Item 1. Business
ITEM 1. BUSINESS
We are a blank check
company incorporated on June 7, 2024 in the Cayman Islands as an exempted company, for the purpose
of effecting a merger, share exchange, asset acquisition, share purchase, reorganization or similar business combination with one or more
businesses or entities (a “Business Combination”).
Our sponsor is Indigo
Sponsor Group, LLC, an entity affiliated with our officers and directors (the “Sponsor”).
On June 7, 2024,
we issued an aggregate of 2,875,000 ordinary shares to EBC Holdings, Inc., an affiliate of EarlyBirdCapital, Inc. (“EBC”),
the representative of the underwriters in our initial public offering (“Initial Public Offering”), for an aggregate purchase
price of $5,000. On March 7, 2025, EBC Holdings, Inc. transferred an aggregate of 2,165,000 ordinary shares (the “Founder Shares”)
to our Sponsor and our directors for an aggregate purchase price of approximately $3,765, or approximately $0.002 per share, the same
per-share purchase price originally paid by EBC Holdings, Inc. for such shares.
On July
2, 2025, the Company consummated its initial public offering (“Initial Public Offering”) of 10,000,000 Units (“Units”
and, with respect to the ordinary shares included in the Units being offered, the “Public Shares”). Each Unit consists of
one Ordinary Share and one Right, each Right entitling the holder thereof to receive one-tenth of one Ordinary Share upon the completion
of the Company’s initial business combination. The Units were sold at an offering price of $10.00 per Unit, generating gross proceeds
of $100,000,000.
Simultaneously with the closing of the Initial
Public Offering, the Company consummated the private placement (“Private Placement”) of an aggregate of 350,000 Units
(the “Private Placement Units”) to the Sponsor and EBC and their designees, at a price of $10.00 per Private Placement
Unit, generating gross proceeds of $3,500,000. Of the 350,000 Private Placement Units, the Sponsor and its designees purchased 225,000 Private
Placement Units and EBC purchased 125,000 Private Placement Units.
On July 11, 2025, the Company consummated the
closing of an additional 1,500,000 Units sold pursuant to the underwriters’ over-allotment option, generating gross proceeds
of $15,000,000. Simultaneously with the consummation of the over-allotment option on July 11, 2025, the Company also consummated the sale
of an additional 30,000 Private Placement Units to the Sponsor and EBC (19,286 to the Sponsor and 10,714 to EBC)
at a price of $10.00 per Private Placement Unit, generating gross proceeds of $300,000.
The Private Placement
Units are identical to the Units sold in the Initial Public Offering. The Ordinary Shares contained in the Private Placement Units are
referred to herein as the “Private Placement Shares” and the Rights contained in the Private Placement Units are referred
to herein as the “Private Placement Rights”). The purchasers of the Private Placement Units have agreed not to transfer, assign
or sell any of the Private Placement Units or Ordinary Shares or Rights underlying the Private Placement Units (except to certain transferees)
until the completion of a Business Combination.
Upon the closing of the
Initial Public Offering and the sale of the Private Placement Units, $115,000,000 ($10.00 per Unit) of the net proceeds of the sale of
the Units in the Initial Public Offering and Private Placement Units in the Private Placement were deposited into a trust account (the
“Trust Account”) located in the United States with Continental Stock Transfer & Trust Company acting as trustee, and will
be held as cash or cash demand deposits or invested only in U.S. “government securities,” within the meaning of Section 2(a)(16)
of the Investment Company Act of 1940, as amended (the “Investment Company Act”), having a maturity of 185 days or less or
in money market funds meeting certain conditions under Rule 2a-7 promulgated under the Investment Company Act, which invest only in direct
U.S. government treasury obligations, as determined by the Company, until the earlier of: (i) the completion of a Business Combination
and (ii) the distribution of the Trust Account as described below.
Effecting a Business
Combination
General
We are not limited to
target businesses in any specific industry or geographic location. However, we have focused our search on established, profitable companies
with attractive market positions and/or growth potential that can leverage our management team’s experience and expertise. We have
generated no revenues to date and we do not expect that we will generate operating revenues until, at the earliest, we consummate our
initial Business Combination.
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We intend to consummate
our initial Business Combination using cash held in the Trust Account, the proceeds from one or more private financings, and our equity
as the consideration. If our initial Business Combination is paid for using equity or debt securities, or not all of the funds released
from the Trust Account are used for payment of the consideration in connection with our initial Business Combination or used for redemptions
of our Ordinary Shares, we may apply the balance of the cash released to us from the Trust Account for general corporate purposes, including
for maintenance or expansion of operations of the post-transaction company, the payment of principal or interest due on indebtedness incurred
in completing our initial Business Combination, to fund the purchase of other assets, companies or for working capital.
We may seek to raise
additional funds through a private offering of debt or equity securities in connection with the completion of our initial Business Combination
(which may include a specified future issuance), and we may complete our initial Business Combination using the proceeds of such offering
rather than using the amounts held in the Trust Account. In addition, we intend to target businesses with enterprise values that are greater
than we could acquire with the net proceeds of our Initial Public Offering and the Private Placement, and, 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 redemptions by holders
of Public Shares (the “Public Shareholders”), we may be required to seek additional financing to complete such proposed initial
Business Combination. Subject to compliance with applicable securities laws, we would expect to complete such financing only simultaneously
with the completion of our initial Business Combination. In the case of an initial Business Combination funded with assets other than
the Trust Account assets, our proxy materials or tender offer documents disclosing the initial Business Combination would disclose the
terms of the financing and, if and only if required by law, we would seek shareholder approval of such financing. There are no prohibitions
on our ability to raise funds privately, including pursuant to any specified future issuance, or through loans in connection with our
initial Business Combination.
The time ultimately required
to select and evaluate a target business and to structure and complete our initial Business Combination, and the costs associated with
this process, are not currently ascertainable with any degree of certainty. Any costs incurred with respect to the identification and
evaluation of a prospective target business with which our Business Combination is not ultimately completed will result in our incurring
losses and will reduce the funds we can use to complete another Business Combination.
Sources of Target
Businesses
We anticipate that target
business candidates will be brought to our attention from various unaffiliated sources, including investment bankers and investment professionals.
Target businesses may be brought to our attention by such unaffiliated sources as a result of being solicited by us by calls or mailings.
These sources may also introduce us to target businesses in which they think we may be interested on an unsolicited basis, since many
of these sources will know what types of businesses we are targeting. Our officers and directors, as well as our Sponsor, and their affiliates,
may also bring to our attention target business candidates that they become aware of through their business contacts as a result of formal
or informal inquiries or discussions they may have, as well as attending trade shows, conferences or conventions. In addition, we expect
to receive a number of proprietary deal flow opportunities that would not otherwise necessarily be available to us as a result of the
business relationships of our officers and directors and our Sponsor and their respective industry and business contacts as well as their
affiliates. We may engage the services of professional firms or other individuals that specialize in business acquisitions, in which event
we may pay a finder’s fee, consulting fee, advisory fee or other compensation to be determined in an arm’s length negotiation
based on the terms of the transaction. We intend to engage a finder only to the extent our management determines that the use of a finder
may bring opportunities to us that may not otherwise be available to us or if finders approach us on an unsolicited basis with a potential
transaction that our management determines is in our best interest to pursue. Payment of finder’s fees is customarily tied to completion
of a transaction, in which case any such fee will be paid out of the funds held in the Trust Account.
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We are not prohibited
from pursuing an initial Business Combination with a target business that is affiliated with our Sponsor, officers, directors or their
affiliates. We have agreed with EBC to obtain an opinion from an independent investment banking firm or another independent entity that
commonly renders valuation opinions that our initial business combination is fair to our company from a financial point of view, regardless
of whether or not it is affiliated with our Sponsor, officers, directors or their affiliates.
Selection of a Target
Business and Structuring of a Business Combination
Nasdaq Stock Market,
LLC (“Nasdaq”) listing rules require that we must complete one or more Business Combinations having an aggregate fair market
value of at least 80% of the value of the assets held in the Trust Account (excluding taxes payable on the interest earned on the Trust
Account) at the time of our signing a definitive agreement in connection with our initial Business Combination. The fair market value
of our initial Business Combination will be determined by our board of directors based upon one or more standards generally accepted by
the financial community, such as a discounted cash flow valuation, a valuation based on trading multiples of comparable public businesses
or a valuation based on the financial metrics of M&A transactions of comparable businesses. If our board of directors is not able
to independently determine the fair market value of our initial Business Combination (including with the assistance of financial advisors),
we will obtain an opinion from an independent investment banking firm or another independent entity that commonly renders valuation opinions
with respect to the satisfaction of such criteria. While we consider it unlikely that our board of directors will not be able to make
an independent determination of the fair market value of our initial Business Combination, it may be unable to do so if it is less familiar
or experienced with the business of a particular target or if there is a significant amount of uncertainty as to the value of a target’s
assets or prospects. We do not intend to purchase multiple businesses in unrelated industries or become a passive investor in conjunction
with our initial Business Combination. Subject to this requirement, our management will have virtually unrestricted flexibility in identifying
and selecting one or more prospective target businesses, although we will not be permitted to effectuate our initial Business Combination
with another blank check company or a similar company with nominal operations.
In any case, we will
only complete an initial Business Combination in which we own or acquire 50% or more of the outstanding voting securities of the target
or otherwise acquire a controlling interest in the target sufficient for it not to be required to register as an investment company under
the Investment Company Act. If we own or acquire less than 100% of the equity interests or assets of a target business or businesses,
the portion of such business or businesses that are owned or acquired by the post-transaction company is what will be taken into account
for purposes of Nasdaq’s 80% fair market value test.
To the extent we effect
our initial Business Combination with a company or business that may be financially unstable or in its early stages of development or
growth, we may be affected by numerous risks inherent in such company or business. Although our management 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 significant risk
factors.
In evaluating a prospective
target business, we expect to conduct a due diligence review, which may encompass, among other things, meetings with incumbent ownership,
management and employees, document reviews, interviews of customers and suppliers, inspection of facilities, as well as a review of financial
and other information that will be made available to us.
The time required to
select and evaluate a target business and to structure and complete our initial Business Combination, and the costs associated with this
process are not currently ascertainable with any degree of certainty. Any costs incurred with respect to the identification and evaluation
of, and negotiation with, a prospective target business with which our initial Business Combination is not ultimately completed will result
in our incurring losses and will reduce the funds we can use to complete an alternative Business Combination.
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Lack of Business Diversification
For an indefinite period of time after the completion
of our initial Business Combination, the prospects for our success may depend entirely on the future performance of a single business.
Unlike other entities that have the resources to complete business combinations with multiple entities in one or several industries, it
is probable that we will not have the resources to diversify our operations and mitigate the risks of being in a single line of business.
By completing an initial Business Combination with only a single entity, our lack of diversification may:
●
subject us to negative economic, competitive, and regulatory developments, any or all of which may have a substantial adverse impact on the particular industry in which we operate after our initial Business Combination, and
●
cause us to depend on the marketing and sale of a single product or limited number of products or services.
Limited Ability to
Evaluate the Target Business’ Management
Although we intend to
scrutinize the management of a prospective target business when evaluating the desirability of effecting a Business Combination, we cannot
assure you that our assessment of the target business’ management will prove to be correct. In addition, we cannot assure you that
the future management will have the necessary skills, qualifications or abilities to manage a public company. Furthermore, the future
role of our officers and directors, if any, in the target business following a business combination cannot presently be stated with any
certainty. While it is possible that some of our key personnel will remain associated in senior management or advisory positions with
us following a business combination, it is unlikely that they will devote their full-time efforts to our affairs subsequent to a business
combination. Moreover, they would only be able to remain with the company after the consummation of a Business Combination if they are
able to negotiate employment or consulting agreements in connection with the Business Combination. Such negotiations would take place
simultaneously with the negotiation of the business combination and could provide for them to receive compensation in the form of cash
payments and/or our securities for services they would render to the company after the consummation of the business combination. Additionally,
our officers and directors may not have significant experience or knowledge relating to the operations of the particular target business.
Following a business
combination, we may seek to recruit additional managers to supplement the incumbent management of the target business. We cannot assure
you that we will have the ability to recruit additional managers, or that any such additional managers we do recruit will have the requisite
skills, knowledge or experience necessary to enhance the incumbent management.
Shareholders May Not
Have the Ability to Approve an Initial Business Combination
We may conduct redemptions without a shareholder
vote pursuant to the tender offer rules of the U.S. Securities and Exchange Commission (the “SEC”) subject to the provisions
of our amended and restated memorandum and articles of association. However, we will seek shareholder approval if it is required by law
or applicable stock exchange rule, or we may decide to seek shareholder approval for business or other legal reasons. Presented in the
table below is a graphic explanation of the types of initial business combinations we may consider and whether shareholder approval is
currently required under Cayman Islands law for each such transaction.
Type of Transaction
Whether Shareholder Approval is Required
Purchase of assets
No
Purchase of stock of target not involving a merger with the company
No
Merger of target into a subsidiary of the company
No
Merger of the company with a target
Yes
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Under Nasdaq’s listing rules, shareholder
approval would be required for our initial business combination if, for example:
●
we issue Ordinary Shares that will be equal to or in excess of 20% of the number of our Ordinary Shares then outstanding;
●
any of our directors, officers or substantial shareholders (as defined by Nasdaq rules) has a 5% or greater interest (or such persons collectively have a 10% or greater interest), directly or indirectly, in the target business or assets to be acquired or otherwise and the present or potential issuance of Ordinary Shares could result in an increase in outstanding common shares or voting power of 5% or more; or
●
the issuance or potential issuance of Ordinary Shares will result in our undergoing a change of control.
The decision as to whether we will seek shareholder
approval of a proposed Business Combination in those instances in which shareholder approval is not required by applicable law or stock
exchange listing requirements will be made by us, solely in our discretion, and will be based on business and legal reasons, which include
a variety of factors, including, but not limited to: (i) the timing of the transaction, including in the event we determine shareholder
approval would require additional time and there is either not enough time to seek shareholder approval or doing so would place the company
at a disadvantage in the transaction or result in other additional burdens on the company; (ii) the expected cost of holding a shareholder
vote; (iii) the risk that the shareholders would fail to approve the proposed business combination; (iv) other time and budget constraints
of the company; and (v) additional legal complexities of a proposed business combination that would be time-consuming and burdensome to
present to shareholders.
Redemption Rights
We will provide our Public Shareholders with the
opportunity to redeem all or a portion of their Public Shares upon the completion of our initial business combination at a per-share price,
payable in cash, equal to the aggregate amount then on deposit in the Trust Account as of two business days prior to the consummation
of the initial business combination including interest earned on the funds held in the Trust Account and not previously released to us
to pay our taxes, divided by the number of then outstanding Public Shares, subject to the limitations described herein. Our shareholders
prior to our Initial Public Offering (the “initial shareholders”) have entered into a letter agreement with us, pursuant to
which they have agreed to waive their redemption rights with respect to any Founder Shares, Private Placement Shares and any Public Shares
held by them in connection with the completion of our initial Business Combination.
Manner of Conducting Redemptions
We will provide our Public Shareholders with the
opportunity to redeem all or a portion of their Ordinary Shares upon the completion of our initial business combination either (i) in
connection with a shareholder meeting called to approve the business combination or (ii) by means of a tender offer. The decision as to
whether we will seek shareholder approval of a proposed business combination or conduct a tender offer will be made by us, solely in our
discretion, and will be based on a variety of factors such as the timing of the transaction and whether the terms of the transaction would
require us to seek shareholder approval under the law or stock exchange listing requirement. Asset acquisitions and stock purchases would
not typically require shareholder approval while direct mergers with our company and any transactions where we issue more than 20% of
our outstanding Ordinary Shares or seek to amend our amended and restated memorandum and articles of association would require shareholder
approval. If we structure a business combination transaction with a target company in a manner that requires shareholder approval, we
will not have discretion as to whether to seek a shareholder vote to approve the proposed business combination.
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If a shareholder vote is not required and we do
not decide to hold a shareholder vote for business or other legal reasons, we will, pursuant to our amended and restated memorandum and
articles of association:
●
conduct the redemptions pursuant to Rule 13e-4 and Regulation 14E under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), which regulate issuer tender offers, and
●
file tender offer documents with the SEC prior to completing our initial business combination which contain substantially the same financial and other information about the initial business combination and the redemption rights as is required under Regulation 14A under the Exchange Act, which regulates the solicitation of proxies.
Upon the public announcement of our initial business
combination, we or our initial shareholders will terminate any plan established in accordance with Rule 10b5-1 to purchase our Ordinary
Shares in the open market if we elect to redeem our Public Shares through a tender offer, to comply with Rule 14e-5 under the Exchange
Act.
In the event that we conduct redemptions pursuant
to the tender offer rules, our offer to redeem will remain open for at least 20 business days, in accordance with Rule 14e-1(a) under
the Exchange Act, and we will not be permitted to complete our initial business combination until the expiration of the tender offer period.
If, however, shareholder approval of the transaction
is required by law or stock exchange listing requirement, or we decide to obtain shareholder approval for business or other legal reasons,
we will, pursuant to our amended and restated memorandum and articles of association:
●
conduct the redemptions in conjunction with a proxy solicitation pursuant to Regulation 14A under the Exchange Act, which regulates the solicitation of proxies, and not pursuant to the tender offer rules, and
●
file proxy materials with the SEC.
In the event that we seek shareholder approval
of our initial business combination, we will distribute proxy materials and, in connection therewith, provide our Public Shareholders
with the redemption rights described above upon completion of the initial business combination.
If we seek shareholder approval, we will complete
our initial business combination only if a majority of the outstanding Ordinary Shares voted are voted in favor of the business combination.
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Limitation on Redemption
upon Completion of Initial Business Combination if we Seek Shareholder Approval
Notwithstanding the foregoing, if we seek shareholder
approval of our initial business combination and we do not conduct redemptions in connection with our initial business combination pursuant
to the tender offer rules, our amended and restated memorandum and articles of association provides that a Public Shareholder, together
with any affiliate of such shareholder or any other person with whom such shareholder is acting in concert or as a “group”
(as defined under Section 13 of the Exchange Act), will be restricted from seeking redemption rights with respect to any Ordinary Shares
they own in excess of 15% of the shares sold in the IPO (the “Excess Shares”). We believe this restriction will discourage
shareholders from accumulating large blocks of shares, and subsequent attempts by such holders to use their ability to exercise their
redemption rights against a proposed business combination as a means to force us or our management to purchase their shares at a significant
premium to the then-current market price or on other undesirable terms. However, our amended and restated memorandum and articles of association
does not restrict our shareholders’ ability to vote all of their shares (including Excess Shares) for or against our initial business
combination.
Tendering Share Certificates
in Connection with a Tender Offer or Redemption Rights
We may require our Public Shareholders seeking
to exercise their redemption rights, whether they are record holders or hold their shares in “street name,” to either tender
their certificates to our transfer agent prior to the date set forth in the tender offer documents mailed to such holders, or up to two
business days prior to the vote on the proposal to approve the business combination in the event we distribute proxy materials, or to
deliver their shares to the transfer agent electronically using the Depository Trust Company’s DWAC (Deposit/Withdrawal At Custodian)
System, at the holder’s option. The tender offer or proxy materials, as applicable, that we will furnish to holders of our Public
Shares in connection with our initial business combination will indicate whether we are requiring Public Shareholders to satisfy such
delivery requirements. Accordingly, a Public Shareholder would have from the time we send out our tender offer materials until the close
of the tender offer period, or up to two days prior to the vote on the business combination if we distribute proxy materials, as applicable,
to tender its shares if it wishes to seek to exercise its redemption rights. Given the relatively short exercise period, it is advisable
for shareholders to use electronic delivery of their Public Shares.
There is a nominal cost associated with the above-referenced
tendering process and the act of certificating the shares or delivering them through the DWAC System. The transfer agent will typically
charge the tendering broker $100.00 and it would be up to the broker whether or not to pass this cost on to the redeeming holder. However,
this fee would be incurred regardless of whether or not we require holders seeking to exercise redemption rights to tender their shares.
The need to deliver shares is a requirement of exercising redemption rights regardless of the timing of when such delivery must be effectuated.
The foregoing is different from the procedures
used by some prior blank check companies. In order to perfect redemption rights in connection with their business combinations, some prior
blank check companies would distribute proxy materials for the shareholders’ vote on an initial business combination, and a holder
could simply vote against a proposed business combination and check a box on the proxy card indicating such holder was seeking to exercise
his or her redemption rights. After the business combination was approved, the company would contact such shareholder to arrange for him
or her to deliver his or her certificate to verify ownership. As a result, the shareholder then had an “option window” after
the completion of the business combination during which he or she could monitor the price of the company’s share in the market.
If the price rose above the redemption price, he or she could sell his or her shares in the open market before actually delivering his
or her shares to the company for cancellation. As a result, the redemption rights, to which shareholders were aware they needed to commit
before the shareholder meeting, would become “option” rights surviving past the completion of the business combination until
the redeeming holder delivered its certificate. The requirement for physical or electronic delivery prior to the meeting ensures that
a redeeming holder’s election to redeem is irrevocable once the business combination is approved.
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Any request to redeem such shares, once made, may be withdrawn at
any time up to the date set forth in the tender offer materials or the date of the shareholder meeting set forth in our proxy materials,
as applicable. Furthermore, if a holder of a public share delivered its certificate in connection with an election of redemption rights
and subsequently decides prior to the applicable date not to elect to exercise such rights, such holder may simply request that the transfer
agent return the certificate (physically or electronically). It is anticipated that the funds to be distributed to holders of our Public
Shares electing to redeem their shares will be distributed promptly after the completion of our initial business combination.
If our initial business combination is not approved
or completed for any reason, then our Public Shareholders who elected to exercise their redemption rights would not be entitled to redeem
their shares for the applicable pro rata share of the Trust Account. In such case, we will promptly return any certificates delivered
by public holders who elected to redeem their shares.
If our initial proposed business combination is
not completed, we may continue to try to complete a business combination with a different target until the date then set forth in our
amended and restated memorandum and articles of association.
Redemption of Public Shares and Liquidation
if no Initial Business Combination
Our amended and restated memorandum and articles
of association provides that we will have only until April 2, 2027 to complete our initial business combination. If we are unable to complete
our initial business combination within such time period, we will: (i) cease all operations except for the purpose of winding up, (ii)
as promptly as reasonably possible but not more than ten business days thereafter, redeem the Public Shares, at a per-share price, payable
in cash, equal to the aggregate amount then on deposit in the Trust Account including interest 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 liquidation and dissolution expenses), divided
by the number of then outstanding Public Shares, which redemption will completely extinguish Public Shareholders’ rights as shareholders
(including the right to receive further 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 shareholders and our board of directors, dissolve and liquidate,
subject in each case to our obligations under Cayman Islands law to provide for claims of creditors and the requirements of other applicable
law. There will be no redemption rights or liquidating distributions with respect to our Rights, which will expire worthless if we fail
to complete our initial business combination within the required time period. Our amended and restated memorandum and articles of association
provides that, if we wind up for any other reason prior to the consummation of our initial business combination, we will follow the foregoing
procedures with respect to the liquidation of the Trust Account as promptly as reasonably possible but not more than ten business days
thereafter, subject to applicable Cayman Islands law.
Our initial shareholders have waived their rights
to liquidating distributions from the Trust Account with respect to any Founder Shares and Private Placement Shares held by them if we
fail to complete our initial business combination within the required time period. However, if they acquire Public Shares after the IPO,
they will be entitled to liquidating distributions from the Trust Account with respect to such Public Shares if we fail to complete our
initial business combination within the allotted time period.
Our Sponsor, officers and directors have agreed
that they will not propose any amendment to our amended and restated memorandum and articles of association (i) that would modify the
substance or timing of our obligation to allow redemption in connection with our initial business combination or to redeem 100% of our
Public Shares if we do not complete our initial business combination within 21 months from the closing of the IPO or (ii) with respect
to any other material provision relating to shareholders’ rights or pre-initial business combination activity, unless we provide
our Public Shareholders with the opportunity to redeem their Public Shares upon approval of any such amendment at a per-share price, payable
in cash, equal to the aggregate amount then on deposit in the Trust Account, including interest earned on the funds held in the Trust
Account, and not previously released to us to pay our taxes, divided by the number of then outstanding Public Shares.
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We expect that all costs and expenses associated
with implementing our plan of liquidation and dissolution, as well as payments to any creditors, will be funded from amounts held outside
the Trust Account, although we cannot assure you that there will be sufficient funds for such purpose. However, if those funds are not
sufficient to cover the costs and expenses associated with implementing our plan of liquidation and dissolution, to the extent that there
is any interest accrued in the Trust Account not required to pay taxes on interest income earned on the Trust Account balance, we may
request the trustee to release to us an additional amount of up to $100,000 of such accrued interest to pay those costs and expenses.
If we were to expend all of the net proceeds of
the IPO and the sale of the Private Placement Units, other than the proceeds deposited in the Trust Account, and without taking into account
interest, if any, earned on the Trust Account, the per-share redemption amount received by shareholders upon our dissolution would be
approximately $10.20. The proceeds deposited in the Trust Account could, however, become subject to the claims of our creditors which
would have higher priority than the claims of our Public Shareholders. We cannot assure you that the actual per-share redemption amount
received by shareholders will not be substantially less than $10.00.
Although we will seek to have all vendors, service
providers, prospective target businesses or other entities with which we do business execute agreements with us waiving any right, title,
interest and claim of any kind in or to any monies held in the Trust Account for the benefit of our Public Shareholders, there is no guarantee
that they will execute such agreements or even if they execute such agreements that they would be prevented from bringing claims against
the Trust Account including but not limited to fraudulent inducement, breach of fiduciary responsibility or other similar claims, as well
as claims challenging the enforceability of the waiver, in each case in order to gain an advantage with respect to a claim against our
assets, including the funds held in the Trust Account. If any third party refuses to execute an agreement waiving such claims to the monies
held in the Trust Account, our management will perform an analysis of the alternatives available to it and will only enter into an agreement
with a third party that has not executed a waiver if management believes that such third party’s engagement would be significantly
more beneficial to us than any alternative. Examples of possible instances where we may engage a third party that refuses to execute a
waiver include the engagement of a third-party consultant whose particular expertise or skills are believed by management to be significantly
superior to those of other consultants that would agree to execute a waiver or in cases where management is unable to find a service provider
willing to execute a waiver.
In addition, there is no guarantee that such entities
will agree to waive any claims they may have in the future as a result of, or arising out of, any negotiations, contracts or agreements
with us and will not seek recourse against the Trust Account for any reason. Our Sponsor has agreed that it will be liable to us if and
to the extent any claims by a third party for services rendered or products sold to us, or a prospective target business with which we
have discussed entering into a transaction agreement, reduce the amount of funds in the Trust Account to below (i) $10.00 per public share
or (ii) such lesser amount per public share held in the Trust Account as of the date of the liquidation of the Trust Account, due to reductions
in value of the trust assets, in each case net of the amount of interest which may be withdrawn to pay taxes, except as to any claims
by a third party who executed a waiver of any and all rights to seek access to the Trust Account and except as to any claims under our
indemnity of the underwriters of the IPO against certain liabilities, including liabilities under the Securities Act. In the event that
an executed waiver is deemed to be unenforceable against a third party, then our Sponsor will not be responsible to the extent of any
liability for such third party claims. We have not independently verified whether our Sponsor has sufficient funds to satisfy its indemnity
obligations and believe that our Sponsor’s only assets are securities of our company. We have not asked our Sponsor to reserve for
such indemnification obligations. Therefore, we believe it is unlikely that our Sponsor would be able to satisfy those obligations. As
a result, if any such claims were successfully made against the Trust Account, the funds available for our initial business combination
and redemptions could be reduced to less than $10.00 per public share. In such event, we may not be able to complete our initial business
combination, and you would receive such lesser amount per share in connection with any redemption of your Public Shares. None of our officers
or directors are required to indemnify us for claims by third parties including, without limitation, claims by vendors and prospective
target businesses.
9
In the event that the proceeds in the Trust Account
are reduced below (i) $10.00 per public share or (ii) such lesser amount per public share held in the Trust Account as of the date of
the liquidation of the Trust Account, due to reductions in value of the trust assets, in each case net of the amount of interest which
may be withdrawn to pay taxes, and our Sponsor assert that it is unable to satisfy its indemnification obligations or that it has no indemnification
obligations related to a particular claim, our independent directors would determine whether to take legal action against our Sponsor
to enforce such indemnification obligations. While we currently expect that our independent directors would take legal action on our behalf
against our Sponsor to enforce its indemnification obligations to us, it is possible that our independent directors in exercising their
business judgment may choose not to do so if, for example, the cost of such legal action is deemed by the independent directors to be
too high relative to the amount recoverable or if the independent directors determine that a favorable outcome is not likely. Accordingly,
we cannot assure you that due to claims of creditors the actual value of the per-share redemption price will not be less than $10.00 per
public share.
If we file a bankruptcy petition or an involuntary
bankruptcy petition is filed against us that is not dismissed, the proceeds held in the Trust Account could be subject to applicable bankruptcy
law, and may be included in our bankruptcy estate and subject to the claims of third parties with priority over the claims of our shareholders.
To the extent any bankruptcy claims deplete the Trust Account, we cannot assure you we will be able to return $10.00 per share to our
Public Shareholders. Additionally, if we file a bankruptcy petition or an involuntary bankruptcy petition is filed against us that is
not dismissed, any distributions received by shareholders could be viewed under applicable debtor/creditor and/or bankruptcy laws as either
a “preferential transfer” or a “fraudulent conveyance.” As a result, a bankruptcy court could seek to recover
some or all amounts received by our shareholders. Furthermore, our board of directors may be viewed as having breached its fiduciary duty
to our creditors and/or may have acted in bad faith, thereby exposing itself and our company to claims of punitive damages, by paying
Public Shareholders from the Trust Account prior to addressing the claims of creditors. We cannot assure you that claims will not be brought
against us for these reasons.
Our Public Shareholders will be entitled to receive
funds from the Trust Account only (i) in the event of the redemption of our Public Shares if we do not complete our initial business combination
within the required time period or (ii) if and to the extent that a holder of such Public Shares exercises its right to redeem such Public
Shares in connection with a vote to approve (a) an extension of the period of time we have to consummate an initial business combination
or (b) an initial business combination itself.
Competition
In identifying, evaluating,
and selecting a target business for our initial business combination, we may encounter intense competition from other entities having
a business objective similar to ours, including other blank check companies, private equity groups and leveraged buyout funds, and operating
businesses seeking strategic acquisitions. Many of these entities are well established and have extensive experience identifying and effecting
business combinations directly or through affiliates. Moreover, many of these competitors possess greater financial, technical, human,
and other resources than we do. Our ability to acquire larger target businesses will be limited by our available financial resources.
This inherent limitation gives others an advantage in pursuing the acquisition of a target business. Furthermore, our obligation to pay
cash in connection with our Public Shareholders who exercise their redemption rights may reduce the resources available to us for our
initial business combination and our outstanding rights, and the future dilution they potentially represent, may not be viewed favorably
by certain target businesses. Either of these factors may place us at a competitive disadvantage in successfully negotiating an initial
business combination.
In addition, since the
fourth quarter of 2020, the number of special purpose acquisition companies that have been formed has increased substantially. Many potential
targets for special purpose acquisition companies have already entered into an initial business combination, and there are still many
special purpose acquisition companies seeking targets for their initial business combination, as well as many such companies currently
in registration. As a result, at times, fewer attractive targets may be available, and it may require more time, more effort and more
resources to identify a suitable target and to consummate an initial business combination.
If we succeed in effecting
a business combination, there will be, in all likelihood, intense competition from competitors of the target business. We cannot assure
you that, subsequent to a business combination, we will have the resources or ability to compete effectively.
Employees
We have two executive
officers. These individuals are not obligated to devote any specific number of hours to our matters and intend to devote only as much
time as they deem necessary to our affairs. The amount of time they will devote in any time period will vary based on whether a target
business has been selected for the business combination and the stage of the business combination process the company is in. Accordingly,
once management locates a suitable target business to acquire, they will likely spend more time investigating such target business and
negotiating and processing the business combination (and consequently spend more time to our affairs) than they would prior to locating
a suitable target business. We presently expect each of our executive officers to devote such amount of time as they reasonably believe
is necessary to our business. We do not intend to have any full-time employees prior to the consummation of a business combination.
Facilities
Our executive offices
are located at 3250 Mary Street, Suite 410, Miami, FL 33133, and our telephone number is (305) 438-7700. Pursuant to an Administrative
Services Agreement, until the completion of our initial Business Combination or liquidation, we will pay a monthly fee of $10,000 to our
Sponsor for office space, secretarial and administrative services. We consider our current office space, combined with the other office
space otherwise available to our executive officers, adequate for our current operations.
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Text extracted from the filing as submitted to EDGAR. Formatting, tables and exhibits are simplified for reading; the original document is authoritative for anything you rely on.