Item 1A. Risk Factors
Item 1A. Risk Factors.
As a smaller reporting company under Rule 12b-2
of the Exchange Act, we are not required to include risk factors in this Report. However, the following is a partial list of material
risks, uncertainties and other factors that could have a material effect on us and our operations:
● we are a blank check company and an early-stage company with
no revenue or basis to evaluate our ability to select a suitable business target;
● we may not be able to select
an appropriate target business or businesses and complete our initial Business Combination within the Combination Period;
● our expectations around the
performance of a prospective target business or businesses may not be realized;
● we may not be successful in
retaining or recruiting required officers, key employees or directors following our initial Business Combination;
● our officers and directors
may have difficulty allocating their time between our Company and other businesses and may potentially have conflicts of interest with
our business or in approving our initial Business Combination;
● we may not be able to obtain
additional financing to complete our initial Business Combination or reduce the number of Public Shareholders requesting redemption;
● we may issue our Ordinary Shares
to investors in connection with our initial Business Combination at a price that is less than the prevailing market price of our Ordinary
Shares at that time;
● our shareholders may not be
given the opportunity to choose the initial Business Combination target or to vote on the initial Business Combination;
● Trust Account funds may not
be protected against third-party claims or bankruptcy;
● an active market for our public
securities may not continue and our shareholders may have limited liquidity and trading;
● our financial performance following
a Business Combination with an entity may be negatively affected by their lack of an established record of revenue, cash flows and experienced
management;
● there may be more competition
to find an attractive target for an initial Business Combination, which could increase the costs associated with completing our initial
Business Combination and may result in our inability to find a suitable target;
● changes in the market for directors
and officers liability insurance could make it more difficult and more expensive for us to negotiate and complete an initial Business
Combination;
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● 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;
● we may engage one or more of
the Underwriters of the Initial Public Offering or one of their respective affiliates to provide additional services to us after the
Initial Public Offering, which may include acting as a financial advisor in connection with an initial Business Combination or as placement
agent in connection with a related financing transaction. The Underwriters of the Initial Public Offering are entitled to receive the
deferred underwriting fee that will be released from the Trust Account only upon completion of an initial Business Combination. These
financial incentives may cause them to have potential conflicts of interest in rendering any such additional services to us after the
Initial Public Offering, including, for example, in connection with the sourcing and consummation of an initial Business Combination;
● we may attempt to complete
our initial Business Combination with a private company about which little information is available, which may result in a Business Combination
with a company that is not as profitable as we suspected, if at all;
● since our Sponsor will lose
its entire investment in us if our initial Business Combination is not completed (other than with respect to any Public Shares they may
acquire during or after the Initial Public Offering), and because our Sponsor, officers and directors may profit substantially even under
circumstances in which our Public Shareholders would experience losses in connection with their investment, a conflict of interest may
arise in determining whether a particular Business Combination target is appropriate for our initial Business Combination;
● the value of the Founder Shares
following completion of our initial Business Combination is likely to be substantially higher than the nominal price paid for them, even
if the trading price of our Public Shares at such time is substantially less than the Redemption Price;
● resources could be wasted in
researching acquisitions that are not completed, which could materially adversely affect subsequent attempts to locate and acquire or
merge with another business. If we have not completed our initial Business Combination within the Combination Period, our Public Shareholders
may receive only the Redemption Price or less than such amount in certain circumstances, on the liquidation of our Trust Account and
our Warrants will expire worthless;
● we may not be able to complete
an initial Business Combination with certain potential target companies if a proposed transaction with the target company may be subject
to review or approval by regulatory authorities pursuant to certain U.S. or foreign laws or regulations, including the Committee on Foreign
Investment in the United States (“CFIUS”). While our Sponsor is a limited liability company formed in Delaware and is not
controlled by, nor does it have substantial ties with, a non-U.S. person, it has two passive minority members that are from exempted
foreign states and one passive minority member from the United Arab Emirates. Investments that result in “control” of a U.S.
business by a foreign person are always subject to CFIUS jurisdiction;
● recent fluctuations in inflation
and interest rates in the United States and elsewhere could make it more difficult for us to consummate an initial Business Combination;
● adverse developments affecting
the financial services industry, including events or concerns involving liquidity, defaults or non-performance by financial institutions,
could adversely affect our business, financial condition or results of operations, or our prospects;
● military or other conflicts
in Ukraine, the Middle East or elsewhere may lead to increased volume and price volatility for publicly traded securities, or affect
the operations or financial condition of potential target companies, which could make it more difficult for us to consummate an initial
Business Combination;
● if our initial Business Combination
involves a company organized under the laws of a state of the United States, it is possible the Excise Tax will be imposed on us in connection
with redemptions of our Ordinary Shares after or in connection with such initial Business Combination;
● cyber incidents or attacks
directed at us or third parties could result in information theft, data corruption, operational disruption and/or financial loss;
● 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;
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● 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; and
● to mitigate the risk that we
might be deemed to be an investment company for purposes of the Investment Company Act, we may, at any time (based on our Management
Team’s ongoing assessment of all factors related to our potential status under the Investment Company Act), instruct the trustee
to liquidate the investments held in the Trust Account and instead to hold the funds in the Trust Account in an interest-bearing demand
deposit account at a bank until the earlier of the consummation of our initial Business Combination or our liquidation. As a result of
such transfer, we could receive less interest on the funds held in the Trust Account than the interest we would have received pursuant
to our original Trust Account investments, which could reduce the dollar amount our Public Shareholders would receive upon any redemption
or our liquidation.
We may seek to extend the Combination Period,
which could reduce the amount held in our Trust Account and have adverse effects on our Company.
If we are unable to consummate our initial Business
Combination on or before May 22, 2027, we may seek shareholder approval to extend the Combination Period by amending our Amended and Restated
Charter. In such event, our Public Shareholders will be provided the opportunity to have all or a portion of their Public Shares redeemed.
Any redemptions will reduce the amount held in our Trust Account, the effect of which may adversely affect our ability to consummate our
initial Business Combination and may also impair our ability to maintain our Nasdaq listing.
We anticipate that our securities will be
suspended from trading on Nasdaq and delisted if we do not consummate our initial Business Combination by May 22, 2027. Any trading suspension
or delisting could have a material adverse effect on the trading of our securities and may adversely affect our ability to consummate
an initial Business Combination.
Our IPO Registration Statement was declared effective
by the SEC on May 20, 2025 and our securities are currently listed on the Global Market tier of Nasdaq. Pursuant to our Amended and Restated
Charter, we have until May 22, 2027 to consummate our initial Business Combination. However, under the Nasdaq Rules, if a SPAC does not
meet the Nasdaq 36-Month Requirement, the SPAC will be subject to a suspension of trading and delisting from Nasdaq.
Under the Nasdaq Rules, a SPAC’s Nasdaq-listed
securities will be immediately suspended from trading if the SPAC does not meet the Nasdaq 36-Month Requirements, and Nasdaq will, at
such point, commence delisting procedures. Although a SPAC can request a hearing before the hearing panel of Nasdaq (the “Hearing
Panel”), the scope of the Hearing Panel’s review is limited. If a SPAC completes a Business Combination after receiving a
delisting determination by the staff of the Listing Qualifications Department of Nasdaq (a “Staff Delisting Determination”)
and/or demonstrates compliance with all applicable initial listing requirements, the combined company can apply to list its securities
on Nasdaq pursuant to the normal application review process. The Nasdaq Rules contain a list of deficiencies that would immediately result
in a Staff Delisting Determination, which includes noncompliance with the Nasdaq 36-Month Requirement. Accordingly, were we to amend our
Amended and Restated Charter to extend the date by which we are permitted to consummate our initial Business Combination, we would still
need to consummate our initial Business Combination on or prior to May 20, 2028 in order to avoid a suspension of our securities from
trading on and delisting from Nasdaq. If Nasdaq were to suspend our securities from trading and delist our securities, our securities
could potentially be quoted on an over-the-counter market. Even if our securities are then quoted on an over-the-counter market, our Nasdaq
suspension and delisting could have significant material adverse consequences, including:
●
making our securities appear to be less attractive to potential target companies than the securities of an exchange listed SPAC;
●
limited availability of market quotations for our securities;
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●
reduced liquidity for our securities;
●
the possibility that our Class A ordinary shares would be deemed “penny stock,” which will require brokers trading in our Class A ordinary shares to adhere to more stringent rules and possibly result in a reduced level of trading activity in the secondary trading market for our securities;
●
limited news and analyst coverage; and
●
decreased ability to issue additional securities or obtain additional financing in the future.
In addition, if our securities are delisted from
Nasdaq, trading in our securities, and offers and sales of our securities by us, may be subject to state securities regulation and additional
compliance costs.
The share price of the post-Business Combination
company may be less than the Redemption Price of our Public Shares.
Each Unit sold in our Initial Public
Offering at an offering price of $10.00 per Unit consisted of one Public Share and one-half of one Public Warrant. Of the proceeds
we received from the Initial Public Offering and the Private Placement, $250,000,000 was placed in our Trust Account. We
will provide our Public Shareholders the opportunity to redeem all or a portion of their Public Shares in connection with the
completion of our initial Business Combination, and potentially upon the occurrence of certain other events prior to our initial
Business Combination. We expect that the pro rata redemption price in any redemption will be approximately $10.24
per Public Share as of December 31, 2025 (before taxes payable, if any), representing a pro rata portion of our Trust Account
without taking into account any interest or other income earned on such funds (less any withdrawals from such interest or income for
taxes paid), although the Redemption Price may be less in certain circumstances. As a result, Public Shareholders who own our Public
Shares on a redemption date can anticipate receiving the Redemption Price in connection with a redemption for each Public Share that
they choose to redeem.
There can be no assurance that, after our initial
Business Combination, our Public Shareholders would be able to sell their shares in the post-Business Combination company for the Redemption
Price, or any higher price. We have not as yet identified a target and are therefore unable to provide any assurances as to its financial
condition, business prospects or potential risks. It is therefore possible that the share price of the post-Business Combination company
may decline below the Redemption Price. In recent years, the share prices of many post-Business Combination companies have fallen following
a Business Combination. As a result, if our Public Shareholders continue to hold shares in the post-Business Combination company following
our initial Business Combination, we cannot assure our shareholders that the trading price of such shares will be greater than the Redemption
Price.
Certain agreements related to the Initial
Public Offering may be amended, or their provisions waived, without shareholder approval.
Certain of the agreements related to the Initial
Public Offering to which we are a party may be amended, or their provisions waived, without shareholder approval. Such agreements include,
among others, the (i) Underwriting Agreement, (ii) Letter Agreement, (iii) Registration Rights Agreement, (iii) Private Placement Units
Purchase Agreement and (iv) Administrative Services Agreement. These agreements contain various provisions that our Public Shareholders
might deem to be material. For example, our Letter Agreement and the Underwriting Agreement contain certain lock-up provisions with respect
to the Founder Shares and other securities held by our Sponsor, officers and directors, subject to certain exceptions. Amendments or waivers
to such agreements would require the consent of the applicable parties thereto and, in certain cases, the consent of the Underwriters
of the Initial Public Offering. Any such modification, such as an amendment to shorten lock-up restrictions, may benefit our Sponsor,
officers and/or directors. Any such amendments would not require approval from our shareholders, may result in the completion of our initial
Business Combination that may not otherwise have been possible, and may have an adverse effect on the value of an investment in our securities.
For example, although we would not amend lock-up provisions to permit securities held by our Sponsor to be freely sold, except to permitted
transferees, prior to our initial Business Combination, we may amend such provisions to permit them to be freely sold after the Business
Combination earlier than they would otherwise be permitted, which may have an adverse effect on the price of our securities. In no event,
however, will the Letter Agreement be amended to enable the Sponsor, officers or directors to redeem any of their Founder Shares from
the aggregate amount then on deposit in the Trust Account.
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Changes in international trade policies,
tariffs and treaties affecting imports and exports may have a material adverse effect on our search for an initial Business Combination
target or the performance or business prospects of a post-Business Combination company.
There have recently been significant changes to
international trade policies and tariffs affecting imports and exports. Any significant increases in tariffs on goods or materials or
other changes in trade policy could negatively affect our search for a target and/or our ability to complete our initial Business Combination.
Recently, the United States has implemented a
range of new tariffs and increases to existing tariffs. In response to the tariffs announced by the United States, other countries have
imposed, are considering imposing, and may in the future impose new or increased tariffs on certain exports from the United States. There
is currently significant uncertainty about the future relationship between the United States and other countries with respect to trade
policies, taxes, government regulations and tariffs. and we cannot predict whether, and to what extent, current tariffs will continue
or trade policies will change in the future.
Tariffs, or the threat of tariffs or increased
tariffs, could have a significant negative impact on certain businesses (either due to domestic businesses’ reliance on imported
goods or dependence on access to foreign markets, or foreign businesses’ reliance on sales into the United States). In addition,
retaliatory tariffs could have a significant negative impact on foreign businesses that rely on imports from the United States, and domestic
businesses that rely on exporting goods internationally. These tariffs and threats of tariffs and other potential trade policy changes
could negatively affect the attractiveness of certain initial Business Combination targets, or lead to material adverse effects on a post-Business
Combination company. Among other things, historical financial performance of companies affected by trade policies and/or tariffs may not
provide useful guidance as to the future performance of such companies, because future financial performance of those companies may be
materially affected by new U.S. tariffs or foreign retaliatory tariffs, or other changes to trade policies. The business prospects of
a particular target for a Business Combination could change even after we enter into a Business Combination agreement, as a result of
tariffs or the threat of tariffs that may have a material impact on that target’s business, and it may be costly or impractical
for us to terminate that Business Combination agreement. These factors could affect our selection of a Business Combination target.
We may not be able to adequately address the risks
presented by these tariffs or other potential trade policy changes. As a result, we may deem it costly, impractical or risky to complete
an initial Business Combination with a particular target or with a target in a particular industry or from a particular country. Consequently,
the pool of potential target companies may be reduced, which could impair our ability to identify a suitable target and to complete an
initial Business Combination. If we complete an initial Business Combination with such a target, the post-Business Combination company’s
operations and financial results could be adversely affected as a result of tariffs or changes to trade policies, which may cause the
market value of the securities of the post-Business Combination company to decline.
Delays in the government budget process
or a government shutdown may materially adversely affect our ability to complete an initial business combination, or the operations of
the combined company following our initial business combination.
Each year, the U.S. Congress must pass all spending
bills in the federal budget. If any such spending bill is not timely passed, a government shutdown will close many federally run operations,
which includes those of the SEC, and halt work for federal employees unless they are considered essential. If a government shutdown were
to occur, and the SEC were to remain closed for a prolonged period of time, we may not be able to complete our initial business combination
within the time period as required by our amended and restated memorandum and articles of association (or such later date as may be approved
by our shareholders), particularly if the SEC is unable to timely review our filings, or those of a target business or other entity that
relate to our initial business combination, or to declare such filings effective as may be applicable. Additionally, following consummation
of our initial business combination, the combined company’s operations or its ability to raise additional capital to support its
operations could be materially adversely affected by any prolonged government shutdown.
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