicable.

In the case of proxy

materials, this date may be up to two business days prior to the scheduled vote on the proposal to approve the initial business combination.

In addition, if we conduct redemptions in connection with a shareholder vote, we intend to require a public shareholder seeking redemption

of its public shares to also submit a written request for redemption to our transfer agent two business days prior to the scheduled vote

in which the name of the beneficial owner of such shares is included.

In the event that a shareholder fails to comply with these or any

other procedures disclosed in the proxy or tender offer materials, as applicable, its shares may not be redeemed.

You will not be entitled to protections normally

afforded to investors of many other blank check companies.

Since the net proceeds of

the Public Offering 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 selected, we may be deemed to be a “blank check” company under the United States securities

However, because we have net tangible assets in excess of $5,000,000 upon the completion of the Public Offering and the sale of

the private placement units and filed a Current Report on Form 8-K, including an audited balance sheet demonstrating this fact, we are

exempt from rules promulgated by the SEC to protect investors in blank check companies, such as Rule 419.

Accordingly, investors will

not be afforded the benefits or protections of those rules.

Among other things, this means our units will be immediately tradable and

we will have a longer period of time to complete our initial business combination than do companies subject to Rule 419.

the Public Offering were subject to Rule 419, that rule would prohibit the release of any interest earned on funds held in the trust account

to us unless and until the funds in the trust account were released to us in connection with our completion of an initial business combination.

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 Class A ordinary shares, you will lose the ability to redeem all such shares in excess of 15%

of our Class A 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 Articles 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 Public Offering, which

we refer to as the “Excess Shares,” without our prior consent.

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% of the shares sold in the Public Offering and, in order to dispose of such shares, would be required to sell your

shares in open market transactions, potentially at a loss.

Because of our limited resources and the significant

competition for business combination opportunities, it may be more difficult for us to complete our initial business combination.

are unable to complete our initial business combination, our public shareholders may receive only approximately $10.00 per public share,

or less in certain circumstances, on the liquidation of our trust account, and our warrants will expire worthless.

We expect to encounter competition

from other entities having a business objective similar to ours, including private investors (which may be individuals or investment partnerships),

other blank check companies and other entities, domestic and international, competing for the types of businesses we intend to acquire.

Many of these individuals and entities are well-established and have extensive experience in identifying and effecting, directly or indirectly,

acquisitions of companies operating in or providing services to various industries.

Many of these competitors possess similar or greater

technical, human and other resources to ours 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 Public Offering 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, we are obligated to offer

holders of our public shares the right to redeem their shares for cash at the time of our initial business combination in conjunction

with a shareholder vote or via a tender offer.

Target companies will be aware that this may reduce the resources available to us for our

initial business combination.

Any of these obligations may place us at a competitive disadvantage in successfully negotiating a business

If we are unable to complete our initial business combination, our public shareholders may receive only approximately $10.00

per public share, or less in certain circumstances, on the liquidation of our trust account, and our warrants will expire worthless.

If the net proceeds of the Public Offering

and the sale of the private placement units not being held in the trust account are insufficient to allow us to operate until at least

the Extended Date, it could limit the amount available to fund our search for a target business or businesses and complete our initial

business combination, and we will depend on loans from our sponsor or management team to fund our search and to complete our initial business

As of December 31, 2022, we

had $1,054,581 available to us outside the trust account to fund our working capital requirements.

We believe that the funds available

to us outside of the trust account, together with funds available from loans from our sponsor, its affiliates or our management team will

be sufficient to allow us to operate until at least the Extended Date;

however, we cannot assure you that our estimate is accurate, and

our sponsor, its affiliates and our management team are under no obligation to advance funds to us in such circumstances.

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

We could also use a portion of the funds as a down payment or to fund a “no-shop” provision (a provision in letters

of intent or merger agreements designed to keep target businesses from “shopping” around for transactions with other companies

or investors on terms more favorable to such target businesses) with respect to a particular proposed business combination, although we

do not have any current intention to do so.

If we entered into a letter of intent or merger agreement where we paid for the right to receive

exclusivity from a target business and were subsequently required to forfeit such funds (whether as a result of our breach or otherwise),

we might not have sufficient funds to continue searching for, or conduct due diligence with respect to, a target business.

If we are required to seek

additional capital, we would need to borrow funds from our sponsor, its affiliates, our management team or other third parties to operate

or may be forced to liquidate.

Neither our sponsor, members of our management team nor any of their affiliates is under any obligation

to advance funds to us in such circumstances.

Any such advances would be repaid only from funds held outside the trust account or from

funds released to us upon completion of our initial business combination.

Up to $1,500,000 of such loans may be convertible into private

placement-equivalent units of the post-business combination entity at a price of $10.00 per unit at the option of the lender.

would be identical to the private placement units.

Prior to the completion of our initial business combination, we do not expect to seek

loans from parties other than our sponsor or an affiliate of our sponsor as we do not believe third parties will be willing to loan such

funds and provide a waiver against any and all rights to seek access to funds in our trust account.

If we are unable to complete our initial

business combination because we do not have sufficient funds available to us, we will be forced to cease operations and liquidate the

trust account.

Consequently, our public shareholders may only receive an estimated $10.00 per share, or possibly less, on our redemption

of our public shares, and our warrants will expire worthless.

See “— If third parties bring claims against us, the proceeds

held in the trust account could be reduced and the per-share redemption amount received by shareholders may be less than $10.00 per public

share” and other risk factors herein.

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 $10.00

Our placing of funds in the

trust account may not protect those funds from third party claims against us.

Although we will seek to have all vendors, service providers,

prospective target businesses and other entities 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 consider whether competitive alternatives are reasonably available to us and will only enter into an agreement with

such third party if management believes that such third party’s engagement would be in the best interests of the company under the

circumstances.

Marcum LLP, our independent registered public accounting firm, and the underwriters of the Public Offering will not execute

agreements with us waiving such claims to the monies held in the trust account.

Examples of possible instances

where we may engage a third party that refuses to execute a waiver include the engagement of a third party consultant whose particular

expertise or skills are believed by management to be significantly superior to those of other consultants that would agree to execute

a waiver or in cases where management is unable to find a service provider willing to execute a waiver.

In addition, there is no guarantee

that such entities will agree to waive any claims they may have in the future as a result of, or arising out of, any negotiations, contracts

or agreements with us and will not seek recourse against the trust account for any reason.

Upon redemption of our public shares, if we

are unable to complete our initial business combination within the prescribed timeframe, or upon the exercise of a redemption right in

connection with our initial business combination, we will be required to provide for payment of claims of creditors that were not waived

that may be brought against us within the 10 years following redemption.

Accordingly, the per-share redemption amount received by public

shareholders could be less than the $10.00 per public share initially held in the trust account, due to claims of such creditors.

to the letter agreement the form of which is filed as an exhibit to our Registration Statement on Form S-1, our sponsor has agreed that

it will be liable to us if and to the extent any claims by a third party for services rendered or products sold to us, or a prospective

target business with which we have entered into a written letter of intent, confidentiality or other similar agreement or business combination

agreement, reduce the amount of funds in the trust account to below the lesser of (i) $10.00 per public share and (ii) the actual amount

per public share held in the trust account as of the date of the liquidation of the trust account, if less than $10.00 per share due to

reductions in the value of the trust assets, less taxes payable, provided that such liability will not apply to any claims by a third

party or prospective target business who executed a waiver of any and all rights to the monies held in the trust account (whether or not

such waiver is enforceable) nor will it apply to any claims under our indemnity of the underwriters of the Public Offering against certain

liabilities, including liabilities under the Securities Act.

However, we have not asked our sponsor to reserve for such indemnification

obligations, nor have we independently verified whether our sponsor has sufficient funds to satisfy its indemnity obligations, and we

believe that our sponsor’s only assets are securities of our company.

Therefore, we cannot assure you that our sponsor would be

able to satisfy those obligations.

As a result, if any such claims were successfully made against the trust account, the funds available

for our initial business combination and redemptions could be reduced to less than $10.00 per public share.

In such event, we may not

be able to complete our initial business combination, and you would receive such lesser amount per share in connection with any redemption

of your public shares.

None of our officers or directors will indemnify us for claims by third parties including, without limitation,

claims by vendors and prospective target businesses.

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) $10.00 per public share and (ii) the actual amount per public share held in the

trust account as of the date of the liquidation of the trust account if less than $10.00 per public share due to reductions in the value

of the trust assets, in each case less taxes payable, and our sponsor asserts that it is unable to satisfy his obligations or that he

has no indemnification obligations related to a particular claim, our independent directors would determine whether to take legal action

against our sponsor to enforce its indemnification obligations.

While we currently expect that our independent directors would take legal

action on our behalf against our sponsor to enforce its indemnification obligations to us, it is possible that our independent directors

in exercising their business judgment and subject to their fiduciary duties may choose not to do so in any particular instance if, for

example, the cost of such legal action is deemed by the independent directors to be too high relative to the amount recoverable or if

the independent directors determine that a favorable outcome is not likely.

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 $10.00

The securities in which we invest the proceeds

held in the trust account could bear a negative rate of interest, which could reduce the interest income available for payment of taxes

or reduce the value of the assets held in trust such that the per share redemption amount received by shareholders may be less than $10.00

The net proceeds of the Public

Offering and certain proceeds from the sale of the private placement units, after giving effect to the redemptions in connection with

the EGM, in the amount of $24.1 million, are held in an interest-bearing trust account.

The proceeds held in the trust account may only

be invested in direct U.S.

Treasury obligations having a maturity of 185 days or less, or in certain money market funds which invest only

in direct U.S.

Treasury obligations.

While short-term U.S.

Treasury obligations currently yield a positive rate of interest, they have

briefly yielded negative interest rates in recent years.

Central banks in Europe and Japan pursued interest rates below zero in recent

years, and the Open Market Committee of the Federal Reserve has not ruled out the possibility that it may in the future adopt similar

policies in the United States.

In the event of very low or negative yields, the amount of interest income would be reduced.

herein, we will be required in certain circumstances to redeem our public shares for their pro-rata share of the proceeds held in the

trust account, plus any interest income.

If the balance of the trust account is reduced below $24.1 million as a result of negative interest

rates, the amount of funds in the trust account available for distribution to our public shareholders may be reduced below $10.00 per

public share.

If, after we distribute the proceeds in the

trust account to our public shareholders, we file a bankruptcy or winding-up petition or an involuntary bankruptcy or winding-up petition

is filed against us that is not dismissed, a bankruptcy or insolvency court may seek to recover such proceeds, and the members of our

Board may be viewed as having breached their fiduciary duties to our creditors, thereby exposing the members of our Board and us to claims

of punitive damages.

If, after we distribute the

proceeds in the trust account to our public shareholders, we file a bankruptcy or winding-up petition, or an involuntary bankruptcy or

winding-up petition is filed against us that is not dismissed, any distributions received by shareholders could be viewed under applicable

debtor/creditor and/or bankruptcy or insolvency laws as either a “preferential transfer” or a “fraudulent conveyance.”

As a result, a bankruptcy or insolvency court could seek to recover some or all amounts received by our shareholders.

In addition, our

Board may be viewed as having breached its fiduciary duty to our creditors and/or having acted in bad faith, thereby exposing itself and

us to claims of punitive damages, by paying public shareholders from the trust account prior to addressing the claims of creditors.

If, before distributing the proceeds in the

trust account to our public shareholders, we file a bankruptcy or winding-up petition, or an involuntary bankruptcy or winding-up petition

is filed against us that is not dismissed, the claims of creditors in such proceeding may have priority over the claims of our shareholders

and the per-share amount that would otherwise be received by our shareholders in connection with our liquidation may be reduced.

If, before distributing the

proceeds in the trust account to our public shareholders, we file a bankruptcy or winding-up petition, or an involuntary bankruptcy or

winding-up petition is filed against us that is not dismissed, the proceeds held in the trust account could be subject to applicable bankruptcy

or insolvency law, and may be included in our bankruptcy estate and subject to the claims of third parties with priority over the claims

of our shareholders.

To the extent any bankruptcy claims deplete the trust account, the per-share amount that would otherwise be received

by our shareholders in connection with our liquidation may be reduced.

Our warrants are accounted for as liabilities

and the changes in value of our warrants could have a material effect on our financial results.

On April 12, 2021, the Acting

Director of the Division of Corporation Finance and Acting Chief Accountant of the SEC together issued a statement regarding the accounting

and reporting considerations for warrants issued by special purpose acquisition companies entitled “Staff Statement on Accounting

and Reporting Considerations for Warrants Issued by Special Purpose Acquisition Companies (“SPACs”)” (the “SEC

Specifically, the SEC Statement focused on certain settlement terms and provisions related to certain tender offers

following a business combination, which terms are similar to those contained in the warrant agreement governing our warrants.

of the SEC Statement, we reevaluated the accounting treatment of our public warrants and private placement warrants included in the private

placement units, and determined to classify the warrants as derivative liabilities measured at fair value, with changes in fair value

each period reported in earnings.

As a result, included on our

balance sheet contained elsewhere in this Annual Report are derivative liabilities related to our warrants.

Accounting Standards Codification

815, Derivatives and Hedging (“ASC 815”), provides for the remeasurement of the fair value of such derivatives at each balance

sheet date, with a resulting non-cash gain or loss related to the change in the fair value being recognized in earnings in the statement

of operations.

As a result of the recurring fair value measurement, our financial statements and results of operations may fluctuate quarterly,

based on factors, which are outside of our control.

Due to the recurring fair value measurement, we expect that we will recognize non-cash

gains or losses on our warrants each reporting period and that the amount of such gains or losses could be material.

The impact of changes

in fair value on earnings may have an adverse effect on the market price of our ordinary shares.

In addition, potential targets may seek

a special purpose acquisition company that does not have warrants that are accounted for as liability, which may make it more difficult

for us to consummate an initial business combination with a target business.

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;

restrictions on the issuance of securities,

each of which may make it

difficult for us to complete our initial business combination.

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

registration as an investment company;

adoption of a specific form of corporate structure;

reporting, record keeping, voting, proxy and disclosure requirements and other rules and regulations.

With respect to the regulation

of special purpose acquisition companies like the Company (“SPACs”), on March 30, 2022, the SEC issued proposed rules (the

“SPAC Rule Proposals”) relating to, among other items, disclosures in business combination transactions involving SPACs and

private operating companies;

the condensed financial statement requirements applicable to transactions involving shell companies;

use of projections by SPACs in SEC filings in connection with proposed business combination transactions;

the potential liability of certain

participants in proposed business combination transactions;

and the extent to which SPACs could become subject to regulation under the

Investment Company Act, including a proposed rule that would provide SPACs a safe harbor from treatment as an investment company if they

satisfy certain conditions that limit a SPAC’s duration, asset composition, business purpose and activities.

There is currently uncertainty

concerning the applicability of the Investment Company Act to a SPAC, including a company like ours, that does not complete its initial

business combination within the proposed time frame set forth in the proposed safe harbor rule.

As indicated above, we completed our IPO

in March 23, 2021 and have operated as a blank check company searching for a target business with which to consummate an initial business

combination since such time (or approximately 24 months after the effective date of our IPO, as of the date of this Annual Report).

we were deemed to be an investment company for purposes of the Investment Company Act, we might be forced to abandon our efforts to complete

an initial business combination and instead be required to liquidate the Company.

If we are required to liquidate the Company, our investors

would not be able to realize the benefits of owning shares in a successor operating business, including the potential appreciation in

the value of our shares and warrants following such a transaction, and our warrants would expire worthless.

The funds in the Trust Account

have, since our IPO, been held only in U.S.

government treasury obligations with a maturity of 185 days or less or in money market funds

investing solely in U.S.

government treasury obligations and meeting certain conditions under Rule 2a-7 under the Investment Company Act.

However, to mitigate the risk of us being deemed to have been operating as an unregistered investment company (including under the subjective

test of Section 3(a)(1)(A) of the Investment Company Act), we may, on or prior to the 24-month anniversary of the effective date of the

registration statement filed in connection with our IPO (the “IPO Registration Statement”), should our Company continue to

exist to such date, instruct Continental, the trustee with respect to the Trust Account, to liquidate the U.S.

government treasury obligations

or money market funds held in the Trust Account and thereafter to hold all funds in the Trust Account in cash until the earlier of consummation

of our initial business combination or liquidation.

As a result, following such liquidation, we will likely receive minimal interest,

if any, on the funds held in the Trust Account, which would reduce the dollar amount our public shareholders would receive upon any redemption

or liquidation of the Company.

In addition, even prior to the 24-month anniversary

of the effective date of the IPO Registration Statement, we may be deemed to be an investment company.

The longer that the funds in the

Trust Account are held in short-term U.S.

government securities or in money market funds invested exclusively in such securities, even

prior to the 24-month anniversary, there is a greater risk that we may be considered an unregistered investment company, in which case

we may be required to liquidate.

Accordingly, we may determine, in our discretion, to liquidate the securities held in the Trust Account

at any time, even prior to the 24-month anniversary, and instead hold all funds in the Trust Account in cash, which would further reduce

the dollar amount our public shareholders would receive upon any redemption or our liquidation.

Changes in laws or regulations, or a failure

to comply with any laws and regulations, may adversely affect our business, including our ability to negotiate and complete our initial

business combination, and results of operations.

We are subject to laws and

regulations enacted by national, regional and local governments.

In particular, we are 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.

and regulations and their interpretation and application may also change from time to time and those changes could have a material adverse

effect on our business, investments and results of operations.

In addition, a failure to comply with applicable laws or regulations, as

interpreted and applied, could have a material adverse effect on our business, including our ability to negotiate and complete our initial

business combination, and results of operations.

If we are unable to consummate our initial

business combination by the Extended Date, our public shareholders may be forced to wait beyond such date before redemption from our trust

If we are unable to consummate

our initial business combination by the Extended Date, the proceeds then on deposit in the trust account, including interest earned on

the funds held in the trust account (less taxes payable and up to $100,000 of interest to pay dissolution expenses), will be used to fund

the redemption of our public shares, as further described herein.

Any redemption of public shareholders from the trust account will be

effected automatically by function of our Articles prior to any voluntary winding up.

If we are required to wind up, liquidate the trust

account and distribute such amount therein, pro rata, to our public shareholders, as part of any liquidation process, such winding up,

liquidation and distribution must comply with the applicable provisions of the Companies Act.

In that case, investors may be forced to

wait beyond the Extended Date 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 Class A 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

As a result, a liquidator could seek to recover some or all amounts received by our shareholders.

Furthermore, our directors

may be viewed as having breached their fiduciary duties to us or our creditors and/or may have acted in bad faith, thereby exposing themselves

and our company to claims, by paying public shareholders from the trust account prior to addressing the claims of creditors.

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 $18,293 and to imprisonment for five

years in the Cayman Islands.

We may not hold an annual general meeting until

after the consummation of our initial business combination, which could delay the opportunity for our shareholders to elect directors.

In accordance with Nasdaq

corporate governance requirements, we are not required to hold an annual general meeting until no later than one year after our first

fiscal year end following our listing on Nasdaq.

There is no requirement under the Companies Act for us to hold annual or general meetings

to elect directors.

Until we hold an annual general meeting, public shareholders may not be afforded the opportunity to elect directors

and to discuss company affairs with management.

Our Board is divided into three classes with only one class of directors being elected

in each year and each class (except for those directors elected prior to our first annual general meeting) serving a three-year term.

In addition, as holders of our Class A ordinary shares, our public shareholders will not have the right to vote on the election of directors

until after the consummation of our initial business combination.

In addition, prior to our initial business combination, holders of a

majority of our founder shares may remove a member of the Board for any reason.

Accordingly, you may not have any say in the management

of our company prior to the consummation of an initial business combination.

Because we are neither limited to evaluating

a target business in a particular industry sector nor have we selected any target businesses with which to pursue our initial business

combination, you will be unable to ascertain the merits or risks of any particular target business’s operations.

Our efforts to identify a

prospective initial business combination target will not be limited to a particular industry, sector or geographic region.

pursue an initial business combination opportunity in any industry or sector, we intend to capitalize on the ability of our management

team to identify and acquire a business or businesses that can benefit from our management team’s established global relationships

and operating experience.

Our management team has extensive experience in identifying and executing strategic investments globally and

has done so successfully in a number of sectors.

Our Articles prohibit us from effectuating a business combination with another blank

check company or similar company with nominal operations.

Because we have not yet selected any specific target business with respect to

a business combination, there is no basis to evaluate the possible merits or risks of any particular target business’s operations,

results of operations, cash flows, liquidity, financial condition or prospects.

To the extent we complete our initial business combination,

we may be affected by numerous risks inherent in the business operations with which we combine.

For example, if we combine with a financially

unstable business or an entity lacking an established record of sales or earnings, we may be affected by the risks inherent in the business

and operations of a financially unstable or a development stage entity.

Although our officers and directors will endeavor to evaluate

the risks inherent in a particular target business, we cannot assure you that we will properly ascertain or assess all of the significant

risk factors or that we will have adequate time to complete due diligence.

Furthermore, some of these risks may be outside of our control

and leave us with no ability to control or reduce the chances that those risks will adversely impact a target business.

We also cannot

assure you that an investment in our units will ultimately prove to be more favorable to investors than a direct investment, if such opportunity

were available, in a business combination target.

Accordingly, any shareholders who choose to remain shareholders following the business

combination could suffer a reduction in the value of their securities.

Such shareholders are unlikely to have a remedy for such reduction

in value unless they are able to successfully claim that the reduction was due to the breach by our officers or directors of a duty of

care or other fiduciary duty owed to them, or if they are able to successfully bring a private claim under securities laws that the proxy

solicitation or tender offer materials, as applicable, relating to the business combination contained an actionable material misstatement

or material omission.

We may seek business combination opportunities

in industries or sectors that may be outside of our management’s areas of expertise.

We will consider a business

combination outside of our management’s areas of expertise if a business combination candidate is presented to us and we determine

that such candidate offers an attractive business combination opportunity for our company.

Although our management will endeavor to evaluate

the risks inherent in any particular business combination candidate, we cannot assure you that we will adequately ascertain or assess

all of the significant risk factors.

We also cannot assure you that an investment in our units will not ultimately prove to be less favorable

to investors in the Public Offering than a direct investment, if an opportunity were available, in a business combination candidate.

the event we elect to pursue a business combination outside of the areas of our management’s expertise, our management’s expertise

may not be directly applicable to its evaluation or operation, and the information contained in this prospectus regarding the areas of

our management’s expertise would not be relevant to an understanding of the business that we elect to acquire.

As a result, our

management may not be able to ascertain or assess adequately all of the relevant risk factors.

Accordingly, any holders who choose to

retain their securities following our initial business combination could suffer a reduction in the value of their securities.

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 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 $10.00 per public share, or less in certain circumstances, on the liquidation of our

trust account, and our warrants will expire worthless.

We may not be required to obtain an opinion

from an independent investment banking firm or from another independent entity that commonly renders valuation opinions, and consequently,

you may have no assurance from an independent source that the consideration 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 (as defined in our Articles) entity or our Board cannot independently determine the fair market

value of the target business or businesses (including with the assistance of financial advisors), we are not required to obtain an opinion

from an independent investment banking firm which is a member of FINRA or from another independent entity that commonly renders valuation

opinions that the consideration we are paying is fair to our company from a financial point of view.

If no opinion is obtained, our shareholders

will be relying on the judgment of our Board, who will determine fair market value based on standards generally accepted by the financial

Such standards used will be disclosed in our proxy materials or tender offer documents, as applicable, related to our initial

business combination.

We may issue additional Class A ordinary shares

or preferred shares to complete our initial business combination or under an employee incentive plan after completion of our initial business

We may also issue Class A ordinary shares upon the conversion of the founder shares at a ratio greater than one-to-one at

the time of our initial business combination as a result of the anti-dilution provisions contained therein.

Any such issuances would dilute

the interest of our shareholders and likely present other risks.

Our Articles authorize the

issuance of up to 200,000,000 Class A ordinary shares, par value $0.0001 per share, 20,000,000 Class B ordinary shares, par value $0.0001

per share, and 1,000,000 preferred shares, par value $0.0001 per share.

Immediately after the Public Offering, there will be 167,630,749

and 11,907,687 authorized but unissued Class A ordinary shares and Class B ordinary shares, respectively, available for issuance which

amount does not take into account shares reserved for issuance upon exercise of outstanding warrants or shares issuable upon conversion

of the Class B ordinary shares.

The Class B ordinary shares are automatically convertible into Class A ordinary shares concurrently with

or immediately following the consummation of our initial business combination, initially at a one-for-one ratio but subject to adjustment

as set forth herein and in our Articles, including in certain circumstances in which we issue Class A ordinary shares or equity- linked

securities related to our initial business combination.

Immediately after the Public Offering, there were no preferred shares issued and

We may issue a substantial

number of additional Class A ordinary shares or preferred shares to complete our initial business combination or under an employee incentive

plan after completion of our initial business combination.

We may also issue Class A ordinary shares upon conversion of the Class B ordinary

shares at a ratio greater than one-to-one at the time of our initial business combination as a result of the anti-dilution provisions

as set forth therein.

However, our Articles provide, among other things, that prior to our initial business combination, we may not issue

additional shares that would entitle the holders thereof to (i) receive funds from the trust account or (ii) vote on any initial business

These provisions of our Articles, like all provisions of our Articles, may be amended with a shareholder vote.

of additional ordinary or preferred shares:

significantly dilute the equity interest of investors in the Public Offering, which dilution would increase if the anti-dilution provisions

in the Class B ordinary shares resulted in the issuance of Class A ordinary shares on a greater than one-to-one basis upon conversion

of the Class B ordinary shares;

subordinate the rights of holders of Class A ordinary shares if preferred shares are issued with rights senior to those afforded our

Class A ordinary shares;

cause a change in control if a substantial number of Class A 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;

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;

may adversely affect prevailing market prices for our units, Class A ordinary shares and/or warrants;

may not result in adjustment to the exercise price of our warrants.

Unlike some other similarly structured special

purpose acquisition companies, our initial shareholders will receive additional Class A ordinary shares if we issue certain shares to

consummate an initial business combination.

The founder shares will automatically

convert into Class A ordinary shares concurrently with or immediately following the consummation of our initial business combination on

a one-for-one basis, subject to adjustment for share sub-divisions, share capitalizations, reorganizations, recapitalizations and the

like, and subject to further adjustment as provided herein.

In the case that additional Class A ordinary shares or equity-linked securities

are issued or deemed issued in connection with our initial business combination, the number of Class A ordinary shares issuable upon conversion

of all founder shares will equal, in the aggregate, on an as-converted basis, 20% of the total number of Class A ordinary shares outstanding

after such conversion (excluding the private placement shares underlying the private placement units and after giving effect to any redemptions

of Class A ordinary shares by public shareholders), including the total number of Class A ordinary shares issued, or deemed issued or

issuable upon conversion or exercise of any equity-linked securities or rights issued or deemed issued, by the company in connection with

or in relation to the consummation of the initial business combination, excluding any Class A ordinary shares or equity-linked securities

exercisable for or convertible into Class A ordinary shares issued, or to be issued, to any seller in the initial business combination

and any private placement-equivalent units issued to our sponsor, officers or directors upon conversion of working capital loans;

that such conversion of founder shares will never occur on a less than one-for-one basis.

Resources could be wasted in researching business

combinations that are not completed, which could materially adversely affect subsequent attempts to locate and acquire or merge with another

If we are unable to complete our initial business combination, our public shareholders may only receive their pro rata portion

of the funds in the trust account that are available for distribution to public shareholders, and our warrants will expire worthless.

We anticipate that the investigation

of each specific target business and the negotiation, drafting and execution of relevant agreements, disclosure documents and other instruments

will require substantial management time and attention and substantial costs for accountants, attorneys, consultants and others.

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.

are unable to complete our initial business combination, our public shareholders may only receive approximately $10.00 per public share,

or less in certain circumstances, on the liquidation of our trust account, and our warrants will expire worthless.

We may be a passive foreign investment company,

or “PFIC,” which could result in adverse United States federal income tax consequences to U.S.

If we are a PFIC for any taxable

year (or portion thereof) that is included in the holding period of a U.S.

Holder (as defined in the section of our prospectus captioned

“Taxation — United States Federal Income Tax Considerations — U.S.

Holders”) of our Class A ordinary shares 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 (see the

section of our prospectus captioned “Taxation — United States Federal Income Tax Considerations — U.S.

Passive Foreign Investment Company Rules”).

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, upon written request, 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.

investors to consult their own tax advisors

regarding the possible application of the PFIC rules.

For a more detailed explanation of the tax consequences of PFIC classification to

Holders, see the section of the prospectus captioned “Taxation — United States Federal Income Tax Considerations —

Holders — Passive Foreign Investment Company Rules.”

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, directors or existing holders.

Our directors also serve as officers and board members for other entities, including, without

limitation, those described in our prospectus under “Management — Conflicts of Interest.” Such entities may compete

with us for business combination opportunities.

Our sponsor, officers and directors are not currently aware of any specific opportunities

for us to complete our initial business combination with any entities with which they are affiliated, and there have been no substantive

discussions concerning a business combination with any such entity or entities.

Although we will not be specifically focusing on, or targeting,

any transaction with any affiliated entities, we would pursue such a transaction if we determined that such affiliated entity met our

criteria for a business combination as set forth in “Proposed Business — Effecting our initial business combination —

Selection of a target business and structuring of our initial business combination” and such transaction was approved by a majority

of our independent and disinterested directors.

Despite our agreement to obtain an opinion from an independent investment banking firm

which is a member of FINRA or another independent entity that commonly renders valuation opinions regarding the fairness to our company

from a financial point of view of a business combination with an affiliate of our sponsor, 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 (other than with respect to public shares they

may acquire after the Public Offering), a conflict of interest may arise in determining whether a particular business combination target

is appropriate for our initial business combination.

On January 22, 2021, our sponsor

paid $25,000, or approximately $0.003 per share, to cover certain of our offering and formation costs in exchange for 8,625,000 founder

Prior to the initial investment in the company of $25,000 by the sponsor, the company had no assets, tangible or intangible.

purchase price of the founder shares was determined by dividing the amount of cash contributed to the company by the number of founder

shares issued.

The number of founder shares outstanding was determined based on the expectation that the total size of the Public Offering

would be a maximum of 34,500,000 units if the underwriters’ over-allotment option is exercised in full, and therefore that such

founder shares would represent 20% of the outstanding shares after the Public Offering, excluding the private placement shares underlying

the private placement units.

Up to 1,125,000 of the founder shares were eligible to be surrendered for no consideration depending on the

extent to which the underwriters’ over-allotment was exercised.

On April 7, 2021, the underwriter exercised the over-allotment option

in part, and as a result, 532,687 founder shares were forfeited.The founder shares will be worthless if we do not complete an initial

business combination.

In addition, our sponsor purchased an aggregate of 1,030,000 private placement units for an aggregate purchase price

of $10,300,000, or $10.00 per unit.

The private placement units (and the underlying securities) will also be worthless if we do not complete

our initial business combination.

The personal and financial interests of our officers and directors may influence their motivation in

identifying and selecting a target business combination, completing an initial business combination and influencing the operation of the

business following the initial business combination.

This risk may become more acute as Extended Date nears, which is the deadline for

our completion of 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 Annual Report on Form 10-K to issue any notes or other debt securities, or to otherwise incur outstanding debt

following the Public Offering, we may choose to incur substantial debt to complete our initial business combination.

We and our officers

have agreed that we will not incur any indebtedness unless we have obtained from the lender a waiver of any right, title, interest or

claim of any kind in or to the monies held in the trust account.

As such, no issuance of debt will affect the per-share amount available

for redemption from the trust account.

Nevertheless, the incurrence of debt could have a variety of negative effects, including:

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

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

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

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

our inability to pay dividends on our Class A ordinary shares;

using a substantial portion of our cash flow to pay principal and interest on our debt, which will reduce the funds available for dividends on our Class A ordinary shares if declared, 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;

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 Public Offering and the sale of the private placement units after effecting redemptions in connection

with the EGM, which will cause us to be solely dependent on a single business which may have a limited number of products or services.

This lack of diversification may negatively impact our operations and profitability.

The net proceeds from the Public Offering and the

private placement of units provided us with $24.1 million that we may use to complete our initial business combination after taking into

account the redemptions in connection with the EGM.

We may effectuate our initial

business combination with a single target business or multiple target businesses simultaneously or within a short period of time.

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.

completing our initial business combination with only a single entity, our lack of diversification may subject us to numerous economic,

competitive and regulatory developments.

Further, we would not be able to diversify our operations or benefit from the possible spreading

of risks or offsetting of losses, unlike other entities which may have the resources to complete several business combinations in different

industries or different areas of a single industry.

Accordingly, the prospects for our success may be:

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

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

This lack of diversification

may subject us to numerous economic, competitive and regulatory risks, any or all of which may have a substantial adverse impact upon

the particular industry in which we may operate subsequent to our initial business combination.

We may attempt to simultaneously complete business

combinations with multiple prospective targets, which may hinder our ability to complete our initial business combination and give rise

to increased costs and risks that could negatively impact our operations and profitability.

If we determine to simultaneously

acquire several businesses that are owned by different sellers, we will need for each of such sellers to agree that our purchase of its

business is contingent on the simultaneous closings of the other business combinations, which may make it more difficult for us, and delay

our ability, to complete our initial business combination.

With multiple business combinations, we could also face additional risks, including

additional burdens and costs with respect to possible multiple negotiations and due diligence investigations (if there are multiple sellers)

and the additional risks associated with the subsequent assimilation of the operations and services or products of the acquired companies

in a single operating business.

If we are unable to adequately address these risks, it could negatively impact our profitability and results

of operations.

We may attempt to complete our initial business

combination with a private company about which little information is available, which may result in a business combination with a company

that is not as profitable as we suspected, if at all.

In pursuing our business combination

strategy, we may seek to effectuate our initial business combination with a privately held company.

Very little public information generally

exists about private companies, and we could be required to make our decision on whether to pursue a potential initial business combination

on the basis of limited information, which may result in a business combination with a company that is not as profitable as we suspected,

We do not have a specified maximum redemption

The absence of such a redemption threshold may make it possible for us to complete our initial business combination with which

a substantial majority of our shareholders do not agree.

Our Articles provide that

in no event will we redeem our public shares in an amount that would cause our net tangible assets to be less than $5,000,001.

our proposed initial business combination may impose a minimum cash requirement for (i) cash consideration to be paid to the target or

its owners, (ii) cash for working capital or other general corporate purposes or (iii) the retention of cash to satisfy other conditions.

As a result, we may be able to complete our initial business combination even though a substantial majority of our public shareholders

do not agree with the transaction and have redeemed their shares or, if we seek shareholder approval of our initial business combination

and do not conduct redemptions in connection with our initial business combination pursuant to the tender offer rules, have entered into

privately negotiated agreements to sell their shares to our sponsor, officers, directors, advisors or any of their affiliates.

event the aggregate cash consideration we would be required to pay for all Class A ordinary shares that are validly submitted for redemption

plus any amount required to satisfy cash conditions pursuant to the terms of the proposed business combination exceed the aggregate amount

of cash available to us, we will not complete the business combination or redeem any shares, all Class A ordinary shares submitted for

redemption will be returned to the holders thereof, and we instead may search for an alternate business combination.

In order to effectuate an initial business

combination, special purpose acquisition companies have, in the recent past, amended various provisions of their charters and other governing

instruments, including their warrant agreements.

We cannot assure you that we will not seek to amend our Articles 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, special purpose acquisition companies have, in the recent past, amended various provisions of their charters and governing

instruments, including their warrant agreements.

For example, special purpose acquisition companies have amended the definition of business

combination, increased redemption thresholds and extended the time to consummate an initial business combination and, with respect to

their warrants, amended their warrant agreements to require the warrants to be exchanged for cash and/or other securities.

Articles will require a special resolution under Cayman Islands law, which requires the affirmative vote of at least two-thirds of our

ordinary shares which are represented in person or by proxy and are voted at a general meeting of the company, and amending our warrant

agreement will require a vote of holders of at least 50% of the public warrants and, solely with respect to any amendment to the terms

of the private placement warrants or any provision of the warrant agreement with respect to the private placement warrants, 50% of the

then outstanding private placement warrants.

In addition, our Articles require us to provide our public shareholders with the opportunity

to redeem their public shares for cash if we propose an amendment to our Articles (A) to modify the substance or timing of our obligation

to allow redemption in connection with our initial business combination or to redeem 100% of our public shares if we do not complete an

initial business combination by the Extended Date or (B) with respect to any other material provisions relating to shareholders’

rights or pre-initial business combination activity.

To the extent any of such amendments would be deemed to fundamentally change the

nature of the securities offered through this registration statement, we would register, or seek an exemption from registration for, the

affected securities.

We cannot assure you that we will not seek to amend our charter or governing instruments or extend the time to consummate

an initial business combination in order to effectuate our initial business combination.

The provisions of our Articles that relate

to our pre-business combination activity (and corresponding provisions of the agreement governing the release of funds from our trust

account) may be amended with the approval of holders of not less than two-thirds of our ordinary shares which are represented in person

or by proxy and are voted at a general meeting of the company, which is a lower amendment threshold than that of some other special purpose

acquisition companies.

It may be easier for us, therefore, to amend our Articles to facilitate the completion of an initial business combination

that some of our shareholders may not support.

Our Articles provide that

any of its provisions related to pre-business combination activity (including the requirement to deposit proceeds of the Public Offering

and the private placement of units into the trust account and not release such amounts except in specified circumstances, and to provide

redemption rights to public shareholders as described herein) and corresponding provisions of the trust agreement governing the release

of funds from our trust account may be amended if approved by special resolution, under Cayman Islands law which requires the affirmative

vote of at least two-thirds of our ordinary shares which are represented in person or by proxy and are voted at a general meeting of the

Our initial shareholders, who collectively beneficially own 70.5% of our ordinary shares after the redemptions in connection

with the EGM, will participate in any vote to amend our Articles and/or trust agreement and will have the discretion to vote in any manner

As a result, we may be able to amend the provisions of our Articles which govern our pre-business combination behavior more

easily than some other special purpose acquisition companies, and this may increase our ability to complete a business combination with

which you do not agree.

Our shareholders may pursue remedies against us for any breach of our Articles.

Our sponsor, officers and

directors have agreed, pursuant to a written agreement with us, that they will not propose any amendment to our Articles (A) to modify

the substance or timing of our obligation to allow redemption in connection with our initial business combination or to redeem 100% of

our public shares if we do not complete our initial business combination by the Extended Date or (B) with respect to any other material

provisions relating to shareholders’ rights or pre-initial business combination activity, unless we provide our public shareholders

with the opportunity to redeem their Class A ordinary shares upon approval of any such amendment at a per-share price, payable in cash,

equal to the aggregate amount then on deposit in the trust account, including interest earned on the funds held in the trust account and

not previously released to us to pay our taxes, divided by the number of then outstanding public shares.

Our shareholders are not parties

to, or third-party beneficiaries of, these agreements and, as a result, will not have the ability to pursue remedies against our sponsor,

officers and directors for any breach of these agreements.

As a result, in the event of a breach, our shareholders would need to pursue

a shareholder derivative action, subject to applicable law.

We may be unable to obtain additional financing

to complete our initial business combination or to fund the operations and growth of a target business, which could compel us to restructure

or abandon a particular business combination.

We intend to target businesses

with enterprise values that are greater than we could acquire with the net proceeds of the Public Offering and the sale of the private

placement units.

As a result, if the cash portion of the purchase price exceeds the amount available from the trust account, net of amounts

needed to satisfy any redemption by public shareholders, we may be required to seek additional financing to complete such proposed initial

business combination.

We cannot assure you that such financing will be available on acceptable terms, if at all.

To the extent that additional

financing proves to be unavailable when needed to complete our initial business combination, we would be compelled to either restructure

the transaction or abandon that particular business combination and seek an alternative target business candidate.

Further, we may be

required to obtain additional financing in connection with the closing of our initial business combination for general corporate purposes,

including for maintenance or expansion of operations of the post-transaction businesses, the payment of principal or interest due on indebtedness

incurred in completing our initial business combination, or to fund the purchase of other companies.

If we are unable to complete our

initial business combination, our public shareholders may receive only approximately $10.00 per public share, or less in certain circumstances,

on the liquidation of our trust account, and our warrants will expire worthless.

In addition, even if we do not need additional financing

to complete our initial business combination, we may require such financing to fund the operations or growth of the target business.

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

Our independent registered public accounting

firm’s report contains an explanatory paragraph that expresses substantial doubt about our ability to continue as a “going

As of December 31, 2022, we

had approximately $1.1 million in cash and approximately $0.8 million in working capital.

Further, we have incurred and expect to continue

to incur significant costs in pursuit of our financing and acquisition plans.

Management’s plans to address this need for capital

are discussed in the section of our Annual Report entitled “Management’s Discussion and Analysis of Financial Condition and

Results of Operations.” We cannot assure you that our plans to raise capital or to complete an initial business combination will

be successful.

These factors, among others, raise substantial doubt about our ability to continue as a going concern.

The financial statements

contained elsewhere in this Annual Report do not include any adjustments that might result from our inability to continue as a going concern.

Our initial shareholders control a substantial

interest in us and thus may exert a substantial influence on actions requiring a shareholder vote, potentially in a manner that you do

Our initial shareholders own

70.5% of our issued and outstanding ordinary shares after giving effect to the redemptions in connection with the EGM.

Accordingly, they

may exert a substantial influence on actions requiring a shareholder vote, potentially in a manner that you do not support, including

amendments to our Articles.

In addition, prior to the closing of our initial business combination, only holders of our founder shares

will have the right to vote to continue the Company in a jurisdiction outside the Cayman Islands.

This provision of our Articles may only

be amended by a special resolution passed by not less than 90% of our ordinary shares which are represented in person or by proxy and

are voted at our general meeting.

As a result, you will not have any influence over our continuation in a jurisdiction outside the Cayman

Islands prior to our initial business combination.

If our initial shareholders

purchase any additional Class A ordinary shares in the aftermarket or in privately negotiated transactions, this would increase their

Neither our initial shareholders nor, to our knowledge, any of our officers or directors, have any current intention to purchase

additional securities, other than as disclosed in the prospectus.

Factors that would be considered in making such additional purchases

would include consideration of the current trading price of our Class A ordinary shares.

In addition, our Board, whose members were appointed

by our sponsor, is and will be divided into three classes, each of which will generally serve for a term for three years with only one

class of directors being appointed in each year.

We may not hold an annual or extraordinary general meeting to appoint new directors prior

to the completion of our initial business combination, in which case all of the current directors will continue in office until at least

the completion of the business combination.

If there is an annual general meeting, as a consequence of our “staggered” Board,

only a minority of the Board will be considered for appointment and our initial shareholders, because of their ownership position, will

have considerable influence regarding the outcome.

Accordingly, our initial shareholders will continue to exert control at least until

the completion of our initial business combination.

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 the proxy statement with respect to the vote on an initial business combination include historical and pro forma financial statement

We will include the same financial statement disclosure in connection with our tender offer documents, whether or not they

are required under the tender offer rules.

These financial statements may be required to be prepared in accordance with, or be reconciled

to, accounting principles generally accepted in the United States of America (“GAAP”) or international financial reporting

standards as issued by the International Accounting Standards Board (“IFRS”) depending on the circumstances and the historical

financial statements may be required to be audited in accordance with the standards of the Public Company Accounting Oversight Board (United

States) (“PCAOB”).

These financial statement requirements may limit the pool of potential target businesses we may acquire

because some targets may be unable to provide such financial statements in time for us to disclose such statements in accordance with

federal proxy rules and complete our initial business combination within the prescribed time frame.

Compliance obligations under the Sarbanes-Oxley

Act may make it more difficult for us to effectuate our initial business combination, require substantial financial and management resources,

and increase the time and costs of completing an initial business combination.

Section 404 of the Sarbanes-Oxley

Act requires that we evaluate and report on our system of internal controls beginning with this Annual Report on Form 10-K for the year

ending December 31, 2022.

Only in the event we are deemed to be a large accelerated filer or an accelerated filer, and no longer qualify

as an emerging growth company, will we be required to comply with the independent registered public accounting firm attestation requirement

on our internal control over financial reporting.

Further, for as long as we remain an emerging growth company, we will not be required

to comply with the independent registered public accounting firm attestation requirement on our internal control over financial reporting.

The fact that we are a blank check company makes compliance with the requirements of the Sarbanes-Oxley Act particularly burdensome on

us as compared to other public companies because a target business with which we seek to complete our initial business combination may

not be in compliance with the provisions of the Sarbanes-Oxley Act regarding adequacy of its internal controls.

The development of the

internal control of any such entity to achieve compliance with the Sarbanes-Oxley Act may increase the time and costs necessary to complete

any such business combination.

RISKS RELATING TO THE POST-BUSINESS COMBINATION

Subsequent to our completion of our initial

business combination, we may be required to take write-downs or write-offs, restructuring and impairment or other charges that could have

a significant negative effect on our financial condition, results of operations and the price of our securities, which could cause you

to lose some or all of your investment.

Even if we conduct due diligence

on a target business with which we combine, we cannot assure you that this diligence will identify all material issues that may be present

within a particular target business, that it would be possible to uncover all material issues through a customary amount of due diligence,

or that factors outside of the target business and outside of our control will not later arise.

As a result of these factors, we may be

forced to later write-down or write-off assets, restructure our operations, or incur impairment or other charges that could result in

our reporting losses.

Even if our due diligence successfully identifies certain risks, unexpected risks may arise and previously known

risks may materialize in a manner not consistent with our preliminary risk analysis.

Even though these charges may be non-cash items and

not have an immediate impact on our liquidity, the fact that we report charges of this nature could contribute to negative market perceptions

about us or our securities.

In addition, charges of this nature may cause us to violate net worth or other covenants to which we may be

subject as a result of assuming pre-existing debt held by a target business or by virtue of our obtaining debt financing to partially

finance the initial business combination or thereafter.

Accordingly, any holders who choose to retain their securities following the business

combination could suffer a reduction in the value of their securities.

Such shareholders are unlikely to have a remedy for such reduction

in value unless they are able to successfully claim that the reduction was due to the breach by our officers or directors of a duty of

care or other fiduciary duty owed to them, or if they are able to successfully bring a private claim under securities laws that the proxy

solicitation or tender offer materials, as applicable, relating to the business combination contained an actionable material misstatement

or material omission.

The officers and directors of an acquisition

candidate may resign upon completion of our initial business combination.

The loss of a business combination target’s key personnel

could negatively impact the operations and profitability of our post-combination business.

The role of an acquisition

candidate’s key personnel upon the completion of our initial business combination cannot be ascertained at this time.

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 management may not be able to maintain

control of a target business after our initial business combination.

We cannot provide assurance that, upon loss of control of a target

business, new management will possess the skills, qualifications or abilities necessary to profitably operate such business.

We may structure our initial

business combination so that the post-transaction company in which our public 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.

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.

For example, we could pursue a transaction in which we issue a substantial

number of new Class A ordinary shares in exchange for all of the outstanding capital stock, shares or other equity interests of a target.

In this case, we would acquire a 100% interest in the target.

However, as a result of the issuance of a substantial number of new Class

A ordinary shares, our shareholders immediately prior to such transaction could own less than a majority of our issued and outstanding

Class A 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 shares than we initially acquired.

this may make it more likely that our management will not be able to maintain control of the target business.

We may have a limited ability to assess the

management of a prospective target business and, as a result, may effect our initial business combination with a target business whose

management may not have the skills, qualifications or abilities to manage a public company.

When evaluating the desirability

of effecting our initial business combination with a prospective target business, our ability to assess the target business’s management

may be limited due to a lack of time, resources or information.

Our assessment of the capabilities of the target business’s management,

therefore, may prove to be incorrect and such management may lack the skills, qualifications or abilities we suspected.

Should the target

business’s management not possess the skills, qualifications or abilities necessary to manage a public company, the operations and

profitability of the post-combination business may be negatively impacted.

Accordingly, any 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 unless they are able to successfully claim that the reduction was due to the breach by our officers or directors

of a duty of care or other fiduciary duty owed to them, or if they are able to successfully bring a private claim under securities laws

that the proxy solicitation or tender offer materials, as applicable, relating to the business combination contained an actionable material

misstatement or material omission.

RISKS RELATING TO ACQUIRING AND OPERATING A

BUSINESS IN FOREIGN COUNTRIES

If we effect our initial business combination

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

If we pursue a target company

with operations or opportunities outside of the United States for our initial business combination, we may face additional burdens in

connection with investigating, agreeing to and completing such initial business combination, and if we effect such initial business combination,

we would be subject to a variety of additional risks that may negatively impact our operations.

If we pursue a target a company

with operations or opportunities outside of the United States for our initial business combination, we would be subject to risks associated

with cross-border business combinations, including in connection with investigating, agreeing to and completing our initial business combination,

conducting due diligence in a foreign jurisdiction, having such transaction approved by any local governments, regulators or agencies

and changes in the purchase price based on fluctuations in foreign exchange rates.

If we effect our initial business

combination with such a company, we would be subject to any special considerations or risks associated with companies operating in an

international setting, including any of the following:

and difficulties inherent in managing cross-border business operations;

and regulations regarding currency redemption;

complex corporate withholding taxes on individuals;

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

exchange listing and/or delisting requirements;

tariffs and trade barriers;

regulations related to customs and import/export matters;

local or regional economic policies and market conditions;

unexpected changes in regulatory requirements;

challenges in managing and staffing international operations;

longer payment cycles;

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

currency fluctuations and exchange controls;

rates of inflation;

challenges in collecting accounts receivable;

cultural and language differences;

employment regulations;

underdeveloped or unpredictable legal or regulatory systems;

protection of intellectual property;

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

regime changes and political upheaval;

terrorist attacks, natural disasters, widespread health emergencies and wars;

deterioration of political relations with the United States.

We may not be able to adequately

address these additional risks.

If we were unable to do so, we may be unable to complete such initial business combination, or, if we

complete such initial business combination, our operations might suffer, either of which may adversely impact our business, financial

condition and results of operations.

We may reincorporate in another jurisdiction

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

We may, in connection with

our initial business combination and subject to requisite shareholder approval by special resolution under the Companies Act, reincorporate

in the jurisdiction in which the target company or business is located or in another jurisdiction.

The transaction may require a shareholder

or warrant holder to recognize taxable income in the jurisdiction in which the shareholder or warrant holder is a tax resident or in which

its members are resident if it is a tax transparent entity.

We do not intend to make any cash distributions to shareholders or warrant

holders to pay such taxes.

Shareholders or warrant holders may be subject to withholding taxes or other taxes with respect to their ownership

of us after the reincorporation.

We may reincorporate in another jurisdiction

in connection with our initial business combination, and the laws of such jurisdiction may govern some or all of our future material agreements

and we may not be able to enforce our legal rights.

In connection with our initial

business combination, we may relocate the home jurisdiction of our business from the Cayman Islands to another jurisdiction.

If we determine

to do this, the laws of such jurisdiction may govern some or all of our future material agreements.

The system of laws and the enforcement

of existing laws in such jurisdiction may not be as certain in implementation and interpretation as in the United States.

The inability

to enforce or obtain a remedy under any of our future agreements could result in a significant loss of business, business opportunities

We are subject to changing law and regulations

regarding regulatory matters, corporate governance and public disclosure that have increased both our costs and the risk of non-compliance.

We are subject to rules and

regulations by various governing bodies, including, for example, the Securities and Exchange Commission, which are charged with the protection

of investors and the oversight of companies whose securities are publicly traded, and to new and evolving regulatory measures under applicable

Our efforts to comply with new and changing laws and regulations have resulted in and are likely to continue to result in, increased

general and administrative expenses and a diversion of management time and attention from revenue- generating activities to compliance

Moreover, because these laws,

regulations and standards are subject to varying interpretations, their application in practice may evolve over time as new guidance becomes

This evolution may result in continuing uncertainty regarding compliance matters and additional costs necessitated by ongoing

revisions to our disclosure and governance practices.

If we fail to address and comply with these regulations and any subsequent changes,

we may be subject to penalty and our business may be harmed.

If our management following our initial business

combination is unfamiliar with United States securities laws, they may have to expend time and resources becoming familiar with such laws,

which could lead to various regulatory issues.

Following our initial business

combination, our management may resign from their positions as officers or directors of the company and the management of the target business

at the time of the business combination will remain in place.

Management of the target business may not be familiar with United States

securities laws.

If new management is unfamiliar with United States securities laws, they may have to expend time and resources becoming

familiar with such laws.

This could be expensive and time-consuming and could lead to various regulatory issues which may adversely affect

our operations.

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

target, all revenues and income would likely be received in a foreign currency, and the dollar equivalent of our net assets and

distributions, if any, could be adversely affected by reductions in the value of the local currency.

The value of the currencies in our

target regions fluctuate and are affected by, among other things, changes in political and economic conditions.

Any change in the relative

value of such currency against our reporting currency may affect the attractiveness of any target business or, following consummation

of our initial business combination, our financial condition and results of operations.

Additionally, if a currency appreciates in value

against the dollar prior to the consummation of our initial business combination, the cost of a target business as measured in dollars

will increase, which may make it less likely that we are able to consummate such transaction.

After our initial business combination, substantially

all of our assets may be located in a foreign country and substantially all of our revenue will be derived from our operations in such

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.

growth could be uneven, both geographically and among various sectors of the economy and such growth may not be sustained in the future.

If in the future such country’s economy experiences a downturn or grows at a slower rate than expected, there may be less demand

for spending in certain industries.

A decrease in demand for spending in certain industries could materially and adversely affect our

ability to find an attractive target business with which to consummate our initial business combination and if we effect our initial business

combination, the ability of that target business to become profitable.

RISKS RELATING TO OUR MANAGEMENT TEAM

We are dependent upon our officers and directors

and their loss could adversely affect our ability to operate.

Our operations are dependent

upon a relatively small group of individuals and, in particular, our 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 their time among various business activities, including identifying potential business combinations and monitoring the related

due diligence.

We do not have an employment agreement with, or key-man insurance on the life of, any of our directors or officers.

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 dependent upon the efforts of our key personnel, some of whom may join us

following our initial business combination.

The loss of key personnel could negatively impact the operations and profitability of our

post-combination business.

Our ability to successfully

effect our initial business combination is dependent upon the efforts of our key personnel.

The role of our key personnel in the target

business, however, cannot presently be ascertained.

Although some of our key personnel may remain with the target business in senior management

or advisory positions following our initial business combination, it is likely that some or all of the management of the target business

will remain in place.

While we intend to closely scrutinize any individuals we engage after our initial business combination, we cannot

assure you that our assessment of these individuals will prove to be correct.

These individuals may be unfamiliar with the requirements

of operating a company regulated by the SEC, which could cause us to have to expend time and resources helping them become familiar with

such requirements.

Our key personnel may negotiate employment

or consulting agreements with a target business in connection with a particular business combination, and a particular business combination

may be conditioned on the retention or resignation of such key personnel.

These agreements may provide for them to receive compensation

following our initial business combination and as a result, may cause them to have conflicts of interest in determining whether a particular

business combination is the most advantageous.

Our key personnel may be able

to remain with our company after the completion of our initial business combination only if they are able to negotiate employment or consulting

agreements in connection with the business combination.

Such negotiations would take place simultaneously with the negotiation of the

business combination and could provide for such individuals to receive compensation in the form of cash payments and/or our securities

for services they would render to us after the completion of the business combination.

Such negotiations also could make such key personnel’s

retention or resignation a condition to any such agreement.

The personal and financial interests of such individuals may influence their

motivation in identifying and selecting a target business, subject to their fiduciary duties under Cayman Islands law.

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.

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 other business endeavors for

which he 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.

Our officers and directors presently have,

and any of them in the future may have additional, fiduciary or contractual obligations to other entities and, accordingly, may have conflicts

of interest in determining to which entity a particular business opportunity should be presented.

Following the completion of

the Public Offering and until we consummate our initial business combination, we intend to engage in the business of identifying and combining

with one or more businesses.

Each of our officers and directors presently has, and any of them in the future may have, additional fiduciary

or contractual obligations to other entities pursuant to which such officer or director is or will be required to present a business combination

opportunity to such entities.

Accordingly, they may have conflicts of interest in determining to which entity a particular business opportunity

should be presented.

These conflicts may not be resolved in our favor and a potential target business may be presented to another entity

prior to its presentation to us, subject to their fiduciary duties under Cayman Islands law.

Our Articles provide that, to the fullest

extent permitted by applicable law:

(i) no individual serving as a director or an officer shall have any duty, except and to the extent

expressly assumed by contract, to refrain from engaging directly or indirectly in the same or similar business activities or lines of

business as us;

and (ii) we renounce any interest or expectancy in, or in being offered an opportunity to participate in, any potential

transaction or matter which may be a corporate opportunity for any director or officer, on the one hand, and us, on the other.

In addition, our sponsor and

our officers and directors may sponsor or form other special purpose acquisition companies similar to ours or may pursue other business

or investment ventures during the period in which we are seeking an initial business combination.

Any such companies, businesses or investments

may present additional conflicts of interest in pursuing an initial business combination.

However, we do not believe that any such potential

conflicts would materially affect our ability to complete our initial business combination.

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.

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.

The personal and financial

interests of our directors and officers may influence their motivation in timely identifying and selecting a target business and completing

a business combination.

Consequently, our directors’ and officers’ discretion in identifying and selecting a suitable target

business may result in a conflict of interest when determining whether the terms, conditions and timing of a particular business combination

are appropriate and in our shareholders’ best interest.

If this were the case, it would be a breach of their fiduciary duties to

us as a matter of Cayman Islands law and we or our shareholders might have a claim against such individuals for infringing on our shareholders’

However, we might not ultimately be successful in any claim we may make against them for such reason.

We may not have sufficient funds to satisfy

indemnification claims of our directors and officers.

We have agreed to indemnify

our officers and directors to the fullest extent permitted by law.

However, our officers and directors have agreed to waive any right,

title, interest or claim of any kind in or to any monies in the trust account and to not seek recourse against the trust account for any

reason whatsoever (except to the extent they are entitled to funds from the trust account due to their ownership of public shares).

any indemnification provided will be able to be satisfied by us only if (i) we have sufficient funds outside of the trust account or (ii)

we consummate an initial business combination.

Our obligation to indemnify our officers and directors may discourage shareholders from

bringing a lawsuit against our officers or directors for breach of their fiduciary duty.

These provisions also may have the effect of

reducing the likelihood of derivative litigation against our officers and directors, even though such an action, if successful, might

otherwise benefit us and our shareholders.

Furthermore, a shareholder’s investment may be adversely affected to the extent we pay

the costs of settlement and damage awards against our officers and directors pursuant to these indemnification provisions.

Our letter agreement with our sponsor, officers

and directors may be amended without shareholder approval.

Our letter agreement with

our sponsor, officers and directors contain provisions relating to transfer restrictions of our founder shares and private placement units,

indemnification of the trust account, waiver of redemption rights and participation in liquidating distributions from the trust account.

The letter agreement may be amended without shareholder approval (although releasing the parties from the restriction not to transfer

the founder shares for 185 days following the date of our prospectus will require the prior written consent of the underwriters).

we do not expect our Board to approve any amendment to the letter agreement 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

the letter agreement.

Any such amendments to the letter agreement would not require approval from our shareholders and may have an adverse

effect on the value of an investment in our securities.

RISKS RELATING TO OUR SECURITIES

You will not have any rights or interests in

funds from the trust account, except under certain limited circumstances.

Therefore, to liquidate your investment, you may be forced to

sell your public shares or warrants, potentially at a loss.

Our public shareholders will

be entitled to receive funds from the trust account only upon the earliest to occur of:

(i) our completion of an initial business combination,

and then only in connection with those Class A ordinary shares that such shareholder properly elected to redeem, subject to the limitations

and on the conditions described herein, (ii) the redemption of any public shares properly submitted in connection with a shareholder vote

to amend our Articles (A) to modify the substance or timing of our obligation to allow redemption in connection with our initial business

combination or to redeem 100% of our public shares if we do not complete our initial business combination by the Extended Date or (B)

with respect to any other material provisions relating to shareholders’ rights or pre-initial business combination activity, and

(iii) the redemption of our public shares if we are unable to complete an initial business combination by the Extended Date, 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.

Holders of warrants will not have any right to the proceeds held in the trust account with respect to the warrants.

Accordingly, to liquidate your investment, you may be forced to sell your public shares or warrants, potentially at a loss.

Nasdaq may delist our securities from trading

on its exchange, which could limit investors’ ability to make transactions in our securities and subject us to additional trading

restrictions.

Our units, Class A ordinary

shares and warrants are currently listed on Nasdaq.

Although we meet, on a pro forma basis, the minimum initial listing standards set

forth in the Nasdaq listing standards, we cannot assure you that our securities will 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 share price levels.

Generally, following our initial public offering, 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, in connection with our initial business combination, we will be required to demonstrate compliance with

Nasdaq’s initial listing requirements, which are more rigorous than Nasdaq’s continued listing requirements, in order to continue

to maintain the listing of our securities on Nasdaq.

For instance, our share price would generally be required to be at least $4.00 per

share and our shareholders’ equity would generally be required to be at least $5.0 million.

We cannot assure you that we will be

able to meet those initial listing requirements at that time.

If Nasdaq delists our securities

from trading on its exchange and we are not able to list our securities on another national securities exchange, we expect our securities

could be quoted on an over-the-counter market.

If this were to occur, we could face significant material adverse consequences, including:

a limited availability of market quotations for our securities;

reduced liquidity for our securities;

a determination that our Class A ordinary shares are a “penny stock” which will require brokers trading in our Class A 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;

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 our units, Class A ordinary shares and warrants are listed on Nasdaq, our

units, Class A ordinary shares and warrants will qualify as covered securities under the statute.

Although the states are preempted from

regulating the sale of our securities, the federal statute does allow the states to investigate companies if there is a suspicion of fraud,

and, if there is a finding of fraudulent activity, then the states can regulate or bar the sale of covered securities in a particular

While we are not aware of a state having used these powers to prohibit or restrict the sale of securities issued by blank check

companies, other than the State of Idaho, certain state securities regulators view blank check companies unfavorably and might use these

powers, or threaten to use these powers, to hinder the sale of securities of blank check companies in their states.

Further, if we were

no longer listed on Nasdaq, our securities would not qualify as covered securities under the statute and we would be subject to regulation

in each state in which we offer our securities.

There is currently no market for our securities

and a market for our securities may not develop, which would adversely affect the liquidity and price of our securities.

There is currently no market

for our securities.

Shareholders therefore have no access to information about prior market history on which to base their investment

Following the Public Offering, the price of our securities may vary significantly due to one or more potential business combinations

and general market or economic conditions.

Furthermore, an active trading market for our securities may never develop or, if developed,

it may not be sustained.

You may be unable to sell your securities unless a market can be established and sustained.

Because we are incorporated under the laws

of the Cayman Islands, you may face difficulties in protecting your interests, and your ability to protect your rights through the U.S.

Federal courts may be limited.

We are an exempted company

incorporated under the laws of the Cayman Islands.

As a result, it may be difficult for investors to effect service of process within

the United States upon our directors or officers, or enforce judgments obtained in the United States courts against our directors or officers.

Our corporate affairs will

be governed by our Articles, the Companies Act (as the same may be supplemented or amended from time to time) and the common law of the

Cayman Islands.

We will also be subject to the federal securities laws of the United States.

The rights of shareholders to take action

against the directors, actions by minority shareholders and the fiduciary responsibilities of our directors to us under Cayman Islands

law are to a large extent governed by the common law of the Cayman Islands.

The common law of the Cayman Islands is derived in part from

comparatively limited judicial precedent in the Cayman Islands as well as from English common law, the decisions of whose courts are of

persuasive authority, but are not binding on a court in the Cayman Islands.

The rights of our shareholders and the fiduciary responsibilities

of our directors under Cayman Islands law are different from what they would be under statutes or judicial precedent in some jurisdictions

in the United States.

In particular, the Cayman Islands has a different body of securities laws as compared to the United States, and

certain states, such as Delaware, may have more fully developed and judicially interpreted bodies of corporate law.

In addition, Cayman

Islands companies may not have standing to initiate a shareholders derivative action in a Federal court of the United States.

We have been advised by Maples

and Calder, 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 or controlling shareholders than they would as public shareholders of a United States company.

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.

Provisions in our Articles may inhibit a takeover

of us, which could limit the price investors might be willing to pay in the future for our Class A ordinary shares and could entrench

Our Articles contain provisions

that may discourage unsolicited takeover proposals that shareholders may consider to be in their best interests.

These provisions include

a staggered Board and the ability of the Board to designate the terms of and issue new series of preferred shares, which may make the

removal of management more difficult and may discourage transactions that otherwise could involve payment of a premium over prevailing

market prices for our securities.

An investment in the Public Offering may result

in uncertain U.S.

federal income tax consequences.

An investment in the Public

Offering may result in uncertain U.S.

federal income tax consequences.

For instance, because there are no authorities that directly address

instruments similar to the units we issued in the Public Offering, the allocation an investor makes with respect to the purchase price

of a unit between the Class A ordinary shares and the one-half of one warrant to purchase one Class A ordinary share included in each

unit could be challenged by the IRS or courts.

In addition, the U.S.

federal income tax consequences of a cashless exercise of warrants

included in the units issued in the Public Offering is unclear under current law.

Finally, it is unclear whether the redemption rights

with respect to our ordinary shares suspend the running of a U.S.

Holder’s holding period for purposes of determining whether any

gain or loss realized by such holder on the sale or exchange of Class A ordinary shares is long-term capital gain or loss and for determining

whether any dividend we pay would be considered “qualified dividend income” for U.S.

federal income tax purposes.

section in our prospectus titled “Taxation — United States Federal Income Tax Considerations” for a summary of the U.S.

federal income tax considerations of an investment in our securities.

Prospective investors are urged to consult their tax advisors with

respect to these and other tax consequences when acquiring, owning or disposing of our securities.

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 at least 50% of the then outstanding public

As a result, the exercise price of your warrants could be increased, the exercise period could be shortened and the number of

Class A ordinary shares purchasable upon exercise of a warrant could be decreased, all without your approval.

Our warrants are issued in

registered form under a warrant agreement between Continental Stock Transfer & Trust Company, as warrant agent, and us.

agreement provides that the terms of the warrants may be amended without the consent of any holder for the purpose of (i) curing any ambiguity

or to correct any defective provision or mistake, including to conform the provisions of the warrant agreement to the description of the

terms of the warrants and the warrant agreement, (ii) adjusting the provisions relating to cash dividends on ordinary shares as contemplated

by and in accordance with the warrant agreement or (iii) adding or changing any provisions with respect to matters or questions arising

under the warrant agreement as the parties to the warrant agreement may deem necessary or desirable and that the parties deem to not adversely

affect the rights of the registered holders of the warrants, provided that the approval by the holders of at least 50% of the then-outstanding

public warrants is required to make any change that adversely affects the interests of the registered holders of public warrants.

we may amend the terms of the public warrants in a manner adverse to a holder of public warrants if holders of at least 50% of the then

outstanding public warrants approve of such amendment.

Although our ability to amend the terms of the public warrants with the consent

of at least 50% of the then outstanding public warrants is unlimited, examples of such amendments could be amendments to, among other

things, increase the exercise price of the warrants, convert the warrants into cash or shares, shorten the exercise period or decrease

the number of Class A ordinary shares purchasable upon exercise of a warrant.

Our warrant agreement designates 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

to obtain a favorable judicial forum for disputes with our company.

Our warrant agreement provides

that, subject to applicable law, (i) any action, proceeding or claim against us arising out of or relating in any way to the warrant agreement,

including under the Securities Act, will be brought and enforced in the courts of the State of New York or the United States District

Court for the Southern District of New York, and (ii) that we irrevocably submit to such jurisdiction, which jurisdiction shall be the

exclusive forum for any such action, proceeding or claim.

We will waive any objection to such exclusive jurisdiction and that such courts

represent an inconvenient forum.

Notwithstanding the foregoing,

these provisions of the warrant agreement will not apply to suits brought to enforce any liability or duty created by the Exchange Act

or any other claim for which the federal district courts of the United States of America are the sole and exclusive forum.

or entity purchasing or otherwise acquiring any interest in any of our warrants shall be deemed to have notice of and to have consented

to the forum provisions in our warrant agreement.

If any action, the subject matter of which is within the scope the forum provisions

of the warrant agreement, is filed in a court other than a court of the State of New York or the United States District Court for the

Southern District of New York (a “foreign action”) in the name of any holder of our warrants, such holder shall be deemed

to have consented to:

(x) the personal jurisdiction of the state and federal courts located in the State of New York in connection with

any action brought in any such court to enforce the forum provisions (an “enforcement action”), and (y) having service of

process made upon such warrant holder in any such enforcement action by service upon such warrant holder’s counsel in the foreign

action as agent for such warrant holder.

This choice-of-forum provision

may limit a warrant holder’s ability to bring a claim in a judicial forum that it finds favorable for disputes with our company,

which may discourage such lawsuits and result in increased costs to warrant holders to bring a lawsuit.

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.

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 closing price of our Class A ordinary shares equals or exceeds $18.00 per share (as adjusted for share sub-divisions, share capitalizations,

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 give proper notice of such redemption to the warrants holders and provided certain other conditions are

We will not redeem the warrants unless an effective registration statement under the Securities Act covering the Class A ordinary

shares issuable upon exercise of the warrants is effective and a current prospectus relating to those Class A ordinary shares is available

throughout the 30-day redemption period, except if the warrants may be exercised on a cashless basis and such cashless exercise is exempt

from registration under the Securities Act.

If and when the warrants become redeemable by us, we may exercise our redemption right even

if we are unable to register or qualify the underlying securities for sale under all applicable state securities laws.

Redemption of the

outstanding warrants could force you to (i) exercise your warrants and pay the exercise price therefor at a time when it may be disadvantageous

for you to do so, (ii) sell your warrants at the then-current market price when you might otherwise wish to hold your warrants or (iii)

accept the nominal redemption price which, at the time the outstanding warrants are called for redemption, 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 the sponsor or its permitted transferees.

Our warrants may have an adverse effect on

the market price of our Class A ordinary shares and make it more difficult to effectuate our initial business combination.

We issued warrants to purchase

16,184,625 of our Class A ordinary shares as part of the units offered and, simultaneously with the closing of the Public Offering, we

issued in a private placement an aggregate of 1,030,000 private placement units, which have underlying warrants to purchase an aggregate

of 515,000 Class A ordinary shares, at $11.50 per share.

In addition, if the sponsor makes any working capital loans, it may convert those

loans into up to an additional 150,000 private placement units, at the price of $10.00 per unit.

To the extent we issue ordinary shares

to effectuate a business transaction, the potential for the issuance of a substantial number of additional Class A ordinary shares upon

exercise of these warrants could make us a less attractive acquisition vehicle to a target business.

Such warrants, when exercised, will

increase the number of issued and outstanding Class A ordinary shares and reduce the value of the Class A ordinary shares issued to complete

the business transaction.

Therefore, our warrants may make it more difficult to effectuate a business transaction or increase the cost

of acquiring the target business.

Because each unit contains one-half of one

warrant and only a whole warrant may be exercised, the units may be worth less than units of other special purpose acquisition companies.

Each unit contains one-half

of one warrant.

Pursuant to the warrant agreement, no fractional warrants were issued upon separation of the units, and only whole units

If, upon exercise of the warrants, a holder would be entitled to receive a fractional interest in a share, we will, upon exercise,

round down to the nearest whole number the number of Class A ordinary shares to be issued to the warrant holder.

This is different from

other offerings similar to ours in which units include one ordinary share and one warrant to purchase one whole share.

We have established

the components of the units in this way in order to reduce the dilutive effect of the warrants upon completion of a business combination

since the warrants will be exercisable in the aggregate for one-half of the number of shares compared to units that each contain a whole

warrant to purchase one share, thus making us, we believe, a more attractive business combination partner for target companies.

Nevertheless,

this unit structure may cause our units to be worth less than if it included a warrant to purchase one whole share.

A provision of our warrant agreement may make

it more difficult for us to consummate an initial business combination.

If (i) we issue additional

ordinary shares or equity-linked securities for capital raising purposes in connection with the closing of our initial business combination

at a Newly Issued Price of less than $9.20 per Class A ordinary share, (ii) the aggregate gross proceeds from such issuances represent

more than 60% of the total equity proceeds, and interest thereon, available for the funding of our initial business combination, and (iii)

the Market Value of our Class A ordinary shares is below $9.20 per share, then the exercise price of the warrants will be adjusted (to

the nearest cent) to be equal to 115% of the higher of the Market Value and the Newly Issued Price, the $18.00 per share redemption trigger

price will be adjusted (to the nearest cent) to be equal to 180% of the higher of the Market Value and the Newly Issued Price and the

$10.00 per share redemption trigger price will be adjusted (to the nearest cent) to be equal to the higher of the Market Value and the

Newly Issued Price.

This may make it more difficult for us to consummate an initial business combination with a target business.

The grant of registration rights to our initial

shareholders 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 Class A ordinary shares.

Pursuant to an agreement entered

into concurrently with the issuance and sale of the securities in the Public Offering, our initial shareholders and their permitted transferees

can demand that we register the Class A ordinary shares into which founder shares are convertible, holders of our private placement units

and their permitted transferees can demand that we register the private placement units, the private placement shares, the private placement

warrants and the Class A ordinary shares issuable upon exercise of the private placement warrants, and holders of securities that may

be issued upon conversion of working capital loans may demand that we register such units, shares, warrants or the Class A ordinary shares

issuable upon exercise of such warrants.

We will bear the cost of registering these securities.

The registration and availability of such

a significant number of securities for trading in the public market may have an adverse effect on the market price of our Class A ordinary

In addition, the existence of the registration rights may make our initial business combination more costly or difficult to conclude.

This is because the shareholders of the target business may increase the equity stake they seek in the combined entity or ask for more

cash consideration to offset the negative impact on the market price of our Class A ordinary shares that is expected when the ordinary

shares owned by our initial shareholders, holders of our private placement units or holders of our working capital loans or their respective

permitted transferees are registered.

Holders of Class A ordinary shares will not

be entitled to vote on the appointment of directors and certain other matters prior to our initial business combination.

As holders of our Class A

ordinary shares, our public shareholders will not have the right to vote on the appointment of directors until after the consummation

of our initial business combination.

In addition, prior to our initial business combination, holders of a majority of our founder shares

may remove a member of the Board for any reason.

Accordingly, you may not have any say in the management of our company prior to the consummation

of an initial business combination.

In addition, prior to the closing of our initial business combination, only holders of Class B ordinary

shares will have the right to vote on continuing the company in a jurisdiction outside of the Cayman Islands.

You will not be permitted to exercise your

warrants unless we register and qualify the underlying Class A ordinary shares or certain exemptions are available.

If the issuance of the Class

A ordinary shares upon exercise of the warrants is not registered, qualified or exempt from registration or qualification under the Securities

Act and applicable state securities laws, holders of warrants will not be entitled to exercise such warrants and such warrants may have

no value and expire worthless.

In such event, holders who acquired their warrants as part of a purchase of units will have paid the full

unit purchase price solely for the Class A ordinary shares included in the units.

We are registering the Class

A ordinary shares issuable upon exercise of the warrants in the registration statement of which this prospectus forms a part because the

warrants will become exercisable 30 days after the completion of our initial business combination, which may be within one year of the

Public Offering.

However, because the warrants will be exercisable until their expiration date of up to five years after the completion

of our initial business combination, in order to comply with the requirements of Section 10(a)(3) of the Securities Act following the

consummation of our initial business combination, under the terms of the warrant agreement, we have agreed that, as soon as practicable,

but in no event later than 20 business days, after the closing of our initial business combination, we will use our commercially reasonable

efforts to file with the SEC a post-effective amendment to the registration statement of which this prospectus forms a part or a new registration

statement covering the registration under the Securities Act of the Class A ordinary shares issuable upon exercise of the warrants and

thereafter will use our best efforts to cause the same to become effective within 60 business days following our initial business combination

and to maintain a current prospectus relating to the Class A ordinary shares issuable upon exercise of the warrants until the expiration

of the warrants in accordance with the provisions of the warrant agreement.

We cannot assure you that we will be able to do so if, for

example, any facts or events arise which represent a fundamental change in the information set forth in the registration statement or

prospectus, the financial statements contained or incorporated by reference therein are not current or correct or the SEC issues a stop

If the Class A ordinary shares

issuable upon exercise of the warrants are not registered under the Securities Act, under the terms of the warrant agreement, holders

of warrants who seek to exercise their warrants will not be permitted to do so for cash and, instead, will be required to do so on a cashless

basis in accordance with Section 3(a)(9) of the Securities Act or another exemption.

In no event will warrants

be exercisable for cash or on a cashless basis, and we will not be obligated to issue any shares to holders seeking to exercise their

warrants, unless the issuance of the shares upon such exercise is registered or qualified under the securities laws of the state of the

exercising holder, or an exemption from registration or qualification is available.

If our Class A ordinary shares

are at the time of any exercise of a warrant not listed on a national securities exchange such that they satisfy the definition of “covered

securities” under Section 18(b)(1) of the Securities Act, we may, at our option, not permit holders of warrants who seek to exercise

their warrants to do so for cash and, instead, require them to do so on a cashless basis in accordance with Section 3(a)(9) of the Securities

in the event we so elect, we will not be required to file or maintain in effect a registration statement or register or qualify the

shares underlying the warrants under applicable state securities laws, and in the event we do not so elect, we will use our best efforts

to register or qualify the shares underlying the warrants under applicable state securities laws to the extent an exemption is not available.

In no event will we be required

to net cash settle any warrant, or issue securities (other than upon a cashless exercise as described above) or other compensation in

exchange for the warrants in the event that we are unable to register or qualify the shares underlying the warrants under the Securities

Act or applicable state securities laws.

You may only be able to exercise your public

warrants on a “cashless basis” under certain circumstances, and if you do so, you will receive fewer Class A ordinary shares

from such exercise than if you were to exercise such warrants for cash.

The warrant agreement provides

that in the following circumstances holders of warrants who seek to exercise their warrants will not be permitted to do for cash and will,

instead, be required to do so on a cashless basis in accordance with Section 3(a)(9) of the Securities Act:

(i) if the Class A ordinary

shares issuable upon exercise of the warrants are not registered under the Securities Act in accordance with the terms of the warrant

(ii) if we have so elected and the Class A ordinary shares are at the time of any exercise of a warrant not listed on a national

securities exchange such that they satisfy the definition of “covered securities” under Section 18(b)(1) of the Securities

and (iii) if we have so elected and we call the public warrants for redemption.

If you exercise your public warrants on a cashless

basis, you would pay the warrant exercise price by surrendering the warrants for that number of Class A ordinary shares equal to lesser

of (A) the quotient obtained by dividing (x) the product of the number of Class A ordinary shares underlying the warrants, multiplied

by the excess of the “fair market value” of our Class A ordinary shares (as defined in the next sentence) over the exercise

price of the warrants by (y) the fair market value and (B) 0.361.

The “fair market value” is the average reported closing

price of the Class A ordinary shares for the 10 trading days ending on the third trading day prior to the date on which the notice of

exercise is received by the warrant agent or on which the notice of redemption is sent to the holders of warrants, as applicable.

result, you would receive fewer Class A ordinary shares from such exercise than if you were to exercise such warrants for cash.

GENERAL RISK FACTORS

We are a blank check company with no operating

history and no revenues, and you have no basis on which to evaluate our ability to achieve our business objective.

We are a blank check company

incorporated under the laws of the Cayman Islands with no operating results, and we did not commence operations until obtaining funding

through the Public Offering.

Because we lack an operating history, you have no basis upon which to evaluate our ability to achieve our

business objective of completing our initial business combination.

We have no plans, arrangements or understandings with any prospective

target business concerning a business combination and may be unable to complete our initial business combination.

If we fail to complete

our initial business combination, we will never generate any operating revenues.

Past performance by our management team or

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 or businesses associated with them is presented for informational purposes only.

Past performance by our management team is not a guarantee either (i) of success with respect to any business combination we may consummate

or (ii) that we will be able to locate a suitable candidate for our initial business combination.

You should not rely on the historical

record of the performance of our management team’s or businesses associated with them as indicative of our future performance of

an investment in us or the returns we will, or is likely to, generate going forward.

Past performance by our management team and

their affiliates, including investments and transactions in which they have participated and businesses with which they have been associated,

may not be indicative of future performance of an investment in the company.

Information regarding our

management team and their affiliates, including investments and transactions in which they have participated and businesses with which

they have been associated, is presented for informational purposes only.

Any past experience and performance by our management team and

their affiliates and the businesses with which they have been associated, is not a guarantee that we will be able to successfully identify

a suitable candidate for our initial business combination, that we will be able to provide positive returns to our shareholders, or of

any results with respect to any initial business combination we may consummate.

You should not rely on the historical experiences of our

management team and their affiliates, including investments and transactions in which they have participated and businesses with which

they have been associated, as indicative of the future performance of an investment in us or as indicative of every prior investment by

each of the members of our management team or their affiliates.

The market price of our securities may be influenced by numerous factors,

many of which are beyond our control, and our shareholders may experience losses on their investment in our securities.

We have identified a material weakness in our

internal control over financial reporting as of December 31, 2022.

If we are unable to develop and maintain an effective system of internal

control over financial reporting, we may not be able to accurately report our financial results in a timely manner, which may adversely

affect investor confidence in us and materially and adversely affect our business and operating results.

Following the issuance of

the SEC Statement, and after consultation with our independent registered public accounting firm, our management concluded that we identified

a material weakness in our internal controls over financial reporting.

A material weakness is a deficiency, or a combination of deficiencies,

in internal control over financial reporting such that there is a reasonable possibility that a material misstatement of our annual or

interim financial statements will not be prevented, or detected and corrected on a timely basis.

Effective internal controls

are necessary for us to provide reliable financial reports and prevent fraud.

We continue to evaluate steps to remediate the material

These remediation measures may be time consuming and costly and there is no assurance that these initiatives will ultimately

have the intended effects.

If we identify any new material

weaknesses in the future, any such newly identified material weakness could limit our ability to prevent or detect a misstatement of our

accounts or disclosures that could result in a material misstatement of our annual or interim financial statements.

In such case, we may

be unable to maintain compliance with securities law requirements regarding timely filing of periodic reports in addition to applicable

stock exchange listing requirements, investors may lose confidence in our financial reporting and our stock price may decline as a result.

We cannot assure you that the measures we have taken to date, or any measures we may take in the future, will be sufficient to avoid potential

future material weaknesses.

We may face litigation and other risks as a

result of the material weakness in our internal control over financial reporting.

As a result of the material

weakness in our internal control over financial reporting, the change in accounting for the warrants and public shares, and other matters

raised or that may in the future be raised by the SEC, we potentially face litigation or other disputes which may include, among others,

claims invoking the federal and state securities laws, contractual claims or other claims arising from the material weaknesses and the

preparation of our financial statements.

As of the date of this Annual Report on Form 10-K, we have no knowledge of any such litigation

However, we can provide no assurance that such litigation or dispute will not arise in the future.

Any such litigation or

dispute, whether successful or not, could have a material adverse effect on our business, results of operations and financial condition

or our ability to complete a Business Combination.

Cyber incidents or attacks directed at us could

result in information theft, data corruption, operational disruption and/or financial loss.

We depend on digital technologies,

including information systems, infrastructure and cloud applications and services, including those of third parties with which we may

Sophisticated and deliberate attacks on, or security breaches in, our systems or infrastructure, or the systems or infrastructure

of third parties or the cloud, could lead to corruption or misappropriation of our assets, proprietary information and sensitive or confidential

As an early stage company without significant investments in data security protection, we may not be sufficiently protected against

such occurrences.

We may not have sufficient resources to adequately protect against, or to investigate and remediate any vulnerability

to, cyber incidents.

It is possible that any of these occurrences, or a combination of them, could have adverse consequences on our business

and lead to financial loss.

We are an emerging growth company and a smaller

reporting company within the meaning of the Securities Act, and if we take advantage of certain exemptions from disclosure requirements

available to emerging growth companies or smaller reporting companies, this could make our securities less attractive to investors and

may make it more difficult to compare our performance with other public companies.

We are an “emerging

growth company” within the meaning of the Securities Act, as modified by the JOBS Act, and we may take advantage of certain exemptions

from various reporting requirements that are applicable to other public companies that are not emerging growth companies, including, but

not limited to, not being required to comply with the auditor internal controls attestation requirements of Section 404 of the Sarbanes-Oxley

Act, reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements, and exemptions from

the requirements of holding a nonbinding advisory vote on executive compensation and 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.

an emerging growth company for up to five years, although circumstances could cause us to lose that status earlier, including if the market

value of our Class A 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

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.

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.

make comparison of our financial statements with another public company which is neither an emerging growth company nor an emerging growth

company which has opted out of using the extended transition period difficult or impossible because of the potential differences in accounting

standards used.

Additionally, we are a “smaller

reporting company” as defined in Item 10(f)(1) of Regulation S-K.

Smaller reporting companies may take advantage of certain reduced

disclosure obligations, including, among other things, providing only two years of audited financial statements.

We will remain a smaller

reporting company until the last day of the fiscal year in which (1) the market value of our ordinary shares held by non-affiliates exceeds

$250 million as of the prior June 30th, or (2) our annual revenues exceeded $100 million during such completed fiscal year and the market

value of our ordinary shares held by non-affiliates exceeds $700 million as of the prior June 30th.

To the extent we take advantage of

such reduced disclosure obligations, it may also make comparison of our financial statements with other public companies difficult or

Our initial business combination and our structure

thereafter may not be tax-efficient to our shareholders and warrant holders.

As a result of our business combination, our tax obligations

may be more complex, burdensome and uncertain.

Although we will attempt to

structure our initial business combination in a tax-efficient manner, tax structuring considerations are complex, the relevant facts and

law are uncertain and may change, and we may prioritize commercial and other considerations over tax considerations.

For example, in connection

with our initial business combination and subject to any requisite shareholder approval, we may structure our business combination in

a manner that requires shareholders and/or warrant holders to recognize gain or income for tax purposes, effect a business combination

with a target company in another jurisdiction, or reincorporate in a different jurisdiction (including, but not limited to, the jurisdiction

in which the target company or business is located).

We do not intend to make any cash distributions to shareholders or warrant holders

to pay taxes in connection with our business combination or thereafter.

Accordingly, a shareholder or a warrant holder may need to satisfy

any liability resulting from our initial business combination with cash from its own funds or by selling all or a portion of the shares

In addition, shareholders and warrant holders may also be subject to additional income, withholding or other taxes with respect

to their ownership of us after our initial business combination.

In addition, we may effect

a business combination with a target company that has business operations outside of the United States, and possibly, business operations

in multiple jurisdictions.

If we effect such a business combination, we could be subject to significant income, withholding and other

tax obligations in a number of jurisdictions with respect to income, operations and subsidiaries related to those jurisdictions.

the complexity of tax obligations and filings in other jurisdictions, we may have a heightened risk related to audits or examinations

federal, state, local and non-U.S.

taxing authorities.

This additional complexity and risk could have an adverse effect on our

after-tax profitability and financial condition.

We employ a mail forwarding service, which

may delay or disrupt our ability to receive mail in a timely manner

Mail addressed to the company

and received at its registered office will be forwarded unopened to the forwarding address supplied by us.

None of the company, its directors,

officers, advisors or service providers (including the organization which provides registered office services in the Cayman Islands) will

bear any responsibility for any delay howsoever caused in mail reaching the forwarding address, which may impair your ability to communicate

UNRESOLVED STAFF COMMENTS.

We currently lease executive

offices at 445 Park Avenue, 9 th Floor, New York, NY 10022 from our Sponsor and the members of our management team.

our current office space adequate for our current operations.

An investment in our securities involves a high degree of risk.

You should carefully consider the risks described below before making an investment decision.

Our business, prospects, financial condition, or operating results could be harmed by any of these risks, as well as other risks not known to us or that we consider immaterial as of the date of this annual report.

The trading price of our securities could decline due to any of these risks, and, as a result, you may lose all or part of your investment.

The following discussion should be read in conjunction with Airship AI’s financial statements and notes thereto included herein.

You should carefully consider the following risk factors in addition to the other information included in this annual report.

Risks Related to Airship AI’s Business and Industry

The market for Airship AI’s edge AI services and products is relatively new, and may decline or experience limited growth, and Airship AI’s business is dependent on its clients’ continuing adoption and use its services and products.

The edge AI market is relatively new and is subject to a number of risks and uncertainties.

Airship AI has developed an edge AI platform system.

Through this platform, we deliver our edge AI services to our clients, which include law enforcement, military, and commercial enterprise organizations.

Airship AI believes that our future success will significantly depend on the growth, if any, of this market and the use of our services and products, including our Nexus real-time analytics technology.

The use of edge AI is still relatively new, and consumers may not recognize the need for or benefits of our services and products.

If consumers do not recognize the need for and benefits of our services and products, then they may decide to adopt alternative services to satisfy some portion of their business needs.

In order to grow our business and extend our market position, Airship AI intends to focus on educating potential customers about the benefits of our services and products, expanding the range of Airship AI’s services and bringing new technologies to market to increase market acceptance and use of our platform.

Airship AI’s ability to expand the market that our services and products address depends upon a number of factors, including the cost, performance and perceived value associated with our services and products.

The market for our services and products could fail to grow significantly or there could be a reduction in demand for our services and/or products as a result of a lack of acceptance, technological challenges, competing services, a decrease in spending by current and prospective customers, weakening economic conditions and other causes.

If the edge AI market does not experience significant growth, or demand for its services and/or products decreases, then our business, financial condition and results of operations could be adversely affected.

If Airship AI does not develop enhancements to its services and introduce new services that achieve market acceptance, its growth, business, results of operations and financial condition could be adversely affected.

Airship AI’s ability to attract new clients and increase revenue from existing clients depends, in part, on its ability to enhance and improve its existing services, increase adoption and usage of its services, and introduce new services.

The success of any enhancements or new services depends on several factors, including timely completion, adequate quality testing, actual performance quality, market accepted pricing levels and overall market acceptance.

Enhancements, such as additional technology features, and new services, such as software licenses and data services, that Airship AI develops may not be introduced in a timely or cost-effective manner, may contain errors or defects, may have interoperability difficulties with its platform or other services or may not achieve the broad market acceptance necessary to generate significant revenue.

Furthermore, Airship AI’s ability to increase the usage of its services depends, in part, on the development of new uses for its services, which may be outside of its control.

Its ability to generate usage of additional services by its data consumers may also require increasingly sophisticated and more costly sales efforts and result in a longer sales cycle.

If Airship AI is unable to successfully enhance its existing services to meet evolving data consumer requirements, increase adoption and usage of its services, develop new services, or if its efforts to increase the usage of its services are more expensive than Airship AI expects, then its business, results of operations and financial condition would be adversely affected.

Airship AI has experienced moderate growth in the past several years, and if Airship AI fails to effectively manage its growth, then its business, results of operations and financial condition could be adversely affected.

Airship AI has experienced moderate growth in its business since 2016 when Airship AI developed its edge AI capabilities in video analytics and cyber analytics.

For example, Airship AI has also experienced significant growth in the number of data consumers, usage and amount of data that its platform and associated infrastructure support.

This growth has placed, and may continue to place, significant demands on its corporate culture, operational infrastructure and management.

Any failure to manage Airship AI’s anticipated growth and organizational changes in a manner that preserves the key aspects of its culture and services could adversely affect Airship AI’s overall chance for future success, including its ability to recruit and retain personnel, and effectively focus on and pursue its corporate objectives.

This, in turn, could adversely affect its business, financial condition and results of operations.

In addition, Airship AI’s ability to manage its operations and future growth will require Airship AI to continue to improve its operational, financial and management controls, compliance programs with multiple and changing international laws and regulations and reporting systems.

Airship AI is currently in the process of strengthening its compliance programs, including its compliance programs related to data protection, privacy and cybersecurity and anti-corruption.

Airship AI may not be able to implement improvements in an efficient or timely manner and may discover deficiencies in existing controls, programs, systems and procedures, which could have an adverse effect on its business, reputation, results of operations and financial condition.

Airship AI’s sales efforts involve considerable time and expense and its sales cycle is often long and unpredictable.

Airship AI’s results of operations may fluctuate, in part, because of the intensive nature of our sales efforts and the length and unpredictability of our sales cycle.

As part of our sales efforts, we invest considerable time and expense evaluating the specific organizational needs of our potential customers and educating these potential customers about the technical capabilities and value of our platforms and services.

We often also provide our platforms to potential customers at no or low cost initially to them for evaluation purposes through short-term pilot deployments of our platforms, and there is no guarantee that we will be able to convert customers from these short-term pilot deployments to full revenue-generating contracts.

In addition, we have a growing direct sales force, and our sales efforts have historically depended on the significant involvement of our senior management team.

The length of our sales cycle, from initial demonstration of our platforms to sale of our platforms and services, tends to be long and varies substantially from customer to customer.

Our sales cycle often lasts six to nine months but can extend to a year or more for some customers.

Because decisions to purchase our platforms involve significant financial commitments, potential customers generally evaluate our platforms at multiple levels within their organization, each of which often have specific requirements, and typically involve their senior management.

Our results of operations depend on sales to government and commercial enterprise organizations, which make product purchasing decisions based in part or entirely on factors, or perceived factors, not directly related to the features of the platforms, including, among others, that customer’s projections of business growth, uncertainty about macroeconomic conditions (including as a result of the ongoing COVID-19 pandemic, the ongoing Russia-Ukraine war and related economic sanctions, rising inflation and interest rates, or monetary policy changes), capital budgets, anticipated cost savings from the implementation of our platforms, potential preference for such customer’s internally-developed software solutions, perceptions about our business and platforms, more favorable terms offered by potential competitors, and previous technology investments.

In addition, certain decision makers and other stakeholders within our potential customers tend to have vested interests in the continued use of internally developed or existing software, which may make it more difficult for us to sell our platforms and services.

As a result of these and other factors, our sales efforts typically require an extensive effort throughout a customer’s organization, a significant investment of human resources, expense and time, including by our senior management, and there can be no assurances that we will be successful in making a sale to a potential customer.

If our sales efforts to a potential customer do not result in sufficient revenue to justify our investments, including in our growing direct sales force, our business, financial condition, and results of operations could be adversely affected.

Historically, existing customers have expanded their relationships with Airship AI, which has resulted in a limited number of customers accounting for a substantial portion of its revenue.

If existing customers do not make subsequent purchases from Airship AI or renew their contracts with Airship AI, or if its relationships with its largest customers are impaired or terminated, Airship AI’s revenue could decline, and its results of operations would be adversely impacted.

We derive a significant portion of our revenue from existing customers that expand their relationships with us.

Increasing the size and number of the deployments of our existing customers is a major part of our growth strategy.

We may not be effective in executing this or any other aspect of our growth strategy.

For the year ended December 31, 2023, three customers represented 34%, 21% and 12% of total revenue from 58 customers, although such a high level of customer concentration is not typical.

We are not substantially dependent on these three customers or any one customer.

The primary reason for the increase in reliance on a single customer for the year ended December 31, 2023 was due to the lag-time in delivering on a large order received in late 2022 from one division of a customer which was not fulfilled until 2023.

For the year ended December 31, 2022, two customers represented 28% and 17% of total revenue from 45 customers, which is more representative of our typical customer concentration.

Our top customers by revenue have been long term customers.

From time to time, we may lose a major customer.

It is not possible for us to predict the future level of demand from our larger customers for our platforms and applications.

We do not have any master service agreements with our customers.

For our government agency customers, we must submit and complete standard bidding forms which contain all the applicable terms and conditions for our service offerings.

In order to bid and secure government agency contracts, we either work directly with certain governmental agencies or work with and through the entity that has the prime bidding relationship with the government agencies.

For our commercial customers, they submit detailed purchase orders which generally contain all the key terms and conditions, but such purchase orders may be supported by separate statements of work for particular projects.

Airship AI’s customer awards, either through commercial or government customers, come in a variety of forms depending on if the relationship with the customer is a direct relationship or if it is through a partner.

For direct relationships, Airship AI receives the award directly from the commercial customer or government agency, either in the form of a purchase order or the requisite government form.

For indirect or partner based awards, Airship AI receives the award in the form of a purchase order or task order against the specific effort being awarded.

Regardless of the form of the purchase order and/or the customer vertical, Airship AI has standard terms and conditions which are applied to all awards accepted.

These include the specific line items by quantity being acquired, the delivery period for which Airship AI has to deliver the products and services awarded, the support and maintenance offering desired, and the total period of performance for the award (single year or multi-year).

Payment is due within 30 days of when the invoice is received irrespective of the type of customer.

While we generally offer contract terms up to five years in length, our customers sometimes enter into shorter-term contracts, such as one-year subscriptions, which may not provide for automatic renewal and may require the customer to opt-in to extend the term.

Our customers have no obligation to renew, upgrade, or expand their agreements with us after the terms of their existing agreements have expired.

In addition, many of our customer contracts permit the customer to terminate their contracts with us with notice periods of varying lengths, generally three to six months.

If one or more of our customers terminate their contracts with us, whether for convenience, for default in the event of a breach by us, or for other reasons specified in our contracts, as applicable;

if our customers elect not to renew their contracts with us;

if our customers renew their contractual arrangements with us for shorter contract lengths or for a reduced scope;

or if our customers otherwise seek to renegotiate terms of their existing agreements on terms less favorable to us, our business and results of operations could be adversely affected.

This adverse impact would be even more pronounced for customers that represent a material portion of our revenue or business operations.

Our ability to renew or expand our customer relationships may decrease or vary as a result of a number of factors, including our customers’ satisfaction or dissatisfaction with our platforms and services, the frequency and severity of software and implementation errors, our platforms’ reliability, our pricing, the effects of general economic conditions, competitive offerings or alternatives, or reductions in our customers’ spending levels.

If our customers do not renew or expand their agreements with us or if they renew their contracts for shorter lengths or on other terms less favorable to us, our revenue may grow more slowly than expected or decline, and our business could suffer.

Our business, financial condition, and results of operations would also be adversely affected if we face difficulty collecting our accounts receivable from our customers or if we are required to refund customer deposits.

Achieving renewal or expansion of deployments may require us to increasingly engage in sophisticated and costly sales efforts that may not result in additional sales.

In addition, our customers’ decisions to expand the deployment of our platforms depends on a number of factors, including general economic conditions, the functioning of our platforms, the ability of our forward-deployed engineers to assist our customers in identifying new use cases, modernizing their data architectures, and achieving success with data-driven initiatives, and our customers’ satisfaction with our services.

If our efforts to expand within our existing customer base are not successful, our business may suffer.

Seasonality may cause fluctuations in Airship AI’s results of operations and financial position.

Historically, the first quarter of our year generally has relatively lower sales, and sales generally increase in each subsequent quarter with substantial increases during our third and fourth quarters ending September 30 and December 31, respectively.

We believe that this seasonality results from a number of factors, including:

the fiscal year end procurement cycle of our government customers, and in particular U.S.

government customers which have a fiscal year end of September 30;

the fiscal year budgeting process for our commercial customers, many of which have a fiscal year end of December 31;

seasonal reductions in business activity during the summer months in the United States, Europe, and certain other regions;

timing of projects and our customers’ evaluation of our work progress.

This seasonality has historically impacted and may in the future continue to impact the timing of collections and recognized revenue.

Because a significant portion of our customer contracts are typically finalized near the end of the year, and we typically invoice customers shortly after entering into a contract, we may receive a portion of our customer payments near the end of the year and record such payment as an increase in deferred revenue or customer deposits (“contract liabilities”), while the revenue from our customer contracts is generally recognized over the contract term.

While we have historically billed and collected payments for multiple contract years from certain customers in advance, we have and may continue to shift to collecting payments on an annual or other basis.

While this has been the historical seasonal pattern of our quarterly sales, we believe that our customers’ required timing for certain new government or commercial programs requiring new software may outweigh the nature or magnitude of seasonal factors that might have influenced our business to date.

As a result, we may experience future growth from additional government or commercial mandates that do not follow the seasonal purchasing and evaluation decisions by our customers that we have historically observed.

For example, increased government spending on technology aimed at national defense, financial or policy regulation, cybersecurity, or healthcare mandates may drive customer demand at different times throughout our year, the timing of which we may not be able to anticipate and may cause fluctuations in our results of operations.

The timing of our fiscal quarters and the U.S.

federal government’s September 30 fiscal year end also may impact sales to governmental agencies in the third quarter of our year, offsetting, at least in part, the otherwise seasonal downturn we have historically observed in later summer months.

Our recent growth may obscure the extent to which seasonality trends have affected our business and may continue to affect our business.

We expect that seasonality will continue to materially impact our business in the future and may become more pronounced over time.

The seasonality of our business may cause continued or increased fluctuations in our results of operations and cash flows, which may prevent us from achieving our quarterly or annual forecasts or meeting or exceeding the expectations of research analysts or investors, which in turn may cause a decline in the trading price of our securities.

If Airship AI does not successfully develop and deploy new technologies to address the needs of its customers, its business and results of operations could suffer.

Airship AI’s success has been based on our ability to design software and products that enable the integration of data into a common operating environment to facilitate advanced data analysis, knowledge management, and collaboration.

We spend substantial amounts of time and money researching and developing new technologies and enhanced versions of existing features to meet our customers’ and potential customers’ rapidly evolving needs.

There is no assurance that our enhancements to our platforms or our new product features, capabilities, or offerings, including new product modules, will be compelling to our customers or gain market acceptance.

If our research and development investments do not accurately anticipate customer demand or if we fail to develop our platforms in a manner that satisfies customer preferences in a timely and cost-effective manner, we may fail to retain our existing customers or increase demand for our platforms.

The introduction of new products and services by competitors or the development of entirely new technologies to replace existing offerings could make our platforms obsolete or adversely affect our business, financial condition, and results of operations.

We may experience difficulties with software development, design, or marketing that delay or prevent our development, introduction, or implementation of new platforms, features, or capabilities.

We have in the past experienced delays in our internally planned release dates of new features and capabilities, and there can be no assurance that new platforms, features, or capabilities will be released according to schedule.

Any delays could result in adverse publicity, loss of revenue or market acceptance, or claims by customers brought against us, any of which could harm our business.

Moreover, the design and development of new platforms or new features and capabilities to our existing platforms may require substantial investment, and we have no assurance that such investments will be successful.

If customers do not widely adopt our new platforms, experiences, features, and capabilities, we may not be able to realize a return on our investment and our business, financial condition, and results of operations may be adversely affected.

Our new and existing platforms and changes to our existing platforms could fail to attain sufficient market acceptance for many reasons, including:

our failure to predict market demand accurately in terms of product functionality and to supply offerings that meet this demand in a timely fashion;

product defects, errors, or failures or our inability to satisfy customer service level requirements;

negative publicity or negative private statements about the security, performance, or effectiveness of our platforms or product enhancements;

delays in releasing to the market our new offerings or enhancements to our existing offerings, including new product modules;

introduction or anticipated introduction of competing platforms or functionalities by our competitors;

inability of our platforms or product enhancements to scale and perform to meet customer demands;

receiving qualified or adverse opinions in connection with security or penetration testing, certifications or audits, such as those related to IT controls and security standards and frameworks or compliance;

poor business conditions for our customers, causing them to delay software purchases;

reluctance of customers to purchase proprietary software products;

reluctance of our customers to purchase products hosted by our vendors and/or service interruption from such providers;

reluctance of customers to purchase products incorporating open source software.

If we are not able to continue to identify challenges faced by our customers and develop, license, or acquire new features and capabilities to our platforms in a timely and cost-effective manner, or if such enhancements do not achieve market acceptance, our business, financial condition, results of operations, and prospects may suffer and our anticipated revenue growth may not be achieved.

Because we derive, and expect to continue to derive, substantially all of our revenue from customers purchasing our platforms and products, market acceptance of these platforms and products, and any enhancements or changes thereto, is critical to our success.

Airship AI’s ability to sell its platforms and satisfy its customers is dependent on the quality of Airship AI’s services, and its failure to offer high quality services could have a material adverse effect on its sales and results of operations.

Once Airship AI’s platforms are deployed and integrated with our customers’ existing information technology investments and data, our customers depend on our support and maintenance services to resolve any issues relating to our platforms.

Increasingly, our platforms have been deployed in large-scale, complex technology environments, and we believe our future success will depend on our ability to increase sales of our platforms for use in such deployments.

Further, our ability to provide effective ongoing services, or to provide such services in a timely, efficient, or scalable manner, may depend in part on our customers’ environments and their upgrading to the latest versions of our platforms and participating in our centralized platform management and services.

In addition, our ability to provide effective services is largely dependent on our ability to attract, train, and retain qualified personnel with experience in supporting customers on platforms such as ours.

The number of our customers has grown significantly, and that growth has and may continue to put additional pressure on our services teams.

We may be unable to respond quickly enough to accommodate short-term increases in customer demand for our support and maintenance services.

We also may be unable to modify the future scope and delivery of our support and maintenance services to compete with changes in the services provided by our competitors.

Increased customer demand for support, without corresponding revenue, could increase costs and negatively affect our business and results of operations.

In addition, as we continue to grow our operations and expand outside of the United States, we need to be able to provide efficient services that meet our customers’ needs globally at scale, and our services teams may face additional challenges, including those associated with operating the platforms and delivering support, training, and documentation in languages other than English and providing services across expanded time-zones.

If we are unable to provide efficient support and maintenance services globally at scale, our ability to grow our operations may be harmed, and we may need to hire additional services personnel, which could negatively impact our business, financial condition, and results of operations.

Our customers typically need training in the proper use of and the variety of benefits that can be derived from our platforms to maximize the potential of our platforms.

If we do not effectively deploy, update, or upgrade our platforms, succeed in helping our customers quickly resolve post-deployment issues, and provide effective ongoing services, our ability to sell additional products and services to existing customers could be adversely affected, we may face negative publicity, and our reputation with potential customers could be damaged.

Many enterprise and government customers require higher levels of service than smaller customers.

If we fail to meet the requirements of the larger customers, it may be more difficult to execute on our strategy to increase our penetration with larger customers.

As a result, our failure to maintain high quality services may have a material adverse effect on our business, financial condition, results of operations, and growth prospects.

If Airship AI is not able to maintain and enhance its brand and reputation, Airship AI’s relationships with its customers, partners, and employees may be harmed, and its business and results of operations may be adversely affected.

We believe that maintaining and enhancing our brand identity and reputation is important to our relationships with, and to our ability to attract and retain customers, partners, investors, and employees.

The successful promotion of our brand depends upon our ability to continue to offer high-quality software, maintain strong relationships with our customers, the community, and others, while successfully differentiating our platforms from those of our competitors.

Unfavorable media coverage may adversely affect our brand and reputation.

We anticipate that as our market becomes increasingly competitive, maintaining and enhancing our brand may become increasingly difficult and expensive.

If we do not successfully maintain and enhance our brand identity and reputation, we may fail to attract and retain employees, customers, investors, or partners, grow our business, or sustain pricing power, all of which could adversely impact our business, financial condition, results of operations, and growth prospects.

Additionally, despite our internal safeguards and efforts to the contrary, we cannot guarantee that our customers will not ultimately use our platforms for purposes inconsistent with our company values, and such uses may harm our brand and reputation.

If the market for Airship AI’s platforms and services develops more slowly than Airship AI expects, its growth may slow or stall, and its business, financial condition, and results of operations could be harmed.

The market for Airship AI’s platforms is rapidly evolving.

Our future success will depend in large part on the growth and expansion of this market, which is difficult to predict and relies on a number of factors, including customer adoption, customer demand, changing customer needs, the entry of competitive products, the success of existing competitive products, potential customers’ willingness to adopt an alternative approach to data collection, storage, and processing and their willingness to invest in new software after significant prior investments in legacy data collection, storage, and processing software.

The estimates and assumptions that are used to calculate our market opportunity are subject to change over time, and there is no guarantee that any particular number or percentage of the organizations covered by our market opportunity estimates will pay for our platforms and services at all or generate any particular level of revenue for us.

Even if the market in which we compete meets the size estimates and growth forecasts, our business could fail to grow at the levels we expect or at all for a variety of reasons outside our control, including competition in our industry.

Further, if we or other data management and analytics providers experience security breaches or incidents, loss, corruption, or unavailability of or unauthorized access to customer data, disruptions in delivery, or other problems, this market as a whole, including our platforms, may be negatively affected.

If software for the challenges that we address does not achieve widespread adoption, or there is a reduction in demand caused by a lack of customer acceptance, technological challenges, weakening economic conditions (including due to the ongoing COVID-19 pandemic, the ongoing Russia-Ukraine war and related economic sanctions, rising inflation and interest rates, and monetary policy changes), security or privacy concerns, competing technologies and products, decreases in corporate spending, or otherwise, or, alternatively, if the market develops but we are unable to continue to penetrate it due to the cost, performance, and perceived value associated with our platforms, or other factors, it could result in decreased revenue and our business, financial condition, and results of operations could be adversely affected.

Issues raised by the use of artificial intelligence (“AI”) (including machine learning) in Airship AI’s platforms may result in reputational harm or liability.

AI is enabled by or integrated into some of Airship AI’s technology platforms and is a significant and potentially growing element of our business.

As with many developing technologies, AI presents risks and challenges that could affect its further development, adoption, and use, and therefore our business.

AI algorithms may be flawed.

Datasets in AI training, development, or operations may be insufficient, of poor quality, or reflect unwanted forms of bias.

Inappropriate or controversial data practices by, or practices reflecting inherent biases of, data scientists, engineers, and end-users of our systems could impair the acceptance of AI solutions.

If the recommendations, forecasts, or analyses that AI applications assist in producing are deficient or inaccurate, we could be subjected to competitive harm, potential legal liability, including under new proposed legislation regulating AI in jurisdictions such as the European Union and brand or reputational harm.

Some AI scenarios present ethical issues.

Though our technologies and business practices are designed to mitigate many of these risks, if we enable or offer AI solutions that are controversial or problematic because of their purported or real impact on human rights, privacy, employment, or other social issues, we may experience brand or reputational harm, as well as regulatory or legal scrutiny.

Real or perceived errors, failures, defects, or bugs in Airship AI’s platforms could adversely affect its results of operations and growth prospects.

Because Airship AI offers very complex technology platforms, undetected errors, defects, failures, or bugs have occurred and may in the future occur, especially when platforms or capabilities are first introduced or when new versions or other product or infrastructure updates are released.

Our platforms are often installed and used in large-scale computing environments with different operating systems, software products and equipment, and data source and network configurations, which may cause errors or failures in our platforms or may expose undetected errors, failures, or bugs in our platforms.

Despite testing by us, errors, failures, or bugs may not be found in new software or releases until after commencement of commercial shipments.

In the past, errors have affected the performance of our platforms and can also delay the development or release of new platforms or capabilities or new versions of platforms, adversely affect our reputation and our customers’ willingness to buy platforms from us, and adversely affect market acceptance or perception of our platforms.

Many of our customers use our platforms in applications that are critical to their businesses or missions and may have a lower risk tolerance to defects in our platforms than to defects in other, less critical, software products.

Any errors or delays in releasing new software or new versions of platforms or allegations of unsatisfactory performance, errors, defects, or failures in released software could cause us to lose revenue or market share, increase our service costs, cause us to incur substantial costs in redesigning the software, cause us to lose significant customers, subject us to liability for damages and divert our resources from other tasks, any one of which could materially and adversely affect our business, results of operations and financial condition.

In addition, our platforms could be perceived to be ineffective for a variety of reasons outside of our control.

Hackers or other malicious parties could circumvent our or our customers’ security measures, and customers may misuse our platforms resulting in a security breach or perceived product failure.

Real or perceived errors, failures, or bugs in our platforms and services, or dissatisfaction with our services and outcomes, could result in customer terminations and/or claims by customers for losses sustained by them.

In such an event, we may be required, or we may choose, for customer relations or other reasons, to expend additional resources in order to help correct any such errors, failures, or bugs.

Although we have limitation of liability provisions in our standard software licensing and service agreement terms and conditions, these provisions may not be enforceable in some circumstances, may vary in levels of protection across our agreements, or may not fully or effectively protect us from such claims and related liabilities and costs.

We generally provide a warranty to our customers for our software products and services.

In the event that there is a failure of warranties in such agreements, we are generally obligated to correct the product or service to conform to the warranty provision as set forth in the applicable agreement, or, if we are unable to do so, the customer is entitled to seek a refund of the purchase price of the product and service (generally prorated over the contract term).

The sale and support of our products also entail the risk of product liability claims.

We maintain insurance to protect against certain claims associated with the use of our products, but our insurance coverage may not adequately cover any claim asserted against us.

In addition, even claims that ultimately are unsuccessful could result in our expenditure of funds in litigation and divert management’s time and other resources.

In addition, our platforms integrate a wide variety of other elements, and our platforms must successfully interoperate with products from other vendors and our customers’ internally developed software.

As a result, when problems occur for a customer using our platforms, it may be difficult to identify the sources of these problems, and we may receive blame for a security, access control, or other compliance breach that was the result of the failure of one of the other elements in a customer’s or another vendor’s IT, security, or compliance infrastructure.

The occurrence of software or errors in data, whether or not caused by our platforms, could delay or reduce market acceptance of our platforms and have an adverse effect on our business and financial performance, and any necessary revisions may cause us to incur significant expenses.

The occurrence of any such problems could harm our business, financial condition, and results of operations.

If an actual or perceived breach of information correctness, auditability, integrity, or availability occurs in one of our customers’ systems, regardless of whether the breach is attributable to our platforms, the market perception of the effectiveness of our platforms could be harmed.

Alleviating any of these problems could require additional significant expenditures of our capital and other resources and could cause interruptions, delays, or cessation of our product licensing, which could cause us to lose existing or potential customers and could adversely affect our business, financial condition, results of operations, and growth prospects.

Airship AI may not be able to adequately protect or enforce its intellectual property rights or prevent unauthorized parties from copying or reverse engineering its solutions.

Airship AI’s efforts to protect and enforce its intellectual property rights and prevent third parties from violating its rights may be costly.

The success of Airship AI’s services and its business depends, in part, on Airship AI’s ability to obtain intellectual property rights and maintain adequate legal protection for its products in the United States and other international jurisdictions.

Airship AI does not have any patents.

Airship AI relies on a combination of copyright, service mark, and trade secret laws, as well as confidentiality procedures and contractual obligations, to establish and protect its proprietary rights, all of which provide only limited protection.

Airship AI cannot be certain that the steps it has taken will prevent unauthorized use of its technology or the reverse engineering of its technology.

Moreover, others may independently develop technologies that are competitive to Airship AI or infringe Airship AI’s intellectual property.

Protecting against the unauthorized use of Airship AI’s intellectual property, products and other proprietary rights is expensive and can be difficult, particularly with respect to international jurisdictions.

Unauthorized parties may attempt to copy or reverse engineer Airship AI’s solutions or certain aspects of Airship AI’s solutions that are considered proprietary.

Litigation may be necessary in the future to enforce or defend Airship AI’s intellectual property rights, to prevent unauthorized parties from copying or reverse engineering its solutions, to determine the validity and scope of the proprietary rights of others or to block the importation of infringing products into the U.S.

Any such litigation, regardless of merit, could be costly, divert the attention of management and may not ultimately be resolved in Airship AI’s favor.

Effective trademark, service mark, copyright and trade secret protection may not be available or applied for in every country in which Airship AI’s products are available and competitors based in other countries may sell infringing products in one or more markets.

An inability to adequately protect and enforce Airship AI’s intellectual property and other proprietary rights or an inability to prevent authorized parties from copying or reverse engineering its technology solutions or certain aspects of its solutions that Airship AI considers proprietary could adversely affect its business, operating results, financial condition and prospects.

Airship AI relies on its unpatented proprietary technology, trade secrets, processes and know-how.

Airship AI relies on proprietary information (such as trade secrets, know-how and confidential information) to protect intellectual property that may not be patentable or subject to copyright, trademark, trade dress or service mark protection, or that Airship AI believes is best protected by means that do not require public disclosure.

Airship AI generally seeks to protect this proprietary information by entering into confidentiality agreements, or consulting, services or employment agreements that contain non-disclosure and non-use provisions with its employees, consultants, contractors and third parties.

However, Airship AI may fail to enter into the necessary agreements and, even if entered into, these agreements may be breached or may otherwise fail to prevent disclosure, third-party infringement or misappropriation of its proprietary information, may be limited as to their term and may not provide an adequate remedy in the event of unauthorized disclosure or use of proprietary information.

Airship AI has limited control over the protection of trade secrets used by its current or future manufacturing partners and suppliers and could lose future trade secret protection if any unauthorized disclosure of such information occurs.

In addition, Airship AI’s proprietary information may otherwise become known or be independently developed by its competitors or other third parties.

To the extent that its employees, consultants, contractors, advisors and other third parties use intellectual property owned by others in their work for Airship AI, disputes may arise as to the rights in related or resulting know-how and inventions.

Costly and time-consuming litigation could be necessary to enforce and determine the scope of Airship AI’s proprietary rights, and failure to obtain or maintain protection for its proprietary information could adversely affect its competitive business position.

Furthermore, laws regarding trade secret rights in certain markets where Airship AI operates may afford limited or no protection for its trade secrets.

Airship AI also relies on physical and electronic security measures to protect its proprietary information, but it cannot provide assurance that these security measures will not be breached or that these measures will provide adequate protection.

There is a risk that third parties may obtain and improperly utilize Airship AI’s proprietary information to its competitive disadvantage.

Airship AI may not be able to detect or prevent the unauthorized use of such information or take appropriate and timely steps to enforce its intellectual property rights.

Airship AI has not been profitable in the past and may not achieve or maintain profitability in the future.

We had net income and net loss of approximately $16,371,000 and $487,000 for the years ended December 31, 2023 and 2022, respectively.

There can be no assurance that Airship AI will ever achieve the level of revenues needed to be profitable in the future and if profitability is achieved, that it will be sustained.

Airship AI’s revenues have fluctuated and may likely continue to fluctuate significantly from quarter to quarter and from year to year.

Airship AI will need to obtain additional capital and increase sales to become profitable.

Airship AI requires substantial additional funding, which may not be available to Airship AI on acceptable terms, or at all, and, if not so available, may require Airship AI to delay, limit, reduce or cease its operations.

Airship AI has limited financial resources.

There can be no assurance that sufficient funding will be available to us to fund our operating expenses and to further develop our business.

Unless we achieve substantial profitability, we anticipate that we will likely need to raise additional capital to fund our operations while we implement and execute our business plan.

We currently do not have any contracts or commitments for additional financing.

In addition, any additional equity financing may involve substantial dilution to our existing shareholders.

There can be no assurance that such additional capital will be available on a timely basis or on terms that will be acceptable to us.

Failure to obtain such additional financing could result in delay or indefinite postponement of operations or the further development of our business.

If adequate funds are not available or are not available on acceptable terms, we may not be able to further fund our business or the expansion thereof, take advantage of strategic acquisitions or investment opportunities or respond to competitive pressures.

Such inability to obtain additional financing when needed could have a material adverse effect on our business, results of operations, cash flow, financial condition and prospects.

There can be no assurance that Airship AI will be able to comply with the terms of its convertible note.

Airship AI issued senior secured convertible promissory notes on June 22, 2023 and October 3, 2023 in principal amounts totaling $2,600,000.

Pursuant to the terms of a senior secured convertible promissory notes, $2,000,000 is due on June 22, 2024 and $600,000 is due on September 30, 2024.

Failure to repay the principal amounts on the due date, an additional 10% and related interest or to convert these amounts into shares of Airship AI common stock in accordance with the promissory notes would result in a default.

We may not have the funds to repay, or the ability to refinance, such outstanding amounts and the holder could foreclose upon critical assets.

Any of these outcomes would have an adverse effect on our business and financial condition.

Airship AI has a limited operating history.

There can be no assurance that Airship AI will be successful in growing its business.

We have a limited history of operations.

As a result, there can be no assurance that we will be successful in our operations.

Any potential for future growth will place additional demands on our executive officers, and any increased scope of our operations will present challenges due to our current limited management resources.

There can be no assurance that we will be successful in our efforts.

Our inability to locate additional opportunities, to hire additional management and other personnel, or to enhance our management systems, could have a material adverse effect on our results of operations.

There can be no assurance that our operations will be profitable.

Airship AI faces intense competition within its industry and is subject to the effects of technology change.

The industry in which we are engaged is subject to rapid and significant technological change.

There can be no assurance that Airship AI’s systems can be upgraded to meet future innovations in the industry or that new technologies will not emerge, or existing technologies will not be improved, which would render Airship AI’s offerings obsolete or non-competitive.

Many of the companies we compete with enjoy significant competitive advantages over us, including greater name recognition;

greater financial, technical and service resources;

established networks;

additional product offerings;

and greater resources for product development and sales and marketing.

In addition, there can be no assurance that other established technology companies, any of which would likely have greater resources than Airship AI, will not enter the market.

There can be no assurance that Airship AI will be able to compete successfully against any of its competitors.

Airship AI’s proprietary products and services and service delivery may not operate properly, which could damage its reputation, give rise to claims against Airship AI, or divert application of its resources from other purposes, any of which could harm its business and operating results.

We may encounter supply chain, human, or technical obstacles that prevent our products and services from operating profitably.

If our offerings do not function reliably or fail to achieve customer expectations in terms of performance, customers could assert liability claims against us or cancel their contracts with us.

This could damage our reputation and impair our ability to attract or maintain customers.

We cannot assure you that material performance problems or defects in our products will not arise in the future.

Errors may result from receipt, entry, or interpretation of customer information or from interface of our services.

These defects and errors and any failure by us to identify and address them could result in loss of revenue or market share, liability to customers or others, failure to achieve market acceptance or expansion, diversion of development resources, injury to our reputation, and increased service and maintenance costs.

The costs incurred in correcting any defects or errors or in responding to resulting claims or liability may be substantial and could adversely affect our operating results.

If critical components used in Airship AI’s products become scarce or unavailable, Airship AI may incur delays in delivering its products and providing services, which could damage its business.

Airship AI relies on a sustainable supply chain.

Any issues with this supply chain could adversely affect daily business operations and profitability.

We depend on third party providers, suppliers and licensors to supply some of the hardware, software and support necessary to provide some of our products and services.

We obtain these materials from a limited number of vendors, some of which do not have a long operating history, or which may not be able to continue to supply the equipment, supplies, and services we desire.

Some of our hardware, software and operational support vendors represent our primary or sole source of supply or have, either through contract or as a result of intellectual property rights, a position of some exclusivity.

If demand exceeds these vendors’ capacity or if these vendors experience operating or financial difficulties or are otherwise unable to provide the equipment or services we need in a timely manner, at our specifications and at reasonable prices, our ability to provide some services might be materially adversely affected, or the need to procure or develop alternative sources of the affected materials or services might delay our ability to serve our customers.

These events could materially and adversely affect our ability to retain and attract customers, and have a material negative impact on our operations, business, financial results and financial condition.

Unavailability of materials or higher costs could adversely affect Airship AI’s financial results.

We depend on certain domestic and international suppliers for the delivery of components used in the assembly of our products.

Our reliance on third-party suppliers creates risks related to our potential inability to obtain an adequate supply of components or sub-assemblies and reduced control over pricing and timing of delivery of components and sub-assemblies.

Specifically, we depend on suppliers of sub-assemblies, machined parts, printed circuit boards, custom wire fabrications and other miscellaneous customer parts for our products.

Although we have and are implementing additional long-term agreements with strategic suppliers to mitigate the risk of supply continuity, there remains risk across our supply chain while we extend our supplier contract program, and there is no guarantee that supply will not be interrupted.

Additionally, if our suppliers do not accurately forecast and effectively allocate production or if they are not willing to allocate sufficient production to us, or they decommit to us previously agreed to supply levels, it may reduce our access to components and require us to search for new suppliers.

If we are unable to accurately match the timing and quantities of component purchases to our actual needs, we may incur unexpected production disruption, storage, transportation and write-off costs, which may harm our business and operating results.

Single or sole-source components used in the manufacture of our products may become unavailable or discontinued.

Delays caused by industry allocations or obsolescence may take weeks or months to resolve.

In some cases, parts obsolescence may require a product re-design to ensure quality replacement components.

These delays could cause significant delays in manufacturing and loss of sales, leading to adverse effects significantly impacting our financial condition or results of operations and could harm our reputation.

A significant number of our raw materials or components are comprised of petroleum-based products or incur some form of landed cost associated with transporting the raw materials or components to our facility.

Our freight and import costs and the timely delivery of our products could be adversely impacted by a number of factors which could reduce the profitability of our operations, including:

higher fuel costs;

potential port closures;

customs clearance issues;

increased government regulation or regulatory changes for imports of foreign products into the U.S.;

delays created by terrorist attacks or threats, public health issues, national disasters or work stoppages;

and other matters.

Any interruption of supply for any material components of our products could significantly delay the shipment of our products and have a material adverse effect on our revenues, profitability and financial condition.

For example, there have been disruptions in the semi-conductor supply chain that could negatively impact our ability to make our products.

While many of the COVID-19 driven supply chain issues have been resolved, challenges to the timely production and delivery of Taiwan based products we utilize for our edge AI platform due to geo-political factors is a concern looking forward.

In the event that our suppliers are unable to provide timely delivery of those supplies it will significantly impact our ability to meet delivery schedules for existing and anticipated edge AI hardware-based solutions.

International or domestic geopolitical or other events, including the imposition of new or increased tariffs and/or quotas by the U.S.

government on any of these raw materials or components and other government trade policies, could adversely impact the supply and cost of these raw materials or components, and could adversely impact our revenues, profitability and financial condition.

In particular, the implementation of tariffs and trade restrictions as well as changes in trade policies between the U.S.

and China may have an adverse effect on our supply chain from a sourcing and cost perspective.

We source certain raw materials from China, as do some of our suppliers.

We may be unable to transition away from China to other jurisdictions or obtain secondary source s for raw materials which could result in a material adverse effect on our revenues, profitability and financial condition.

If Airship AI’s security measures are breached or fail and unauthorized access is obtained to a customer’s data, our service may be perceived as insecure, the attractiveness of its services to current or potential customers may be reduced, and Airship AI may incur significant liabilities.

Airship AI services involve the web-based and data storage and transmission of customers’ information.

We rely on proprietary and commercially available systems, software, tools and monitoring, as well as other processes, to provide security for processing, transmission and storage of such information.

Because of the sensitivity of this information and due to requirements under applicable laws and regulations, the effectiveness of our security efforts is very important.

If our security measures are breached or fail as a result of third-party action, acts of terror, social unrest, employee error, malfeasance or for any other reasons, someone may be able to obtain unauthorized access to customer data.

Improper activities by third-parties, advances in computer and software capabilities and encryption technology, new tools and discoveries and other events or developments may facilitate or result in a compromise or breach of our security systems.

Our security measures may not be effective in preventing unauthorized access to the customer data stored on our servers.

If a breach of our security occurs, we could face damages for contract breach, penalties for violation of applicable laws or regulations, possible lawsuits by individuals affected by the breach and significant remediation costs and efforts to prevent future occurrences.

In addition, whether there is an actual or a perceived breach of our security, the market perception of the effectiveness of our security measures could be harmed and we could lose current or potential customers.

The loss of one or more of Airship AI’s significant customers, or any other reduction in the amount of revenue Airship AI derives from any such customer, would adversely affect its business, financial condition, results of operations and growth prospects.

Airship AI sells its product to commercial and government customers under agreements that are normally paid within 30 days of contract completion.

For the year ended December 31, 2023, three customers represented 34%, 21% and 12% of total revenue from 58 customers, although such a high level of customer concentration is not typical.

As of December 31, 2023, three customers represented approximately 51%, 26% and 17% of outstanding account receivables.

Due to the customers and timely payments, customer concentration in account receivables is minimal.

For the year ended December 31, 2022, two customers represented 28% and 17% of total revenue from 45 customers, which is more representative of our typical customer concentration.

As of December 31, 2022, four customers represent approximately 42%, 19%, 14% and 10% of outstanding account receivables.

Due to the customers and timely payments, customer concentration in account receivables is minimal.

We expect to continue to derive a significant portion of our revenue from a limited number of customers in the future and, in some cases, the portion of our revenue attributable to individual customers may increase.

The loss of one or more significant customers or a reduction in the amount of revenue we derive from any such customer could significantly and adversely affect our business, financial condition and results of operations.

Customers may choose not to renew their contracts or may otherwise reduce the breadth of the offerings which they purchase for any number of reasons.

We are also subject to the risk that any such customer will experience financial difficulties that prevent them from making payments to us on a timely basis or at all.

Airship AI depends on key information systems and third party service providers.

We depend on key information systems to accurately and efficiently transact our business.

These systems and services are vulnerable to interruptions or other failures resulting from, among other things, pandemics, epidemics, natural disasters, terrorist attacks, software or equipment failures, processing errors, computer viruses, other security issues or supplier defaults.

Security, backup and disaster recovery measures may not be adequate or implemented properly to avoid such disruptions or failures.

Any disruption or failure of these systems or services could cause substantial errors, processing inefficiencies, security breaches, inability to use the systems or process transactions, loss of customers or other business disruptions, all of which could negatively affect our business and financial performance.

As cybersecurity attacks continue to evolve and increase, our information systems could also be penetrated or compromised by internal and external parties’ intent on extracting confidential information, disrupting business processes or corrupting information.

These risks could arise from external parties or from acts or omissions of internal or service provider personnel.

Such unauthorized access could disrupt our business and could result in the loss of assets, litigation, remediation costs, damage to our reputation and failure to retain or attract customers following such an event, which could adversely affect our business.

Cyber-attacks and security vulnerabilities could lead to reduced revenue, increased costs, liability claims, or harm to Airship AI’s competitive position.

Increased sophistication and activities of perpetrators of cyber-attacks have resulted in an increase in information security risks in recent years.

Hackers develop and deploy viruses, worms, and other malicious software programs that attack products and services and gain access to networks and data centers.

If we experience difficulties maintaining existing systems or implementing new systems, we could incur significant losses due to disruptions in our operations.

Additionally, these systems contain valuable proprietary and confidential information and may contain personal data of our customers.

A security breach could result in disruptions of our internal systems and business applications, harm to our competitive position from the compromise of confidential business information, or subject us to liability under laws that protect personal data.

As cyber threats continue to evolve, we may be required to expend additional resources to continue to enhance our information security measures and/or to investigate and remediate any information security vulnerabilities.

Any of these consequences would adversely affect our revenue and margins.

Claims by others that Airship AI infringes their intellectual property could force Airship AI to incur significant costs or revise the way Airship AI conducts its business.

Our competitors protect their proprietary rights by means of patents, trade secrets, copyrights, trademarks and other intellectual property.

We have not conducted an independent review of patents and other intellectual property issued to third-parties, who may have patents or patent applications relating to our proprietary technology.

We may receive letters from third parties alleging, or inquiring about, possible infringement, misappropriation or violation of their intellectual property rights.

Any party asserting that we infringe, misappropriate or violate proprietary rights may force us to defend ourselves, and potentially our customers, against the alleged claim.

These claims and any resulting lawsuit, if successful, could subject us to significant liability for damages and/or invalidation of our proprietary rights or interruption or cessation of our operations.

Any such claims or lawsuit could:

be time-consuming and expensive to defend, whether meritorious or not;

require us to stop providing products or services that use the technology that allegedly infringes the other party’s intellectual property;

divert the attention of our technical and managerial resources;

require us to enter into royalty or licensing agreements with third-parties, which may not be available on terms that we deem acceptable;

prevent us from operating all or a portion of our business or force us to redesign our products, services or technology platforms, which could be difficult and expensive and may make the performance or value of our product or service offerings less attractive;

subject us to significant liability for damages or result in significant settlement payments;

require us to indemnify our customers.

Furthermore, during the course of litigation, confidential information may be disclosed in the form of documents or testimony in connection with discovery requests, depositions or trial testimony.

Disclosure of our confidential information and our involvement in intellectual property litigation could materially adversely affect our business.

Some of our competitors may be able to sustain the costs of intellectual property litigation more effectively than we can because they have substantially greater resources.

In addition, any litigation could significantly harm our relationships with current and prospective customers.

Any of the foregoing could disrupt our business and have a material adverse effect on our business, operating results and financial condition.

Airship AI’s success depends upon the continued protection of its intellectual property rights and Airship AI may be forced to incur substantial costs to maintain, defend, protect and enforce its intellectual property rights.

We do not have any patents and instead rely on trade secrets and know-how in the development of our business, which are of material importance to Airship AI and its future prospects.

Competitors may attempt to challenge our IP and IP systems, or may be able to design alternative techniques or devices that develop products with functionalities that are comparable to ours.

In the event a competitor infringes upon our intellectual property, enforcing those rights, even if successful, could be expensive, uncertain, difficult and time consuming and could require significant time and attention from our management.

Furthermore, there can be no assurance that Airship AI’s products will not infringe on others.

We may not have sufficient resources to enforce our intellectual property rights or to defend our IP against challenges from others.

Airship AI depends on its management team and other key employees, and the loss of one or more of these employees or an inability to attract and retain highly skilled employees could adversely affect its business.

Our future success depends, in part, on our ability to continue to attract and retain highly skilled personnel.

The loss of the services of any of our key personnel, the inability to attract or retain qualified personnel, or delays in hiring required personnel, particularly in engineering and sales, may seriously and adversely affect our business, financial condition and results of operations.

Although we have entered into employment or consulting agreements with our personnel, their employment is generally for no specific duration.

Our future performance also depends on the continued services and continuing contributions of our senior management team, which include Victor Huang, our co-Founder and Chief Executive Officer, and Derek Xu, our co-Founder and Chief Operating Officer, to execute on our business plan and to identify and pursue new opportunities and product innovations.

The loss of services of our senior management team, particularly our Chief Executive Officer, Chief Operating Officer or Chief Technology Officer, could significantly delay or prevent the achievement of our development and strategic objectives, which could adversely affect our business, financial condition and results of operations.

Airship AI’s management team has limited experience managing a public company and regulatory compliance may divert their attention from the day-to-day management of Airship AI’s business.

Our management team has limited experience managing a publicly-traded company and limited experience complying with the increasingly complex laws pertaining to public companies.

These obligations typically require substantial attention from our senior management and could divert their attention away from the day-to-day management of our business.

Airship AI’s business depends, in part, on sales to government organizations, and significant changes in the contracting or fiscal policies of such government organizations could have an adverse effect on Airship AI’s business and operating results.

Our future depends, in part, on continuing sales to government organizations.

Demand from government organizations is often unpredictable, subject to budgetary uncertainty and typically involves long sales cycles.

We have made significant investments to address the government sector, but we cannot assure you that these investments will be successful, or that we will be able to maintain or grow our revenue from the government sector.

Although we anticipate that they may increase in the future, sales to governmental organizations have not accounted for, and may never account for, a significant portion of our revenue.

Sales to governmental organizations are subject to a number of challenges and risks that may adversely impact our business.

Sales to such government entities include the following risks:

selling to governmental agencies can be highly competitive, expensive and time consuming, often requiring significant upfront time and expense without any assurance that such efforts will generate a sale;

government certification requirements applicable to our platform may change and, in doing so, restrict our ability to sell into the governmental sector until we have attained the revised certification;

government demand and payment for our platform may be impacted by public sector budgetary cycles and funding authorizations, with funding reductions or delays adversely affecting public sector demand for our platform;

governments routinely investigate and audit government contractors’ administrative processes, and any unfavorable audit could result in the government refusing to continue buying our platform, which would adversely impact our revenue and operating results.

The occurrence of any of the foregoing could cause governmental organizations to delay or refrain from purchasing our solutions in the future or otherwise have an adverse effect on our business, operating results and financial condition.

Acquisitions of, or investments in, other companies, products, or technologies may require significant management attention and could disrupt Airship AI’s business, dilute stockholder value, and adversely affect its operating results.

Our business strategy may include acquiring other complementary products, technologies or businesses.

Negotiating these transactions can be time-consuming, difficult and expensive, and our ability to close these transactions may be subject to third-party approvals, such as government regulatory approvals, which are beyond our control.

Consequently, we can make no assurance that these transactions once undertaken and announced, will close.

If we merge with or acquire another company following the Business Combination, it is reasonably expected that there will be increased operating expenses and costs associated with the merger that could negatively impact operating profits in the future periods immediately following the M&A event.

The extent and longevity of those impacts is not possible to quantify.

These kinds of acquisitions or investments may result in unforeseen operating difficulties and expenditures.

If we acquire businesses or technologies, we may not be able to integrate the acquired personnel, operations, and technologies successfully, or effectively manage the combined business following the acquisition.

We also may not achieve the anticipated benefits from the acquired business due to a number of factors, including:

inability to integrate or benefit from acquired technologies, products, personnel or services in a profitable manner;

unanticipated costs or liabilities associated with the acquisition, including potential liabilities due to litigation and potential identified or unknown security vulnerabilities in acquired technologies that expose us to additional security risks or delay our ability to integrate the product into our offerings or recognize the benefits of our investment;

differences between our values and those of an acquired company, as well as potential disruptions to our workplace culture;

incurrence of acquisition-related costs, including costs related to integration activities;

difficulty integrating the accounting and information systems, operations, and personnel of the acquired business;

augmenting the acquired technologies and platforms to the levels that are consistent with our brand and reputation;

difficulties and additional expenses associated with supporting legacy products and hosting infrastructure of the acquired business;

challenges converting the acquired company’s revenue recognition policies and forecasting the related revenues, including subscription-based revenues and software license revenues;

potential write-offs of acquired assets or investments, and potential financial and credit risks associated with acquired customers;

difficulty converting the customers of the acquired business onto our platform and contract terms;

diversion of management’s attention and other company resources;

harm to our existing business relationships with business partners and customers as a result of the acquisition;

the potential loss of key employees;

use of resources that are needed in other parts of our business;

use of substantial portions of our available cash to consummate the acquisition.

We cannot assure you that the anticipated benefits of any acquisition or investment would be realized or that we would not be exposed to unknown liabilities or risks.

Integrating an acquired technology, asset or business into our operations can be challenging, complex and costly and we cannot assure you that we will be successful or that the anticipated benefits of the acquisitions that we complete will be realized or outweigh their costs.

If our integration and development efforts are not successful and the anticipated benefits of the acquisitions that we complete are not achieved, our business, operating results, financial condition, and prospects could be adversely affected.

In connection with these types of transactions, we may issue additional equity securities that would dilute our stockholders, use cash that we may need in the future to operate our business, incur debt on terms unfavorable to us or that we are unable to repay, incur large charges or substantial liabilities, encounter difficulties integrating diverse business cultures and values, and become subject to adverse tax consequences, substantial depreciation, or deferred compensation charges.

These challenges could adversely affect our business, operating results, financial condition, and prospects.

Material adverse developments in domestic and global economic conditions, or the occurrence of other world events, could materially adversely affect Airship AI’s revenue and results of operations.

Various factors contribute to the uncertain economic environment, including the ongoing Russia-Ukraine war, the increase in, and volatility of, interest rates, high inflation, an actual recession or fears of a recession, trade policies and tariffs and geopolitical tensions.

Our inability to offset price inflation in our materials, components, shipping, or labor through increased prices to customers with long-term fixed contracts and formula-based or long-term fixed price contracts with suppliers could adversely affect our business, financial condition and results of operations.

Global supply chain and labor market challenges could also negatively affect our performance as well as the performance of our suppliers.

Interest rate increases have also created financial market volatility and could further negatively impact financial markets, lead to an economic downturn or recession or have an adverse effect on our operating results.

Economic slowdowns can also negatively impact municipal and state tax collections and put pressure on law enforcement budgets which may increase the risk that our customers will be unable to appropriate funds for existing or future contracts with us.

In addition, geopolitical risks could affect our customers’ budgets and policies.

These and other factors may adversely affect customer demand and ability to pay, cause decrease in sales, and negatively impact the realizability of our accounts and notes receivable and contract assets.

Catastrophic events could materially adversely affect Airship AI’s business, results of operations and/or financial condition.

A disruption or failure of our systems or operations in the event of a major earthquake, weather event, fire, explosion, failure to contain hazardous materials, industrial accident, utility failure, cyber-attack, terrorist attack, public health crisis, pandemic, or other catastrophic event could cause delays in completing sales, providing services, or performing other mission-critical functions.

A catastrophic event that results in the destruction or disruption of any of our critical business or information technology systems could harm our ability to conduct normal business operations and our operating results as well as expose us to claims, litigation and governmental investigations and fines.

If our backup and mitigation plans are not sufficient to minimize business disruption, our financial results could be adversely affected.

We are continuously monitoring our operations and intend to take appropriate actions to mitigate the risks arising from catastrophic events, but there can be no assurances that we will be successful in doing so.

If Airship AI fails to maintain effective internal control over financial reporting or identify a material weakness or significant deficiency in its internal control over financial reporting, Airship AI’s ability to report its financial condition and results of operations in a timely and accurate manner could be adversely affected, investor confidence in Airship AI company could diminish, and the value of its stock may decline.

Preparing our consolidated financial statements involves a number of complex manual and automated processes, which are dependent upon individual data input or review and require significant management judgment.

One or more of these processes may result in errors that may not be detected and could result in a material misstatement or other errors of our consolidated financial statements.

Such errors may be more likely to occur when implementing new systems and processes, particularly when implementing evolving and complex accounting rules.

The Sarbanes-Oxley Act of 2002 (the “Sarbanes-Oxley Act”) requires, among other things, that as a publicly-traded company we disclose whether our internal control over financial reporting and disclosure controls and procedures are effective.

A material weakness is a deficiency, or combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of our annual or interim financial statements will not be prevented or detected on a timely basis.

While we continually undertake steps to improve our internal control over financial reporting as our business changes, we may not be successful in making the improvements and changes necessary to be able to identify and remediate control deficiencies or material weaknesses on a timely basis.

If we are unable to successfully remediate any current or future material weaknesses in our internal control over financial reporting, the accuracy and timing of our financial reporting may be adversely affected;

our liquidity, access to capital markets and perceptions of our creditworthiness may be adversely affected;

we may be unable to maintain compliance with securities laws, stock exchange listing requirements and debt instruments covenants regarding the timely filing of periodic reports;

we may be subject to regulatory investigations and penalties;

investors may lose confidence in our financial reporting;

we may suffer defaults under our debt instruments;

and our stock price may decline.

Changes in accounting principles or their application to Airship AI could result in unfavorable accounting charges or effects, which could adversely affect its results of operations and growth prospects.

We prepare our consolidated financial statements in accordance with GAAP.

In particular, we make certain estimates and assumptions related to the adoption and interpretation of these principles including the recognition of our revenue and the accounting for our provision for income taxes.

If these assumptions turn out to be incorrect, our financial results and position could materially differ from our expectations and could be materially adversely affected.

A change in any of these principles or guidance, or in their interpretations or application to us, may have a significant effect on our reported results, as well as our processes and related controls, and may retroactively affect previously reported results or our forecasts, which may negatively impact our financial statements.

If Airship AI’s judgments or estimates relating to its critical accounting policies are based on assumptions that change or prove to be incorrect, Airship AI’s results of operations could fall below expectations of securities analysts and investors, resulting in a decline in its stock price.

The preparation of our financial statements in conformity with GAAP requires management to make judgments, estimates, and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes.

We base our estimates on historical experience and on various other assumptions that we believe to be reasonable under the circumstances, as provided in the section titled “ Management’s Discussion and Analysis of Financial Condition and Results of Operations of Airship AI ” the results of which form the basis for making judgments about the carrying values of assets, liabilities, and equity, and the amount of revenue and expenses that are not readily apparent from other sources.

Our results of operations may be adversely affected if our assumptions change or if actual circumstances differ from those in our assumptions, which could cause our results of operations to fall below the expectations of securities analysts and investors, resulting in a decline in the trading price of the combined company’s securities.

Significant judgments, estimates, and assumptions used in preparing our consolidated financial statements include, or may in the future include, those related to revenue recognition and income taxes.

Airship AI has limited insurance which may not cover claims by third parties against Airship AI or its officers and directors.

We have directors’ and officers’ liability insurance and commercial liability insurance policies.

Claims, however, by third parties against us may exceed policy amounts and we may not have amounts to cover these claims.

Any significant claims would have a material adverse effect on our business, financial condition and results of operations.

In addition, our limited directors’ and officers’ liability insurance may affect our ability to attract and retain directors and officers.

Airship AI could be subject to additional tax liabilities.

We are subject to federal, state, and local income taxes in the United States and numerous foreign jurisdictions.

Determining our provision for income taxes requires significant management judgment, and the ultimate tax outcome may be uncertain.

In addition, our provision for income taxes is subject to volatility and could be adversely affected by many factors, including, among other things, changes to our operating or holding structure, changes in the amounts of earnings in jurisdictions with differing statutory tax rates, changes in the valuation of deferred tax assets and liabilities, and changes in U.S.

and foreign tax laws.

Moreover, we are subject to the examination of our income tax returns by tax authorities in the United States and various foreign jurisdictions, which may disagree with our calculation of research and development tax credits, cross-jurisdictional transfer pricing, or other matters and assess additional taxes, interest or penalties.

While we regularly assess the likely outcomes of these examinations to determine the adequacy of our provision for income taxes and we believe that our financial statements reflect adequate reserves to cover any such contingencies, there can be no assurance that the outcomes of such examinations will not have a material impact on our results of operations and cash flows.

or other foreign tax authorities change applicable tax laws, our overall taxes could increase, and our financial condition or results of operations may be adversely impacted.

Under the Tax Reform Act of 1986, the amounts of, and benefits from, net operating losses may be limited in certain circumstances, including a change in control.

Section 382 of the Internal Revenue Code generally imposes an annual limitation on the amount of net operating loss carryforwards that may be used to offset taxable income when a corporation has undergone significant changes in its stock ownership.

There can be no assurance that the Company will be able to utilize any net operating loss carryforwards in the future.

Provisions enacted by the 2017 Tax Cuts and Jobs Act related to the capitalization for tax purposes of research and experimental (“R&E”) expenditures became effective on January 1, 2022.

Beginning January 1, 2022, all U.S.

based R&E expenditures must be capitalized and amortized over five years and 15 years, respectively.

Costs incurred in the development of software programs for Airship AI’s products are charged to operations as incurred until technological feasibility of the software has been established.

Generally, technological feasibility is established when the software module performs its primary functions described in its original specifications, contains features required for it to be usable in a production environment, is completely documented and the related hardware portion of the product is complete.

After technological feasibility is established, any additional costs are capitalized.

Capitalization of software costs ceases when the software is substantially complete and is ready for its intended use.

No software development costs have been capitalized during the years ended or as of December 31, 2023 and 2022.

Risks Related to Our Securities

Currently, our Common Stock and Public Warrants are listed on Nasdaq.

However, there may not be enough liquidity in such market to enable stockholders to sell their securities.

Currently, our Common Stock and Public Warrants are listed on The Nasdaq Global Market and The Nasdaq Capital Market, respectively.

If a public market for our securities does not develop, investors may not be able to re-sell their Common Stock or Warrants, rendering their securities illiquid and possibly resulting in a complete loss of their investment.

We cannot predict the extent to which investor interest in us will lead to the development of an active, liquid trading market.

The trading price of and demand for the Common Stock and the development and continued existence of a market and favorable price for the Common Stock will depend on a number of conditions, including the development of a market following, including by analysts and other investment professionals, the businesses, operations, results, and prospects of the Company, general market and economic conditions, governmental actions, regulatory considerations, legal proceedings, and developments or other factors.

These and other factors may impair the development of a liquid market and the ability of investors to sell shares at an attractive price.

These factors also could cause the market price and demand for the Common Stock to fluctuate substantially, which may limit or prevent investors from readily selling their shares and may otherwise negatively affect the price and liquidity of the Common Stock.

Many of these factors and conditions are beyond the control of the Company or the stockholders.

Our executive officers and directors exercise significant control over us, which will limit your ability to influence corporate matters and could delay or prevent a change in corporate control.

Victor Huang, Airship AI’s co-Founder and our Chief Executive Officer, and Derek Xu, Airship AI’s co-Founder and our Chief Operating Officer, beneficially own (including shares underlying outstanding warrants, stock options and SARs) approximately 70.5% of our combined voting power.

As a result, these stockholders will be able to influence our management and affairs and control the outcome of matters submitted to our stockholders for approval, including the election of directors and any sale, merger, consolidation, or sale of all or substantially all of our assets.

These stockholders may have interests, with respect to their Common Stock, which are different from those of the public investors and the concentration of voting power among one or more of these stockholders may have an adverse effect on the price of the Common Stock.

In addition, this concentration of ownership might adversely affect the market price of the Common Stock by:

(1) delaying, deferring or preventing a change of control;

(2) impeding a merger, consolidation, takeover or other business combination involving us;

or (3) discouraging a potential acquirer from making a tender offer or otherwise attempting to obtain control of us.

The requirements of being a public company may strain the Company’s resources and distract management and we will incur substantial costs as a result of being a public company.

Following the consummation of the Business Combination, the Company is subject to the reporting requirements of the Exchange Act, the Sarbanes-Oxley Act, and the Securities Act.

These rules, regulations and requirements are extensive.

We will incur significant costs associated with our public company corporate governance and reporting requirements.

The Exchange Act requires, among other things, that we file annual, quarterly and current reports with respect to our business and operating results.

The Sarbanes-Oxley Act requires, among other things, that we maintain effective disclosure controls and procedures and internal control over financial reporting.

In order to maintain and, if required, improve our disclosure controls and procedures and internal control over financial reporting to meet this standard, significant resources and management oversight may be required.

As a result, management’s attention may be diverted from other business concerns, which could adversely affect our business and operating results.

We may need to hire more corporate employees to comply with these requirements or engage outside consultants, which would increase our costs and expenses.

This may divert management’s attention from other business concerns, which could have a material adverse effect on our business, financial condition and results of operations.

These applicable rules and regulations may make it more difficult and more expensive for us to obtain director and officer liability insurance and it may be required to accept reduced policy limits and coverage or incur substantially higher costs to obtain the same or similar coverage.

As a result, it may be more difficult for us to attract and retain qualified individuals to serve on the Board or as executive officers.

In addition, changing laws, regulations and standards relating to corporate governance and public disclosure are creating uncertainty for public companies, increasing legal and financial compliance costs and making some activities more time-consuming.

These laws, regulations and standards are subject to varying interpretations, in many cases due to their lack of specificity, and, as a result, their application in practice may evolve over time as new guidance is provided by regulatory and governing bodies.

This could result in continuing uncertainty regarding compliance matters and higher costs necessitated by ongoing revisions to disclosure and governance practices.

We intend to invest resources to comply with evolving laws, regulations and standards, and this investment may result in increased general and administrative expenses and a diversion of management’s time and attention from revenue-generating activities to compliance activities.

If our efforts to comply with new laws, regulations and standards differ from the activities intended by regulatory or governing bodies due to ambiguities related to their application and practice, regulatory authorities may initiate legal proceedings against us and our business may be adversely affected.

As a result of disclosure of information in this annual report and in the filings that we are required to make as a public company, our business, operating results and financial condition have become more visible, which may result in threatened or actual litigation, including by competitors and other third parties.

If any such claims are successful, our business, operating results and financial condition could be adversely affected, and even if the claims do not result in litigation or are resolved in our favor, these claims, and the time and resources necessary to resolve them, could divert the resources of our management and adversely affect our business, operating results and financial condition.

Sales of a substantial amount of Common Stock in the public market, particularly sales by our executive officers, directors and significant stockholders, or the perception that these sales could occur, could cause the market price of Common Stock to decline.

Sales of a substantial number of shares of Common Stock in the public market, particularly sales by our executive officers, directors and principal stockholders, or the perception that these sales might occur, could cause the market price of Common Stock to decline.

Some of our executive officers, directors and the holders of a substantial number of shares of Common Stock are subject to lock-up provisions in our Bylaws in that, for a period of at least six months from the date of closing of the Business Combination, subject to certain exceptions, prohibit them from offering for sale, selling, contracting to sell, granting any option for the sale of, transferring or otherwise disposing of any shares of Common Stock and of any securities convertible into or exercisable for Common Stock, unless waived, amended, or repealed by the Board.

When the applicable lock-up periods expire, our security holders subject to lock-up provisions will be able to sell shares of Common Stock in the public market.

In addition, the Board may, in its discretion, permit our security holders to sell shares prior to the expiration of the restrictive provisions contained in the Bylaws.

Sales of a substantial number of such shares upon expiration of the lock-up provisions, the perception that such sales may occur or early release of these provisions could cause our market price to fall or make it more difficult for you to sell your shares of Common Stock at a time and price that you deem appropriate.

In addition, we may file a registration statement to register shares reserved for future issuance under our equity compensation plans.

Subject to the satisfaction of applicable vesting requirements and expiration of the lock-up provisions referred to above, the shares issued upon exercise of outstanding stock options would be available for immediate resale in the open market.

A decline in the price of Common Stock could affect our ability to raise working capital and adversely impact our ability to continue operations.

A prolonged decline in the price of Common Stock could result in a reduction in the liquidity of the Common Stock and a reduction in our ability to raise capital.

A decline in the price of Common Stock could be especially detrimental to our liquidity, operations and strategic plans.

Such reductions may force us to reallocate funds from other planned uses and may have a significant negative effect on our business plan and operations, including our ability to develop new products and services and continue current operations.

If our Common Stock’s price declines, we can offer no assurance that we will be able to raise additional capital or generate funds from operations sufficient to meet our obligations.

If we are unable to raise sufficient capital in the future, we may not be able to have the resources to continue our normal operations.

If securities or industry analysts do not publish research or publish inaccurate or unfavorable research about us or our business, our Common Stock price and trading volume could decline.

The trading market for our Common Stock will depend in part on the research and reports that securities or industry analysts publish about us or our business.

Securities and industry analysts do not currently, and may never, publish research on us.

If no securities or industry analysts commence coverage of us, the trading price for our Common Stock would likely be negatively affected.

In the event securities or industry analysts initiate coverage, if one or more of the analysts who cover us downgrade our securities or publish inaccurate or unfavorable research about our business, our share price would likely decline.

If one or more of these analysts cease coverage of us or fail to publish reports on us, demand for our Common Stock could decrease, which might cause the share price and trading volume to decline.

We do not intend to pay any cash dividends in the foreseeable future and, therefore, any return on your investment in our capital stock must come from increases in the fair market value and trading price of the capital stock.

We have not paid any cash dividends on Common Stock and do not intend to pay cash dividends on Common Stock in the foreseeable future.

We intend to retain future earnings, if any, for reinvestment in the development and expansion of our business.

Any credit agreements which we may enter into with institutional lenders, may restrict our ability to pay dividends.

Whether we pay cash dividends in the future will be at the discretion of the Board and will be dependent upon our financial condition, results of operations, capital requirements and any other factors that the Board decides is relevant.

Therefore, any return on your investment in our capital stock must come from increases in the fair market value and trading price of the capital stock.

The market price of our equity securities may be volatile, and you could lose a significant part of your investment.

The stock markets, including the Nasdaq, on which certain of our securities are listed, have from time to time experienced significant price and volume fluctuations.

Even if an active, liquid and orderly trading market develops and is sustained for the Common Stock and our Public Warrants, the market price of the Common Stock and our Public Warrants may be volatile and could decline significantly.

On March 29, 2024, the last reported sales price of our Common Stock was $6.45.

The exercise price of the Public Warrants is higher than the current market price of our Common Stock and accordingly, Public Warrant holders may not be able to exercise their Public Warrants at this time.

Cash proceeds associated with the exercises of the Public Warrants (and our other outstanding warrants) are dependent on our stock price and given the recent price volatility of our Common Stock and relative lack of liquidity in our stock, we may not receive any cash proceeds in relation to our outstanding warrants.

In addition, the trading volume in our Common Stock and our Public Warrants may fluctuate and cause significant price variations to occur.

We cannot assure you that the market price of the Common Stock and our Public Warrants will not fluctuate widely or decline significantly in the future in response to a number of factors, including, among others, the following:

the realization of any of the risk factors presented in this annual report;

the concentration of the ownership of our shares by a limited number of affiliated stockholders may limit interest in our securities;

limited “public float” with a small number of persons whose sales or lack of sales could result in positive or negative pricing pressure on the market price for the Common Stock;

additions or departures of key personnel;

loss of a strategic relationship;

variations in operating results from the expectations of securities analysts or investors;

announcements of new products or services by us or our competitors;

reductions in the market share of our products;

announcements by us or our competitors of significant acquisitions, strategic partnerships, joint ventures or capital commitments;

investor perception of our industry or prospects;

insider selling or buying;

investors entering into short sale contracts;

regulatory developments affecting our industry;

changes in our industry;

competitive pricing pressures;

our ability to obtain working capital financing;

our ability to execute our business plan;

operating results that fall below expectations;

revisions in securities analysts’ estimates or reductions in security analysts’ coverage;

economic and other external factors.

Many of these factors are beyond our control and may decrease the market price of the Common Stock, regardless of our operating performance.

We cannot make any predictions or projections as to what the prevailing market price for the Common Stock will be at any time, including as to whether the Common Stock will sustain current market prices, or as to what effect that the sale of shares or the availability of the Common Stock for sale at any time will have on the prevailing market price.

In addition, the securities markets have from time-to-time experienced significant price and volume fluctuations that are unrelated to the operating performance of particular companies.

These market fluctuations may also materially and adversely affect the market price of the Common Stock.

In the past, many companies that have experienced volatility in the market price of their stock have been subject to securities class action litigation.

We may be the target of this type of litigation in the future.

Securities litigation against us could result in substantial costs and divert our management’s attention from other business concerns, which could seriously harm our business.

If our shares become subject to the penny stock rules, it would become more difficult to trade our shares.

The SEC has adopted rules that regulate broker-dealer practices in connection with transactions in penny stocks.

Penny stocks are generally equity securities with a price of less than $5.00, other than securities registered on certain national securities exchanges or authorized for quotation on certain automated quotation systems, provided that current price and volume information with respect to transactions in such securities is provided by the exchange or system.

If our common stock is no longer listed on a national securities exchange such as Nasdaq and if the price of our common stock is less than $5.00, our common stock may be deemed a penny stock.

The penny stock rules require a broker-dealer, before a transaction in a penny stock not otherwise exempt from those rules, to deliver a standardized risk disclosure document containing specified information.

In addition, the penny stock rules require that before effecting any transaction in a penny stock not otherwise exempt from those rules, a broker-dealer must make a special written determination that the penny stock is a suitable investment for the purchaser and receive:

(i) the purchaser’s written acknowledgment of the receipt of a risk disclosure statement;

(ii) a written agreement to transactions involving penny stocks;

and (iii) a signed and dated copy of a written suitability statement.

These disclosure requirements may have the effect of reducing the trading activity in the secondary market for our common stock, and therefore stockholders may have difficulty selling their shares.

We are a “smaller reporting company” and “emerging growth company” under the U.S.

federal securities laws, and the reduced reporting requirements applicable to smaller reporting companies and emerging growth companies could make our common stock less attractive to investors.

We are a “smaller reporting company” and an “emerging growth company” under U.S.

federal securities laws.

For as long as we continue to be a smaller reporting company, we may take advantage of exemptions from various reporting requirements that are applicable to other public companies that are not smaller reporting companies, including reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements.

Furthermore, as an emerging growth company, we may take advantage of exemptions from certain reporting requirements including not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act and exemptions from the requirements of holding a non-binding advisory vote on executive compensation.

Investors may not find our common stock attractive because we may rely on these exemptions and reduced disclosures.

If some investors find our common stock less attractive as a result, there may be a less active trading market for our common stock and our stock price may be more volatile.

We will remain a smaller reporting company until the last day of the fiscal year in which (1) the market value of our common stock held by non-affiliates exceeds $250 million as of the prior June 30, or (2) our annual revenues exceeded $100 million during such completed fiscal year and the market value of our common stock held by non-affiliates exceeds $700 million as of the prior June 30.

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 closing of the IPO, (b) in which we have total annual gross revenue of at least $1.23 billion, or (c) in which we are deemed to be a large accelerated filer, which means the market value of our common equity that is held by non-affiliates exceeds $700 million as of the end of the prior fiscal year’s second fiscal quarter;

and (2) the date on which we have issued more than $1.00 billion in non-convertible debt securities during the prior three-year period.

Anti-takeover provisions contained in our certificate of incorporation and bylaws could impair a takeover attempt.

Our Charter and bylaws afford certain rights and powers to our board of directors that could contribute to the delay or prevention of an acquisition that it deems undesirable, including:

the ability of our board of directors to issue shares of preferred stock and to determine the price and other terms of those shares, including preferences and voting rights, without stockholder approval, which could be used to significantly dilute the ownership of a hostile acquiror;

the right of our board of directors to elect a director to fill a vacancy created by the expansion of our board of directors or the resignation, death or removal of a director, which may prevent stockholders from being able to fill vacancies on our board of directors;

the requirement that a special meeting of stockholders may be called only by our board of directors or the chairman of the board of directors, which could delay the ability of our stockholders to force consideration of a proposal or to take action, including the removal of directors;

We are also subject other provisions of Delaware law that limit the ability of stockholders in certain situations to effect certain business combinations.

Any of the foregoing provisions and terms that has the effect of delaying or deterring a change in control could limit the opportunity for stockholders to receive a premium for their shares of Common Stock, and could also affect the price that some investors are willing to pay for the Common Stock.

Our certificate of incorporation provides, subject to limited exceptions, that the Court of Chancery of the State of Delaware will be the sole and exclusive forum for certain stockholder litigation matters, which could limit stockholders’ ability to obtain a favorable judicial forum for disputes with us or our directors, officers, employees or stockholders.

Our Charter requires, to the fullest extent permitted by law, that derivative actions brought in our name, actions against directors, officers and employees for breach of fiduciary duty and other similar actions may be brought in the Court of Chancery in the State of Delaware or, if that court lacks subject matter jurisdiction, another federal or state court situated in the State of Delaware.

These provisions will not apply to suits brought to enforce any liability or duty created by the Securities Act, the Exchange Act, or any other claim for which the federal courts have exclusive jurisdiction.

Any person or entity purchasing or otherwise acquiring any interest in shares of our capital stock shall be deemed to have notice of and consented to the forum provisions in the Charter.

In addition, our Charter and bylaws provide that, to the fullest extent permitted by law, claims made under the Securities Act must be brought in federal district court.

This choice of forum provision may limit a stockholder’s ability to bring a claim in a judicial forum that it finds favorable for disputes with us or any of our directors, officers, other employees or stockholders, which may discourage lawsuits with respect to such claims and result in increased costs for investors to bring a claim.

Alternatively, if a court were to find the choice of forum provision contained in the Charter to be inapplicable or unenforceable in an action, we may incur additional costs associated with resolving such action in other jurisdictions, which could harm our business, operating results and financial condition.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1A. Risk Factors