Item 1. Business
Item
1. Business.
Introduction
We
are a blank check company incorporated on March 12, 2024, as a Cayman Islands exempted company for the purpose of effecting a merger,
share exchange, asset acquisition, share purchase, reorganization or similar business combination with one or more businesses. We have
neither engaged in any operations nor generated any revenue to date.
We were formed as an independent company by executives
of M3 Partners, LP (“ M3 Partners ”) and Brigade Capital Management, LP (“ Brigade ”). M3 Partners is
a leading financial advisory firm which provides advisory services to companies at inflection points in their growth trajectories. Brigade
is a leading global investment advisor that was founded in 2006 to specialize in credit-focused investment strategies and has approximately
$27 billion in assets under management. M3 Partners and Brigade have agreed to provide support to us in our pursuit of a successful initial
business combination. The team at M3 Partners has successfully completed hundreds of engagements in which it has assisted stockholders,
creditors and companies in maximizing the value of businesses and assets held by them. Brigade brings a track record of nearly 20 years
of deep fundamental credit research driven by a disciplined investment process which has been proven over numerous market cycles.
We are led by the team that organized M III Acquisition
Corp. (the “Initial SPAC”), M3-Brigade Acquisition II Corp. (the “Second SPAC”), M3-Brigade Acquisition III Corp.
(the “Third SPAC”) and M3-Brigade Acquisition IV Corp. (the “Fourth SPAC”). Members of our team managed the Initial
SPAC through an initial business combination in March 2018 to create Infrastructure and Energy Alternatives, Inc. (“IEA”)
(NASDAQ: IEA). IEA was a leading engineering, procurement and construction company which specializes in renewable energy infrastructure
which was acquired by MasTec Inc. (NYSE: MTZ) on October 7, 2022 at a valuation of $1.1 billion. The Third SPAC (NYSE: GFR) completed
its initial business combination with Greenfire Resources (“Greenfire”) in September 2023 in a transaction which valued Greenfire
at $950 million. The Second SPAC was liquidated in accordance with the terms of its charter in December 2023 and the sponsors of the
Fourth SPAC elected not to pursue its initial public offering and withdrew its registration statement in March 2022. The team that organized
our Sponsor also organized BM3EAC Corp. (the “EuroSPAC”), incorporated in the Cayman Islands and listed on Euronext Amsterdam,
which is currently seeking to effect a business combination with an operating company with significant operations in Europe. The Initial
SPAC, the Second SPAC, the Third SPAC, the Fourth SPAC and the EuroSPAC are collectively referred to herein as the “Prior SPACs”.
While we will not limit our efforts to identify
a prospective business combination to any particular business industry or sector or to any geographic region, we believe that our team’s
experience with companies based in North America and in the energy sector (or related products or services) may be a source of potential
business combination candidates.
Our executive offices are located at 1700 Broadway,
19th Floor, New York, NY 10019 and our telephone number is (212) 202-2200. Our corporate website address is www.m3-brigade.com. Our website
and the information contained on, or that can be accessed through, the website is not deemed to be incorporated by reference in, and
is not considered part of, this annual report. You should not rely on any such information in making your decision whether to invest
in our securities.
Company History
On March 15, 2024, our Sponsor paid $25,000, or
approximately $0.004 per share, to cover certain of our offering costs in exchange for 7,187,500 founder shares. On August 2, 2024, we
consummated our initial public offering of 28,750,000 units (the “Units”), which includes the full exercise by the underwriters
of their over-allotment option in the amount of 3,750,000 Units, at $10.00 per Unit, generating gross proceeds of $287,500,000 (the “ IPO ”).
Each Unit consists of one Class A ordinary share, par value $0.0001 per share (the “ Class A ordinary shares ” or “ Public
Shares ”) and one half of one redeemable warrant (the “ Public Warrants ”) of the Company, with each whole
Public Warrant entitling the holder to purchase one Class A ordinary share for $11.50 per share, subject to adjustment.
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Simultaneously with the closing of the IPO, the
Company consummated the sale of 8,337,500 warrants (the “ Private Placement Warrants ”) to the Sponsor and Cantor Fitzgerald
& Co., the representative of the underwriters of the IPO, at a price of $1.00 per warrant, or $8,337,500. Of those 8,337,500 Private
Placement Warrants, the Sponsor purchased 5,043,750 Private Placement Warrants and Cantor Fitzgerald & Co. purchased 3,293,750 Private
Placement Warrants. Each whole warrant entitles the holder to purchase one Class A ordinary share at a price of $11.50 per share. Certain
institutional investors who are not affiliated with any member of management (the “non-managing sponsor investors”), the
Sponsor or any other investor in the Sponsor provided approximately 50.1% of the capital utilized by the Sponsor to purchase the Private
Placement Warrants and, as a result, indirectly hold approximately 50.1% of such warrants.
Following the closing of the Initial Public Offering,
on August 2, 2024, an amount of $288,937,500 ($10.05 per Unit) from the net proceeds of the sale of the Units and the sale of the Private
Placement Warrants was placed in the trust account (the “ Trust Account ”). This amount included $13,400,000 of the
deferred underwriter’s discount. The funds held in the Trust Account are invested in U.S. government securities, within the meaning
set forth in Section 2(a)(16) of the Investment Company Act of 1940, as amended (the “Investment Company Act”), with a maturity
of 185 days or less or in money market funds meeting certain conditions under Rule 2a-7 under the Investment Company Act which invest
only in direct U.S. government treasury obligations.
Effecting Our Initial Business Combination
General
We are not presently engaged in, and we will not
engage in, any operations for an indefinite period of time. We intend to effectuate our initial business combination using cash held
in the Trust Account, the proceeds of the sale of our shares in connection with our initial business combination, shares issued to the
owners of the target, debt issued to bank or other lenders or the owners of the target, other securities issuances or a combination of
the foregoing. We may seek to complete our initial business combination with a company or business that may be financially unstable or
in its early stages of development or growth, which would subject us to the numerous risks inherent in such companies and businesses.
If our initial business combination is paid for
using equity or debt securities, or not all of the funds released from the Trust Account are used for payment of the consideration in
connection with our initial business combination or used for redemptions of our Class A ordinary shares, we may use the balance of the
cash released to us from the Trust Account for general corporate purposes, including for maintenance or expansion of operations of the
post-transaction company, the payment of principal or interest due on indebtedness incurred in completing our initial business combination,
to fund the purchase of other companies, or for working capital.
Although we are not limited to a particular industry
or geographic region for purposes of consummating an initial business combination, we may focus our search on North American and European
businesses in disruptive growth sectors, which complements the expertise of our management team. Although our management will assess
the risks inherent in a particular target business with which we may combine, we cannot assure you that this assessment will result in
our identifying all risks that a target business may encounter. Furthermore, some of those risks may be outside of our control, meaning
that we can do nothing to control or reduce the chances that those risks will adversely affect a target business.
We may seek to raise additional funds through
a private offering of debt or equity securities in connection with the completion of our initial business combination and we may effectuate
our initial business combination using the proceeds of such offering rather than using the amounts held in the Trust Account. In addition,
we may target businesses with enterprise values that are greater than we could acquire with the net proceeds of the IPO and the sale
of the Private Placement Warrants, and, as a result, if the cash portion of the purchase price exceeds the amount available from the
Trust Account, net of amounts needed to satisfy any redemptions by holders of our Public Shares (“ public shareholders ”),
we may be required to seek additional financing to complete such proposed initial business combination. Subject to compliance with applicable
securities laws, we would expect to complete such financing only simultaneously with the completion of our initial business combination.
In the case of an initial business combination funded with assets other than the Trust Account assets, our proxy materials or tender
offer documents disclosing the initial business combination would disclose the terms of the financing and, only if required by law, we
would seek shareholder approval of such financing. There is no limitation on our ability to raise funds through the issuance of equity
or equity-linked securities or through loans, advances or other indebtedness in connection with our initial business combination, including
pursuant to forward purchase agreements or backstop agreements we may enter into following consummation of the IPO. At this time, we
are not a party to any arrangement or understanding with any third party with respect to raising any additional funds through the sale
of securities or otherwise. None of our Sponsor, officers, directors or shareholders is required to provide any financing to us in connection
with or after our initial business combination.
Selection of a Target Business and Structuring
of Our Initial Business Combination
The rules of The Nasdaq Stock Market LLC (“ Nasdaq ”)
require that we must complete one or more business combinations having an aggregate fair market value of at least 80% of the value of
the assets held in the Trust Account (excluding the deferred underwriting commissions and taxes payable on the interest earned on the
Trust Account). Our board of directors will make the determination as to the fair market value of our initial business combination. If
our board of directors is not able to independently determine the fair market value of our initial business combination (including with
the assistance of financial advisors), we will obtain an opinion from an independent investment banking firm which is a member of Financial
Industry Regulatory Authority, Inc. (“ FINRA ”) or a valuation or appraisal firm with respect to the satisfaction of
such criteria. While we consider it likely that our board of directors will be able to make an independent determination of the fair
market value of our initial business combination, it may be unable to do so if it is less familiar or experienced with the business of
a particular target or if there is a significant amount of uncertainty as to the value of the target’s assets or prospects. Additionally,
pursuant to Nasdaq rules, any initial business combination must be approved by a majority of our independent directors.
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We anticipate structuring our initial business
combination so that the post-transaction company in which our public shareholders own shares will own or acquire 100% of the equity interests
or assets of the target business or businesses. We may, however, structure our initial business combination such that the post transaction
company owns or acquires less than 100% of such interests or assets of the target business in order to meet certain objectives of the
target management team or shareholders or for other reasons, but we will only complete such business combination if the post-transaction
company owns or acquires 50% or more of the outstanding voting securities of the target or otherwise acquires a controlling interest
in the target sufficient for it not to be required to register as an investment company under the Investment Company Act of 1940, as
amended, or the Investment Company Act. Even if the post-transaction company owns or acquires 50% or more of the voting securities of
the target, our shareholders prior to the business combination may collectively own a minority interest in the post-transaction company,
depending on valuations ascribed to the target and us in the business combination. For example, we could pursue a transaction in which
we issue a substantial number of new shares in exchange for all of the outstanding capital stock, shares or other equity interests of
a target. In this case, we would acquire a 100% controlling interest in the target. However, as a result of the issuance of a substantial
number of new shares, our shareholders immediately prior to our initial business combination could own less than a majority of our issued
and outstanding shares subsequent to our initial business combination. If less than 100% of the equity interests or assets of a target
business or businesses are owned or acquired by the post transaction company, the portion of such business or businesses that is owned
or acquired is what will be taken into account for purposes of the 80% of net assets test described above. If the business combination
involves more than one target business, the aggregate value of all of the target businesses, will be taken into account for purposes
of the 80% fair market value test.
In evaluating a prospective target business, we
expect to conduct a due diligence review which may encompass, among other things, meetings with incumbent management and employees, document
reviews, interviews of customers and suppliers, inspection of facilities, as applicable, as well as a review of financial, operational,
legal and other information which will be made available to us. If we determine to move forward with a particular target, we will proceed
to structure and negotiate the terms of the business combination transaction.
The time required to select and evaluate a target
business and to structure and complete our initial business combination, and the costs associated with this process, are not currently
ascertainable with any degree of certainty. Any costs incurred with respect to the identification and evaluation of, and negotiation
with, a prospective target business with which our initial business combination is not ultimately completed will result in our incurring
losses and will reduce the funds we can use to complete another business combination.
We are not prohibited from pursuing an initial
business combination with a company that is affiliated with our Sponsor, officers or directors, or completing the business combination
through a joint venture or other form of shared ownership with our Sponsor, officers or directors. In the event we seek to complete an
initial business combination with a target that is affiliated (as defined in our amended and restated memorandum and articles of association)
with our Sponsor, officers or directors, we, or a committee of independent directors, would obtain an opinion from an independent investment
banking firm which is a member of FINRA or a valuation or appraisal firm stating that the consideration to be paid by us in such an initial
business combination is fair to our Company from a financial point of view. We are not required to obtain such an opinion in any other
context.
Certain members of our management team and directors indirectly own founder shares and/or Private Placement Warrants and, accordingly, may have a conflict of interest in determining
whether a particular target business is an appropriate business with which to effectuate our initial business combination. Further, each
of our officers and directors may have a conflict of interest with respect to evaluating a particular business combination if the retention
or resignation of any such officers and directors was included by a target business as a condition to any agreement with respect to our
initial business combination.
Each of our officers and directors presently has,
and any of them in the future may have additional, fiduciary or contractual obligations to at least one other entity pursuant to which
such officer or director is or will be required to present a business combination opportunity to such entity. Accordingly, if any of
our officers or directors becomes aware of a business combination opportunity which is suitable for an entity to which he or she has
then-current fiduciary or contractual obligations, he or she will honor his or her fiduciary or contractual obligations to present such
business combination opportunity to such other entity, subject to their fiduciary duties under Cayman Islands law. Our amended and restated
memorandum and articles of association provides that, to the fullest extent permitted by applicable law: (i) no individual serving as
a director or an officer shall have any duty, except and to the extent expressly assumed by contract, to refrain from engaging directly
or indirectly in the same or similar business activities or lines of business as us; and (ii) we renounce any interest or expectancy
in, or in being offered an opportunity to participate in, any potential transaction or matter which may be a corporate opportunity for
any director or officer, on the one hand, and us, on the other. We do not believe, however, that the fiduciary duties or contractual
obligations of our officers or directors will materially affect our ability to complete our initial business combination.
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In addition, our Sponsor and our officers and
directors may sponsor or form other special purpose acquisition companies similar to ours or may pursue other business or investment
ventures during the period in which we are seeking an initial business combination. As a result, our Sponsor, officers and directors
could have conflicts of interest in determining whether to present business combination opportunities to us or to any other special purpose
acquisition company with which they may become involved. Any such companies, businesses or investments may present additional conflicts
of interest in pursuing an initial business combination target. However, we do not believe that any such potential conflicts would materially
affect our ability to complete our initial business combination.
Redemption Rights for Public Shareholders
upon Completion of our Initial Business Combination
We will provide our public shareholders with the
opportunity to redeem all or a portion of their Class A ordinary shares upon the completion of our initial business combination either
(i) in connection with a general meeting called to approve the business combination or (ii) without a shareholder vote by means of a
tender offer. The decision as to whether we will seek shareholder approval of a proposed business combination or conduct a tender offer
will be made by us, solely in our discretion, and will be based on a variety of factors such as the timing of the transaction and whether
the terms of the transaction would require us to seek shareholder approval under applicable law or stock exchange listing requirement
or whether we were deemed to be a foreign private issuer (which would require a tender offer rather than seeking shareholder approval
under SEC rules). Asset acquisitions and share purchases would not typically require shareholder approval while direct mergers with our
Company where we do not survive and any transactions where we issue more than 20% of our issued and outstanding ordinary shares or seek
to amend our amended and restated memorandum and articles of association would require shareholder approval. So long as we obtain and
maintain a listing for our securities on Nasdaq, we will be required to comply with Nasdaq’s shareholder approval rules.
The requirement that we provide our public shareholders
with the opportunity to redeem their Public Shares by one of the two methods listed above are contained in provisions of our amended
and restated memorandum and articles of association and will apply whether or not we maintain our registration under the Exchange Act
or our listing on Nasdaq. Such provisions may be amended if approved by a special resolution, which requires the affirmative vote of
at least two-thirds of the votes cast by the shareholders of the issued shares present in person or represented by proxy and entitled
to vote on such matter at a general meeting of the Company, so long as we offer redemption in connection with such amendment.
If we provide our public shareholders with the
opportunity to redeem their Public Shares in connection with a general meeting, we will, pursuant to our amended and restated memorandum
and articles of association:
● conduct
the redemptions in conjunction with a proxy solicitation pursuant to Regulation 14A of the
Exchange Act, which regulates the solicitation of proxies, and not pursuant to the tender
offer rules, and
● file
proxy materials with the SEC.
In the event that we seek shareholder approval
of our initial business combination, we will distribute proxy materials and, in connection therewith, provide our public shareholders
with the redemption rights described above upon completion of the initial business combination.
If we seek shareholder approval, we will complete
our initial business combination only if we receive an ordinary resolution under Cayman Islands law, which requires the affirmative vote
of at least a majority of the votes cast by the shareholders of the issued shares present in person or represented by proxy and entitled
to vote on such matter at a general meeting of the Company. A quorum for such meeting will be present if the holders of one third of
issued and outstanding shares entitled to vote at the meeting are represented in person or by proxy. Our Sponsor, officers and directors
will count toward this quorum and, pursuant to a letter agreement (the “ Letter Agreement ”), our Sponsor, officers
and directors have agreed to vote their founder shares and any Public Shares purchased during or after the IPO (including in open market
and privately-negotiated transactions) in favor of our initial business combination. For purposes of seeking approval of an ordinary
resolution, non-votes will have no effect on the approval of our initial business combination once a quorum is obtained. As a result,
in addition to our initial shareholders’ founder shares, we would need 10,781,251, or 37.5%, of the 28,750,000 Public Shares sold
in the IPO to be voted in favor of an initial business combination in order to have our initial business combination approved, assuming
all outstanding shares are voted and the parties to the Letter Agreement do not acquire any Class A ordinary shares. Assuming that only
the holders of one-third of our issued and outstanding ordinary shares, representing a quorum under our amended and restated memorandum
and articles of association vote their shares at a general meeting of the Company, we will not need any Public Shares in addition to
our founder shares to be voted in favor of an initial business combination in order to approve an initial business combination. However,
if our initial business combination is structured as a statutory merger or consolidation with another company under Cayman Islands law,
the approval of our initial business combination will require a special resolution, which requires the affirmative vote of at least two-thirds
of the votes cast by the shareholders of the issued shares present in person or represented by proxy and entitled to vote on such matter
at a general meeting of the Company. These quorum and voting thresholds, and the voting agreement of our Sponsor, officers and directors,
may make it more likely that we will consummate our initial business combination. Each public shareholder may elect to redeem their Public
Shares irrespective of whether they vote for or against the proposed transaction, or whether they do not vote or abstain from voting
on the proposed transaction, or whether they were a public shareholder on the record date for the general meeting held to approve the
proposed transaction.
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If a shareholder vote is not required and we do
not decide to hold a shareholder vote for business or other legal reasons, we will:
● conduct
the redemptions pursuant to Rule 13e-4 and Regulation 14E of the Exchange Act, which regulate
issuer tender offers, and
● file
tender offer documents with the SEC prior to completing our initial business combination
which contain substantially the same financial and other information about the initial business
combination and the redemption rights as is required under Regulation 14A of the Exchange
Act, which regulates the solicitation of proxies.
In the event we conduct redemptions pursuant to
the tender offer rules, our offer to redeem will remain open for at least 20 business days, in accordance with Rule 14e-1(a) under the
Exchange Act, and we will not be permitted to complete our initial business combination until the expiration of the tender offer period.
In addition, the tender offer will be conditioned on public shareholders not tendering more than the number of Public Shares we are permitted
to redeem. If public shareholders tender more shares than we have offered to purchase, we will withdraw the tender offer and not complete
the initial business combination.
Upon the public announcement of our initial business
combination, if we elect to conduct redemption pursuant to the tender offer rules, we or our Sponsor will terminate any plan established
in accordance with Rule 10b5-1 to purchase our Class A ordinary shares in the open market, in order to comply with Rule 14e-5 under the
Exchange Act.
We intend to require our public shareholders seeking
to exercise their redemption rights, whether they are record holders or hold their shares in “street name,” to, at the holder’s
option, either deliver their share certificates to our transfer agent or deliver their shares to our transfer agent electronically using
the Depository Trust Company’s DWAC (Deposit/Withdrawal At Custodian) system, prior to the date set forth in the proxy materials
or tender offer documents, as applicable. In the case of proxy materials, this date may be up to two business days prior to the scheduled
vote on the proposal to approve the initial business combination. In addition, if we conduct redemptions in connection with a shareholder
vote, we intend to require a public shareholder seeking redemption of its Public Shares to also submit a written request for redemption
to our transfer agent two business days prior to the scheduled vote in which the name of the beneficial owner of such shares is included.
The proxy materials or tender offer documents, as applicable, that we will furnish to holders of our Public Shares in connection with
our initial business combination will indicate whether we are requiring public shareholders to satisfy such delivery requirements. We
believe that this will allow our transfer agent to efficiently process any redemptions without the need for further communication or
action from the redeeming public shareholders, which could delay redemptions and result in additional administrative cost. If the proposed
initial business combination is not approved and we continue to search for a target company, we will promptly return any certificates
or shares delivered by public shareholders who elected to redeem their shares.
We will provide our public shareholders with the
opportunity to redeem their Public Shares for cash at a per share price equal to the aggregate amount then on deposit in the Trust Account
calculated as of two business days prior to the consummation of our initial business combination, including interest earned on the funds
held in the Trust Account (less taxes payable), divided by the number of then outstanding Public Shares, upon the completion of our initial
business combination, subject to the limitations and on the conditions described herein and in the registration statement relating to
the IPO. The per share amount we will distribute to investors who properly redeem their shares will not be reduced by the deferred underwriting
commissions we will pay to the underwriters. There will be no redemption rights upon the completion of our initial business combination
with respect to our Warrants. The Sponsor, our officers and directors have entered into the Letter Agreement, pursuant to which they
have agreed to waive their redemption rights with respect to their founder shares and any Public Shares held by them in connection with
the completion of our initial business combination.
Our proposed initial business combination may
impose a minimum cash requirement for (i) cash consideration to be paid to the target or its owners, (ii) cash for working capital or
other general corporate purposes or (iii) the retention of cash to satisfy other conditions. In the event the aggregate cash consideration
we would be required to pay for all Class A ordinary shares that are validly submitted for redemption plus any amount required to satisfy
cash conditions pursuant to the terms of the proposed initial business combination exceed the aggregate amount of cash available to us,
we will not complete the initial business combination or redeem any shares, and all Class A ordinary shares submitted for redemption
will be returned to the holders thereof. We may, however, raise funds through the issuance of equity or equity-linked securities or through
loans, advances or other indebtedness in connection with our initial business combination, including pursuant to forward purchase agreements
or backstop arrangements we may enter into following consummation of the IPO, in order to, among other reasons, satisfy such net tangible
assets or minimum cash requirements.
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If we seek shareholder approval of our initial
business combination and we do not conduct redemptions in connection with our initial business combination pursuant to the tender offer
rules, our Sponsor, initial shareholders, directors, officers, advisors and their affiliates may purchase Public Shares or Public Warrants
in privately negotiated transactions or in the open market either prior to or following the completion of our initial business combination,
although they are under no obligation or duty to do so. Any such price per share may be different than the amount per share a public
shareholder would receive if it elected to redeem its shares in connection with our initial business combination. Such a purchase may
include a contractual acknowledgment that such shareholder, although still the record holder of our shares is no longer the beneficial
owner thereof and therefore agrees not to exercise its redemption rights. In the event that our Sponsor, initial shareholders, directors,
officers, advisors and their affiliates purchase shares in privately negotiated transactions from public shareholders who have already
elected to exercise their redemption rights, such selling shareholders would be required to revoke their prior elections to redeem their
shares. It is intended that, if Rule 10b-18 would apply to purchases by our Sponsor, initial shareholders, directors, officers, advisors
and their affiliates, then such purchases will comply with Rule 10b-18 under the Exchange Act, to the extent it applies, which provides
a safe harbor for purchases made under certain conditions, including with respect to timing, pricing and volume of purchases.
Additionally, at any time at or prior to our initial
business combination, subject to applicable securities laws (including with respect to material nonpublic information), our Sponsor,
initial shareholders, directors, officers, advisors and their affiliates may enter into transactions with investors and others to provide
them with incentives to acquire Public Shares, vote their Public Shares in favor of our initial business combination or not redeem their
Public Shares. However, they have no current commitments, plans or intentions to engage in such transactions and have not formulated
any terms or conditions for any such transactions. None of the funds in the Trust Account will be used to purchase Public Shares or Public
Warrants in such transactions.
The purpose of any such transactions could be
to (1) increase the likelihood of obtaining shareholder approval of the business combination, (2) reduce the number of Public Warrants
outstanding and/or increase the likelihood of approval on any matters submitted to the public warrant holders for approval in connection
with our initial business combination or (3) satisfy a closing condition in an agreement with a target that requires us to have a minimum
net worth or a certain amount of cash at the closing of our initial business combination, where it appears that such requirement would
otherwise not be met. Any such purchases of our securities may result in the completion of our initial business combination that may
not otherwise have been possible.
In addition, if such purchases are made, the public
“float” of our securities may be reduced and the number of beneficial holders of our securities may be reduced, which may
make it difficult to maintain or obtain the quotation, listing or trading of our securities on a national securities exchange.
Our Sponsor, initial shareholders, directors,
officers, advisors and their affiliates anticipate that they may identify the shareholders with whom our Sponsor, initial shareholders,
directors, officers, advisors and their affiliates may pursue privately negotiated transactions by either the shareholders contacting
us directly or by our receipt of redemption requests submitted by shareholders (in the case of Class A ordinary shares) following our
mailing of proxy materials in connection with our initial business combination. To the extent that our Sponsor, initial shareholders,
directors, officers, advisors and their affiliates enter into a private transaction, they would identify and contact only potential selling
or redeeming shareholders who have expressed their election to redeem their shares for a pro rata share of the Trust Account or vote
against our initial business combination, whether or not such shareholder has already submitted a proxy with respect to our initial business
combination but only if such shares have not already been voted at the general meeting related to our initial business combination. Our
Sponsor, initial shareholders, directors, officers, advisors and their affiliates will select which shareholders to purchase shares from
based on the negotiated price and number of shares and any other factors that they may deem relevant, and will be restricted from purchasing
shares if such purchases do not comply with Regulation M under the Exchange Act and the other federal securities laws.
Our Sponsor, initial shareholders, directors,
officers, advisors and their affiliates will be restricted from making purchases of shares if the purchases would violate Section 9(a)(2)
or Rule 10b-5 of the Exchange Act. Any such purchases will be reported pursuant to Section 13 and Section 16 of the Exchange Act to the
extent such purchasers are subject to such reporting requirements. Additionally, in the event our Sponsor, initial shareholders, directors,
officers, advisors and their affiliates were to purchase Public Shares or Public Warrants from public shareholders, such purchases would
be structured in compliance with the requirements of Rule 14e-5 under the Exchange Act including, in pertinent part, through adherence
to the following:
● our
registration statement/proxy statement filed for our business combination transaction would
disclose the possibility that our Sponsor, initial shareholders, directors, officers, advisors
and their affiliates may purchase Public Shares or Public Warrants from public shareholders
outside the redemption process, along with the purpose of such purchases;
● if
our Sponsor, initial shareholders, directors, officers, advisors and their affiliates were
to purchase Public Shares or Public Warrants from public shareholders, they would do so at
a price no higher than the price offered through our redemption process;
● our
registration statement/proxy statement filed for our business combination transaction would
include a representation that any of our securities purchased by our Sponsor, initial shareholders,
directors, officers, advisors and their affiliates would not be voted in favor of approving
the business combination transaction;
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● our
Sponsor, initial shareholders, directors, officers, advisors and their affiliates would not
possess any redemption rights with respect to our securities or, if they do acquire and possess
redemption rights, they would waive such rights; and
● we
would disclose in a Form 8-K, before our security holder meeting to approve the business
combination transaction, the following material items:
o the
amount of our securities purchased outside of the redemption offer by our Sponsor, initial
shareholders, directors, officers, advisors and their affiliates, along with the purchase
price;
o the
purpose of the purchases by our Sponsor, initial shareholders, directors, officers, advisors
and their affiliates;
o the
impact, if any, of the purchases by our Sponsor, initial shareholders, directors, officers,
advisors and their affiliates on the likelihood that the business combination transaction
will be approved;
o the
identities of our security holders who sold to our Sponsor, initial shareholders, directors,
officers, advisors and their affiliates (if not purchased on the open market) or the nature
of our security holders (e.g., 5% security holders) who sold to our Sponsor, initial shareholders,
directors, officers, advisors and their affiliates; and
o the
number of our securities for which we have received redemption requests pursuant to our redemption
offer.
Redemption of Public Shares and Liquidation
if No Initial Business Combination
Our amended and restated memorandum and articles
of association provide that we will have only 24 months from the closing of the IPO or by such earlier liquidation date as the Company’s
board of directors may approve (the “ completion window ”) to complete our initial business combination. If we are unable
to complete our initial business combination within such completion window, we will cease all operations except for the purpose of winding
up and, as promptly as reasonably possible but not more than ten business days thereafter, redeem the Public Shares, at a per-share price,
payable in cash, equal to the aggregate amount then on deposit in the Trust Account, including interest earned on the funds held in the
Trust Account (less taxes payable and up to $100,000 of interest to pay dissolution expenses), divided by the number of then outstanding
Public Shares, which redemption will constitute full and complete payment for the Public Shares and completely extinguish public shareholders’
rights as shareholders (including the right to receive further liquidation or other distributions, if any) subject to our obligations
under Cayman Islands law to provide for claims of creditors and subject to the other requirements of applicable law. There will be no
redemption rights or liquidating distributions with respect to our Warrants, which will expire worthless if we fail to complete our initial
business combination within the completion window.
Our Sponsor, officers and directors have entered
into the Letter Agreement, pursuant to which they have waived their rights to liquidating distributions from the Trust Account with respect
to any founder shares held by them if we fail to complete our initial business combination within the completion window, although they
will entitled to liquidating distributions from assets outside the Trust Account. However, if our Sponsor or management team acquire
Public Shares in or after the IPO, they will be entitled to liquidating distributions from the Trust Account with respect to such Public
Shares if we fail to complete our initial business combination within the allotted completion window.
Our Sponsor, officers, and directors have agreed,
pursuant to a written agreement with us, that they will not propose any amendment to our amended and restated memorandum and articles
of association (A) to modify the substance or timing of our obligation to allow redemption in connection with our initial business combination
or to redeem 100% of our Public Shares if we do not complete our initial business combination within the completion window or (B) with
respect to any other material provisions relating to shareholders’ rights or pre-initial business combination activity, unless
we provide our public shareholders with the opportunity to redeem their Public Shares upon approval of any such amendment at a per-share
price, payable in cash, equal to the aggregate amount then on deposit in the Trust Account, including interest earned on the funds held
in the Trust Account (less taxes payable), divided by the number of then outstanding Public Shares.
Competition
In identifying, evaluating and selecting a target
business for our initial business combination, we may encounter competition from other entities having a business objective similar to
ours, including other special purpose acquisition companies, private equity groups and leveraged buyout funds, public companies and operating
businesses seeking strategic acquisitions. Many of these entities are well established and have extensive experience identifying and
effecting business combinations directly or through affiliates. Moreover, many of these competitors possess similar or greater financial,
technical, human and other resources than us. Our ability to acquire larger target businesses will be limited by our available financial
resources. This inherent limitation gives others an advantage in pursuing the acquisition of a target business. Furthermore, our obligation
to pay cash in connection with our public shareholders who exercise their redemption rights may reduce the resources available to us
for our initial business combination and our issued and outstanding Warrants, and the future dilution they potentially represent, may
not be viewed favorably by certain target businesses. Either of these factors may place us at a competitive disadvantage in successfully
negotiating and completing an initial business combination.
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Employees and Human Capital Resources
We do not
intend to have any full-time employees prior to the completion of our initial business combination. Each of our officers is engaged in
other business endeavors for which he may be entitled to substantial compensation, and our officers are not obligated to contribute any
specific number of hours per week to our affairs. Our officers intend to devote as much of their time as they deem necessary to
our affairs until we have completed our initial business combination. The amount of time they will devote in any time period will vary
based on whether a target business has been selected for our initial business combination and the stage of the business combination process
we are in.
Periodic Reporting and Financial Information
We are required to file Annual Reports on Form
10-K and Quarterly Reports on Form 10-Q with the SEC on a regular basis, and are required to disclose certain material events in a Current
Report on Form 8-K. The SEC maintains an Internet website that contains reports, proxy and information statements and other information
regarding issuers that file electronically with the SEC. The SEC’s Internet website is located at www.sec.gov. In addition, the
Company will provide copies of these documents without charge upon request from us in writing at 1700 Broadway, 19 th Floor,
New York, NY 10019 or by telephone at (212) 202-2200.
We will provide shareholders with audited financial
statements of the prospective target business as part of the proxy solicitation materials or tender offer documents sent to shareholders
to assist them in assessing the target business. In all likelihood, these financial statements will need to be prepared in accordance
with, or reconciled to, accounting principles generally accepted in the United States of America (“ GAAP ”) or international
financial reporting standards as issued by the International Accounting Standards Board (“ IFRS ”), depending on the
circumstances, and the historical financial statements may be required to be audited in accordance with the standards of the Public Company
Accounting Oversight Board (United States) (“ PCAOB ”). These financial statement requirements may limit the pool of
potential target businesses we may conduct an initial business combination with because some targets may be unable to provide such statements
in time for us to disclose such statements in accordance with federal proxy rules and complete our initial business combination within
the prescribed time frame. We cannot assure you that any particular target business identified by us as a potential business combination
candidate will have financial statements prepared in accordance with the requirements outlined above, or that the potential target business
will be able to prepare its financial statements in accordance with the requirements outlined above. To the extent that these requirements
cannot be met, we may not be able to acquire the proposed target business. While this may limit the pool of potential business combination
candidates, we do not believe that this limitation will be material.
We will not be required to evaluate our internal
control procedures until our annual report for the fiscal year ending December 31, 2025 as required by the Sarbanes-Oxley Act. Only in
the event we are deemed to be a large accelerated filer or an accelerated filer, and no longer qualify as an emerging growth company,
will we be required to have our internal control procedures audited. A target business may not be in compliance with the provisions of
the Sarbanes-Oxley Act regarding adequacy of their internal controls. The development of the internal controls of any such entity to
achieve compliance with the Sarbanes-Oxley Act may increase the time and costs necessary to complete any such business combination.
We are a Cayman Islands exempted company. Exempted
companies are Cayman Islands companies conducting business mainly outside the Cayman Islands and, as such, are exempted from complying
with certain provisions of the Companies Act (As Revised) of the Cayman Islands as the same may be amended from time to time (the “ Companies
Act ”). As an exempted company, we have applied for and received a tax exemption undertaking from the Cayman Islands government
that, in accordance with Section 6 of the Tax Concessions Act (As Revised) of the Cayman Islands, for a period of 20 years from the date
of the undertaking, no law which is enacted in the Cayman Islands imposing any tax to be levied on profits, income, gains or appreciations
will apply to us or our operations and, in addition, that no tax to be levied on profits, income, gains or appreciations or which is
in the nature of estate duty or inheritance tax will be payable (i) on or in respect of our shares, debentures or other obligations or
(ii) by way of the withholding in whole or in part of a payment of dividend or other distribution of income or capital by us to our shareholders
or a payment of principal or interest or other sums due under a debenture or other obligation of us.
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