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;
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● 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;
● 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 Business Combination Marketing 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”);
● 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;
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● 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.
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 January 8, 2028, 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 January 6,
2029. 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 January 6, 2026 and our securities are currently listed on the Global Market tier of Nasdaq. Pursuant
to our Amended and Restated Charter, we have until January 8, 2028 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.
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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 January 6, 2029 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 Unit sold in our Initial
Public Offering at an offering price of $10.00 per Unit consisted of one Public Share and one-third of one Public Warrant. Of the proceeds
we received from the Initial Public Offering and the Private Placement, $253,000,000 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 $10.00 per Public Share as of January 8, 2026 (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 Warrants 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 contains 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.
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.
Our search for an initial Business Combination,
and any target business with which we may ultimately consummate an initial Business Combination, may be materially adversely affected
by current global geopolitical conditions resulting from the ongoing Russia-Ukraine conflict and the recent escalation of the
conflict in the Middle East and Southwest Asia, including Iran.
United States and global
markets are experiencing volatility and disruption following the geopolitical instability resulting from the ongoing Russia-Ukraine conflict
and the recent escalation of conflict in the Middle East and Southwest Asia. In response to the ongoing Russia-Ukraine conflict,
the North Atlantic Treaty Organization (“NATO”) deployed additional military forces to eastern Europe, and the United States,
the United Kingdom, the European Union and other countries have announced various sanctions and restrictive actions against Russia, Belarus
and related individuals and entities, including the removal of certain financial institutions from the Society for Worldwide Interbank
Financial Telecommunication (SWIFT) payment system. Certain countries, including the United States, have also provided and may continue
to provide military aid or other assistance to Ukraine and to Israel, or have undertaken or will undertake military strikes in Southwest
Asia, increasing geopolitical tensions among a number of nations. The invasion of Ukraine by Russia and the escalation of the conflict
in the Middle East and Southwest Asia, particularly the escalation of the Israel-Hamas and Israel-Iran conflicts, and the resulting measures
that have been taken, and could be taken in the future, by NATO, the United States, the United Kingdom, the European Union, Israel,
Iran and its neighboring states and other countries have created global security concerns that could have a lasting impact on regional
and global economies. Although the length and impact of the ongoing conflicts are highly unpredictable, they could lead to market disruptions,
including significant volatility in commodity prices, credit and capital markets, as well as supply chain interruptions and increased
cyber-attacks against U.S. companies. Additionally, any resulting sanctions could adversely affect the global economy and financial
markets and lead to instability and lack of liquidity in capital markets.
Any of the abovementioned
factors, or any other negative impact on the global economy, capital markets or other geopolitical conditions resulting from the Russian
invasion of Ukraine, the escalation of the conflict in the Middle East and Southwest Asia, particularly the escalation of the Israel-Hamas
and Israel-Iran conflicts, and subsequent sanctions or related actions, could adversely affect our search for an initial Business Combination
and any target business with which we may ultimately consummate an initial Business Combination.
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The extent and duration of
the ongoing conflicts, resulting sanctions and any related market disruptions are impossible to predict, but could be substantial, particularly
if current or new sanctions continue for an extended period of time or if geopolitical tensions result in expanded military operations
on a global scale. Any such disruptions may also have the effect of heightening many of the other risks described in this section. If
these disruptions or other matters of global concern continue for an extended period of time, our ability to consummate an initial Business
Combination, or the operations of a target business with which we may ultimately consummate an initial Business Combination, may be materially
adversely affected.
Military or other conflicts in Ukraine,
the Middle East and Southwest Asia, 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.
Military or other conflicts
in Ukraine, the Middle East, Southwest Asia, 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, and to other company or industry-specific, national, regional
or international economic disruptions and economic uncertainty, any of which could make it more difficult for us to identify a Business
Combination target and consummate an initial Business Combination on acceptable commercial terms, or at all.
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.