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Item 1A. Risk Factors

2022-03-16 compared with 2021-03-12 · 326 added, 1693 removed, 0 unchanged (100% of the section changed)

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 and the prospectus associated with our initial public offering, 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.

In that event, the trading price of our securities could decline, and you could lose all or part

of your investment.

For risk factors related to the Proposed Transaction, see the Proxy Statement/Prospectus initially filed by

us on February 3, 2021.

Forward-looking statements are based on

our current expectations and beliefs concerning future developments and their potential effects on us.

There can be no assurance

that future developments affecting us will be those that we have anticipated.

These forward-looking statements involve a number

of risks, uncertainties (some of which are beyond our control) or other assumptions that may cause actual results or performance

to be materially different from those expressed or implied by these forward-looking statements.

Our forward-looking statements

include, but are not limited to, statements regarding our or our management team’s expectations, hopes, beliefs, intentions

or strategies regarding the future.

In addition, any statements that refer to projections, forecasts or other characterizations

of future events or circumstances, including any underlying assumptions, are forward-looking statements.

The words “anticipate,”

“believe,”

“continue,”

“could,”

“estimate,”

“expect,”

“intends,”

“may,”

“might,”

“plan,”

“possible,”

“potential,”

“predict,”

“project,”

“should,”

“would”

and similar expressions may identify forward-looking statements,

but the absence of these words does not mean that a statement is not forward-looking.

Factors that might cause or contribute to

such forward-looking statements include, but are not limited to, those set forth herein and should be read in conjunction with

our financial statements and related notes thereto included elsewhere in this report.

We are a blank check company with

no operating history and no revenues, and our stockholders have no basis on which to evaluate our ability to achieve our business

We are a blank check company with no operating

Because we lack an operating history, our stockholders have no basis upon which to evaluate our ability to achieve our

business objective of completing our initial Business Combination with one or more target businesses.

Except for the Proposed Transaction,

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.

Our public stockholders 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 stockholders do not support such a combination.

We may choose not to hold a stockholder

vote to approve our initial Business Combination unless the initial Business Combination would require stockholder approval under

applicable law or stock exchange listing requirements.

In such case, the decision as to whether we will seek stockholder approval

of a proposed initial Business Combination or will allow stockholders 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 stockholder approval.

Even if we seek stockholder 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 outstanding Public Shares do not approve of the initial Business Combination we complete.

If we seek stockholder approval of

our initial Business Combination, our Sponsors have agreed to vote in favor of such initial Business Combination, regardless of

how our public stockholders vote.

Pursuant to the A&R Letter Agreement,

our Sponsors, officers and directors have agreed to vote their Founder Shares, as well as any Public Shares purchased (including

in open market and privately-negotiated transactions), in favor of our initial Business Combination.

As a result, in addition to

our Sponsors’

Founder Shares and the Public Shares they have purchased, we would need only 17,250,001, or 34.5%, of the 50,000,000

Public Shares to be voted in favor of an initial Business Combination (assuming all outstanding shares are voted) in order to have

our initial Business Combination approved.

Our Sponsors own shares representing 22.4% of our outstanding shares of common stock.

Accordingly, if we seek stockholder approval of our initial Business Combination, the agreement by our Sponsors, officers and directors

to vote in favor of our initial Business Combination will increase the likelihood that we will receive the requisite stockholder

approval for such initial Business Combination.

Our stockholders’

only opportunity

to affect the investment decision regarding a potential Business Combination will be limited to the exercise of their redemption

rights, unless we seek stockholder approval of the initial Business Combination.

If we do not seek stockholder approval,

our stockholders’

only opportunity to affect the investment decision regarding a potential business combination may be limited

to exercising their redemption rights in connection with the closing of our initial Business Combination.

The ability of our public stockholders

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 an agreement for an initial Business Combination with a target.

We may seek to enter into an initial Business

Combination agreement with a prospective target that requires as a closing condition that we have a minimum net worth or a certain

amount of cash.

If too many public stockholders exercise their redemption rights, we would not be able to meet such closing condition

and, as a result, would not be able to proceed with the initial Business Combination.

Furthermore, in no event will we redeem our

Public Shares in an amount that would cause our net tangible assets to be less than $5,000,001 upon consummation of our initial

Business Combination (so that we are not subject to the SEC’s “penny stock”

rules) or any greater net tangible

asset or cash requirement that may be contained in the agreement relating to our initial Business Combination.

Consequently, if

accepting all properly submitted redemption requests would cause our net tangible assets to be less than $5,000,001 upon consummation

of our initial Business Combination or such greater amount necessary to satisfy a closing condition as described above, we would

not proceed with such redemption and the related Business Combination and may instead search for an alternate Business Combination.

Prospective targets will be aware of these risks and, thus, may be reluctant to enter into an initial Business Combination agreement

The ability of our public stockholders

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 stockholders may exercise their redemption rights, and therefore

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

If our initial Business Combination agreement requires us to use a portion of the cash in the Trust Account to pay the purchase

price, or requires us to have a minimum amount of cash at closing, we will need to reserve a portion of the cash in the Trust Account

to meet such requirements, or arrange for third-party financing.

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

than we initially expected, we may need to restructure the transaction to reserve a greater portion of the cash in the Trust Account

or arrange for third-party financing.

Raising additional third-party financing may involve dilutive equity issuances or the incurrence

of indebtedness at higher than desirable levels.

Furthermore, this dilution would increase to the extent that the anti-dilution

provision of the Founder Shares results in the issuance of Class A shares on a greater than one-to-one basis upon conversion

of the Founder Shares at the time of our Business Combination.

The above considerations may limit our ability to complete the most

desirable Business Combination available to us or optimize our capital structure.

The amount of the deferred underwriting commissions

payable to the underwriters is not required to be adjusted for any shares that are redeemed in connection with an initial Business

The per-share amount we will distribute to stockholders who properly exercise their redemption rights will not be

reduced by deferred underwriting commissions and after such redemptions, the per-share value of shares held by non-redeeming stockholders

will reflect our obligation to pay the deferred underwriting commissions.

The ability of our public stockholders

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 our public stockholders would have to wait for liquidation in order to redeem their

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, our public stockholders would not receive their pro rata portion of the Trust Account until

we liquidate the Trust Account.

If our public stockholders are in need of immediate liquidity, they could attempt to sell their

stock in the open market;

however, at such time, our stock may trade at a discount to the pro rata amount per share in the

Trust Account.

In either situation, our public stockholders may suffer a material loss on their investment or lose the benefit

of funds expected in connection with their exercise of redemption rights until we liquidate or they are able to sell their stock

in the open market.

The requirement that we complete

our initial Business Combination by October 14, 2022, may give potential target businesses leverage over us in negotiating

an initial Business Combination and may decrease our ability 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 stockholders.

Any potential target business with which

we enter into negotiations concerning an initial Business Combination will be aware that we must complete our initial Business

Combination by October 14, 2022.

Consequently, such target business may have leverage over us in negotiating an initial Business

Combination, knowing that if we do not complete our initial Business Combination with that particular target business, we may be

unable to complete our initial Business Combination with any target business.

This risk will increase as we get closer to the timeframe

described above.

In addition, we may have limited time to conduct due diligence and may enter into our initial Business Combination

on terms that we would have rejected upon a more comprehensive investigation.

Our search for a business combination, and any target

business with which we ultimately consummate a business combination, may be materially adversely affected by the recent coronavirus

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

In December 2019, a novel strain of coronavirus was reported

to have surfaced in Wuhan, China, which has and is continuing to spread throughout China and other parts of the world, including

the United States.

On January 30, 2020, the World Health Organization declared the outbreak of the coronavirus disease (COVID-19)

a “Public Health Emergency of International Concern.”

On January 31, 2020, U.S.

Health and Human Services Secretary

Azar II declared a public health emergency for the United States to aid the U.S.

healthcare community in responding to

COVID-19, and on March 11, 2020 the World Health Organization characterized the outbreak as a “pandemic”.

COVID-19 outbreak has, and a significant outbreak of other infectious diseases could result in a widespread health crisis that

could adversely affect the economies and financial markets worldwide, and the operations and financial position of any potential

target business with which we consummate a business combination could be materially and adversely affected.

Furthermore, we may

be unable to complete a business combination if ongoing concerns relating to COVID-19 continue to restrict travel;

limit the ability

to have meetings with potential investors or the target company’s personnel;

or prevent vendors and services from being able

to negotiate and consummate a transaction in a timely manner.

The extent to which COVID-19 impacts our search for a business combination

will depend on future developments, which are highly uncertain and cannot be predicted, including new information which may emerge

concerning the severity of COVID-19 and the actions to contain COVID-19 or treat its impact, among others.

If the disruptions posed

by COVID-19 or other matters of global concern continue for an extensive period of time, our ability to consummate a business combination,

or the operations of a target business with which we ultimately consummate a business combination, may be materially adversely

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.

We may not be able to complete our

initial Business Combination by October 14, 2022, in which case we would cease all operations except for the purpose of winding

up and we would redeem our Public Shares and liquidate, in which case our public stockholders may receive only $10.00 per share,

or less than such amount in certain circumstances, and our warrants will expire worthless.

Our second amended and restated certificate

of incorporation provides that we must complete our initial Business Combination by October 14, 2022 (within 24 months from

the closing of the Public Offering).

We may not be able to find a suitable target business and complete our initial Business Combination

within such time period.

Our ability to complete our initial Business Combination may be negatively impacted by general market

conditions, political considerations, volatility in the capital and debt markets and the other risks described herein.

not completed our initial Business Combination within such time period, we will:

(i) cease all operations except for the purpose

of winding up, (ii) as promptly as reasonably possible but not more than 10 business days thereafter, redeem the Public Shares,

at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the Trust Account, including interest earned

on the funds held in the Trust Account and not previously released to us to pay our taxes (less up to $100,000 of interest to pay

dissolution expenses), divided by the number of then outstanding Public Shares, which redemption will completely extinguish public

stockholders’

rights as stockholders (including the right to receive further liquidating distributions, if any), subject

to applicable law and (iii) as promptly as reasonably possible following such redemption, subject to the approval of our remaining

stockholders and our board of directors, dissolve and liquidate, subject in each case to our obligations under Delaware law to

provide for claims of creditors and the requirements of other applicable law.

In such case, our public stockholders may receive

only $10.00 per share, and our warrants will expire worthless.

In certain circumstances, our public stockholders may receive less

than $10.00 per share on the redemption of their shares.

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

held in the Trust Account could be reduced and the per-share redemption amount received by stockholders may be less than $10.00

per share”

and other risk factors below.

If we seek stockholder approval of

our initial Business Combination, our Sponsors, directors, officers, advisors and their affiliates may elect to purchase shares

or warrants from public holders, which may influence a vote on a proposed initial Business Combination and reduce the public “float”

of our Class A common stock or public warrants.

If we seek stockholder 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 Sponsors, directors, officers, advisors or their affiliates may purchase shares or public warrants

or a combination thereof, in privately-negotiated transactions or in the open market, either prior to or following the completion

of our initial Business Combination, although they are under no obligation to do so.

However, they have no current commitments,

plans or intentions to engage in such transactions and have not formulated any terms or conditions for any such transactions.

of the funds in the Trust Account will be used to purchase shares or public warrants in such transactions.

Such a purchase may include a contractual

acknowledgement that such stockholder, 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 Sponsors, directors, officers, advisors or their

affiliates purchase shares in privately-negotiated transactions from public stockholders who have already elected to exercise their

redemption rights, such selling stockholders would be required to revoke their prior elections to redeem their shares.

of such purchases could be to vote such shares in favor of the initial Business Combination and thereby increase the likelihood

of obtaining stockholder approval of the initial Business Combination, or to satisfy a closing condition in an agreement with a

target that requires us to have a minimum net worth or a certain amount of cash at the closing of our initial Business Combination,

where it appears that such requirement would otherwise not be met.

The purpose of any such purchases of public warrants could be

to reduce the number of public warrants outstanding or to vote such warrants on any matters submitted to the 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 common stock 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 stockholder 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 stockholder fails to receive our proxy materials or tender offer documents, as applicable, such

stockholder 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.

we intend to require our public stockholders 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 stock certificates to our transfer

agent, or to deliver their shares to our transfer agent electronically prior to the date set forth in the proxy materials or tender

offer documents, as applicable.

In the case of proxy materials, this date may be up to two business days prior to the vote on the

proposal to approve the initial Business Combination.

In addition, if we conduct redemptions in connection with a stockholder vote,

we intend to require a public stockholder seeking redemption of its Public Shares to also submit a written request for redemption

to our transfer agent two business days prior to the vote in which the name of the beneficial owner of such shares is included.

In the event that a stockholder 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.

Our stockholders do not have any

rights or interests in funds from the Trust Account, except under certain limited circumstances.

To liquidate their investment,

therefore, stockholders may be forced to sell their Public Shares or warrants, potentially at a loss.

Our public stockholders are 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 shares of Class A common stock that such stockholder properly elected to redeem, subject

to the limitations described herein, (ii) the redemption of any Public Shares properly submitted in connection with a stockholder

vote to amend our second amended and restated certificate of incorporation to modify the substance or timing of our obligation

to redeem 100% of our Public Shares if we do not complete our initial Business Combination by October 14, 2022, or to provide

for redemption in connection with a Business Combination and (iii) the redemption of our Public Shares if we are unable to

complete an initial Business Combination by October 14, 2022, subject to applicable law and as further described herein.

addition, if our plan to redeem our Public Shares if we are unable to complete an initial Business Combination by October 14,

2022, is not completed for any reason, compliance with Delaware law may require that we submit a plan of dissolution to our then-existing

stockholders for approval prior to the distribution of the proceeds held in our Trust Account.

In that case, public stockholders

may be forced to wait beyond 24 months from the closing of the public offering before they receive funds from our Trust Account.

In no other circumstances will a public stockholder 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 their

investment, stockholders may be forced to sell their 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 securities are listed on Nasdaq.

can be no assurance that our securities will continue to be listed on Nasdaq in the future or prior to our initial Business Combination.

In order to continue listing our securities on Nasdaq prior to our initial Business Combination, we must maintain certain financial,

distribution and stock price levels.

Generally, following our initial public offering, we must maintain a minimum amount in stockholders’

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 stock price would generally be required to be at least $4.00 per share,

our stockholders’

equity would generally be required to be at least $4.0 million, we would be required to have a minimum

of 300 round lot holders of our securities and we would be required to have a market value of listed securities of 

million There can be no assurance 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 common stock is a “penny stock,”

which will require

brokers trading in our Class A common stock 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.”

Our units, Class A common stock and warrants, are covered securities.

Although the states are preempted from regulating the sale of our securities, the federal statute does allow the states to investigate

companies if there is a suspicion of fraud, and, if there is a finding of fraudulent activity, then the states can regulate or

bar the sale of covered securities in a particular case.

While we are not aware of a state having used these powers to prohibit

or restrict the sale of securities issued by blank check companies, other than the State of Idaho, certain state securities regulators

view blank check companies unfavorably and might use these powers, or threaten to use these powers, to hinder the sale of securities

of blank check companies in their states.

Further, if we were no longer listed on Nasdaq, our securities would not qualify as covered

securities and we would be subject to regulation in each state in which we offer our securities, including in connection with our

initial Business Combination.

Our stockholders are not entitled

to protections normally afforded to investors of many other blank check companies.

We are a “blank check”

under the U.S.

securities laws.

However, because we have net tangible assets in excess of $5,000,000, we are exempt from rules promulgated

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

Accordingly, investors are not afforded the benefits

or protections of those rules.

Among other things, this means we will have a longer period of time to complete our initial Business

Combination than companies subject to Rule 419.

Moreover, if the Public Offering had been 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 stockholder approval of

our initial Business Combination and we do not conduct redemptions pursuant to the tender offer rules, and if a stockholder or

a “group”

of stockholders are deemed to hold in excess of 15% of our Class A common stock, they will lose the

ability to redeem all such shares in excess of 15% of our Class A common stock.

If we seek stockholder 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 second amended and restated certificate of incorporation provides that a public stockholder, together

with any affiliate of such stockholder or any other person with whom such stockholder is acting in concert or as a “group”

(as defined under Section 13 of the Exchange Act), is restricted from seeking redemption rights with respect to more than

an aggregate of 15% of the shares sold in the Public Offering without our prior consent, which we refer to as the “Excess

Shares.”

However, we will not restrict our stockholders’

ability to vote all of their shares (including Excess Shares)

for or against our initial Business Combination.

Our stockholders’

inability to redeem their Excess Shares will reduce their

influence over our ability to complete our initial Business Combination and stockholders could suffer a material loss on their

investment in us if they sell Excess Shares in open market transactions.

Additionally, our stockholders will not receive redemption

distributions with respect to the Excess Shares if we complete our initial Business Combination.

And as a result, stockholders

will continue to hold that number of shares exceeding 15% and, in order to dispose of such shares, would be required to sell their

stock 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.

If we are unable to complete our initial Business Combination, our public stockholders may receive only approximately

$10.00 per share on our redemption of our Public Shares, or less than such amount in certain circumstances, and our warrants will

expire worthless.

We expect to encounter competition from

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

partnerships), other blank check companies and other entities, domestic and international, competing for the types of businesses

we intend to acquire.

Many of these individuals and entities are well-established and have extensive experience in identifying

and effecting, directly or indirectly, acquisitions of companies operating in or providing services to various industries.

of these competitors possess similar or greater technical, human and other resources to ours, and our financial resources will

be relatively limited when contrasted with those of many of these competitors.

While we believe there are numerous target businesses

we could potentially acquire with the net proceeds of the Public Offering and the sale of the private placement warrants, our ability

to compete with respect to the acquisition of certain target businesses that are sizable will be limited by our available financial

This inherent competitive limitation gives others an advantage in pursuing the acquisition of certain target businesses.

Furthermore, because we are obligated to pay cash for the shares of Class A common stock which our public stockholders redeem

in connection with our initial Business Combination, target companies will be aware that this may reduce the resources available

to us for our initial Business Combination.

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

negotiating an initial Business Combination.

If we are unable to complete our initial Business Combination, our public stockholders

may receive only approximately $10.00 per share on the liquidation of our Trust Account and our warrants will expire worthless.

In certain circumstances, our public stockholders may receive less than $10.00 per share upon our liquidation.

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 stockholders may be less than $10.00 per share”

and other risk factors below.

If the net proceeds of the Public

Offering and the sale of the private placement warrants not being held in the Trust Account are insufficient to allow us to operate

until October 14, 2022, we may be unable to complete our initial Business Combination, in which case our public stockholders

may only receive $10.00 per share, or less than such amount in certain circumstances, and our warrants will expire worthless.

The funds available to us outside of the

Trust Account may not be sufficient to allow us to operate until October 14, 2022, assuming that our initial Business Combination

is not completed during that time.

We believe the funds available to us outside of the Trust Account will be sufficient to allow

us to operate until October 14, 2022;

however, there can be no assurance that our estimate is accurate.

Of the funds available

to us, we could use a portion of the funds available to us to pay fees to consultants to assist us with our search for a target

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

provision (a provision

in letters of intent or merger agreements designed to keep target businesses from “shopping”

around for transactions

with other companies or investors on terms more favorable to such target businesses) with respect to a particular proposed initial

Business Combination, although we do not have any current intention to do so.

If we entered into a letter of intent or merger agreement

where we paid for the right to receive exclusivity from a target business and were subsequently required to forfeit such funds

(whether as a result of our breach or otherwise), we might not have sufficient funds to continue searching for, or conduct due

diligence with respect to, a target business.

If we are required to seek additional capital, we would need to borrow funds from

our Sponsors, management team or other third parties to operate or may be forced to liquidate.

None of our Sponsors, members of

our management team nor any of their affiliates is under any obligation to advance funds to us in such circumstances.

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 warrants at a price of 

$1.50 per warrant at the option of the lender.

Prior to the completion of our initial Business Combination, we do not expect to

seek advances or loans from parties other than our Sponsors or an affiliate of one of our Sponsors as we do not believe third parties

will be willing to loan such funds and provide a waiver against any and all rights to seek access to funds in our Trust Account.

If we are unable to obtain these loans, we may be unable to complete our initial Business Combination.

If we are unable to complete

our initial Business Combination, our public stockholders may receive only approximately $10.00 per share on the liquidation of

our Trust Account and our warrants will expire worthless.

In certain circumstances, our public stockholders may receive less than

$10.00 per share upon our liquidation.

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 stockholders may be less than $10.00 per share”

and other risk factors below.

Subsequent to the completion of our

initial Business Combination, we may be required to take write-downs or write-offs, restructuring and impairment or other charges

that could have a significant negative effect on our financial condition, results of operations and our stock price, and which

could cause stockholders to lose some or all of their investment.

Even if we conduct extensive due diligence

on a target business with which we combine, there can be no assurance 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.

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.

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 stockholders who choose to remain stockholders following the initial Business Combination could suffer a reduction

in the value of their shares.

Such stockholders are unlikely to have a remedy for such reduction in value.

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 stockholders may be

less than $10.00 per share.

Our placing of funds in the Trust Account

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

Although we 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 stockholders, 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 enter into an agreement waiving such claims

to the monies held in the Trust Account, the Company’s management will consider whether competitive alternatives are reasonably

available to the Company, and will only enter into an agreement with such third party if the Company’s 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 offering, have not executed 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 by October 14, 2022, 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 stockholders could be less than the $10.00 per share initially held in the Trust Account, due to claims

of such creditors.

Pursuant to the letter agreement, which is filed as an exhibit to this report, our Sponsors have agreed that

they will be jointly and severally 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 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;

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

However, we have not asked our Sponsors to reserve for such indemnification obligations, nor have we independently verified

whether our Sponsors have sufficient funds to satisfy their indemnity 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 public stockholders

would receive such lesser amount per share in connection with any redemption of their Public Shares.

Therefore, there can be no

assurance that our Sponsors would be able to satisfy those obligations.

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 Sponsors, resulting in a reduction in the amount of funds in the Trust Account available

for distribution to our public stockholders.

In the event that the proceeds in the Trust

Account are reduced below the lesser of (i) $10.00 per share and (ii) the actual amount per 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 net of the interest, which may be withdrawn to pay taxes, and our Sponsors assert that they are

unable to satisfy their obligations or that they have no indemnification obligations related to a particular claim, our independent

directors would determine whether to take legal action against our Sponsors to enforce their indemnification obligations.

While we currently expect that our independent

directors would take legal action on our behalf against our Sponsors to enforce their 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 stockholders may be reduced below $10.00 per share.

We may not have sufficient funds

to satisfy indemnification claims of our directors and executive officers.

We have agreed to indemnify our officers

and directors to the fullest extent permitted by law.

However, our officers and directors have agreed to waive (and any other persons

who may become an officer or director prior to the initial Business Combination will also be required to waive) any right, title,

interest or claim of any kind in or to any monies in the Trust Account and not to seek recourse against the Trust Account for any

reason whatsoever.

Accordingly, any indemnification provided will be able to be satisfied by us only if  (i) we

have sufficient funds outside of the Trust Account or (ii) we consummate an initial Business Combination.

Our obligation to

indemnify our officers and directors may discourage stockholders 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 stockholders.

a stockholder’s investment may be adversely affected to the extent we pay the costs of settlement and damage awards against

our officers and directors pursuant to these indemnification provisions.

If, after we distribute the proceeds

in the Trust Account to our public stockholders, we file a bankruptcy petition or an involuntary bankruptcy petition is filed against

us that is not dismissed, a bankruptcy court may seek to recover such proceeds, and we and our board may be exposed to claims of

punitive damages.

If, after we distribute the proceeds in

the Trust Account to our public stockholders, we file a bankruptcy petition or an involuntary bankruptcy petition is filed against

us that is not dismissed, any distributions received by stockholders could be viewed under applicable debtor/creditor and/or bankruptcy

laws as either a “preferential transfer”

or a “fraudulent conveyance.”

As a result, a bankruptcy court

could seek to recover some or all amounts received by our stockholders.

In addition, our board of directors may be viewed as having

breached its fiduciary duty to our creditors and/or having acted in bad faith, thereby exposing itself and us to claims of punitive

damages, by paying public stockholders from the Trust Account prior to addressing the claims of creditors.

If, before distributing the proceeds

in the Trust Account to our public stockholders, we file a bankruptcy petition or an involuntary bankruptcy petition is filed against

us that is not dismissed, the claims of creditors in such proceeding may have priority over the claims of our stockholders and

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

If, before distributing the proceeds in

the Trust Account to our public stockholders, we file a bankruptcy petition or an involuntary bankruptcy petition is filed against

us that is not dismissed, the proceeds held in the Trust Account could be subject to applicable bankruptcy law, and may be included

in our bankruptcy estate and subject to the claims of third parties with priority over the claims of our stockholders.

To the extent

any bankruptcy claims deplete the Trust Account, the per-share amount that would otherwise be received by our stockholders in connection

with our liquidation may be reduced.

If we are deemed to be an investment

company under the Investment Company Act, we may be required to institute burdensome compliance requirements and our activities

may be restricted, which may make it difficult for us to complete our initial Business Combination.

If we are deemed to be an investment company

under the Investment Company Act, our activities may be restricted, including:

restrictions on the nature of our investments;

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.

In order not to be regulated as an investment

company under the Investment Company Act, unless we can qualify for an exclusion, we must ensure that we are engaged primarily

in a business other than investing, reinvesting or trading in securities and that our activities do not include investing, reinvesting,

owning, holding or trading “investment securities”

constituting more than 40% of our total assets (exclusive of U.S.

government securities and cash items) on an unconsolidated basis.

Our business is to identify and complete an initial Business

Combination and thereafter to operate the post-transaction business or assets for the long term.

We do not plan to buy businesses

or assets with a view to resale or profit from their resale.

We do not plan to buy unrelated businesses or assets or to be a passive

We do not believe that our anticipated

principal activities are subject to the Investment Company Act.

To this end, the proceeds held in the Trust Account may only be

invested in U.S.

“government securities,”

within the meaning of Section 2(a)(16) of the Investment Company Act,

having a maturity of 180 days or less or in money market funds meeting certain conditions under Rule 2a-7 promulgated under

the Investment Company Act, which invest only in direct U.S.

government treasury obligations.

Pursuant to the trust agreement,

the trustee is not permitted to invest in other securities or assets.

By restricting the investment of the proceeds to these instruments,

and by having a business plan targeted at acquiring and growing businesses for the long term (rather than on buying and selling

businesses in the manner of a merchant bank or private equity fund), we intend to avoid being deemed an “investment company”

within the meaning of the Investment Company Act.

Our securities are not intended for persons who are seeking a return on investments

in government securities or investment securities.

The Trust Account is intended as a holding place for funds pending the earliest

(i) the completion of our initial Business Combination;

(ii) the redemption of any Public Shares properly

submitted in connection with a stockholder vote to amend our second amended and restated certificate of incorporation to modify

the substance or timing of our obligation to redeem 100% of our Public Shares if we do not complete our initial Business Combination

by October 14, 2022, or to provide for redemption in connection with a Business Combination;

or (iii) absent an initial

Business Combination by October 14, 2022, our return of the funds held in the Trust Account to our public stockholders as

part of our redemption of the Public Shares.

If we do not invest the proceeds as discussed above, we may be deemed to be subject

to the Investment Company Act.

If we were deemed to be subject to the Investment Company Act, compliance with these additional

regulatory burdens would require additional expenses for which we have not allotted funds and may hinder our ability to complete

an initial Business Combination or may result in our liquidation.

If we are unable to complete our initial Business Combination,

our public stockholders may receive only approximately $10.00 per share, or less in certain circumstances described herein, on

the liquidation of our Trust Account and our warrants will expire worthless.

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 be required to comply with certain SEC and other legal

requirements.

Compliance with, and monitoring of, applicable laws and regulations may be difficult, time consuming and costly.

Those laws and regulations and their interpretation

and application may also change from time to time and those changes could have a material adverse effect on our business, investments

and results of operations.

In addition, a failure to comply with applicable laws or regulations, as interpreted and applied, could

have a material adverse effect on our business, including our ability to negotiate and complete our initial Business Combination

and results of operations.

Our stockholders may be held liable

for claims by third parties against us to the extent of distributions received by them upon redemption of their shares.

Under the Delaware General Corporations

Law (“DGCL’), stockholders may be held liable for claims by third parties against a corporation to the extent of distributions

received by them in a dissolution.

The pro rata portion of our Trust Account distributed to our public stockholders upon

the redemption of our Public Shares in the event we do not complete our initial Business Combination by October 14, 2022,

may be considered a liquidating distribution under Delaware law.

If a corporation complies with certain procedures set forth in

Section 280 of the DGCL intended to ensure that it makes reasonable provision for all claims against it, including a 60-day

notice period during which any third-party claims can be brought against the corporation, a 90-day period during which the corporation

may reject any claims brought, and an additional 150-day waiting period before any liquidating distributions are made to stockholders,

any liability of stockholders with respect to a liquidating distribution is limited to the lesser of such stockholder’s pro

rata share of the claim or the amount distributed to the stockholder, and any liability of the stockholder would be barred

after the third anniversary of the dissolution.

However, it is our intention to redeem our Public Shares as soon as reasonably

possible following May 2021, the 24th month from the closing of the Public Offering in the event we do not complete our

initial Business Combination and, therefore, we do not intend to comply with the foregoing procedures.

Because we will not be complying with Section 280,

Section 281(b) of the DGCL requires us to adopt a plan, based on facts known to us at such time that will provide for

our payment of all existing and pending claims or claims that may be potentially brought against us within the 10 years following

our dissolution.

However, because we are a blank check company, rather than an operating company, and our operations are limited

to searching for prospective target businesses to acquire, the only likely claims to arise would be from our vendors (such as lawyers,

investment bankers, etc.) or prospective target businesses.

If our plan of distribution complies with Section 281(b) of

the DGCL, any liability of stockholders with respect to a liquidating distribution is limited to the lesser of such stockholder’s

pro rata share of the claim or the amount distributed to the stockholder, and any liability of the stockholder would likely be

barred after the third anniversary of the dissolution.

There can be no assurance that we will properly assess all claims that may

be potentially brought against us.

As such, our stockholders could potentially be liable for any claims to the extent of distributions

received by them (but no more) and any liability of our stockholders may extend beyond the third anniversary of such date.

if the pro rata portion of our Trust Account distributed to our public stockholders upon the redemption of our Public Shares

in the event we do not complete our initial Business Combination by October 14, 2022, is not considered a liquidating distribution

under Delaware law and such redemption distribution is deemed to be unlawful (potentially due to the imposition of legal proceedings

that a party may bring or due to other circumstances that are currently unknown), then pursuant to Section 174 of the DGCL,

the statute of limitations for claims of creditors could then be six years after the unlawful redemption distribution, instead

of three years, as in the case of a liquidating distribution.

We may not hold an annual meeting

of stockholders until after the consummation of our initial Business Combination, which could delay the opportunity for our stockholders

to elect directors.

In accordance with Nasdaq corporate governance

requirements, we are not required to hold an annual meeting until no later than one year after our first fiscal year end following

our listing on Nasdaq.

Under Section 211(b) of the DGCL, we are, however, required to hold an annual meeting of stockholders

for the purposes of electing directors in accordance with our bylaws unless such election is made by written consent in lieu of

such a meeting.

We may not hold an annual meeting of stockholders to elect new directors prior to the consummation of our initial

Business Combination, and thus we may not be in compliance with Section 211(b) of the DGCL, which requires an annual

Therefore, if our stockholders want us to hold an annual meeting prior to the consummation of our initial Business Combination,

they may attempt to force us to hold one by submitting an application to the Delaware Court of Chancery in accordance with Section 211(c) of

Our sponsors, as the holders of our Class B common

stock, will have the right to elect all of our directors prior to our initial business combination, which could delay the opportunity

for our stockholders to elect directors.

The holders of the Class B common stock have the right

to elect all of our directors prior to our initial business combination.

Accordingly, we do not expect to hold an annual meeting

of stockholders to elect new directors prior to the consummation of our initial business combination.

We have not registered the shares

of Class A common stock issuable upon exercise of the warrants under the Securities Act or any state securities laws at this

time, and such registration may not be in place when an investor desires to exercise warrants, thus precluding such investor from

being able to exercise its warrants except on a cashless basis.

If the issuance of the shares upon exercise of warrants is not

registered, qualified or exempt from registration or qualification, the holder of such warrant will not be entitled to exercise

such warrant and such warrant may have no value and expire worthless.

We have not registered the shares of Class A

common stock issuable upon exercise of the warrants under the Securities Act or any state securities laws at this time.

under the terms of the warrant agreement, we have agreed that as soon as practicable, but in no event later than 15 business days

after the closing of our initial Business Combination, we will use our best efforts to file with the SEC a registration statement

for the registration under the Securities Act of the shares of Class A common stock 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 common stock issuable upon exercise of the warrants,

until the expiration of the warrants in accordance with the provisions of the warrant agreement.

There can be no assurance that

we will be able to do so if, for example, any facts or events arise which represent a fundamental change in the information set

forth in the registration statement or prospectus, the financial statements contained or incorporated by reference therein are

not current or correct or the SEC issues a stop order.

If the shares issuable upon exercise of the warrants are not registered

under the Securities Act, we will be required to permit holders to exercise their warrants on a cashless basis.

However, no warrant

will be exercisable for cash or on a cashless basis, and we will not be obligated to issue any shares to holders seeking to exercise

their warrants, unless the issuance of the shares upon such exercise are registered or qualified under the securities laws of the

state of the exercising holder, or an exemption from registration is available.

Notwithstanding the foregoing, if a registration

statement covering the Class A common stock issuable upon exercise of the warrants is not effective within a specified period

following the consummation of our initial Business Combination, warrantholders may, until such time as there is an effective registration

statement and during any period when we shall have failed to maintain an effective registration statement, exercise warrants on

a “cashless basis”

pursuant to the exemption provided by Section 3(a)(9) of the Securities Act;

that such exemption is available.

If that exemption, or another exemption, is not available, holders will not be able to exercise

their warrants on a cashless basis.

In no event will we be required to net cash settle any warrant, or issue securities or other

compensation in exchange for the warrants in the event that we are unable to register or qualify the shares underlying the warrants

under applicable state securities laws and there is no exemption available.

If the issuance of the shares upon exercise of the

warrants is not so registered or qualified or exempt from registration or qualification, the holder of such warrant will not be

entitled to exercise such warrant and such warrant may have no value and expire worthless.

In such event, holders who acquired

their warrants as part of a purchase of units will have paid the full unit purchase price solely for the shares of Class A

common stock included in the units.

If and when the warrants become redeemable by us, we may not exercise our redemption right

if the issuance of shares of common stock upon exercise of the warrants is not exempt from registration or qualification under

applicable state blue sky laws or we are unable to effect such registration or qualification.

We will use our best efforts to register

or qualify such shares of common stock under the blue sky laws of the state of residence in those states in which the warrants

were initially offered by us in the Public Offering.

However, there may be instances in which holders of our public warrants may

be unable to exercise such public warrants but holders of our private warrants may be able to exercise such private warrants.

If our stockholders exercise their

public warrants on a “cashless basis,”

they will receive fewer shares of Class A common stock from such exercise

than if they were to exercise such warrants for cash.

Under the following circumstances, the

exercise of the public warrants may be required or permitted to be made on a cashless basis:

(i) if a registration statement

covering the shares of Class A common stock issuable upon exercise of the warrants is not effective by the 60th business day

after the closing of our initial Business Combination, warrantholders may, until such time as there is an effective registration

statement and during any period when we shall have failed to maintain an effective registration statement, exercise warrants on

a “cashless basis”

in accordance with Section 3(a)(9) of the Securities Act or another exemption;

our common stock is at the time of any exercise of a warrant not listed on a national securities exchange such that it satisfies

the definition of a “covered security”

under Section 18(b)(1) of the Securities Act, we may, at our option,

require holders of public warrants who exercise their warrants to do so on a “cashless basis”

in accordance with Section 3(a)(9) of

the Securities Act and, in the event we so elect, we will not be required to file or maintain in effect a registration statement;

and (iii) if we call the public warrants for redemption, our management will have the option to require all holders that wish

to exercise warrants to do so on a cashless basis.

In the event of an exercise on a cashless basis, a holder would pay the warrant

exercise price by surrendering the warrants for that number of shares of Class A common stock equal to the quotient obtained

by dividing (x) the product of the number of shares of Class A common stock underlying the warrants multiplied by the

excess of the “fair market value”

(as defined in the next sentence) over the exercise price of the warrants by (y) the

fair market value.

The “fair market value”

is the average reported closing price of the Class A common stock 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.

As a result, stockholders would receive

fewer shares of Class A common stock from such exercise than if they were to exercise such warrants for cash.

The grant of registration rights

to our Sponsors 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 common stock.

Pursuant to a registration rights agreement

entered into concurrently with our initial public offering, our Sponsors and their permitted transferees can demand that we register

the resale of private placement warrants, the shares of Class A common stock issuable upon exercise of the Founder Shares

and the private placement warrants held, or to be held, by them and holders of warrants that may be issued upon conversion of working

capital loans may demand that we register the resale of such warrants or the Class A common stock 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 common stock.

In addition, the existence of the registration rights may make our initial Business Combination more costly or difficult to conclude.

This is because the stockholders 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 common stock that is expected when

the securities owned by our Sponsors or holders of working capital loans or their respective permitted transferees are registered

Because we are not limited to evaluating

a target business in a particular industry sector or any specific target businesses with which to pursue our initial Business Combination,

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

We will seek to complete an initial Business

Combination with companies in the dining, hospitality, entertainment and gaming industries but may also pursue other Business Combination

opportunities, except that we are not, under our second amended and restated certificate of incorporation, permitted to effectuate

our initial Business Combination with another blank check company or similar company with nominal operations.

To the extent we

complete our initial Business Combination, we may be affected by numerous risks inherent in the business operations with which

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,

there can be no assurance 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.

There can be no assurance that an investment

in our securities 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 stockholders who choose to remain stockholders following our initial Business

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

Such stockholders are unlikely to have a remedy for such

reduction in value.

Past performance by our management

team and their affiliates may not be indicative of future performance of an investment in the Company.

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.

should not rely on the historical record of the performance of our management team or businesses associated with them as indicative

of our future performance of an investment in the Company or the returns the Company will, or is likely to, generate going forward.

We may seek Business Combination

opportunities in industries or sectors that may or may not be outside of our management’s area of expertise.

Although we intend to focus on identifying

companies in the dining, hospitality, entertainment and gaming industries, we will consider an initial Business Combination outside

of our management’s area of expertise if an initial Business Combination candidate is presented to us and we determine that

such candidate offers an attractive Business Combination opportunity for our company or we are unable to identify a suitable candidate

in this sector after having expanded a reasonable amount of time and effort in an attempt to do so.

Although our management will

endeavor to evaluate the risks inherent in any particular Business Combination candidate, there can be no assurance that we will

adequately ascertain or assess all of the significant risk factors.

There can be no assurance that an investment in our securities

will not ultimately prove to be less favorable to investors than a direct investment, if such an opportunity were available, in

an initial Business Combination candidate.

In 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 report regarding the areas of our management’s expertise would not be relevant to an understanding of the

business that we elect to acquire.

As a result, our management may not be able to ascertain or assess adequately all of the relevant

risk factors.

Accordingly, any stockholders who choose to remain stockholders following our initial Business Combination could

suffer a reduction in the value of their shares.

Such stockholders 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 stockholders 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 stockholder approval of the transaction is required by law, or we decide

to obtain stockholder approval for business or other reasons, it may be more difficult for us to attain stockholder 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 stockholders may receive only approximately $10.00 per share, or less in

certain circumstances as described herein, on the liquidation of our Trust Account and our warrants will expire worthless.

circumstances, our public stockholders may receive less than $10.00 per share on the redemption of their shares.

See “—If

third parties bring claims against us, the proceeds held in the Trust Account could be reduced and the per-share redemption amount

received by stockholders may be less than $10.00 per share”

and other risk factors herein.

We may seek Business Combination

opportunities with a financially unstable business or an entity lacking an established record of revenue, cash flow or earnings,

which could subject us to volatile revenues, cash flows or earnings or difficulty in retaining key personnel.

To the extent we complete our initial Business

Combination with an early stage company, a financially unstable business or an entity lacking an established record of revenues

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

include investing in a business without a proven business model or with limited historic financial data, volatile revenues or earnings,

intense competition and difficulties in obtaining and retaining key personnel.

Although our officers and directors will endeavor

to evaluate the risks inherent in a particular target business, we may not be able to properly ascertain or assess all of the relevant

risk factors and we may not have adequate time to complete due diligence.

Furthermore, some of these risks may be outside of our

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

We are not required to obtain an

opinion from an independent investment banking firm or from an independent accounting firm, and consequently, stockholders may

have no assurance from an independent source that the price we are paying for the target(s) of our initial Business Combination

is fair to our company from a financial point of view.

Unless we complete our initial Business

Combination with an affiliated entity or our board of directors cannot independently determine the fair market value of the target

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

independent investment banking firm that is a member of FINRA or from an independent accounting firm that the price we are paying

is fair to our company from a financial point of view.

If no opinion is obtained, our stockholders will be relying on the judgment

of our board of directors, who will determine fair market value based on standards generally accepted by the financial community.

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

may issue additional common stock or preferred stock to complete our initial Business Combination or under an employee incentive

plan after completion of our initial Business Combination.

We may also issue shares of Class A common stock 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 in our second amended and restated certificate of incorporation.

Any such issuances

would dilute the interest of our stockholders and likely present other risks.

Our second amended and restated certificate

of incorporation authorizes the issuance of up to 380,000,000 shares of Class A common stock, par value $0.0001 per share,

20,000,000 shares of Founder Shares, par value $0.0001 per share, and 1,000,000 shares of preferred stock, par value $0.0001 per

As of December 31, 2020, there were 305,333,333 and 7,500,000 authorized but unissued shares of Class A common

stock and Founder Shares, respectively, available for issuance, which amount takes into account the shares of Class A common

stock reserved for issuance upon exercise of outstanding warrants but not the shares of Class A common stock issuable upon

conversion of Founder Shares.

As of December 31, 2020, there were no shares of preferred stock issued and outstanding.

of Founder Shares are convertible into shares of our Class A common stock initially at a one-for-one ratio but subject to

adjustment as set forth herein, including in certain circumstances in which we issue Class A common stock or equity-linked

securities related to our initial Business Combination.

We may issue a substantial number of additional

shares of common or preferred stock to complete our initial Business Combination or under an employee incentive plan after completion

of our initial Business Combination (although our second amended and restated certificate of incorporation provides that we may

not issue additional shares of capital stock that would entitle the holders thereof to receive funds from the Trust Account or

vote on any initial Business Combination or on matters related to our pre-initial Business Combination activity.

We may also issue

shares of Class A common stock upon 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 in our second amended and restated certificate

of incorporation.

However, our second amended and restated certificate of incorporation provides, among other things, that prior

to our initial Business Combination, we may not issue additional shares of capital stock that would entitle the holders thereof

to (i) receive funds from the Trust Account, (ii) vote on any initial Business Combination or (iii) vote on matters

related to our pre-initial Business Combination activity.

These provisions of our second amended and restated certificate of incorporation,

like all provisions of our second amended and restated certificate of incorporation, may be amended with the approval of our stockholders.

However, our executive officers and directors have agreed, pursuant to a written agreement with us, that they will not propose

any amendment to our second amended and restated certificate of incorporation to modify the substance or timing of our obligation

to redeem 100% of our Public Shares if we do not complete our initial Business Combination by October 14, 2022, or to provide

for redemption in connection with a Business Combination, unless we provide our public stockholders with the opportunity to redeem

their shares of common stock upon approval of any such amendment at a per-share price, payable in cash, equal to the aggregate

amount then on deposit in the Trust Account, including interest (which interest shall be net of taxes payable), divided by the

number of then outstanding Public Shares.

The issuance of additional shares of common

or preferred stock:

may significantly dilute the equity interest of investors in the Public Offering;

may subordinate the rights of holders of common stock if preferred stock is issued with rights

senior to those afforded our common stock;

could cause a change of control if a substantial number of shares of our common stock are issued,

which may affect, among other things, our ability to use our net operating loss carry forwards, if any, and could result in the

resignation or removal of our present officers and directors;

may adversely affect prevailing market prices for our units, Class A common stock and/or warrants.

Unlike some other similarly structured special purpose

acquisition companies, our Sponsors will receive additional shares of Class A common stock if we issue certain shares to consummate

an initial business combination.

The founder shares will automatically convert into shares of

Class A common stock concurrently with or immediately following the consummation of our initial business combination on a

one-for-one basis, subject to adjustment for stock splits, stock dividends, reorganizations, recapitalizations and the like, and

subject to further adjustment as provided herein.

In the case that additional shares of Class A common stock or equitylinked

securities are issued or deemed issued in connection with our initial business combination, the number of shares of Class A

common stock issuable upon conversion of all founder shares will equal, in the aggregate, on an as-converted basis, 20% of the

total number of shares of Class A common stock outstanding after such conversion (after giving effect to any redemptions of

shares of Class A common stock by public stockholders), including the total number of shares of Class A common stock

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 shares

of Class A common stock or equity-linked securities or rights exercisable for or convertible into shares of Class A common

stock issued, or to be issued, to any seller in the initial business combination and any private placement warrants issued to our

sponsor, officers or directors upon conversion of working capital loans, provided that such conversion of founder shares will never

occur on a less than one-for-one basis.

This is different than some other similarly structured special purpose acquisition companies

in which the initial stockholders will only be issued an aggregate of 20% of the total number of shares to be outstanding prior

to our initial business combination.

Resources could be wasted in researching

Business Combinations that are not completed, which could materially adversely affect subsequent attempts to locate and acquire

or merge with another business.

If we are unable to complete our initial Business Combination, our public stockholders may receive

only approximately $10.00 per share, or less than such amount in certain circumstances, on the liquidation of our Trust Account

and our warrants will expire worthless.

We anticipate that the investigation of

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

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

If we decide not to complete a specific initial Business Combination, the costs incurred up to that point for the proposed

transaction likely would not be recoverable.

Furthermore, if we reach an agreement relating to a specific target business, we may

fail to complete our initial Business Combination for any number of reasons, including those beyond our control.

Any such event

will result in a loss to us of the related costs incurred, which could materially adversely affect subsequent attempts to locate

and acquire or merge with another business.

If we are unable to complete our initial Business Combination, our public stockholders

may receive only approximately $10.00 per share on the liquidation of our Trust Account and our warrants will expire worthless.

In certain circumstances, our public stockholders may receive less than $10.00 per share on the redemption of their shares.

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

redemption amount received by stockholders may be less than $10.00 per share”

and other risk factors herein.

Our ability to successfully effect

our initial Business Combination and to be successful thereafter will be totally dependent upon the efforts of our key personnel,

some of whom may join us following our initial Business Combination.

The loss of key personnel could negatively impact the operations

and profitability of our post-combination business.

Our ability to successfully effect our

initial Business Combination is dependent upon the efforts of our key personnel.

The role of our key personnel in the target business,

however, cannot presently be ascertained.

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

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

business will remain in place.

While we intend to closely scrutinize any individuals we engage after our initial Business Combination,

there can be no assurance 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.

In addition, the officers and directors of an initial Business Combination candidate

may resign upon completion of our initial Business Combination.

The departure of an initial Business Combination target’s

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

The role of an initial

Business Combination candidate’s key personnel upon the completion of our initial Business Combination cannot be ascertained

at this time.

Although we contemplate that certain members of an initial Business Combination candidate’s management team

will remain associated with the initial Business Combination candidate following our initial Business Combination, it is possible

that members of the management of an initial Business Combination candidate will not wish to remain in place.

The loss of key personnel

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

We are dependent upon our officers

and directors and their departure could adversely affect our ability to operate.

Our operations are dependent upon a relatively

small group of individuals and, in particular, our officers and directors.

We believe that our success depends on the continued

service of our executive officers and directors, at least until we have completed our initial Business Combination.

our officers and directors are not required to commit any specified amount of time to our affairs and, accordingly, will have conflicts

of interest in allocating management time among various their business activities, including identifying potential Business Combinations

and monitoring the related due diligence, negotiations and other activities.

We do not have an employment agreement with, or key-man

insurance on the life of, any of our directors or officers.

The unexpected loss of the services of one or more of our directors

or officers could have a detrimental effect on us.

Our key personnel may negotiate employment

or consulting agreements as well as reimbursement of out-of-pocket expenses, if any, with a target business in connection with

a particular Business Combination.

These agreements may provide for them to receive compensation or reimbursement for out-of-pocket

expenses, if any, following our initial Business Combination and as a result, may cause them to have conflicts of interest in determining

whether a particular Business Combination is the most advantageous.

Our key personnel may be able to remain

with the Company after the completion of our initial Business Combination only if they are able to negotiate employment or consulting

agreements in connection with the initial Business Combination.

Additionally, they may negotiate reimbursement of any out-of-pocket

expenses incurred on our behalf prior to the consummation of our initial Business Combination, should they choose to do so.

negotiations would take place simultaneously with the negotiation of the initial 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 initial Business Combination, or as reimbursement for such out-of-pocket expenses.

The personal and financial

interests of such individuals may influence their motivation in identifying and selecting a target business.

However, we believe

the ability of such individuals to remain with us after the completion of our initial Business Combination will not be the determining

factor in our decision as to whether or not we will proceed with any potential Business Combination.

There is no certainty, however,

that any of our key personnel will remain with us after the completion of our initial Business Combination.

There can be no assurance

that any of our key personnel will remain in senior management or advisory positions with us.

The determination as to whether any

of our key personnel will remain with us will be made at the time of our initial Business Combination.

We may have a limited ability to

assess the management of a prospective target business and, as a result, may affect our initial Business Combination with a target

business whose management may not have the skills, qualifications or abilities to manage a public company, which could, in turn,

negatively impact the value of our stockholders’

investment in us.

When evaluating the desirability of effecting

our initial Business Combination with a prospective target business, our ability to assess the target business’s management

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

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

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

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

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

Accordingly, any stockholders who choose to remain

stockholders following the initial Business Combination could suffer a reduction in the value of their shares.

Such stockholders

are unlikely to have a remedy for such reduction in value.

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

This conflict of interest could have a negative impact on our ability to complete our initial Business Combination.

Our officers and directors are not required

to, and will not, commit their full time to our affairs, which may result in a conflict of interest in allocating their time between

our operations and our search for an initial 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 they 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 may also serve as officers or board members for other entities.

our officers’

and directors’

other business affairs require them to devote substantial amounts of time to such affairs

in excess of their current commitment levels, it could limit their ability to devote time to our affairs which may have a negative

impact on our ability to complete our initial Business Combination.

Certain of our officers and directors

are now, and all of them may in the future become, affiliated with entities engaged in business activities similar to those intended

to be conducted by us and, accordingly, may have conflicts of interest in allocating their time and determining to which entity

a particular business opportunity should be presented.

Until we complete our initial Business

Combination, we intend to engage in the business of identifying and combining with one or more businesses.

Our Sponsors, officers

and directors are, and may in the future become, affiliated with entities (such as operating companies or investment vehicles)

that are engaged in a similar business.

Our officers and directors also may become

aware of business opportunities that may be appropriate for presentation to us and the other entities to which they owe certain

fiduciary or contractual duties.

Accordingly, they may have conflicts of

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

These conflicts may not be resolved

in our favor and a potential target business may be presented to another entity prior to its presentation to us.

Our second amended

and restated certificate of incorporation provides that we renounce our interest in any corporate opportunity offered to any director

or officer unless such opportunity is expressly offered to such person solely in his or her capacity as a director or officer of

our company and such opportunity is one we are legally and contractually permitted to undertake and would otherwise be reasonable

for us to pursue, and to the extent the director or officer is permitted to refer that opportunity to us without violating another

legal obligation.

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 an initial Business Combination with a target business that is affiliated with our Sponsors, our directors or

We do not 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 stockholders’

best interest.

If this were the case, it would be a breach

of their fiduciary duties to us as a matter of Delaware law and we or our stockholders might have a claim against such individuals

for infringing on our stockholders’

However, we might not ultimately be successful in any claim we may make against

them for such reason.

We may engage in an initial Business

Combination with one or more target businesses that have relationships with entities that may be affiliated with our Sponsors,

officers, directors or existing holders that may raise potential conflicts of interest.

In light of the involvement of our Sponsors,

officers and directors with other entities, we may decide to acquire one or more businesses affiliated with our Sponsors, officers

or directors.

Our directors also serve as officers and board members for other entities which may compete with us for Business

Combination opportunities.

Our Sponsors, 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 discussions

concerning an initial 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 an initial Business Combination and such transaction was approved by a majority of our disinterested

Despite our agreement to obtain an opinion from an independent investment banking firm that is a member of FINRA or

from an independent accounting firm, regarding the fairness to the Company and our stockholders from a financial point of view

of an initial Business Combination with one or more domestic or international businesses affiliated with our officers, directors

or existing holders, potential conflicts of interest still may exist and, as a result, the terms of the initial Business Combination

may not be as advantageous to our public stockholders as they would be absent any conflicts of interest.

These risks may become

more acute as the 24-month deadline for the completion of our initial Business Combination approaches.

Since our Sponsors, officers and

directors will lose their entire investment in us if our initial Business Combination is not completed, a conflict of interest

may arise in determining whether a particular Business Combination target is appropriate for our initial Business Combination.

As of December 31, 2020, our Sponsors,

JFG and TJF, owned 48.3% and 51.7%, respectively, of the 12,500,000 issued and outstanding Founder Shares.

The number of Founder

Shares issued was determined based on the expectation that such Founder Shares would represent 20% of the outstanding shares after

the Public Offering.

The Founder Shares will be worthless if we do not complete an initial Business Combination.

In addition, our

Sponsors purchased an aggregate of 8,000,000 Sponsor Warrants at $1.50 per warrants for a total purchase price of $12,000,000.

Each Sponsor Warrant is exercisable for one share of our Class A common stock at $11.50 per share, and will be deemed worthless

if we do not complete an initial Business Combination.

Holders of Founder Shares have agreed (i) to vote any shares owned

by them in favor of any proposed initial Business Combination and (ii) not to redeem any Founder Shares in connection with

a stockholder vote to approve a proposed initial Business Combination.

In addition, we may obtain loans from our Sponsors, affiliates

of our Sponsors or an officer or director.

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

motivation in identifying and selecting a target Business Combination, completing an initial Business Combination and influencing

the operation of the business following the initial Business Combination.

We may issue notes or other debt

securities, or otherwise incur substantial debt, to complete an initial Business Combination, which may adversely affect our leverage

and financial condition and thus negatively impact the value of our stockholders’

investment in us.

Although we have no commitments as of December 31,

2020 to issue any notes or other debt securities, or to otherwise incur outstanding debt, we may choose to incur substantial debt

to complete our initial Business Combination.

We have agreed that we will not incur any indebtedness unless we have obtained from

the lender a waiver of any right, title, interest or claim of any kind in or to the monies held in the Trust Account.

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

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 common stock;

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 common stock if declared, our ability to pay expenses, make capital expenditures

and acquisitions, and fund other general corporate purposes;

limitations on our flexibility in planning for and reacting to changes in our business and in the

industry in which we operate;

increased vulnerability to adverse changes in general economic, industry and competitive conditions

and adverse changes in government regulation;

limitations on our ability to borrow additional amounts for expenses, capital expenditures, acquisitions,

debt service requirements, and execution of our strategy;

other disadvantages compared to our competitors who have less debt.

We may be able to complete only one

Business Combination with the proceeds of the Public Offering and Sponsor Warrants, which will cause us to be solely dependent

on a single business, which may have a limited number of products or services and limited operating activities.

This lack of diversification

may negatively impact our operating results and profitability.

Of the net proceeds from the Public Offering

and Sponsor Warrants, $500,000,000 may be used to complete our initial Business Combination and pay related fees and expenses (which

includes $17,500,000 for the payment of deferred underwriting commissions being held in the Trust Account).

We may effectuate our initial Business

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

we may not be able to effectuate our initial Business Combination with more than one target business because of various factors,

including the existence of complex accounting issues and the requirement that we prepare and file pro forma financial statements

with the SEC that present operating results and the financial condition of several target businesses as if they had been operated

on a combined basis.

By completing our initial Business Combination with only a single entity, our lack of diversification may

subject us to numerous economic, competitive and regulatory developments.

Further, we would not be able to diversify our operations

or benefit from the possible spreading of risks or offsetting of losses, unlike other entities which may have the resources to

complete several Business Combinations in different industries or different areas of a single industry.

In addition, we intend

to focus our search for an initial Business Combination in 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.

We do not, however, intend to purchase multiple businesses

in unrelated industries in conjunction with 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 an initial Business

Combination with a company that is not as profitable as we suspected, if at all.

In pursuing our initial Business Combination,

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 an initial Business Combination with a company that is not

as profitable as we suspected, if at all.

Our management may not be able to

maintain control of a target business after our initial Business Combination.

We may structure an initial Business Combination

so that the post-transaction company in which our public stockholders 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 stockholders prior to the initial 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 initial Business Combination.

For example, we could pursue

a transaction in which we issue a substantial number of new shares of Class A common stock in exchange for all of the outstanding

capital stock of a target.

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

However, as a result of the issuance of

a substantial number of new shares of common stock, our stockholders immediately prior to such transaction could own less than

a majority of our outstanding shares of common stock subsequent to such transaction.

In addition, other minority stockholders may

subsequently combine their holdings resulting in a single person or group obtaining a larger share of the company’s stock

than we initially acquired.

Accordingly, this may make it more likely that our management will not be able to maintain our control

of the target business.

We 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 do not have a specified maximum

redemption threshold.

The absence of such a redemption threshold may make it possible for us to complete an initial Business Combination

with which a substantial majority of our stockholders do not agree.

Our second amended and restated certificate

of incorporation does not provide a specified maximum redemption threshold, except that in no event will we redeem our Public Shares

in an amount that would cause our net tangible assets to be less than $5,000,001 upon consummation of our initial Business Combination

and after payment of deferred underwriters’

commissions (such that we are not subject to the SEC’s “penny stock”

rules) or any greater net tangible asset or cash requirement that may be contained in the agreement relating to our initial Business

As a result, we may be able to complete our initial Business Combination even though a substantial majority of our

public stockholders do not agree with the transaction and have redeemed their shares or, if we seek stockholder 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 Sponsors, officers, directors,

advisors or their affiliates.

In the event the aggregate cash consideration we would be required to pay for all shares of Class A

common stock 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, all shares of Class A common stock submitted for redemption will be returned to

the holders thereof, and we instead may search for an alternate Business Combination.

In order to effectuate an initial

Business Combination, blank check companies have, in the recent past, amended various provisions of their charters and other governing

instruments, including their warrant agreements.

There can be no assurance that we will not seek to amend our second amended and

restated certificate of incorporation or governing instruments in a manner that will make it easier for us to complete our initial

Business Combination that our stockholders may not support.

In order to effectuate an initial Business

Combination, blank check companies have, in the recent past, amended various provisions of their charters and modified governing

instruments, including their warrant agreements.

For example, blank check companies have amended the definition of business combination,

increased redemption thresholds, changed industry focus and extended the time to consummate an initial Business Combination and,

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

Amending our second amended and restated certificate of incorporation requires the approval of holders of 65% of our

common stock, and amending our warrant agreement requires 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 our warrant agreement with respect

to the private placement warrants, 50% of the number of the then outstanding private placement warrants.

In addition, our second

amended and restated certificate of incorporation requires us to provide our public stockholders with the opportunity to redeem

their Public Shares for cash if we propose an amendment to our second amended and restated certificate of incorporation to modify

the substance or timing of our obligation to redeem 100% of our Public Shares if we do not complete our initial Business Combination

by October 14, 2022, or to provide for redemption in connection with a Business Combination.

To the extent any such amendments

would be deemed to fundamentally change the nature of any securities offered through this registration statement, we would register,

or seek an exemption from registration for, the affected securities.

There can be no assurance 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 second amended

and restated certificate of incorporation that relate to our pre-business combination activity (and corresponding provisions of

the agreement governing the release of funds from our Trust Account), including an amendment to permit us to withdraw funds from

the Trust Account such that the per share amount investors will receive upon any redemption or liquidation is substantially reduced

or eliminated, may be amended with the approval of holders of 65% of our common stock, which is a lower amendment threshold than

that of some other blank check companies.

It may be easier for us, therefore, to amend our second amended and restated certificate

of incorporation and the trust agreement to facilitate the completion of an initial Business Combination that some of our stockholders

may not support.

Our second amended and restated certificate

of incorporation provides that any of its provisions related to pre-initial Business Combination activity (including the requirement

to deposit proceeds of the Public Offering and the private placement of warrants into the Trust Account and not release such amounts

except in specified circumstances, and to provide redemption rights to public stockholders as described herein and including to

permit us to withdraw funds from the Trust Account such that the per share amount investors will receive upon any redemption or

liquidation is substantially reduced or eliminated) may be amended if approved by holders of 65% of our common stock entitled to

vote thereon, and corresponding provisions of the trust agreement governing the release of funds from our Trust Account may be

amended if approved by holders of 65% of our common stock entitled to vote thereon.

In all other instances, our second amended

and restated certificate of incorporation may be amended by holders of a majority of our outstanding common stock entitled to vote

thereon, subject to applicable provisions of the DGCL or applicable stock exchange rules.

We may not issue additional securities

that can vote on amendments to our second amended and restated certificate of incorporation.

Our Sponsors will participate in any

vote to amend our second amended and restated certificate of incorporation and/or trust agreement and will have the discretion

to vote in any manner they choose.

As a result, we may be able to amend the provisions of our second amended and restated certificate

of incorporation, which governs our pre-initial Business Combination behavior more easily than some other blank check companies,

and this may increase our ability to complete an initial Business Combination with which our stockholders do not agree.

Our stockholders

may pursue remedies against us for any breach of our second amended and restated certificate of incorporation.

Our Sponsors, officers and directors have

agreed, pursuant to a written agreement with us, that they will not propose any amendment to our second amended and restated certificate

of incorporation to modify the substance or timing of our obligation to redeem 100% of our Public Shares if we do not complete

our initial Business Combination by October 14, 2022, or to provide for redemption in connection with a Business Combination,

unless we provide our public stockholders with the opportunity to redeem their shares of Class A common stock 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,

divided by the number of then outstanding Public Shares.

These agreements are contained in a letter agreement that we have entered

into with our Sponsors, officers and directors.

Our stockholders 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 Sponsors, officers or directors for any breach of these

As a result, in the event of a breach, our stockholders would need to pursue a stockholder 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 Sponsor Warrants.

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 stockholders, we may be required to seek additional financing to complete such proposed initial Business Combination.

There can be no assurance 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.

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 stockholders may receive only approximately $10.00 per

share plus any pro rata interest earned on the funds held in the Trust Account and not previously released to us to pay

our taxes on the liquidation of our Trust Account and our warrants will expire worthless.

In addition, even if we do not need additional

financing to complete our initial Business Combination, we may require such financing to fund the operations or growth of the target

The failure to secure additional financing could have a material adverse effect on the continued development or growth

of the target business.

None of our Sponsors, officers, directors or stockholders is required to provide any financing to us in

connection with or after our initial Business Combination.

If we are unable to complete our initial Business Combination, our public

stockholders may only receive approximately $10.00 per share on the liquidation of our Trust Account, and our warrants will expire

Furthermore, as described in the risk factor entitled “—If third parties bring claims against us, the proceeds

held in the Trust Account could be reduced and the per-share redemption amount received by stockholders may be less than $10.00

per share,”

under certain circumstances our public stockholders may receive less than $10.00 per share upon the liquidation

of the Trust Account.

Our Sponsors may exert a substantial

influence on actions requiring a stockholder vote, potentially in a manner that our public stockholders do not support.

Our Sponsors own shares representing 22.4%

of our issued and outstanding shares of common stock.

Accordingly, they may exert a substantial influence on actions requiring

a stockholder vote, potentially in a manner that our public stockholders do not support, including amendments to our second amended

and restated certificate of incorporation and approval of major corporate transactions.

If our Sponsors purchase any additional

shares of common stock in the aftermarket, as they have done in the past, or in privately-negotiated transactions, this would increase

their control.

Factors that would be considered in making such additional purchases would include consideration of the current

trading price of our Class A common stock.

In addition, our board of directors, whose members were elected by our Sponsors,

is divided into three classes, each of which generally serve for a term of three years with only one class of directors being elected

in each year.

We may not hold an annual meeting of stockholders to elect 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 initial Business

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

board of directors, only a minority

of the board of directors will be considered for election and our Sponsors, because of their ownership position, will have considerable

influence regarding the outcome.

Accordingly, our Sponsors will continue to exert control at least until the completion of our

initial Business Combination.

Stockholders may experience dilution

of our Class A common stock at the time of our initial Business Combination.

Dilution may occur as a result of the anti-dilution

provisions of the Founder Shares resulting in the issuance of Class A shares on a greater than one to-one basis upon conversion

of the Founder Shares at the time of our initial Business Combination.

In addition, because of the anti-dilution protection in

the Founder Shares, any equity or equity-linked securities issued or deemed issued in connection with our initial Business Combination

would be disproportionately dilutive to our Class A common stock and would be exacerbated to the extent the public stockholders

seek redemptions from the Trust Account.

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 warrants.

As a result, the exercise price of public stockholders’

warrants could be increased, the exercise period

could be shortened and the number of shares of our Class A common stock purchasable upon exercise of a warrant could be decreased,

all without public stockholders’

Our warrants were 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 to cure any ambiguity or correct

any defective provision, but requires the approval by the holders of at least 50% of the then outstanding public warrants to make

any change that adversely affects the interests of the registered holders of public warrants.

Accordingly, 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 stock, shorten the exercise period or decrease the

number of shares of our Class A common stock purchasable upon exercise of a warrant.

We may redeem unexpired warrants

prior to their exercise at a time that is disadvantageous to stockholders, thereby making their 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 reported closing price of our Class A common stock equals or exceeds $18.00 per share (as adjusted for stock

splits, stock dividends, 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 warrant holders and

provided certain other conditions are met.

If and when the warrants become redeemable by us, we may not exercise our redemption

right if the issuance of shares of common stock upon exercise of the warrants is not exempt from registration or qualification

under applicable state blue sky laws or we are unable to effect such registration or qualification.

We will use our best efforts

to register or qualify such shares of common stock under the blue sky laws of the state of residence in those states in which the

warrants were initially offered by us in the Public Offering.

Redemption of the outstanding warrants could force stockholders (i) to

exercise their warrants and pay the exercise price therefor at a time when it may be disadvantageous to do so, (ii) to sell

their warrants at the then-current market price when they might otherwise wish to hold their warrants or (iii) to accept the

nominal redemption price which, at the time the outstanding warrants are called for redemption, is likely to be substantially less

than the market value of their warrants.

None of the private placement warrants will be redeemable by us so long as they are held

by the Sponsors or their permitted transferees.

warrants and Founder Shares may have an adverse effect on the market price of our Class A common stock

and make it more difficult to effectuate our initial Business Combination.

We issued warrants to purchase 16,666,667

shares of our Class A common stock as part of the units offered in the Public Offering, and we issued 8,000,000 in Sponsor

Warrants in a private placement.

Each warrant is exercisable to purchase one share of Class A common stock at $11.50 per share.

Further, our Sponsors own an aggregate of 12,500,000 in Founder Shares.

The Founder Shares are convertible into shares of Class A

common stock on a one-for-one basis, subject to adjustment as set forth herein.

In addition, if our Sponsors make any working capital

loans, up to $1,500,000 of such loans may be converted into warrants, at the price of  $1.50 per warrant at the option

of the lender.

Such warrants would be identical to the private placement warrants, including as to exercise price, exercisability

and exercise period.

To the extent we issue shares of Class A

common stock to effectuate an initial Business Combination, the potential for the issuance of a substantial number of additional

shares of Class A common stock upon exercise of these warrants and conversion rights could make us a less attractive Business

Combination vehicle to a target business.

Any such issuance will increase the number of issued and outstanding shares of our Class A

common stock and reduce the value of the shares of Class A common stock issued to complete the initial Business Combination.

Therefore, our warrants and Founder Shares may make it more difficult to effectuate an initial Business Combination or increase

the cost of acquiring the target business.

The Sponsor Warrants are identical to the

warrants sold as part of the units in the Public Offering except that, so long as they are held by our Sponsors or their permitted

transferees, (i) they will not be redeemable by us, (ii) they (including the Class A common stock issuable upon

exercise of these warrants) may not, subject to certain limited exceptions, be transferred, assigned or sold by our Sponsors until

30 days after the completion of our initial Business Combination and (iii) they may be exercised by the holders on a cashless

A provision of our warrant agreement may make it more

difficult for us to consummate an initial business combination.

Unlike most blank check companies, if (i) we issue additional

shares of Class A common stock or equitylinked 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 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

on the date of the consummation of our initial business combination (net of redemptions), and (iii) the Market Value is below $9.20

per share, then the exercise price of the warrants will be adjusted to be equal to 115% of the higher of the Market Value and the

Newly Issued Price, and the $18.00 per share redemption trigger prices described below under “Description of Securities —

Redeemable Warrants —

Public Stockholders’

Warrants —

Redemption of warrants when the price per share of Class

A common stock equals or exceeds $18.00”

and “Redemption of warrants when the price per share of Class A common stock

equals or exceeds $10.00”

will be adjusted (to the nearest cent) to be equal to 180% of the higher of the Market Value and

the Newly Issued Price, and the $10.00 per share redemption trigger price described below under “Description of Securities

Redeemable Warrants —

Public Stockholders’

Warrants —

Redemption of warrants when the price per share

of Class A common stock equals or exceeds $10.00”

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.

Because we must furnish our stockholders

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

We are an emerging growth company

within the meaning of the Securities Act, and if we take advantage of certain exemptions from disclosure requirements available

to emerging growth companies, this could make our securities less attractive to investors and may make it more difficult to compare

our performance with other public companies.

We are an “emerging growth company”

within the meaning of the Securities Act, as modified by the JOBS Act, and we may take advantage of certain exemptions from various

reporting requirements that are applicable to other public companies that are not emerging growth companies, including, but not

limited to, not being required to comply with the auditor 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 stockholder approval of

any golden parachute payments not previously approved.

As a result, our stockholders may not have access to certain information

they may deem important.

We could be an emerging growth company for up to five years, although circumstances could cause us to

lose that status earlier, including if the market value of our Class A common stock 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.

investors find our securities less attractive as a result of our reliance on these exemptions, the trading prices of our securities

may be lower than they otherwise would be, there may be a less active trading market for our securities and the trading prices

of our securities may be more volatile.

Further, Section 102(b)(1) of

the JOBS Act exempts emerging growth companies from being required to comply with new or revised financial accounting standards

until private companies (that is, those that have not had a Securities Act registration statement declared effective or do not

have a class of securities registered under the Exchange Act) are required to comply with the new or revised financial accounting

The JOBS Act provides that a company can elect to opt out of the extended transition period and comply with the requirements

that apply to non-emerging growth companies but any such an election to opt out is irrevocable.

We have elected not to opt out

of such extended transition period, which means that when a standard is issued or revised and it has different application dates

for public or private companies, we, as an emerging growth company, can adopt the new or revised standard at the time private companies

adopt the new or revised standard.

This may make comparison of our financial

statements with another public company that 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

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 our Annual Report on Form 10-K

for the year ending December 31, 2020.

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 company with which

we seek to complete our initial Business Combination may not be in compliance with the provisions of the Sarbanes-Oxley Act regarding

adequacy of its internal controls.

The development of the internal control of any such entity to achieve compliance with the Sarbanes-Oxley

Act may increase the time and costs necessary to complete any such Business Combination.

Provisions in our second amended

and restated certificate of incorporation and Delaware law may inhibit a takeover of us, which could limit the price investors

might be willing to pay in the future for our Class A common stock and could entrench management.

Our second amended and restated certificate

of incorporation contains provisions that may discourage unsolicited takeover proposals that stockholders may consider to be in

their best interests.

These provisions include a staggered board of directors and the ability of the board of directors to designate

the terms of and issue new series of preferred shares, which may make the removal of management more difficult and may discourage

transactions that otherwise could involve payment of a premium over prevailing market prices for our securities.

We are also subject to anti-takeover provisions

under Delaware law, which could delay or prevent a change of control.

Together these provisions may make the removal of management

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

for our securities.

Provisions in our second amended

and restated certificate of incorporation and Delaware law may have the effect of discouraging lawsuits against our directors and

Our second amended and restated certificate

of incorporation 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 only in the Court of Chancery

in the State of Delaware and, if brought outside of Delaware, the stockholder bringing such suit will be deemed to have consented

to service of process on such stockholder’s counsel.

This provision may have the effect of discouraging lawsuits against

our directors and officers.

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 deal.

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 data.

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.

If we effect our initial Business

Combination with a company with locations, operations or opportunities outside of the United States, we would be subject to a variety

of additional risks that may negatively impact our operations.

If we effect our initial Business Combination

with a company with locations, operations or opportunities outside of the United States, we would be subject to any special considerations

or risks associated with companies operating in an international setting, including any of the following:

higher costs and difficulties inherent in managing cross-border business operations and complying

with different commercial and legal requirements of overseas markets;

rules and regulations regarding currency redemption;

complex corporate withholding taxes on individuals;

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

tariffs and trade barriers;

regulations related to customs and import/export matters;

longer payment cycles and challenges in collecting accounts receivable;

tax issues, including, but not limited to, tax law changes and variations in tax laws as compared

to the United States;

currency fluctuations and exchange controls;

rates of inflation;

cultural and language differences;

employment regulations;

changes in industry, regulatory or environmental standards within the jurisdictions where we operate;

crime, strikes, riots, civil disturbances, terrorist attacks, natural disasters and wars;

deterioration of political relations with the United States;

government appropriations of assets.

We may not be able to adequately address

these additional risks.

If we were unable to do so, our operations might suffer, which may adversely impact our results of operations

and financial condition.

Unresolved Staff Comments

Item 1A - Risk Factors.

You should carefully consider the following risks.

However, the risks set forth below are not the only risks that we face, and we face other risks which have not yet been identified or which are not yet otherwise predictable.

If any of the following risks occur or are otherwise realized, our business, financial condition, and results of operations could be materially adversely affected.

You should carefully consider the risks described below and all other information in this Annual Report on Form 10-K, including our Consolidated Financial Statements and the related Notes to Consolidated Financial Statements and schedules thereto.

Risks Relating to Our Business

Supply and demand for our products is influenced by general economic conditions and trends in spending on repair and remodel home projects, new home construction, and personal protective equipment.

Adverse trends in, among other things, the general health of the economy, consumer confidence, interest rates, repair and remodel home projects, new home construction activity, commercial construction activity, and the use of personal protective equipment could adversely affect our business.

Demand for our products is impacted by general economic conditions in North America and other international markets including, without limitation, inflation, recession, instability in financial or credit markets, the level of consumer debt, interest rates, discretionary spending and the ability of our customers to obtain credit.

We are particularly impacted by spending trends in existing home sales, new home construction activity, home repair and remodel activity, commercial construction and demand for personal protective equipment including masks and cleaning supplies.

While we believe consumer preferences have increased spending on the home and personal protective equipment, the level of spending could decrease in the future.

Our customers, suppliers, and other parties with whom we do business are also impacted by the foregoing conditions and adverse changes may result in financial difficulties leading to restructurings, bankruptcies, liquidations, and other unfavorable events for our customers, suppliers, and other service providers.

Adverse trends in any of the foregoing factors could reduce our sales, adversely impact the mix of our sales or increase our costs which could have a material adverse effect on our business, financial condition and results of operations.

The COVID-19 pandemic could have a material adverse effect on our business, financial condition and results of operations.

In December 2019, a strain of coronavirus, now known as COVID-19, was reported to have surfaced in Wuhan, China.

that time, the widespread and sustained transmission of the virus has reached global pandemic status.

In response to the pandemic, many national and international health agencies have recommended, and many countries and state, provincial and local governments have implemented, various measures, including travel bans and restrictions, limitations on public and private gatherings, business closures or operating restrictions, social distancing, and shelter-in-place orders.

Given the ongoing and dynamic nature of the COVID-19 virus and the worldwide response related thereto, it is difficult to predict the full impact of the ongoing COVID-19 pandemic on our business.

We could experience future reductions in demand for our products depending on the future course of the pandemic and related actions taken to curb its spread.

The increased demand for imported goods driven by a shift in consumer spending has also stressed the global supply chain from factory production capacity to transportation availability.

The impact of a continued COVID-19 outbreak or sustained measures taken to limit or contain the outbreak could have a material adverse effect on our business, financial condition, results of operations and cash flows.

Our suppliers could fail to deliver product in a timely manner as a result of disruption to the global supply chain due to the ongoing COVID-19 pandemic.

If such failures occur, we may be unable to provide products when requested by our customers.

Our business could be substantially disrupted if we were required to, or chose to, replace the products from one or more major suppliers with products or services from another source, especially if the replacement became necessary on short notice.

Any such disruption could increase our costs, decrease our operating efficiencies, and have a material adverse effect on our business, results of operations, and financial condition.

The extent to which the ongoing COVID-19 pandemic impacts us will depend on numerous evolving factors and future developments that we are not able to predict, including:

• the duration of the pandemic, including the ability of governments and health care providers to timely distribute available vaccines and the efficacy of such vaccines;

• governmental, business and other actions (which could include limitations on our operations or mandates to provide products or services) taken to limit the reach of the virus and the impact of the pandemic;

• the impact on our supply chain;

• the impact on our contracts with customers and suppliers, including potential disputes over whether COVID-19 constitutes a force majeure event;

• the impact of the pandemic on worldwide economic activity;

• the health of and the effect on our workforce and our ability to meet the staffing needs of our critical functions, particularly if members of our work force are infected with COVID-19, quarantined as a result of exposure to COVID-19 or unable to work remotely in areas subject to shelter-in-place orders;

• the health and effect on our distribution network staff, if we need to close any of our facilities or a critical number of our employees become too ill to work;

• any impairment in value of our tangible or intangible assets that could be recorded as a result of a weaker economic conditions;

• the potential effects on our internal controls including those over financial reporting as a result of changes in working environments such as shelter-in-place and similar orders that are applicable to our team members and business partners, among others.

We operate in a highly competitive industry, which may have a material adverse effect on our business, financial condition, and results of operations .

The retail industry is highly competitive, with the principal methods of competition being product innovation, price, quality of service, quality of products, product availability and timeliness, credit terms, and the provision of value-added services, such as merchandising design, in-store service, and inventory management.

We encounter competition from a large number of regional and national distributors which could adversely affect our business, financial condition, and results of operations.

To compete successfully, we must develop and commercialize a continuing stream of innovative new products that create consumer demand.

Our long-term success in the current competitive environment depends on our ability to develop and commercialize a continuing stream of innovative new products, including those in our new mass merchant fastener program, which create and maintain consumer demand.

We also face the risk that our competitors will introduce innovative new products that compete with our products.

Our strategy includes increased investment in new product development and continued focus on innovation.

There are, nevertheless, numerous uncertainties inherent in successfully developing and commercializing innovative new products on a continuing basis, and new product launches may not provide expected growth results.

Our business may be adversely affected by seasonality.

In general, we have experienced seasonal fluctuations in sales and operating results from quarter to quarter.

Typically, the first calendar quarter is the weakest due to the effect of weather on home projects and the construction industry.

If adverse weather conditions persist on a regional or national basis into the second or other calendar quarters, our business, financial condition, and results of operations may be materially adversely affected.

Because our business is working capital intensive, we rely on our ability to manage our product purchasing and customer credit policies.

Our operations are working capital intensive, and our inventories, accounts receivable and accounts payable are significant components of our net asset base.

We manage our inventories and accounts payable through our purchasing policies and our accounts receivable through our customer credit policies.

If we fail to adequately manage our product purchasing or customer credit policies, our working capital and financial condition may be adversely affected.

We are subject to inventory management risks:

insufficient inventory may result in increased costs, lost sales and lost customers, while excess inventory may increase our costs.

We balance the need to maintain inventory levels that are sufficient to maintain superior customer fulfillment levels against the risk and financial costs of carrying excess inventory levels.

In order to successfully manage our inventories, we must estimate demand from our customers at the product level and timely purchase products in quantities that substantially correspond to that demand.

If we overestimate demand and purchase too much of a particular product, we could have excess inventory handling costs, distribution center capacity constraints and inventory that we cannot sell profitably.

In addition, we may have to write down such inventory if we are unable to sell it for its recorded value.

By contrast, if we underestimate demand and purchase insufficient quantities of a product, and/or do not maintain enough inventory of a product we may not be able to fulfill customer orders on a timely basis which could result in fines, the loss of sales and ultimately loss of customers for those products as they turn to our competitors.

Our business, financial condition and results of operations could suffer a material adverse effect if either or both of these situations occur frequently or in large volumes.

We have substantial fixed costs and, as a result, our operating income is sensitive to changes in our net sales.

A significant portion of our expenses are fixed costs (including personnel), which do not fluctuate with net sales.

Consequently, a percentage decline in our net sales could have a greater percentage effect on our operating income if we do not act to reduce personnel or take other cost reduction actions.

Any decline in our net sales would cause our profitability to be adversely affected.

Large customer concentration and the inability to penetrate new channels of distribution could adversely affect our business.

Our two largest customers constituted approximately $679.1 million of net sales and $50.4 million of the year-end accounts receivable balance for 2021.

Both of these customers are big box chain stores.

Our results of operations depend greatly on our ability to maintain existing relationships and arrangements with these big box chain stores.

To the extent that the big box chain stores are materially adversely impacted by the changing retail landscape, this could have a negative effect on our results of operations.

These two customers have been key components of our growth and failure to maintain fulfillment and service levels or relationships with these customers could result in a material loss of business.

Our inability to penetrate new channels of distribution, including ecommerce, may also have a negative impact on our future sales and business.

Successful sales and marketing efforts depend on our ability to recruit and retain qualified employees.

The success of our efforts to grow our business depends on the contributions and abilities of key executives, our sales force, and other personnel, including the ability of our sales force to achieve adequate customer coverage.

We must therefore continue to recruit, retain, and motivate management, sales, and other personnel to maintain our current business and to support our projected growth.

A shortage of these key employees might jeopardize our ability to implement our growth strategy.

Increases in labor costs, potential labor disputes and work stoppages or an inability to hire skilled distribution, sales and other personnel could adversely affect our business.

An increase in labor costs, work stoppages or disruptions at our facilities or those of our suppliers or transportation service providers, or other labor disruptions, could decrease our sales and increase our expenses.

In addition, although our employees

are not represented by a union, our labor force may become subject to labor union organizing efforts, which could cause us to incur additional labor costs and increase the related risks that we now face.

A significant increase in the salaries and wages paid by competing employers could result in a reduction of our labor force, increases in the salaries and wages that we must pay or both.

If we are unable to hire warehouse, distribution, sales and other personnel, our ability to execute our business plan and our results of operations would suffer.

We are exposed to adverse changes in currency exchange rates.

Exposure to foreign currency risk exists because we, through our global operations, enter into transactions and make investments denominated in multiple currencies.

Our predominant exposures are in Canadian, Mexican, and Asian currencies, including the Chinese Yuan (“CNY”).

In preparing our Consolidated Financial Statements for foreign operations with functional currencies other than the U.S.

dollar, asset and liability accounts are translated at current exchange rates and income and expenses are translated using weighted-average exchange rates.

With respect to the effects on translated earnings, if the U.S.

dollar strengthens relative to local currencies, our earnings could be negatively impacted.

We do not make a practice of hedging our non-U.S.

dollar earnings.

We source many products from China and other Asian countries for resale in other regions.

To the extent that the CNY or other currencies appreciate with respect to the U.S.

dollar, we may experience cost increases on such purchases.

dollar decreased in value relative to the CNY by 2.6% in 2021, decreased by 6.5% in 2020 and increased by 1.7% in 2019.

Significant appreciation of the CNY or other currencies in countries where we source our products could adversely impact our profitability.

In addition, our foreign subsidiaries in Canada and Mexico may purchase certain products from their vendors denominated in U.S.

dollar strengthens compared to the local currencies, it may result in margin erosion.

We have a practice of hedging some of our Canadian subsidiary's purchases denominated in U.S.

We may not be successful at implementing customer pricing or other actions in an effort to mitigate the related cost increases and thus our results of operations may be adversely impacted.

Our results of operations could be negatively impacted by inflation or deflation in supply chain costs, including raw materials, sourcing, transportation and energy.

Our products are manufactured of metals, including but not limited to steel, aluminum, zinc, and copper.

Additionally, we use other commodity-based materials in the manufacture of LNS that are resin-based and subject to fluctuations in the price of oil.

We source the majority of our products from third parties and are subject to changes in their underlying manufacturing costs.

We also use third parties for transportation and are exposed to fluctuations in freight costs to transport goods from our suppliers to our distribution facilities and from there to our customers, as well as the price of diesel fuel in the form of freight surcharges on customer shipments and the cost of gasoline used by the field sales and service force.

Inflation in these costs could result in significant cost increases.

If we are unable to mitigate the any cost increases from the foregoing factors through various customer pricing actions and cost reduction initiatives, our financial condition may be adversely affected.

Conversely, in the event that there is deflation, we may experience pressure from our customers to reduce prices.

There can be no assurance that we would be able to reduce our cost base (through negotiations with suppliers or other measures) to offset any such price concessions which could adversely impact our results of operations and cash flows.

We are subject to the risks of doing business internationally.

A portion of our revenue is generated outside the United States, primarily from customers located in Canada, Mexico, Latin America, and the Caribbean.

Because we sell our products and services outside the United States, our business is subject to risks associated with doing business internationally, which include:

• changes in a specific country's or region's political and cultural climate or economic condition;

• unexpected or unfavorable changes in foreign laws and regulatory requirements;

• difficulty of effective enforcement of contractual provisions in local jurisdictions;

• inadequate intellectual property protection in foreign countries;

• the imposition of duties and tariffs and other trade barriers;

• trade-protection measures, import or export licensing requirements such as Export Administration Regulations promulgated by the U.S.

Department of Commerce, Economic Sanctions Laws and Regulations administered by the Office of Foreign Assets Control, and fines, penalties, or suspension or revocation of export privileges;

• violations of the United States Foreign Corrupt Practices Act;

• the effects of applicable and potentially adverse foreign tax law changes;

• significant adverse changes in foreign currency exchange rates;

• difficulties associated with repatriating cash in a tax-efficient manner.

Any failure to adapt to these or other changing conditions in foreign countries in which we do business could have an adverse effect on our business and financial results.

Our business is subject to risks associated with sourcing product from overseas.

We import a significant amount of our products and rely on foreign sources to meet our supply demands at prices that support our current operating margins.

Substantially all of our import operations are subject to customs requirements and to tariffs and quotas set by governments through mutual agreements or unilateral actions.

tariffs on steel and aluminum and other imported goods have materially increased the costs of many of our foreign sourced products, and any escalation in the tariffs will increase the impact.

In order to sustain current operating margins while the tariffs are in effect, we must be able to increases prices with our customers and find alternative, similarly priced sources that are not subject to the tariffs.

If we are unable to effectively implement these countermeasures, our operating margins will be impacted.

In addition, the countries from which our products and materials are manufactured or imported may, from time to time, impose additional quotas, duties, tariffs, or other restrictions on their imports or adversely modify existing restrictions.

Adverse changes in these import costs and restrictions, or our suppliers' failure to comply with customs regulations or similar laws, could harm our business.

If any of our existing vendors fail to meet our needs, we believe that sufficient capacity exists in the open market to supply any shortfall that may result.

However, it is not always possible to replace a vendor on short notice without disruption in our operations which may require more costly expedited transportation expense and replacement of a major vendor is often at higher prices.

Our ability to import products in a timely and cost-effective manner may also be affected by conditions at ports or issues that otherwise affect transportation and warehousing providers, such as port and shipping capacity, labor disputes, severe weather, or increased homeland security requirements in the U.S.

and other countries.

These issues could delay importation of products or require us to locate alternative ports or warehousing providers to avoid disruption to customers.

These alternatives may not be available on short notice or could result in higher transit costs, which could have an adverse impact on our business and financial condition.

Further, our business could be adversely affected by the outbreak of COVID-19.

This situation may have a material and adverse effect on our business which could include temporary closures of our facilities, the facilities of our suppliers, and other disruptions caused to us, our suppliers or customers.

This may adversely affect our results of operations, financial position, and cash flows.

Acquisitions have formed a significant part of our growth strategy in the past and may continue to do so.

If we are unable to identify suitable acquisition candidates, successfully integrate an acquired business, or obtain financing needed to complete an acquisition, our growth strategy may not succeed.

Historically, our growth strategy has relied in part on acquisitions that either expand or complement our businesses in new or existing markets.

However, there can be no assurance that we will be able to identify or acquire acceptable acquisition candidates on terms favorable to us and in a timely manner, if at all, to the extent necessary.

The process of integrating acquired businesses into our operations may result in unforeseen difficulties and may require a disproportionate amount of resources and management attention, and there can be no assurance that we will be able to successfully integrate acquired businesses into our operations.

Additionally, we may not achieve the anticipated benefits from any acquisition.

Unfavorable changes in the current economic environment may make it difficult to acquire businesses in order to further our growth strategy.

We will continue to seek acquisition opportunities both to expand into new markets and to enhance our position in our existing markets.

However, our ability to do so will depend on a number of factors, including our ability to obtain financing that we may need to complete a proposed acquisition opportunity which may be unavailable or available on terms that are not advantageous to us.

If financing is unavailable, we may be forced to forego otherwise attractive acquisition opportunities which may have a negative effect on our ability to grow.

If we were required to write down all or part of our goodwill or indefinite-lived trade names, our results of operations could be materially adversely affected.

We have $825.4 million of goodwill and $85.6 million of indefinite-lived trade names recorded on our accompanying

Consolidated Balance Sheets at December 25, 2021.

We are required to periodically determine if our goodwill or indefinite-lived trade names have become impaired, in which case we would write down the impaired portion.

A continued decline in our stock price may trigger an evaluation of the recoverability of the recorded goodwill and other long-lived assets.

If we were required to write down all or part of our goodwill or indefinite-lived trade names, our net income could be materially adversely affected.

Our success is highly dependent on information and technology systems.

We believe that our proprietary computer software programs are an integral part of our business and growth strategies.

We depend on our information systems to process orders, to manage inventory and accounts receivable collections, to purchase, sell, and ship products efficiently and on a timely basis, to maintain cost-effective operations, and to provide superior service to our customers.

If these systems are damaged, intruded upon, shutdown, or cease to function properly (whether by planned upgrades, force majeure, telecommunications failures, hardware or software break-ins or viruses, other cyber-security incidents, or otherwise), we may suffer disruption in our ability to manage and operate our business.

There can be no assurance that the precautions which we have taken against certain events that could disrupt the operations of our information systems will prevent the occurrence of such a disruption.

Any such disruption could have a material adverse effect on our business and results of operations.

Unauthorized disclosure of sensitive or confidential customer, employee, supplier, or Company information, whether through a breach of our computer systems, including cyber-attacks or otherwise, could severely harm our business.

As part of our business, we collect, process, and retain sensitive and confidential personal information about our customers, employees, and suppliers.

Despite the security measures we have in place, our facilities and systems, and those of the retailers and other third party distributors with which we do business, may be vulnerable to security breaches, cyber-attacks, acts of vandalism, computer viruses, misplaced or lost data, programming and/or human errors, or other similar events.

Any security breach involving the misappropriation, loss, or other unauthorized disclosure of confidential customer, employee, supplier, or Company information, whether by us or by the retailers and other third party distributors with which we do business, could result in losses, severely damage our reputation, expose us to the risks of litigation and liability, disrupt our operations, and have a material adverse effect on our business, results of operations, and financial condition.

The regulatory environment related to information security, data collection, and privacy is increasingly rigorous, with new and constantly changing requirements applicable to our business, and compliance with those requirements could result in additional costs.

Failure to adequately protect intellectual property could adversely affect our business.

Intellectual property rights are an important and integral component of our business.

We attempt to protect our intellectual property rights through a combination of patent, trademark, copyright, and trade secret laws, as well as licensing agreements and third-party nondisclosure and assignment agreements.

In the event that our trademarks or patents are successfully challenged and we lose the rights to use those trademarks or patents, or if we fail to prevent others from using them, we could experience reduced sales or be forced to redesign or rebrand our products, requiring us to devote resources to product development, advertising and marketing new products and brands.

In addition, we cannot be sure that any pending trademark or patent applications will be granted or will not be challenged or opposed by third parties or that we will be able to enforce our trademark rights against counterfeiters.

Failure to obtain or maintain adequate protection of our intellectual property rights for any reason could have a material adverse effect on our business, results of operations and financial condition.

Our success depends in part on our ability to operate without infringing on or misappropriating the proprietary rights of others, and if we are unable to do so we may be liable for damages.

We cannot be certain that United States or foreign patents or patent applications of other companies do not exist or will not be issued that would prevent us from commercializing our products.

Third parties may sue us for infringing or misappropriating their patent or other intellectual property rights.

Intellectual property litigation is costly.

If we do not prevail in litigation, in addition to any damages we might have to pay, we could be required to cease the infringing activity or obtain a license requiring us to make royalty payments.

It is possible that a required license may not be available to us on commercially acceptable terms, if at all.

In addition, a required license may be non-exclusive, and therefore our competitors may have access to the same technology licensed to us.

If we fail to obtain a required license or are unable to design around another company’s patent, we may be unable to make use of some of the affected products, which would reduce our revenues.

The defense costs and settlements for patent infringement lawsuits are not covered by insurance.

Patent infringement lawsuits can take years to settle.

If we are not successful in our defenses or are not successful in obtaining dismissals of any such lawsuit, legal fees or settlement costs could have a material adverse effect on our results of operations and financial position.

Recent changes in United States patent laws may limit our ability to obtain, defend, and/or enforce our patents.

The United States has recently enacted and implemented wide ranging patent reform legislation.

The United States Supreme Court has ruled on several patent cases in recent years, either narrowing the scope of patent protection available in certain circumstances or weakening the rights of patent owners in certain situations.

In addition to increasing uncertainty with regard to our ability to obtain patents in the future, this combination of events has created uncertainty with respect to the value of patents, once obtained.

Depending on actions by the United States Congress, the United States federal courts, and the United States Patent and Trademark Office, the laws and regulations governing patents could change in unpredictable ways that could weaken our ability to obtain new patents or to enforce patents that we have licensed or that we might obtain in the future.

Similarly, changes in patent law and regulations in other countries or jurisdictions, changes in the governmental bodies that enforce them or changes in how the relevant governmental authority enforces patent laws or regulations may weaken our ability to obtain new patents or to enforce patents that we have licensed or that we may obtain in the future.

Regulations related to conflict minerals could adversely impact our business.

The Dodd-Frank Wall Street Reform and Consumer Protection Act contains provisions to improve transparency and accountability concerning the supply of certain minerals, known as “conflict minerals”, originating from the Democratic Republic of Congo (“DRC”) and adjoining countries.

These rules could adversely affect the sourcing, supply, and pricing of materials used in our products, as the number of suppliers who provide conflict-free minerals may be limited.

We may also suffer harm to our image if we determine that certain of our products contain minerals not determined to be conflict-free or if we are unable to modify our products to avoid the use of such materials.

We may also face challenges in satisfying customers who may require that our products be certified as containing conflict-free minerals.

Future changes in financial accounting standards may significantly change our reported results of operations.

The Accounting Principles Generally Accepted in the United States of America (“GAAP”) are subject to interpretation by the Financial Accounting Standards Board (“FASB”), the American Institute of Certified Public Accountants, the SEC and various bodies formed to promulgate and interpret appropriate accounting principles.

A change in these principles or interpretations could have a significant effect on our reported financial results and could affect the reporting of transactions completed before the announcement of a change.

Additionally, our assumptions, estimates and judgments related to complex accounting matters could significantly affect our financial results.

GAAP and related accounting pronouncements, implementation guidelines and interpretations with regard to a wide range of matters that are relevant to our business, including, but not limited to, revenue recognition, impairment of long-lived assets, leases and related economic transactions, intangibles, self-insurance, income taxes, property and equipment, litigation and stock-based compensation are highly complex and involve many subjective assumptions, estimates and judgments by us.

Changes in these rules or their interpretation or changes in underlying assumptions, estimates or judgments by us (i) could require us to make changes to our accounting systems to implement these changes that could increase our operating costs and (ii) could significantly change our reported or expected financial performance.

Future tax law changes may materially increase our prospective income tax expense.

We are subject to income taxation in many jurisdictions in the U.S.

as well as foreign jurisdictions.

Judgment is required in determining our worldwide income tax provision and, accordingly, there are many transactions and computations for which our final income tax determination is uncertain.

We are occasionally audited by income tax authorities in several tax jurisdictions.

Although we believe the recorded tax estimates are reasonable, the ultimate outcome from any audit (or related litigation) could be materially different from amounts reflected in our income tax provisions and accruals.

Future settlements of income tax audits may have a material effect on earnings between the period of initial recognition of tax estimates in the financial statements and the point of ultimate tax audit settlement.

Additionally, it is possible that future income tax legislation, regulations or interpretations thereof and/or import tariffs in any jurisdiction to which we are subject to taxation may be enacted and such changes could have a material impact on our worldwide income tax provision beginning with the period during which such changes become effective.

In addition, our future effective tax rates could be subject to volatility or adversely affected by a number of factors, including:

• changes in the valuation of our deferred tax assets and liabilities;

• expected timing and amount of the release of any tax valuation allowances;

• tax effects of stock-based compensation;

• costs related to intercompany restructurings;

• lower than anticipated future earnings in jurisdictions where we have lower statutory tax rates and higher than anticipated future earnings in jurisdictions where we have higher statutory tax rates.

We are subject to legal proceedings and legal compliance risks.

We are involved in various legal proceedings, which from time to time may involve lawsuits, state and federal governmental inquiries, audits and investigations, environmental matters, employment, tort, state false claims act, consumer litigation, and intellectual property litigation.

At times, such matters may involve executive officers and other management.

Certain of these legal proceedings may be a significant distraction to management and could expose us to significant liability, including settlement expenses, damages, fines, penalties, attorneys' fees and costs, and non-monetary sanctions, any of which could have a material adverse effect on our business and results of operations.

Increases in the cost of employee health benefits could impact our financial results and cash flows.

Our expenses relating to employee health benefits, for which we are primarily self insured, are significant.

Healthcare costs have risen significantly in recent years, and recent legislative and private sector initiatives regarding healthcare reform have resulted and could continue to result in significant changes to the U.S.

healthcare system.

Unfavorable changes in the cost of such benefits could have a material adverse effect on our financial results and cash flows.

If we become subject to material liabilities under our self-insured programs, our financial results may be adversely affected.

We provide workers’ compensation, automobile, and product/general liability coverage through a high deductible insurance program.

In addition, we are self-insured for our health benefits and maintain per employee stop-loss coverage.

Although we believe that we have adequate stop-loss coverage for catastrophic claims to cap the risk of loss, our results of operations and financial condition may be adversely affected if the number and severity of claims that are not covered by stop-loss insurance increases.

We occupy most of our locations under long-term non-cancelable leases.

We may be unable to renew leases on favorable terms or at all.

Also, if we close a location, we may remain obligated under the applicable lease.

Most of our locations are located in leased premises.

Many of our current leases are non-cancelable and typically have terms ranging from two to fourteen years, with options to renew for specified periods of time.

We believe that leases we enter into in the future will likely be long-term and noncancelable and have similar renewal options.

However, there can be no assurance that we will be able to renew our current or future leases on favorable terms or at all which could have an adverse effect on our ability to operate our business and on our results of operations.

In addition, if we close a location, we generally remain committed to perform our obligations under the applicable lease, which include, among other things, payment of the base rent for the balance of the lease term.

Our obligation to continue making rental payments in respect of leases for closed locations could have an adverse effect on our business and results of operations.

Risks Relating to Our Indebtedness

We have significant indebtedness that could affect operations and financial condition and prevent us from fulfilling our obligations under our indebtedness.

We have a significant amount of indebtedness.

On December 25, 2021, total indebtedness was $945.8 million, $851.0 million of such indebtedness is indebtedness issued under the term loan facility, $93.0 million of such indebtedness is indebtedness issued under the our asset-based revolving credit facility, and $1.8 million is indebtedness under capital lease obligations.

Our substantial indebtedness could have important consequences.

For example, it could:

• make it more difficult for us to satisfy obligations to holders of our indebtedness;

• increase our vulnerability to general adverse economic and industry conditions;

• require the dedication of a substantial portion of cash flow from operations to payments on indebtedness, thereby reducing the availability of cash flow to fund working capital, capital expenditures, research and development efforts, and other general corporate purposes;

• limit flexibility in planning for, or reacting to, changes in our business and the industry in which we operate;

• place us at a competitive disadvantage compared to competitors that have less debt;

• limit our ability to borrow additional funds.

In addition, the agreement governing Hillman Group's senior secured credit facilities contain financial and other restrictive covenants that limit our ability to engage in activities that may be in our long-term best interests.

The failure to comply with those covenants could result in an event of default which, if not cured or waived, could result in the acceleration of all outstanding debts.

Despite current indebtedness levels, we may still be able to incur substantially more debt.

This could further exacerbate the risks associated with our substantial leverage.

We may be able to incur substantial additional indebtedness in the future.

The terms of the indenture do not fully prohibit us from doing so.

The senior secured credit facilities permit additional borrowing of $124.1 million on the revolving credit facility.

If new debt is added to our current debt levels, the related risks that we now face could intensify.

We rely on available borrowings under the asset-based revolving credit facility (“ABL Revolver”) for cash to operate our business, and the availability of credit under the ABL Revolver may be subject to significant fluctuation.

In addition to cash we generate from our business, our principal existing source of cash is borrowings available under the ABL Revolver.

Availability will be limited to the lesser of a borrowing base and $250.0 million.

The borrowing base is calculated on a monthly (or more frequent under certain circumstances) valuation of our inventory, accounts receivable and certain cash balances.

As a result, our access to credit under the ABL Revolver is potentially subject to significant fluctuation, depending on the value of the borrowing base-eligible assets as of any measurement date.

The inability to borrow under the ABL Revolver may adversely affect our liquidity, financial position and results of operations.

As of December 25, 2021, the ABL Revolver had an outstanding amount of $93.0 million and outstanding letters of credit of $32.9 million leaving $124.1 million of available borrowings as a source of liquidity.

The failure to meet certain financial covenants required by our credit agreements may materially and adversely affect assets, financial position, and cash flows.

Certain aspects of our credit agreements require the maintenance of a leverage ratio and limit our ability to incur debt, make investments, or undertake certain other business activities.

In particular, our minimum allowed fixed charge coverage ratio requirement is 1.0x as of December 25, 2021.

A breach of the covenant, or any other covenants, could result in an event of default under the credit agreements.

Upon the occurrence of an event of default under the credit agreements, all amounts outstanding, together with accrued interest, could be declared immediately due and payable by our lenders.

If this happens, our assets may not be sufficient to repay in full the payments due under the credit agreements.

The current credit market environment and other macro-economic challenges affecting the global economy may adversely impact our ability to borrow sufficient funds or sell assets or equity in order to pay existing debt.

We are subject to fluctuations in interest rates.

All of our indebtedness incurred under the Hillman Group’s senior secured credit facilities have variable interest rates.

Increases in borrowing rates will increase our cost of borrowing, which may adversely affect our results of operations and financial condition.

Furthermore, regulatory changes, such as the announcement of the United Kingdom’s Financial Conduct Authority to phase out the London Interbank Offered Rate (“LIBOR”), may adversely affect our floating rate debt and interest rate derivatives.

We may enter into interest rate derivatives that hedge risks related to floating for fixed rate interest payments in order to reduce interest rate volatility.

However, we may not maintain interest rate swaps with respect to all of our variable rate indebtedness.

Restrictions imposed by our Senior Facilities and our other outstanding indebtedness, may limit our ability to operate our business and to finance our future operations or capital needs or to engage in other business activities.

Hillman Group’s senior secured credit facilities contain restrictive covenants that limit our ability to engage in certain types of activities and transactions that may be in our long-term best interests.

The failure to comply with those covenants could result in an event of default which, if not cured or waived, could result in the acceleration of all outstanding indebtedness under our new secured credit facilities.

In the event our lenders accelerate the repayment of our outstanding indebtedness, we and our subsidiaries may not have sufficient cash and assets to repay that indebtedness.

These covenants restrict Hillman Group’s ability and the ability of its restricted subsidiaries, among other things, to:

• incur additional indebtedness and create additional liens;

• pay dividends on our capital stock or redeem, repurchase, or retire our capital stock or indebtedness;

• make investments, loans, advances, and acquisitions;

• engage in transactions with our affiliates;

• sell assets, including capital stock of our subsidiaries;

• consolidate or merge.

In addition, the ABL Revolver requires us to maintain inventory and accounts receivable balances to collateralize the underlying loan with a maximum allowable borrowing limit of $250.0 million.

Our ability to comply with this covenant can be affected by events beyond our control, and we may not be able to satisfy them.

A breach of this covenant would be an event of default.

In the event of a default under the ABL Revolver, those lenders could elect to declare all amounts outstanding under the ABL Revolver to be immediately due and payable or terminate their commitments to lend additional money, which would also lead to a cross-default and cross-acceleration of amounts owing under the Senior Facilities.

If the indebtedness under our Senior Facilities or the notes were to be accelerated, our assets may not be sufficient to repay such indebtedness in full.

In particular, note holders will be paid only if we have assets remaining after we pay amounts due on our secured indebtedness, including our Senior Facilities.

We have pledged a significant portion of our assets as collateral under our Senior Facilities.

We may not be able to generate sufficient cash to service all of our indebtedness and may be forced to take other actions to satisfy our obligations under our indebtedness, which may not be successful.

Our ability to make scheduled payments on or to refinance our debt obligations depends on our financial condition and operating performance, which is subject to prevailing economic and competitive conditions and to certain financial, business, and other factors beyond our control.

We may not be able to maintain a level of cash flows from operating activities sufficient to permit us to pay the principal, premium, if any, and interest on our indebtedness, including the notes.

If our cash flows and capital resources are insufficient to fund our debt service obligations, we may be forced to reduce or delay investments and capital expenditures, or to sell assets, seek additional capital, or restructure or refinance our indebtedness.

Our ability to restructure or refinance our debt will depend on the condition of the capital markets and our financial condition at such time.

Any refinancing of our debt could be at higher interest rates and may require us to comply with more onerous covenants, which could further restrict our business operations.

The terms of existing or future debt instruments may restrict us from adopting some of these alternatives.

In addition, any failure to make payments of interest and principal on our outstanding indebtedness on a timely basis would likely result in a reduction of our credit rating, which could harm our ability to incur additional indebtedness.

In the absence of such operating results and resources, we could face substantial liquidity problems and might be required to dispose of material assets or operations to meet our debt service and other obligations.

In addition, the ability to borrow under our asset-based revolving credit facility is subject to limitations based on advances rates against certain eligible inventory and accounts receivables that collateralize the underlying loans.

Our ability to ability to access the full $250.0 million of revolving credit can be affected by events beyond our control if the value of our inventory and accounts receivables is materially adversely affected.

Our ability to repay our debt is affected by the cash flow generated by our subsidiaries.

Our subsidiaries own all of our operating assets and conduct all of our operations.

As a result, our ability to make future dividend payments, if any, is dependent on the earnings of our subsidiaries and the payment of those earnings to us in the form of dividends, loans or advances and through repayment of loans or advances from us.

Payments to us by our subsidiaries will be contingent upon our subsidiaries’ earnings and other business considerations and may be subject to statutory or contractual restrictions, including the credit agreements governing our credit facilities.

To the extent that we determine in the future to pay dividends on our common stock, the ability of our operating subsidiaries to pay dividends will be restricted by the credit agreements governing credit facilities of The Hillman Group, Inc., our wholly owned indirect subsidiary.

Under the credit agreements, dividends may only be paid to us by The Hillman Group, Inc.

and its subsidiaries for corporate overhead expenses, taxes attributable to The Hillman Group, Inc.

and its subsidiaries and otherwise pursuant to customary baskets and exceptions.

These baskets and exceptions include customary fixed dollar baskets, a basket based on excess cash flow (as determined under the credit agreements) not required to prepay the term loans under the credit facilities and equity proceeds among other things, an unlimited amount under the credit agreement governing our asset-based revolving credit facility subject to satisfying minimum availability requirements for borrowings under the credit agreement and the absence of certain defaults, and an unlimited amount under the credit agreement governing our term loan facilities subject to The Hillman Group, Inc.’s total leverage not exceeding certain thresholds on a pro forma basis.

Volatility and weakness in bank and capital markets may adversely affect credit availability and related financing costs for us.

Bank and capital markets can experience periods of volatility and disruption.

If the disruption in these markets is prolonged, our ability to refinance, and the related cost of refinancing, some or all of our debt could be adversely affected.

Additionally, during

periods of volatile credit markets, there is a risk that lenders, even those with strong balance sheets and sound lending practices, could fail or refuse to honor their legal commitments and obligations under existing credit commitments.

Although we currently can access the bank and capital markets, there is no assurance that such markets will continue to be a reliable source of financing for us.

These factors, including the tightening of credit markets, could adversely affect our ability to obtain cost-effective financing.

Increased volatility and disruptions in the financial markets also could make it more difficult and more expensive for us to refinance outstanding indebtedness and obtain financing.

In addition, the adoption of new statutes and regulations, the implementation of recently enacted laws or new interpretations or the enforcement of older laws and regulations applicable to the financial markets or the financial services industry could result in a reduction in the amount of available credit or an increase in the cost of credit.

Disruptions in the financial markets can also adversely affect our lenders, insurers, customers, and other counterparties.

Any of these results could cause a material adverse effect to our business, financial condition, and results of operations.

Item 1B - Unresolved Staff Comments.

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