Item 1A. Risk Factors
Item
1A. Risk Factors.
As
of the date of this Quarterly Report, other than as set forth below, there have been no material changes from the risk factors previously
disclosed in our (i) Registration Statement; (ii) Annual Report on Form 10-K for the year ended March 31, 2022 filed with the SEC on
June 24, 2022; and (iii) Quarterly Report on Form 10-Q for the quarter ended September 30, 2022 filed with the SEC on November 14, 2022.
Any of these factors could result in a significant or material adverse effect on our results of operations or financial condition. Additional
risk factors not presently known to us or that we currently deem immaterial may also impair our business or results of operations.
A
1% U.S. federal excise tax may be imposed on us in connection with our redemptions of shares in connection with a Business Combination
or other stockholder vote pursuant to which stockholders would have a right to submit their shares for redemption (a “Redemption
Event”).
Pursuant
to the Inflation Reduction Act of 2022 (the “ IR Act ”), commencing in 2023, a 1% U.S. federal excise tax is imposed
on certain repurchases (including redemptions) of stock by publicly traded domestic (i.e., U.S.) corporations and certain domestic subsidiaries
of publicly traded foreign corporations. The excise tax is imposed on the repurchasing corporation and not on its stockholders. The amount
of the excise tax is equal to 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. The U.S. Department of the Treasury (the “ Treasury
Department ”) has authority to promulgate regulations and provide other guidance regarding the excise tax. In December 2022,
the Treasury Department issued Notice 2023-2, indicating its intention to propose such regulations and issuing certain interim rules
on which taxpayers may rely. Under the interim rules, liquidating distributions made by publicly traded domestic corporations are exempt
from the excise tax. In addition, any redemptions that occur in the same taxable year as a liquidation is completed will also be exempt
from such tax. Accordingly, redemptions of our Public Shares in connection with an extension may subject us to the excise tax, unless
one of the two exceptions above apply. Redemptions would only occur if an extension proposal is approved by our stockholders and the
extension is implemented by the Board.
Any
redemption or other repurchase may be subject to the excise tax. The extent to which we would be subject to the excise tax in connection
with a Redemption Event would depend on a number of factors, including: (i) the fair market value of the redemptions and repurchases
in connection with the Redemption Event, (ii) the nature and amount of any “PIPE” or other equity issuances in connection
with the Business Combination (or otherwise issued not in connection with the Redemption Event but issued within the same taxable year
of the Business Combination), (iii) if we fail to timely consummate a Business Combination and liquidate in a taxable year following
a Redemption Event and (iv) the content of any proposed or final regulations and other guidance from the Treasury Department. In addition,
because the excise tax would be payable by us and not by the redeeming holders, the mechanics of any required payment of the excise tax
remains to be determined. Any excise tax payable by us in connection with a Redemption Event may cause a reduction in the cash available
to us to complete a Business Combination and could affect our ability to complete a Business Combination.
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