Item 1. Business
Item 1. Business
References in this Form
10-K to “we,” “us,” “our” or the “Company” refer to Apex Treasury Corporation. References
to our “management” or our “management team” refer to our officers and directors.
Introduction
We are a blank check company
incorporated on July 11, 2025 as a Cayman Islands exempted company for the purpose of effecting a merger, amalgamation, share exchange,
asset acquisition, share purchase, reorganization or similar business combination with one or more businesses (the “Business Combination”).
We have 24 months from the closing of our initial public offering (“IPO” or “Initial Public Offering”), or until
such earlier liquidation date as our board of directors may approve (the “Completion Window”), to complete our initial Business
Combination.
We have reviewed, and continue
to review, a number of opportunities to enter into a Business Combination, but we are not able to determine at this time whether we will
complete a Business Combination with any of the target businesses that we have reviewed or with any other target business. We may pursue
an initial Business Combination in any business or industry. We also have neither engaged in any operations nor generated any revenue
to date. Based on our business activities, the Company is a “shell company” as defined under the Securities Exchange Act of
1934, as amended (the “Exchange Act”), because we have no operations and nominal assets consisting almost entirely of cash.
The registration statement
for our IPO was declared effective on December 10, 2025. On December 12, 2025, we consummated the IPO of 17,250,000 units (the “Units”
and, with respect to the Class A Ordinary Shares included in the Units being offered, the “Public Shares” or “Class
A Ordinary Shares”), which included the exercise by the underwriters of their over-allotment option in full in the amount of 2,250,000
Units, at $10.00 per Unit, generating gross proceeds of $172,500,000. Each Unit consists of one Class A Ordinary Share and one-third of
one redeemable warrant of the Company (the “Public Warrants”), with each whole warrant entitling the holder thereof to purchase
one Class A Ordinary Share at $11.50 per share.
Simultaneously with the closing
of our IPO, we consummated the sale of an aggregate of 4,500,000 warrants (the “Private Placement Warrants”) at a price of
$1.00 per Private Placement Warrant, in a private placement to the Company’s Sponsor, Bluerock Acquisition Holdings, LLC, a Delaware
limited liability company (the “Sponsor”), and Cantor Fitzgerald & Co. (“Cantor”), the representative of the
underwriters of the IPO, generating gross proceeds of $4,500,000. Of those 4,500,000 Private Placement Warrants, the Sponsor purchased
3,000,000 Private Placement Warrants and Cantor purchased 1,500,000 Private Placement Warrants.
Prior to the consummation
of the IPO, on July 23, 2025, our Sponsor made a capital contribution of $25,000, or approximately $0.003 per share, to cover certain
expenses on our behalf in exchange for issuance of 7,666,667 Class B Ordinary Shares (the “Founder Shares”). On November 6,
2025, our Sponsor surrendered 1,916,667 Founder Shares to us for no consideration. In November 2025, our Sponsor transferred an aggregate
of 60,000 Founder Shares to certain of our independent directors, resulting in our Sponsor holding 5,690,000 Founder Shares. On December
12, 2025, the underwriters exercised their over-allotment option in full and forfeited the unexercised balance. On January 23, 2026, our
Sponsor transferred 35,000 Founder Shares to an independent director, resulting in our Sponsor holding 5,655,000 Founder Shares and our
initial shareholders holding an aggregate of 5,750,000 Founder Shares.
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Following the closing of the
IPO, on December 12, 2025, an amount of $172,500,000 ($10.00 per Unit) from the net proceeds of the sale of the Units in the IPO and the
sale of the Private Placement Warrants was placed in the Trust Account (the “Trust Account”) and can be held as cash or invested
in U.S. government treasury obligations with a maturity of 185 days or less or in money market funds meeting certain conditions under
Rule 2a-7 under the Investment Company Act, which invest only in direct U.S. government treasury obligations and/or held as cash or cash
items (including in demand deposit accounts). Except with respect to interest earned on the funds held in the Trust Account that may be
released to the Company to pay its taxes, if any, the proceeds from the IPO and the sale of the Private Placement Warrants will not be
released from the Trust Account until the earliest of (i) the completion of the Company’s initial Business Combination or an earlier
redemption in connection with the commencement of the procedures to consummate the initial Business Combination if the Company determines
it is desirable to facilitate the completion of the initial Business Combination, (ii) the redemption of the Company’s Public Shares
if the Company is unable to complete the initial Business Combination within the Completion Window, subject to applicable law, or (iii)
the redemption of the Company’s Public Shares properly submitted in connection with a shareholder vote to amend the Company’s
amended and restated memorandum and articles of association to (A) modify the substance or timing of the Company’s obligation to
allow redemption in connection with the initial Business Combination or to redeem 100% of the Company’s Public Shares if the Company
has not consummated an initial Business Combination within the Completion Window or (B) with respect to any other material provisions
relating to shareholders’ rights or pre-initial Business Combination activity. The proceeds deposited in the Trust Account could
become subject to the claims of the Company’s creditors, if any, which could have priority over the claims of the Company’s
Public Shareholders. To mitigate the risk that might be deemed to be an investment company for purposes of the Investment Company Act,
which risk increases the longer that the Company holds investments in the Trust Account, the Company may, at any time (based on the management
team’s ongoing assessment of all factors related to the Company’s potential status under the Investment Company Act), instruct
the trustee to liquidate the investments held in the Trust Account and instead to hold the funds in the Trust Account in an interest bearing
bank demand deposit account at a bank.
Effecting Our Initial Business Combination
General
We are not presently engaged
in, and we will not engage in, any operations for an indefinite period of time. We intend to effectuate our initial Business Combination
using cash held in the Trust Account, the proceeds of the sale of our shares in connection with our initial Business Combination (including
pursuant to forward purchase agreements or backstop agreements we may enter into), shares issued to the owners of the target, debt issued
to bank or other lenders or the owners of the target, other securities issuances, or a combination of the foregoing. We may seek to complete
our initial Business Combination with a company or business that may be financially unstable or in its early stages of development or
growth, which would subject us to the numerous risks inherent in such companies and businesses.
We may need to obtain additional
financing to complete our initial Business Combination, either because the transaction requires more cash than is available from the proceeds
held in our Trust Account or because we become obligated to redeem a significant number of our Public Shares upon completion of the Business
Combination, in which case we may issue additional securities or incur debt in connection with such business combination. There are no
prohibitions on our ability to issue securities or incur debt in connection with our initial Business Combination. We are not currently
a party to any arrangement or understanding with any third party with respect to raising any additional funds through the sale of securities,
the incurrence of debt or otherwise.
Business Strategy
We believe that we will
be able to capitalize on the capabilities of Bluerock’s platform, as well as the management team’s broad industry experience.
Our sourcing strategy will draw on the depth and breadth of Bluerock and its principals’ relationships, built over three decades
of institutional investing, operating, and investment banking. Bluerock’s principals and affiliates maintain long-standing connections
across a wide array of counterparties, including both broad global and specialized boutique investment banks, lenders, financial advisors,
operating partners, private equity sponsors, venture capital firms, and institutional allocators. These relationships have been cultivated
through direct deal experience, capital and JV partnerships, and the firm’s track record of managing assets across a diverse set
of fund structures and strategies.
We intend to activate this
network to generate a broad pipeline of proprietary and selectively marketed opportunities. We intend to focus our sourcing efforts on
companies at an inflection point in their growth trajectory seeking a strategic, long-term capital partner. By leveraging Bluerock’s
brand equity, institutional credibility, and demonstrated history of partnering with management teams, we believe we are well-positioned
to access high-quality deal flow that may not be widely marketed.
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Once we identify a suitable
target, our focus will shift to planning for long-term value creation. We approach each potential combination as a partnership — with
a clear focus on working collaboratively with incumbent management to drive growth, improve operations, and prepare the company for the
rigors and responsibilities of public ownership. We intend to support the target business in a number of ways, including:
● Sharpening strategic positioning and long-term planning;
● Advising on capital allocation, capital markets strategy,
and potential follow-on M&A;
● Enhancing operational efficiency and margin optimization;
● Improving financial reporting, internal controls, and investor
communications;
● Elevating governance practices and public company readiness;
and
● Helping recruit key board or executive talent where appropriate.
Our team brings experience
across multiple investment cycles and asset classes, and we understand the key drivers of durable shareholder value in the public markets.
We aim to be a differentiated partner who brings real institutional insight, strategic alignment, and a demonstrated ability to help growth
companies scale successfully in the public arena.
Selection of a Target Business and
Structuring of Our Initial Business Combination
The rules of Nasdaq and our
amended and restated memorandum and articles of association require that we complete one or more business combinations having an aggregate
fair market value of at least 80% of the value of the assets held in the Trust Account (excluding the deferred underwriting commissions
and taxes paid or payable on the interest earned on the Trust Account) at the time of our signing a definitive agreement in connection
with our initial Business Combination. Our board of directors will make the determination as to the fair market value of our initial Business
Combination. In the event that we seek to complete our initial Business Combination with a company that is affiliated with our Sponsor,
officers or directors (or their respective affiliates or related entities), we, or a committee of independent directors, will obtain an
opinion from an independent investment banking firm that is a member of FINRA, or an independent firm that commonly renders valuation
opinions for the type of company we are seeking to acquire or from an independent accounting firm, that our initial Business Combination
is fair to the Company from a financial point of view. We are not required to obtain such an opinion in any other context. Additionally,
pursuant to Nasdaq rules, our initial Business Combination must be approved by a majority of our independent directors.
We anticipate structuring
our initial Business Combination so that the post transaction company in which our Public Shareholders own shares will own or acquire
100% of the equity interests or assets of the target business or businesses. We may, however, structure our initial Business Combination
such that the post transaction company owns or acquires less than 100% of such interests or assets of the target business in order to
meet certain objectives of the target management team or shareholders or for other reasons, but we will only complete 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 it not to be required to register as an investment company under the Investment Company
Act. Even if the post transaction company owns or acquires 50% or more of the voting securities of the target, our shareholders prior
to the initial Business Combination may collectively own a minority interest in the post transaction company, depending on valuations
ascribed to the target and us in the initial Business Combination. For example, we could pursue a transaction in which we issue a substantial
number of new shares in exchange for all of the outstanding capital stock, shares or other equity interests of a target. In this case,
we would acquire a 100% controlling interest in the target. However, as a result of the issuance of a substantial number of new shares,
our shareholders immediately prior to our initial Business Combination could own less than a majority of our issued and outstanding shares
subsequent to our initial Business Combination.
If less than 100% of the equity
interests or assets of a target business or businesses are owned or acquired by the post transaction company, the portion of such business
or businesses that is owned or acquired is what will be taken into account for purposes of the 80% of net assets test described above.
If the business combination involves more than one target business, the 80% of net assets test will be based on the aggregate value of
all of the target businesses.
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Consistent with our business
strategy, we will look to identify companies that have compelling growth potential and a combination of the characteristics below. We
intend to use these criteria and guidelines in evaluating initial business combination opportunities, but we may decide to enter into
our initial business combination with a target that does not meet the following criteria:
● Robust growth prospects : Companies with a history
of or potential for above-average growth, particularly those in expanding or attractive end markets with favorable secular trends supporting
long-term expansion. This includes “growth” businesses whose future performance is expected to outpace historical results,
especially where clear drivers exist to bridge from past to projected performance (for example, new product launches, market expansion,
or operational improvements).
● Recurring and Predictable Revenues : A stable,
recurring revenue stream or subscription-like business model that provides visibility into future cash flows. We favor companies with
high customer retention and long-term contracts or other revenue stability, as these factors tend to be rewarded by public market investors.
● Experienced management team : A proven,
capable management team with a successful track record of executing on its business plan. We place strong emphasis on partnering with
skilled operators who are committed to the company and have demonstrated the ability to drive growth, manage risks, and create shareholder
value.
● Comparable public peers : Businesses that
have well-understood and publicly traded comparables in their industry. The presence of comparable companies can help validate valuation
multiples and investor interest. Companies in sectors that are already followed by analysts and investors (or that fit into a known category)
are generally easier for the market to understand and appreciate.
● Strong profitability and margins : Businesses
with healthy operating margins and a track record (or clear path) to robust earnings. While high-growth companies may be investing for
expansion, we will look for unit economics or gross margins that demonstrate the potential for sustainable profitability.
● Favorable industry dynamics : Companies
operating in sectors that are growing and supported by favorable macro-economic or technological tailwinds. We seek targets in industries
with attractive, expanding total addressable markets and secular dynamics that can underpin continued growth (for example, digital transformation,
demographic shifts, or supply/demand imbalances in an emerging market).
● Moderate leverage : A
sound balance sheet with low to moderate leverage (debt) levels, or a clear and feasible plan to maintain prudent leverage post-transaction.
We are not inclined to acquire a highly levered business; ideally, the target’s Debt/EBITDA ratio would be conservative, allowing
for flexibility and further investment in growth.
These criteria and guidelines
are not intended to be exhaustive. Any evaluation relating to the merits of a particular initial Business Combination may be based, to
the extent relevant, on these general criteria and guidelines as well as other considerations, factors, guidelines and criteria that our
management may deem relevant. In the event that we decide to enter into our initial Business Combination with a target business that does
not meet the above criteria and guidelines, we will disclose that the target business does not meet the above criteria and guidelines
in our shareholder communications related to our initial Business Combination, which would be in the
form of proxy solicitation materials or tender offer documents, as applicable, that we would file with the U.S. Securities and Exchange
Commission (the “SEC”).
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In evaluating a prospective
target business, we expect to conduct a thorough due diligence review that may encompass, among other things, meetings with incumbent
management and employees, document reviews, interviews of customers and suppliers, inspection of facilities, as applicable, as well as
a review of financial, operational, legal and other information which will be made available to us. If we determine to move forward with
a particular target, we will proceed to structure and negotiate the terms of the initial Business Combination transaction.
The time required to select
and evaluate a target business and to structure and complete our initial Business Combination, and the costs associated with this process,
are not currently ascertainable with any degree of certainty. Any costs incurred with respect to the identification and evaluation of,
and negotiation with, a prospective target business with which our initial Business Combination is not ultimately completed will result
in our incurring losses and will reduce the funds we can use to complete another business combination.
We are not prohibited from
pursuing an initial Business Combination with a company that is affiliated with our Sponsor, officers or directors (or their respective
affiliates or related entities). In the event that we seek to complete our Initial Business Combination with a company that is affiliated
(as defined in our amended and restated memorandum and articles of association) with our Sponsor, officers or directors (or their respective
affiliates or related entities), we, or a committee of independent directors, will obtain an opinion from an independent investment banking
firm which is a member of FINRA or a valuation or appraisal firm stating that the consideration to be paid by us in such an initial business
combination is fair to our company from a financial point of view. We are not required to obtain such an opinion in any other context.
Members of our management
team and our independent directors directly or indirectly own Founder Shares and Private Placement Warrants and, accordingly, may have
a conflict of interest in determining whether a particular target business is an appropriate business with which to effectuate our initial
Business Combination. The low price that our Sponsor, executive officers and directors (directly or indirectly) paid for the Founder Shares
creates an incentive whereby our officers and directors could potentially make a substantial profit even if we select an acquisition target
that subsequently declines in value and is unprofitable for Public Shareholders. If we are unable to complete our initial Business Combination
within the Completion Window, the Founder Shares and Private Placement Warrants may expire worthless, except to the extent they receive
liquidating distributions from assets outside the Trust Account, which could create an incentive for our Sponsor, executive officers and
directors to complete a transaction even if we select an acquisition target that subsequently declines in value and is unprofitable for
Public Shareholders. Further, each of our officers and directors may have a conflict of interest with respect to evaluating a particular
business combination if the retention or resignation of any such officers and directors was included by a target business as a condition
to any agreement with respect to our initial Business Combination.
Each of our officers and directors
presently has, and any of them in the future may have additional, fiduciary, contractual or other obligations to another entity pursuant
to which such officer or director is or will be required to present a business combination opportunity to such entity. Our amended and
restated memorandum and articles of association 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 to
any director or officer on the one hand, and us, on the other. Accordingly, if any of our officers or directors becomes aware of a business
combination opportunity which is suitable for an entity to which he or she has then current fiduciary or contractual obligations, he or
she will honor his or her fiduciary or contractual obligations to present such business combination opportunity to such other entity,
subject to their fiduciary duties under Cayman Islands law.
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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. As a result,
our Sponsor, officers and directors could have conflicts of interest in determining whether to present business combination opportunities
to us or to any other special purpose acquisition company with which they may become involved. Any such companies, businesses or investments
may present additional conflicts of interest in pursuing an initial Business Combination. However, we do not believe that such duties
or obligations will materially affect our ability to complete our initial Business Combination.
Redemption Rights for Public Shareholders
upon Completion of our Initial Business Combination
We will provide our Public
Shareholders with the opportunity to redeem all or a portion of their Public Shares in connection with the completion of our initial Business
Combination either (i) in connection with a general meeting called to approve the Business Combination or (ii) without a shareholder vote
by means of a tender offer. Each Public Shareholder may elect to redeem its Public Shares irrespective of whether they vote for or against
the initial Business Combination, or whether they do not vote or abstain from voting on the initial Business Combination, or whether they
were a shareholder on the record date for the shareholder meeting held to approve the initial Business Combination. The decision as to
whether we will seek shareholder approval of a proposed Business Combination or conduct a tender offer will be made by us, solely in our
discretion, and will be based on a variety of factors such as the timing of the transaction and whether the terms of the transaction would
require us to seek shareholder approval under applicable law or stock exchange listing requirement or whether we were deemed to be a foreign
private issuer (which would require a tender offer rather than seeking shareholder approval under SEC rules). Asset acquisitions and share
purchases would not typically require shareholder approval while direct mergers with our Company and any transactions where we issue more
than 20% of our issued and outstanding Class A Ordinary Shares or seek to amend our amended and restated memorandum and articles of association
would require shareholder approval. So long as we obtain and maintain a listing for our securities on Nasdaq, we will be required to comply
with Nasdaq’s shareholder approval rules.
The requirement that we provide
our Public Shareholders with the opportunity to redeem their Public Shares by one of the two methods listed above are contained in provisions
of our amended and restated memorandum and articles of association and will apply whether or not we maintain our registration under the
Exchange Act or our listing on Nasdaq. Such provisions may be amended if approved by a special resolution, which requires the affirmative
vote of at least two-thirds of the votes cast by the shareholders of the issued shares present in person or represented by proxy and entitled
to vote on such matter at a general meeting of the company, so long as we offer redemption in connection with such amendment.
If we provide our Public Shareholders
with the opportunity to redeem their Public Shares in connection with a general meeting, we will, pursuant to our amended and restated
memorandum and articles of association:
● conduct the redemptions in conjunction with a proxy solicitation
pursuant to Regulation 14A of the Exchange Act, which regulates the solicitation of proxies, and not pursuant to the tender offer rules,
and
● file proxy materials with the SEC.
In the event that we seek
shareholder approval of our initial Business Combination, we will distribute proxy materials and, in connection therewith, provide our
Public Shareholders with the redemption rights described above upon completion of the initial Business Combination.
If we seek shareholder approval,
we will complete our initial Business Combination only if we obtain the approval of an ordinary resolution under Cayman Islands law and
our amended and restated memorandum and articles of association, which requires the affirmative vote of a majority of the votes
cast by the shareholders of the issued shares present in person or represented by proxy and entitled to vote on such matter at a general
meeting of the company. A quorum for such meeting will be present if the holders of one-third of issued and outstanding shares entitled
to vote at the meeting are represented in person or by proxy. Our Sponsor, officers and directors will count toward this quorum and, pursuant
to the letter agreement, our Sponsor, officers and directors have agreed to vote their Founder Shares and any Public Shares purchased
during or after our IPO (including in open market and privately-negotiated transactions) in favor of our initial Business Combination.
For purposes of seeking approval of an ordinary resolution, non-votes will have no effect on the approval of our initial Business Combination
once a quorum is obtained. Assuming that only the holders of one-third of our issued and outstanding ordinary shares, representing a quorum
under our amended and restated memorandum and articles of association, vote their ordinary shares at a general meeting of the Company,
we will not need any Public Shares in addition to our Founder Shares to be voted in favor of an initial Business Combination in order
to approve an initial Business Combination. However, 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 the approval of a special
resolution, which requires the affirmative vote of at least two-thirds of the votes cast by the shareholders of the issued shares present
in person or represented by proxy and entitled to vote on such matter at a general meeting of the company. Each Public Shareholder may
elect to redeem their Public Shares irrespective of whether they do not vote or abstain from voting on the proposed transaction or whether
they were a Public Shareholder on the record date for the general meeting held to approve the proposed transaction.
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If a shareholder vote is not
required and we do not decide to hold a shareholder vote for business or other legal reasons, we will:
● conduct the redemptions pursuant to Rule 13e-4 and Regulation
14E of the Exchange Act, which regulate issuer tender offers, and
● file tender offer documents with the SEC prior to completing
our initial Business Combination which contain substantially the same financial and other information about the initial Business Combination
and the redemption rights as is required under Regulation 14A of the Exchange Act, which regulates the solicitation of proxies.
In the event we conduct redemptions
pursuant to the tender offer rules, our offer to redeem will remain open for at least 20 business days, in accordance with Rule 14e-1(a)
under the Exchange Act, and we will not be permitted to complete our initial Business Combination until the expiration of the tender offer
period. In addition, the tender offer will be conditioned on Public Shareholders not tendering more than the number of Public Shares we
are permitted to redeem. If Public Shareholders tender more shares than we have offered to purchase, we will withdraw the tender offer
and not complete the initial Business Combination.
Upon the public announcement
of our initial Business Combination, if we elect to conduct redemptions pursuant to the tender offer rules, we or our Sponsor will terminate
any plan established in accordance with Rule 10b5-1 to purchase our Class A Ordinary Shares in the open market, in order to comply with
Rule 14e-5 under the Exchange Act.
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 deliver their shares to our transfer
agent electronically using the Depository Trust Company’s DWAC (Deposit/Withdrawal At Custodian) system, 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. The 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 indicate whether we are requiring Public Shareholders to satisfy such delivery requirements.
We believe that this will allow our transfer agent to efficiently process any redemptions without the need for further communication or
action from the redeeming Public Shareholders, which could delay redemptions and result in additional administrative cost. If the proposed
initial Business Combination is not approved and we continue to search for a target company, we will promptly return any certificates
or shares delivered by Public Shareholders who elected to redeem their shares.
We will provide our Public
Shareholders with the opportunity to redeem, regardless of whether they abstain, vote for, or against, our initial Business Combination,
all or a portion of their Public Shares upon the completion of our initial Business Combination at a per-share price, payable in cash,
equal to the aggregate amount then on deposit in the Trust Account calculated as of two business days prior to the consummation of the
initial Business Combination, including interest (which interest shall be net of taxes paid or payable), divided by the number of then
issued and outstanding Public Shares, subject to the limitations and on the conditions described herein. The amount in the Trust Account
is initially anticipated to be $10.00 per Public Share. The per share amount we will distribute to investors who properly redeem their
shares will not be reduced by the deferred underwriting commissions we will pay to the underwriters. The redemption rights will include
the requirement that any beneficial owner on whose behalf a redemption right is being exercised must identify itself in order to validly
redeem its shares. Our Sponsor, officers and directors have entered into a letter agreement with us, pursuant to which they have agreed
to waive their redemption rights with respect to their Founder Shares and any Public Shares they may hold in connection with the completion
of our initial Business Combination or an earlier redemption in connection with the commencement of the consummation of the initial Business
Combination if we determine it is desirable to facilitate the completion of the initial Business Combination.
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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. In the event the aggregate cash
consideration we would be required to pay for all Public Shares that are validly submitted for redemption plus any amount required to
satisfy cash conditions pursuant to the terms of the proposed initial Business Combination exceed the aggregate amount of cash available
to us, we will not complete the initial Business Combination or redeem any shares, and all Public Shares submitted for redemption will
be returned to the holders thereof. We may, however, raise funds through the issuance of equity-linked securities or through loans, advances
or other indebtedness in connection with our initial Business Combination, including pursuant to forward purchase agreements or backstop
arrangements we may enter into following the consummation of our Initial Public Offering, in order to, among other reasons, satisfy such
net tangible assets or minimum cash requirements.
If we seek shareholder approval
of our initial Business Combination and we do not conduct redemptions in connection with our initial Business Combination pursuant to
the tender offer rules, our Sponsor, initial shareholders, directors, officers or their affiliates may purchase Public Shares or Public
Warrants in privately negotiated transactions or in the open market either prior to or following the completion of our initial Business
Combination, although they are under no obligation or duty to do so. Such a purchase 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,
initial shareholders, directors, officers 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 (i) vote such shares in favor of the business combination and thereby increase the likelihood of obtaining shareholder
approval of the business combination or (ii) to satisfy a closing condition in an agreement with a target that requires us to have a minimum
net worth or a certain amount of cash at the closing of our initial Business Combination, where it appears that such requirement would
otherwise not be met. The purpose of any such purchases of Public Warrants could be to reduce the number of Public Warrants outstanding
or to vote such warrants on any matters submitted to the warrant holders for approval in connection with our initial Business Combination.
Any such purchases of our securities may result in the completion of our initial Business Combination that may not otherwise have been
possible.
In addition, if such purchases
are made, the public “float” of our Class A Ordinary Shares or Public Warrants may be reduced and the number of beneficial
holders of our securities may be reduced, which may make it difficult to maintain or obtain the quotation, listing or trading of our securities
on a national securities exchange.
Our Sponsor, officers, directors
and/or their affiliates anticipate that they may identify the shareholders with whom our initial shareholders, officers, directors or
their affiliates may pursue privately negotiated purchases by either the shareholders contacting us directly or by our receipt of redemption
requests submitted by shareholders (in the case of Class A Ordinary Shares) following our mailing of proxy materials in connection with
our initial Business Combination. To the extent that our Sponsor, officers, directors or their affiliates enter into a private purchase,
they would identify and contact only potential selling shareholders who have expressed their election to redeem their shares for a pro
rata share of the Trust Account or vote against our initial Business Combination, whether or not such shareholder has already submitted
a proxy with respect to our initial Business Combination but only if such shares have not already been voted at the general meeting related
to our initial Business Combination. Our Sponsor, officers, directors or any of their affiliates will select which shareholders to purchase
shares from based on a negotiated price and number of shares and any other factors that they may deem relevant, and will only purchase
shares if such purchases comply with Regulation M under the Exchange Act and the other federal securities laws. Our Sponsor, officers,
directors and/or their affiliates will not make purchases of shares if the purchases would violate Section 9(a)(2) or Rule 10b-5 of the
Exchange Act. 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.
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Our Sponsor, initial shareholders,
directors, officers and their affiliates will be restricted from making purchases of shares if the purchases would violate Section 9(a)(2)
or Rule 10b-5 of the Exchange Act. 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. Additionally, in the event our Sponsor, initial shareholders, directors,
officers and their affiliates were to purchase Public Shares or warrants from Public Shareholders, such purchases would be structured
in compliance with the requirements of Rule 14e-5 under the Exchange Act including, in pertinent part, through adherence to the following:
● our registration statement/proxy statement filed for our business
combination transaction would disclose the possibility that our Sponsor, initial shareholders, directors, officers and their affiliates
may purchase Public Shares or warrants from Public Shareholders outside the redemption process, along with the purpose of such purchases;
● if our Sponsor, initial shareholders, directors, officers
or their affiliates were to purchase Public Shares or warrants from Public Shareholders, they would do so at a price no higher than the
price offered through our redemption process;
● our registration statement/proxy statement filed for our business
combination transaction would include a representation that any of our securities purchased by our Sponsor, initial shareholders, directors,
officers or their affiliates would not be voted in favor of approving the business combination transaction;
● our Sponsor, initial shareholders, directors, officers or
their affiliates would not possess any redemption rights with respect to our securities or, if they do acquire and possess redemption
rights, they would waive such rights; and
● we would disclose in a Form 8-K, before our security holder
meeting to approve the Business Combination transaction, the following material items:
● the amount of our securities purchased outside of the redemption
offer by our Sponsor, initial shareholders, directors, officers or their affiliates, along with the purchase price;
● the purpose of the purchases by our Sponsor, initial shareholders,
directors, officers or their affiliates;
● the impact, if any, of the purchases by our Sponsor, initial
shareholders, directors, officers or their affiliates on the likelihood that the business combination transaction will be approved;
● the identities of our security holders who sold to our Sponsor,
initial shareholders, directors, officers or their affiliates (if not purchased on the open market) or the nature of our security holders
(e.g., 5% security holders) who sold to our Sponsor, initial shareholders, directors, officers or their affiliates; and
● the number of our securities for which we have received redemption
requests pursuant to our redemption offer.
Please see “ Item
1A. Risk Factors - If we seek shareholder approval of our initial Business Combination, our Sponsor, initial shareholders, directors,
executive officers 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 securities.”
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Notwithstanding the foregoing,
if we seek shareholder approval of our initial Business Combination and we do not conduct redemptions in connection with our initial Business
Combination pursuant to the tender offer rules, our amended and restated memorandum and articles of association provide that a Public
Shareholder, together with any affiliate of such Public Shareholder or any other person with whom such Public Shareholder is acting in
concert or as a “group” (as defined 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 Public Shares without our prior consent (the “Excess Shares”). We believe
this restriction will discourage shareholders from accumulating large blocks of shares, and subsequent attempts by such holders to use
their ability to exercise their redemption rights against a proposed business combination as a means to force us or our management to
purchase their shares at a significant premium to the then-current market price or on other undesirable terms. Absent this provision,
a Public Shareholder holding more than an aggregate of 15% of the Public Shares could threaten to exercise its redemption rights if such
holder’s shares are not purchased by us, our Sponsor or our management at a premium to the then-current market price or on other
undesirable terms. By limiting our shareholders’ ability to redeem no more than 15% of the Public Shares, we believe we will limit
the ability of a small group of shareholders to unreasonably attempt to block our ability to complete our initial Business Combination,
particularly in connection with a business combination with a target that requires as a closing condition that we have a minimum net worth
or a certain amount of cash. However, we would not be restricting our shareholders’ ability to vote all of their shares (including
Excess Shares) for or against our initial Business Combination.
Redemption of Public Shares if No
Initial Business Combination
Our amended and restated memorandum
and articles of association provide that we will have only the duration of the Completion Window to complete our initial Business Combination.
If we are unable to complete our initial Business Combination within the Completion Window, we will as promptly as reasonably possible
but not more than ten business days thereafter (and subject to lawfully available funds therefor), redeem the Public Shares, at a per-share
price, payable in cash, equal to the aggregate amount then on deposit in the Trust Account, including interest (which interest shall be
net of taxes paid or payable and up to $100,000 of interest to pay liquidation expenses), divided by the number of then issued and outstanding
Public Shares, which redemption will completely extinguish Public Shareholders’ rights as shareholders (including the right to receive
further liquidating distributions, if any), subject to our obligations under Cayman Islands law to provide for claims of creditors and
subject to the other requirements of applicable law.
Our Sponsor, officers and
directors have entered into a letter agreement with us, pursuant to which they have waived their rights to liquidating distributions from
the Trust Account with respect to any Founder Shares held by them if we fail to complete our initial Business Combination within the Completion
Window, although they will be entitled to liquidating distributions from assets outside the Trust Account. However, if our Sponsor or
management team acquire Public Shares in or after our Initial Public Offering, they will be entitled to liquidating distributions from
the Trust Account with respect to such Public Shares, and to liquidating distributions from assets outside the Trust Account, if we fail
to complete our initial Business Combination within the allotted Completion Window.
Our Sponsor, officers and
directors have agreed, pursuant to a written agreement with us, that they will not propose any amendment to our amended and restated memorandum
and articles of association (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 within the Completion
Window 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 Public Shares upon approval of any such amendment
at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the Trust Account, including interest (which interest
shall be net of taxes paid or payable), divided by the number of then issued and outstanding Public Shares.
We expect that all costs and
expenses associated with our liquidation, as well as payments to any creditors, will be funded from amounts remaining out of the approximately
$750,000 of proceeds held outside the Trust Account, although we cannot assure you that there will be sufficient funds for such purpose.
However, if those funds are not sufficient to cover the costs and expenses associated with our liquidation, to the extent that there is
any interest accrued in the Trust Account not required to pay taxes, we may request the trustee to release to us an additional amount
of up to $100,000 of such accrued interest to pay those costs and expenses.
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If we were to expend all of
the net proceeds of our Initial Public Offering and the sale of the Private Placement Warrants, other than the proceeds deposited in the
Trust Account, and without taking into account interest, if any, earned on the Trust Account, the per-share redemption amount received
by shareholders upon our dissolution would be approximately $10.00. The proceeds deposited in the Trust Account could, however, become
subject to the claims of our creditors which would have higher priority than the claims of our Public Shareholders. We cannot assure you
that the actual per-share redemption amount received by shareholders will not be substantially less than $10.00. While we intend to pay
such amounts, if any, we cannot assure you that we will have funds sufficient to pay or provide for all creditors’ claims.
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,
there is no guarantee that they will execute such agreements or even if they execute such agreements that they would 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 an 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. 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. WithumSmith+Brown, PC, our independent registered public accounting firm, and
the underwriters of our Initial Public Offering will not execute agreements with us waiving such claims to the monies held in the Trust
Account. 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. In order to protect the amounts held in the Trust Account, 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 (except for the Company’s independent registered public
accounting firm), 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, in each case less taxes paid or payable and
up to $100,000 of interests to pay liquidation expenses, 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 our Initial 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.
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 share due to reductions in the value of the
trust assets, in each case less taxes paid or payable and up to $100,000 of interest to pay liquidation expenses, and our Sponsor asserts
that it is unable to satisfy its indemnification obligations or that it has no indemnification obligations related to a particular claim,
our independent directors would determine whether to take legal action against our Sponsor to enforce its indemnification obligations.
While we currently expect that our independent directors would take legal action on our behalf against our Sponsor to enforce its indemnification
obligations to us, it is possible that our independent directors in exercising their business judgment may choose not to do so in any
particular instance if, 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. Accordingly, we cannot assure you
that due to claims of creditors the actual value of the per-share redemption price will not be less than $10.00 per share.
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We will seek to reduce the
possibility that our Sponsor will have to indemnify the Trust Account due to claims of creditors by endeavoring to have all vendors, service
providers, prospective target businesses or other entities with which we do business execute agreements with us waiving any right, title,
interest or claim of any kind in or to monies held in the Trust Account. Our Sponsor will also not be liable as to any claims under our
indemnity of the underwriters of our Initial Public Offering against certain liabilities, including liabilities under the Securities Act.
We will have access to up to approximately $1,000,000 from the proceeds of our Initial Public Offering with which to pay any such potential
claims (including costs and expenses incurred in connection with our liquidation, currently estimated to be no more than approximately
$100,000). In the event that we liquidate and it is subsequently determined that the reserve for claims and liabilities is insufficient,
shareholders who received funds from our Trust Account could be liable for claims made by creditors.
If 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 or insolvency estate
and subject to the claims of third parties with priority over the claims of our shareholders. To the extent any bankruptcy or insolvency
claims deplete the Trust Account, we cannot assure you we will be able to return $10.00 per share to our Public Shareholders. Additionally,
if 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/insolvency laws as either
a “preferential transfer” or a “fraudulent conveyance, preference or disposition.” As a result, a liquidator,
bankruptcy or insolvency court could seek to recover some or all amounts received by our shareholders. Furthermore, our board of directors
may be viewed as having breached its fiduciary duty to us or our creditors and/or may have acted in bad faith, and thereby exposing itself
and our company to claims of punitive damages, by paying Public Shareholders from the Trust Account prior to addressing the claims of
creditors. We cannot assure you that claims will not be brought against us for these reasons.
Our Public Shareholders will
be entitled to receive funds from the Trust Account only (i) in the event of the redemption of our Public Shares if we do not complete
our initial Business Combination within the Completion Window, (ii) in connection with a shareholder vote to amend our amended and restated
memorandum and articles of association (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 within
the Completion Window or (B) with respect to any other material provisions relating to shareholders’ rights or pre-initial Business
Combination activity or (iii) if they redeem their respective shares for cash in connection with the completion of our initial Business
Combination. In no other circumstances will a shareholder have any right or interest of any kind to or in the Trust Account. In the event
that we seek shareholder approval in connection with our initial Business Combination, a shareholder’s voting in connection with
the business combination alone will not result in a shareholder’s redeeming its shares to us for an applicable pro rata share of
the Trust Account. Such shareholder must have also exercised its redemption rights described above. These provisions of our amended and
restated memorandum and articles of association, like all provisions of our amended and restated memorandum and articles of association,
may be amended with a shareholder vote.
Competition
In identifying, evaluating
and selecting a target business for our initial Business Combination, we may encounter competition from other entities having a business
objective similar to ours, including other special purpose acquisition companies, private equity groups and leveraged buyout funds, public
companies and operating businesses seeking strategic acquisitions. Many of these entities are well established and have extensive experience
identifying and effecting Business Combinations directly or through affiliates. Moreover, many of these competitors possess similar or
greater financial, technical, human and other resources than us. Our ability to acquire larger target businesses will be limited by our
available financial resources. This inherent limitation gives others an advantage in pursuing the acquisition of a target business. Furthermore,
our obligation to pay cash in connection with our Public Shareholders who exercise their redemption rights may reduce the resources available
to us for our initial Business Combination and our outstanding warrants, and the future dilution they potentially represent, may not be
viewed favorably by certain target businesses. Either of these factors may place us at a competitive disadvantage in successfully negotiating
an initial Business Combination.
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Employees
We currently have eight officers:
R. Ramin Kamfar, Jordan B. Ruddy, Ryan S. MacDonald, Simon Adamiyatt, Christopher Vohs, Jason Emala, Harrison Seideman and Julia Phillips.
These individuals are not obligated to devote any specific number of hours to our matters but they intend to devote as much of their time
as they deem necessary to our affairs until we have completed our initial Business Combination. The amount of time they will devote in
any time period will vary based on whether a target business has been selected for our initial Business Combination and the stage of the
business combination process we are in. We do not intend to have any full time employees prior to the completion of our initial Business
Combination.
Available Information
We are required to file Annual
Reports on Form 10-K and Quarterly Reports on Form 10-Q with the SEC on a regular basis, and are required to disclose certain material
events (e.g., changes in corporate control, acquisitions or dispositions of a significant amount of assets other than in the ordinary
course of business and bankruptcy) in a Current Report on Form 8-K. The SEC maintains an Internet website that contains reports, proxy
and information statements and other information regarding issuers that file electronically with the SEC. The SEC’s Internet website
is located at http://www.sec.gov . In addition, we will provide copies of these documents without charge upon request from us in
writing at 919 Third Avenue, New York, New York 10022 or by telephone at (212) 843-1601.
Emerging Growth Company, Smaller Reporting
Company and Controlled Company
We are an “emerging
growth company,” as defined in Section 2(a) of the Securities Act, as modified by the JOBS Act. As such, we are eligible to take
advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not “emerging
growth companies” including, but not limited to, not being required to comply with the auditor attestation requirements of Section
404 of the Sarbanes- Oxley Act reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements,
and exemptions from the requirements of holding a non-binding advisory vote on executive compensation and shareholder approval of any
golden parachute payments not previously approved. If some investors find our securities less attractive as a result, there may be a less
active trading market for our securities and the prices of our securities may be more volatile.
In addition, Section 107 of
the JOBS Act also provides that an “emerging growth company” can take advantage of the extended transition period provided
in Section 7(a)(2)(B) of the Securities Act for complying with new or revised accounting standards. In other words, an “emerging
growth company” can delay the adoption of certain accounting standards until those standards would otherwise apply to private companies.
We intend to take advantage of the benefits of this extended transition period.
We will remain an emerging
growth company until the earlier of (1) the last day of the fiscal year (a) following the fifth anniversary of the completion of our IPO,
(b) in which we have total annual gross revenue of at least $1.235 billion, or (c) in which we are deemed to be a large accelerated filer,
which means the market value of our Class A Ordinary Shares that are held by non-affiliates exceeds $700 million as of the prior June
30, and (2) the date on which we have issued more than $1.0 billion in non-convertible debt securities during the prior three-year period.
References herein to “emerging growth company” will have the meaning associated with it in the JOBS Act.
Additionally, we are a “smaller
reporting company” as defined in Item 10(f)(1) of Regulation S-K. Smaller reporting companies may take advantage of certain reduced
disclosure obligations, including, among other things, providing only two years of audited financial statements. We will remain a smaller
reporting company until the last day of the fiscal year in which (1) the market value of our ordinary shares held by non-affiliates is
equal to or exceeds $250 million as of the prior June 30, or (2) our annual revenues equaled or exceeded $100 million during such completed
fiscal year and the market value of our ordinary shares held by non-affiliates is equal to or exceeds $700 million as of the prior June
30.
In addition, prior to the
consummation of a Business Combination, only holders of our Class B Ordinary Shares will have the right to vote on the appointment or
removal of directors. As a result, Nasdaq will consider us to be a “controlled company” within the meaning of Nasdaq corporate
governance standards. Under Nasdaq corporate governance standards, a company of which more than 50% of the voting power for the appointment
of directors is held by an individual, group or another company is a “controlled company” and may elect not to comply with
certain corporate governance requirements. We currently do not intend to rely on the “controlled company” exemption, but may
do so in the future. Accordingly, if we choose to do so, you will not have the same protections afforded to shareholders of companies
that are subject to all of the Nasdaq corporate governance requirements.
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