Item 1A. Risk Factors
Item 1A. Risk Factors.
Factors that could cause our actual results to
differ materially from those in this Quarterly Report include the risk factors described under the heading “Risk Factors”
in Annual Report on Form 10-K filed with the SEC on April 14, 2022. As of the date of this Quarterly Report, there have been no material
changes to the risk factors disclosed in the Form 10-K, except as follows:
There is substantial doubt about our ability
to continue as a “going concern.”
As of September 30, 2022, we had $19,442 in our
operating bank account, and working capital deficiency $1,995,115. Further, we have incurred and expect to continue to incur significant
costs in pursuit of our acquisition plans. Management’s plans to address this need for capital are discussed in the section of this
Quarterly Report titled “Management’s Discussion and Analysis of Financial Condition and Results of Operations.” If
we are unable to raise additional funds to alleviate liquidity needs and complete an Initial Business Combination within 24 months from
the closing of the IPO (by September 24, 2023), then we will cease all operations except for the purpose of liquidating. Our liquidity
condition raises substantial doubt about our ability to continue as a going concern. The financial statements contained elsewhere in this
Quarterly Report do not include any adjustments that might result from our inability to continue as a going concern.
If we are deemed to be an investment company
for purposes of the Investment Company Act, we may be forced to abandon our efforts to complete an Initial Business Combination and instead
be required to liquidate the Company. To mitigate the risk of that result, on or prior to the 24-month anniversary of the effective date
of the registration statement relating to our Public Offering, we may instruct Continental Stock Transfer & Trust Company to liquidate
the securities held in the Trust Account and instead hold all funds in the Trust Account in cash. As a result, following such change,
we will likely receive minimal, if any, interest, on the funds held in the Trust Account, which would reduce the dollar amount that our
Public Shareholders would have otherwise received upon any redemption or liquidation of the Company if the assets in the Trust Account
had remained in U.S. government securities or money market funds.
On March 30, 2022, the SEC issued proposed rules
(the “SPAC Rule Proposals”), relating, among other things, to circumstances in which special purpose acquisition companies
(“SPACs”) such as us could potentially be subject to the Investment Company Act and the regulations thereunder. The SPAC Rule
Proposals would provide a safe harbor for such companies from the definition of “investment company” under Section 3(a)(1)(A)
of the Investment Company Act, provided that a SPAC satisfies certain criteria. To comply with the duration limitation of the proposed
safe harbor, a SPAC would have a limited time period to announce and complete a de-SPAC transaction. Specifically, to comply with the
safe harbor, the SPAC Rule Proposals would require a company to file a report on Form 8-K announcing that it has entered into an agreement
with a target company for an initial business combination no later than 18 months after the effective date of the registration statement
for its initial public offering. The company would then be required to complete its initial business combination no later than 24 months
after the effective date of the registration statement for its initial public offering. We understand that the SEC has recently been taking
informal positions regarding the Investment Company Act consistent with the SPAC Rule Proposals.
There is currently uncertainty concerning the
applicability of the Investment Company Act to a SPAC, including a company like ours, that does not complete its initial business combination
within the proposed time frame set forth in the proposed safe harbor rule. As indicated above, we completed our IPO in September 2021
and have operated as a blank check company searching for a target business with which to consummate an Initial Business Combination and
working to negotiate and consummate the Proposed Business Combination since such time (or approximately 14 months after the effective
date of the registration statement for our Public Offering, as of the date of this Quarterly Report). If we were deemed to be an investment
company for purposes of the Investment Company Act, we might be forced to abandon our efforts to complete the Proposed Business Combination
or any other Initial Business Combination and instead be required to liquidate the Company. If we are required to liquidate the Company,
our investors would not be able to realize the benefits of owning shares in a successor operating business, including the potential appreciation
in the value of our shares and warrants following such a transaction, and our warrants would expire worthless.
The funds in the Trust Account have, since our
Public Offering, been held only in U.S. government treasury obligations with a maturity of 185 days or less or in money market funds investing
solely in U.S. government treasury obligations and meeting certain conditions under Rule 2a-7 under the Investment Company Act. As of
September 30, 2022, amounts held in Trust Account included approximately $1,992,611 of accrued interest. To mitigate the risk of us being
deemed to have been operating as an unregistered investment company under the Investment Company Act, we may, on or prior to the 24-month
anniversary of the effective date of the registration statement relating to our Public Offering, or September 21, 2023, instruct Continental
Stock Transfer & Trust Company, the trustee with respect to the Trust Account, to liquidate the U.S. government treasury obligations
or money market funds held in the Trust Account and thereafter to hold all funds in the Trust Account in cash (i.e., in one or more bank
accounts) until the earlier of the consummation of the Proposed Business Combination, another Initial Business Combination or our liquidation.
Following such liquidation of the assets in our Trust Account, we will likely receive minimal interest, if any, on the funds held in the
Trust Account, which would reduce the dollar amount our Public Shareholders would have otherwise received upon any redemption or liquidation
of the Company if the assets in the Trust Account had remained in U.S. government securities or money market funds. This means that the
amount available for redemption will not increase after such liquidation.
In addition, even prior to the 24-month anniversary of the effective
date of the registration statement relating to our Public Offering, we may be deemed to be an investment company. The longer that the
funds in the Trust Account are held in short-term U.S. government securities or in money market funds invested exclusively in such securities,
even prior to the 24-month anniversary, there is a greater risk that we may be considered an unregistered investment company, in which
case we may be required to liquidate. Accordingly, we may determine, in our discretion, to liquidate the securities held in the Trust
Account at any time, even prior to the 24-month anniversary, and instead hold all funds in the Trust Account in cash, which would further
reduce the dollar amount our Public Shareholders would receive upon any redemption or our liquidation.
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