Item 1A. Risk Factors
ITEM 1A. RISK FACTORS
As of the date of this Quarterly Report on Form
10-Q, there have been no material changes to the risk factors disclosed in the 2021 Annual Report filed with the SEC on March 31, 2022,
except as described below.
Unless specifically stated, this Quarterly Report
does not contain the risks associated with the proposed Obagi and Milk Business Combinations.
Global or regional conditions may adversely
affect our business and our ability to consummate our initial Business Combination.
Adverse changes in global or regional economic
conditions periodically occur, including recession or slowing growth, changes, or uncertainty in fiscal, monetary or trade policy, higher
interest rates, tighter credit, inflation, lower capital expenditures by businesses, increases in unemployment and lower consumer confidence
and spending. Adverse changes in economic conditions can harm global business and adversely affect our ability to consummate our initial
Business Combination. Such adverse changes could result from geopolitical and security issues, such as armed conflict and civil or military
unrest, political instability, human rights concerns and terrorist activity, catastrophic events such as natural disasters and public
health issues (including the COVID-19 pandemic), supply chain interruptions, new or revised export, import or doing-business regulations,
including trade sanctions and tariffs or other global or regional occurrences.
In particular, in response to Russia’s recent
invasion of Ukraine, the North Atlantic Treaty Organization (“NATO”) deployed additional military forces to eastern Europe,
and the United States, the European Union, and several other countries are imposing far-reaching sanctions and export control restrictions
on Russian entities and individuals, including the removal of certain financial institutions from the Society for Worldwide Interbank
Financial Telecommunication (SWIFT) payment system. Although the length and impact of the ongoing military conflict in Ukraine is highly
unpredictable, the conflict could lead to market disruptions, including significant volatility in commodity prices, credit and capital
markets, as well as supply chain interruptions. Additionally, Russian military actions and the resulting sanctions could adversely affect
the global economy and financial markets and lead to instability and lack of liquidity in capital markets, 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.
In addition, the recent invasion of Ukraine by Russia, and the impact of sanctions against Russia and the potential for retaliatory acts
from Russia, could result in increased cyberattacks against U.S. companies.
Additionally, tensions between the United States
and China have led to increased tariffs and trade restrictions. The United States has imposed economic sanctions on certain Chinese individuals
and entities and restrictions on the export of U.S.-regulated products and technology to certain Chinese technology companies. These and
other global and regional conditions may adversely impact our business and our ability to consummate our initial Business Combination.
Any of the foregoing factors may have the effect
of heightening many of the other risks described in the “Risk Factors” section of this Quarterly Report on Form 10-Q.
Changes in laws or regulations, or how such
laws or regulations are interpreted or applied, 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.
We are subject to laws and regulations enacted by national, regional
and local governments. In particular, we are required to comply with certain SEC and other legal requirements, our Business Combination
may be contingent on our ability to comply with certain laws and regulations and any post-business combination company may be subject
to additional laws and regulations. Compliance with, and monitoring of, applicable laws and regulations may be difficult, time consuming
and costly. A failure to comply with applicable laws or regulations, as interpreted and applied, could have a material adverse effect
on our business, including our ability to negotiate and complete our initial Business Combination, and results of operations. In addition,
those laws and regulations and their interpretation and application may change from time to time, including as a result of changes in
economic, political, social and government policies, and those changes could have a material adverse effect on our business, including
our ability to negotiate and complete our initial Business Combination, and results of operations.
On March 30, 2022, the SEC issued proposed rules that would, among
other items, impose additional disclosure requirements in business combination transactions involving Special Purpose Acquisition
Companies (“SPACs”) and private operating companies; amend the financial statement requirements applicable to business combination
transactions involving such companies; update and expand guidance regarding the general use of projections in SEC filings, as well as
when projections are disclosed in connection with proposed business combination transactions; increase the potential liability of certain
participants in proposed business combination transactions; and impact the extent to which SPACs could become subject to regulation under
the Investment Company Act of 1940. These rules, if adopted, whether in the form proposed or in revised form, may materially adversely
affect our business, including our ability to negotiate and complete our initial Business Combination and may increase the costs and time
related thereto.
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