Item 1A. Risk Factors
Item 1A. Risk Factors.
Factors that could cause our actual results to
differ materially from those in this report include the risk factors described in our Form 10-K for the fiscal year ended December 31,
2021. As of the date of this Report, there have been no material changes to the risk factors disclosed in our Form 10-K for the period
ended December 31, 2021 filed with the SEC, except as set forth below:
A new 1% U.S. federal excise tax could be
imposed on us in connection with redemptions.
On August 16, 2022, the Inflation Reduction Act
of 2022 (the “IRA”) was signed into federal law. The IRA provides for, among other things, a new U.S. federal 1% excise tax
on certain repurchases (including redemptions) of stock by publicly traded U.S. corporations, by certain U.S. subsidiaries of publicly
traded non-U.S. corporations, by “covered surrogate foreign corporations” (as defined in the IRA) and by certain affiliates
of the foregoing (each, a “covered corporation”). Because our securities are trading on the Nasdaq, we are a “covered
corporation” for this purpose. The excise tax is imposed on the repurchasing corporation itself, not its shareholders from which
shares are repurchased. The amount of the excise tax is generally 1% of the fair market value of the shares repurchased at the time of
the repurchase. However, for purposes of calculating the excise tax, repurchasing corporations are permitted to net the fair market value
of certain new stock issuances against the fair market value of stock repurchases during the same taxable year. In addition, certain
exceptions apply to the excise tax. The U.S. Department of Treasury has been given authority to provide regulations and other guidance
to carry out, and to prevent the avoidance of the excise tax. The IRA applies only to repurchases that occur after December 31, 2022.
If we complete a business combination after December
31, 2022, any redemption or other repurchase that occurs in connection with the business combination, or any other redemption or other
repurchase that occurs after December 31, 2022 may be subject to the excise tax. Whether and to what extent we would be subject to the
excise tax would depend on a number of factors, including (i) the fair market value of the redemptions and repurchases, (ii) the nature
and amount of the equity issued in connection with the business combination (or otherwise issued not in connection with the business combination
but issued within the same taxable year of the business combination), and (iii) the content of regulations and other guidance from the
U.S. Department of the Treasury. In addition, because the excise tax would be payable by us, and not by the redeeming holder, the mechanics
of any required payment of the excise tax have not been determined. The foregoing could cause a reduction in the cash available on hand
to complete any business combination and in our ability to complete any such business combination.
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