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;
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● 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;
● 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 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;
●
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;
●
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.
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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 September 9, 2026, 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 September 5, 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 September 5, 2024 and our securities are currently listed on the Global Market tier of Nasdaq. Pursuant
to our Amended and Restated Charter, we have until September 9, 2026 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 Requirement,
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 September 5, 2027 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;
● 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 Public Unit sold in our
Initial Public Offering at an offering price of $10.00 per Public 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, $231,150,000 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 $10.15 per Public Share as of December 31, 2024 (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.
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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 Agreements 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
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.
Uncertainty in connection with certain
international economic and political relationships, including the imposition of tariffs on international trade, political disputes,
regulatory changes and other international matters could have a material adverse effect on our ability to identify potential targets
and to consummate our initial Business Combination, and could adversely affect the financial performance of any target, either
foreign or domestic.
The
international economic and political environment is dynamic and subject to change. There is currently significant uncertainty about
the future economic and political relationships between the United States and a number of other countries. These uncertainties include,
among other things, the potential imposition of protective tariffs on goods imported from other countries and reciprocal tariffs other
countries may impose on United States products, political disputes that may affect relationships between the United States and other countries
and the imposition of regulatory or other restrictions on trade and commerce. Any such matters could potentially limit the number of potential
targets we may consider, and could also have a material adverse effect on the financial performance of such potential targets. Among other
things, historical financial performance of companies affected by these international matters may not provide as accurate a barometer
of future performance as would pertain in a more stable economic environment.
For additional risks relating
to our operations, other than as set forth above, see the section titled “Risk Factors” contained in our IPO Registration
Statement. Any of these factors could result in a significant or material adverse effect on our results of operations or financial condition.
Additional risks could arise that may also affect our business or ability to consummate an initial Business Combination. We may disclose
changes to such risk factors or disclose additional risk factors from time to time in our future filings with the SEC.