{"url_path":"/sec/hovr/10-k/2026/item-1a","section_key":"item-1a","section_title":"Item 1A Risk Factors.","topic":"sec","document":{"doc_type":"10-K","doc_date":"2026-07-16","source_url":"https://www.sec.gov/Archives/edgar/data/1930021/0001213900-26-078490-index.html","accession_number":"0001213900-26-078490","cik":"0001930021","ticker":"HOVR","issuer_name":"New Horizon Aircraft Ltd.","edgar_url":"https://www.sec.gov/Archives/edgar/data/1930021/0001213900-26-078490-index.html","primary_entity_key":"0001930021","primary_entity_name":"New Horizon Aircraft Ltd."},"word_count":14604,"has_tables":true,"body_markdown":"Item 1A. Risk Factors.\n\n \n\n*The following risk factors\napply to the business and operations of Horizon and its consolidated subsidiaries. The occurrence of one or more of the events or circumstances\ndescribed in these risk factors, alone or in combination with other events or circumstances, may adversely affect the ability to realize\nthe anticipated benefits of the Company and may have an adverse effect on the business, cash flows, financial condition and results of\noperations of Horizon. We may face additional risks and uncertainties that are not presently known to us or that we currently deem immaterial,\nwhich may also impair our business, cash flows, financial condition and results of operations.*\n\n* *\n\n*All figures noted are in thousands of Canadian dollars\nunless noted otherwise.*\n\n \n\nRisks Related to Our Business and Industry\n\n \n\n*We have incurred losses and expect to incur\nsignificant expenses and continuing losses for the foreseeable future, and we may not achieve or maintain profitability.*\n\n \n\nWe expect to incur significant\noperating losses. We have not yet started commercial operations, making it difficult for us to predict our future operating results, and\nwe believe that we will continue to incur operating losses until at least the time we begin commercial operations with aircraft deliveries\nor licensing revenues. As a result, our losses may be larger than anticipated, and we may not achieve profitability when expected, or\nat all, and even if we do, we may not be able to maintain or increase profitability.\n\n \n\nWe expect our operating expenses\nto significantly increase over the next several years as we complete our aircraft design, build, testing, and manufacturing. We expect\nthe rate at which we incur losses will be significantly higher in fiscal 2027 and beyond as we engage in the following activities:\n\n \n\n \n●\ncontinuing to build our Cavorite X7 hybrid eVTOL aircraft with the goal of having such aircraft certified and ultimately produced;\n\n \n \n \n\n \n●\nengaging suppliers in the development of aircraft components and committing capital to serial production of those components;\n\n \n \n \n\n \n●\nbuilding our production capabilities to assemble and test the major components of our aircraft: propulsion systems, energy system assembly and aircraft integration, as well as incurring costs associated with outsourcing production of subsystems and other key components;\n\n \n \n \n\n \n●\nhiring additional employees across design, production, marketing, administration and commercialization of our business;\n\n \n \n \n\n \n●\nengaging with third party providers for design, testing, certification and commercialization of our products;\n\n \n \n \n\n \n●\nbuilding up inventories of parts and components for our aircraft;\n\n \n \n \n\n \n●\nfurther enhancing our research and development capacities to continue the work on our aircraft’s technology, components, hardware and software performance;\n\n \n \n \n\n \n●\ntesting and certifying the performance and operation of our aircraft;\n\n \n \n \n\n \n●\nworking with third-party providers to train our pilots, mechanics and technicians in our proprietary aircraft operation and maintenance;\n\n \n \n \n\n \n●\ndeveloping and launching our digital platform and customer user interface;\n\n \n\n12\n\n \n\n \n\n \n●\ndeveloping our sales and marketing activities and developing our vertiport infrastructure; and\n\n \n \n \n\n \n●\nincreasing our general and administrative functions to support our growing operations and our responsibilities as a public company.\n\n \n\nBecause we will incur the\ncosts and expenses from these efforts before we receive any associated revenue, our losses in future periods will be significant. In addition,\nwe may find that these efforts are more expensive than we currently anticipate or that these efforts may not result in the revenue we\nanticipate, which would further increase our losses. Furthermore, if our future growth and operating performance fails to meet investor\nor analyst expectations, or if we have future negative cash flow or losses resulting from our investment in acquiring customers or expanding\nour operations, this could have a material adverse effect on our business, financial condition and results of operations.\n\n \n\n*The eVTOL market may not continue to develop,\neVTOL aircraft may not be adopted by the transportation market, eVTOL aircraft may not be certified by transportation and aviation authorities\nor eVTOL aircraft may not deliver the expected reduction in operating costs or time savings.*\n\n* *\n\neVTOL aircraft involve a complex set of technologies and are subject\nto evolving regulations, many of which were originally not intended to apply to electric and/or VTOL aircraft. Before any eVTOL aircraft\ncan fly passengers, manufacturers and operators must receive requisite regulatory approvals, including, but not limited to, aircraft type\ncertificate and certification related to production of the aircraft. As of now, there are no eVTOL aircraft that have passed certification\nby TCCA, the European Union Aviation Safety Agency, or the FAA for commercial operations in Canada, Europe or the United States,\nrespectively, and there is no assurance that our current serial prototype for the Cavorite X7 aircraft will receive government certification\nin a way that is market-viable or commercially successful, in a timely manner or at all. Gaining government certification requires us\nto prove the performance, reliability and safety of its Cavorite X7 aircraft, which cannot be assured. Any of the foregoing risks and\nchallenges could adversely affect our prospects, business, financial condition and results of operations.\n\n \n\n*The success of our business depends on\nthe safety and positive perception of our aircraft, the establishment of strategic relationships, and of our ability to effectively market\nand sell aircraft that will be used in RAM services.*\n\n* *\n\nWe expect that the success of selling our aircraft will be highly dependent\non our target customers’ embrace of RAM and eVTOL vehicles, which we believe will be influenced by the public’s perception\nof the safety, convenience and cost of our Cavorite X7 specifically but also of the industry as a whole. As a new industry, the public\nhas low awareness of RAM and eVTOL vehicles, which will require substantial publicity and marketing campaigns in a cost-effective manner\nto effectively and adequately target and engage our potential customers. If we are unable to demonstrate the safety of our aircraft, the\nconvenience of our aircraft, and the cost-effectiveness of our use in RAM services as compared with other commuting, goods transportation,\nairport shuttle, or regional transportation options, our business may not develop as we anticipate we could, and our business, revenue\nand operations may be adversely affected. Further, our sales growth will depend on our ability to develop relationships with infrastructure\nproviders, airline operators, other commercial entities, municipalities and regional governments and landowners, which may not be effective\nin generating anticipated sales, and marketing campaigns can be expensive and may not result in the acquisition of customers in a cost-effective\nmanner, if at all. If conflicts arise with our strategic counterparties, the other party may act in a manner adverse to us and could limit\nour ability to implement our strategies. Our strategic counterparties may develop, either alone or with others, products or services in\nrelated fields that are competitive with our products and services.\n\n \n\n*We have a limited operating history and\nface significant challenges to develop, certify, and manufacture our aircraft. Our Cavorite X7 eVTOL aircraft remains in development,\nand we do not expect to deliver any aircraft until 2029, at the earliest, if at all.*\n\n* *\n\nWe are developing an aircraft for the emerging RAM market, which is\ncontinuously evolving. Although our team has experience designing, building and testing new aircraft, we have no experience as an organization\nin volume manufacturing of our planned Cavorite X7 aircraft. We cannot assure that us or our suppliers and other commercial counterparties\nwill be able to develop efficient, cost-effective manufacturing capability and processes, and reliable sources of component supplies that\nwill enable us to meet the quality, price, engineering, design and production standards, as well as the production volumes, required to\nsuccessfully produce and maintain Cavorite X7 aircraft. Based on our current testing and projections, we believe that we can achieve our\nbusiness plan and forecasted performance model targets in terms of aircraft range, speed, energy system capacity, and payload for our\nfull-scale Cavorite X7 aircraft.\n\n \n\n13\n\n \n\n \n\nDetailed build of our full-scale\nCavorite X7 aircraft has not yet been completed, and many of the systems, the aerodynamics, the structure, and other critical elements\nof the design have yet to be designed, produced, and tested at full-scale. As such, we might not achieve all, or any, of our performance\ntargets, which would materially impact our business plan and results of operations.\n\n \n\nYou should consider our business\nand prospects in light of the risks and significant challenges we face as a new entrant into a new industry, including, among other things,\nwith respect to our ability to:\n\n \n\n \n●\ndesign, build, test and produce safe, reliable and high-quality Cavorite X7 aircraft and scale that production in a cost- effective manner;\n\n \n \n \n\n \n●\nobtain the necessary certification and regulatory approvals in a timely manner;\n\n \n \n \n\n \n●\nbuild a well-recognized and respected brand;\n\n \n \n \n\n \n●\nestablish and expand our customer base;\n\n \n \n \n\n \n●\nproperly price our aircraft, and successfully anticipate the demand by our target customers;\n\n \n \n \n\n \n●\nimprove and maintain our manufacturing efficiency;\n\n \n \n \n\n \n●\nmaintain a reliable, secure, high-performance and scalable technology infrastructure;\n\n \n \n \n\n \n●\npredict our future revenues and appropriately budget for our expenses;\n\n \n \n \n\n \n●\nanticipate trends that may emerge and affect our business;\n\n \n \n \n\n \n●\nanticipate and adapt to changing market conditions, including technological developments and changes in competitive landscape;\n\n \n \n \n\n \n●\nsecure, protect and defend our intellectual property; and\n\n \n \n \n\n \n●\nnavigate an evolving and complex regulatory environment.\n\n \n\nIf we fail to adequately address\nany or all of these risks and challenges, our business may be materially and adversely affected.\n\n \n\n*The RAM market for eVTOL passenger and\ngoods transport services does not exist; whether and how it develops is based on assumptions, and the RAM market may not achieve the\ngrowth potential we expect or may grow more slowly than expected.*\n\n* *\n\nOur estimates for the total addressable market for eVTOL RAM, regional\npassenger and goods transport, and military use are based on a number of internal and third-party estimates, including customers who have\nexpressed interest, assumed prices at which we can offer our services, assumed aircraft development, estimated certification and production\ncosts, our ability to manufacture, obtain regulatory approval and certification, our internal processes and general market conditions.\nWhile we believe our assumptions and the data underlying our estimates are reasonable, these assumptions and estimates may not be correct\nand the conditions supporting our assumptions or estimates may change at any time, thereby reducing the predictive accuracy of these underlying\nfactors. As a result, our estimates may prove to be incorrect, which could negatively affect our operating revenue, costs, operations\nand potential profitability.\n\n \n\n14\n\n \n\n \n\n*We may be unable to adequately control the\ncosts associated with our pre-launch operations, and our costs will continue to be significant after we commence operations.*\n\n* *\n\nWe will require significant capital to develop and grow our business,\nincluding designing, developing, testing, certifying and manufacturing our aircraft, educating customers of the safety, efficiency and\ncost-effectiveness of our unique aircraft and building our brand. Our research and development expenses were $13.2 million and $3.7 million\nin fiscal year 2026 and 2025, respectively, and we expect to continue to incur significant expenses which will impact our profitability,\nincluding continuing expenses, manufacturing, maintenance and procurement costs, marketing, customer and payment system expenses, and\ngeneral and administrative expenses as we scale our operations. Our ability to become profitable in the future will not only depend on\nour ability to successfully market our aircraft for global use but also our ability to control our costs. If we are unable to efficiently\ndesign, certify, manufacture, market, and deliver our aircraft on time, our margins, profitability and prospects would be materially and\nadversely affected.\n\n \n\n*We are a relatively small company in comparison\nto current industry leaders in the RAM market. We may experience difficulties in managing our growth.*\n\n* *\n\nWe expect to experience significant\ngrowth in team size as we experience an increase in the scope and nature of our research and development, manufacturing, testing, and\ncertification of our aircraft. Our ability to manage our future growth will require us to continue to improve our operational, financial\nand management controls, compliance programs and reporting systems. We are currently in the process of strengthening our compliance programs,\nincluding our compliance programs related to internal controls, intellectual property management, privacy and cybersecurity. We may not\nbe able to implement improvements in an efficient or timely manner and may discover deficiencies in existing controls, programs, systems\nand procedures, which could have an adverse effect on our business, reputation and financial results. We also may not be able to grow\nthe team in a timely manner or hire the expertise required in order to successfully continue our aircraft development.\n\n \n\n*Our forward-looking operating information\nand business plan forecast relies in large part upon assumptions and analyses that we have developed or obtained from respected third\nparties. If these assumptions or analyses prove to be incorrect, our actual operating results may be materially different from our forecasted\nresults.*\n\n* *\n\nOur management has prepared\nour projected financial performance, operating information and business plan, which reflect our current estimates of future performance.\nWhether our actual financial results and business develops in a way that is consistent with our expectations and assumptions as reflected\nin our forecasts depends on a number of factors, many of which are outside our control. Our estimates and assumptions may prove inaccurate,\ncausing the actual amount to differ from our estimates. These factors include, but are not limited to, the risk factors described herein\nand the following factors:\n\n \n\n \n●\nour ability to obtain sufficient capital to sustain and grow our business;\n\n \n \n \n\n \n●\nour effectiveness in managing our costs and our growth;\n\n \n \n \n\n \n●\nour ability to meet the performance and cost targets of manufacturing our aircraft;\n\n \n \n \n\n \n●\nour ability to effectively develop our fan-in-wing eVTOL technology that underpins our Cavorite X7 aircraft design and operation;\n\n \n \n \n\n \n●\nestablishing and maintaining relationships with key providers and suppliers;\n\n \n \n \n\n \n●\nthe timing, cost and ability to obtain the necessary certifications and regulatory approvals;\n\n \n \n \n\n \n●\nthe development of the RAM market and customer demand for our aircraft;\n\n \n \n \n\n \n●\nthe costs and effectiveness of our marketing and promotional efforts;\n\n \n\n15\n\n \n\n \n\n \n●\ncompetition from other companies with compelling aircraft that may emerge to compete directly or indirectly with our Cavorite X7 aircraft;\n\n \n \n \n\n \n●\nour ability to retain existing key management, to integrate recent hires and to attract, retain and motivate qualified personnel;\n\n \n \n \n\n \n●\nthe overall strength and stability of domestic and international economies;\n\n \n \n \n\n \n●\nregulatory, legislative and political changes; and\n\n \n \n \n\n \n●\nconsumer spending habits.\n\n \n\nUnfavorable changes in any\nof these or other factors, most of which are beyond our control, could materially and adversely affect our business, results of operations\nand financial results. It is difficult to predict future revenues and appropriately budget for our expenses, and we have limited insight\ninto trends that may emerge and affect our business. If actual results differ from our estimates or we adjust our estimates in future\nperiods, our operating results and financial position could be materially affected.\n\n \n\n*We do not anticipate delivering our first\nCavorite X7 eVTOL aircraft to customers until 2029 at the earliest, pending receipt of regulatory approval and certification. The aircraft\nremains in the detailed design and building phase and has yet to complete any flight testing or go through a certification process. Any\ndelay in the design, production, or completion or requisite testing and certification, and any design changes that may be required to\nbe implemented in order to receive certification, could adversely impact our business plan and strategic growth plan and our financial\ncondition.*\n\n* *\n\nWhile we currently have an\nexperienced aircraft prototyping team, there are many important milestones to achieve prior to being able to deliver our first commercial\naircraft, including completing the detailed design, sub-system assembly, airframe manufacturing, systems integration, testing, design\nrefinement, type certification of the aircraft, and production certification of our manufacturing facility. Our inability to properly\nplan, execute our operations, and analyze and contain the risk associated with each step could negatively impact our ability to successfully\noperate our business.\n\n \n\n*Any delays in the development, certification,\nmanufacture and commercialization of our Cavorite X7 aircraft and related technology, such as battery technology or electric motors, may\nadversely impact our business, financial condition and results of operations.*\n\n* *\n\nWe may experience future delays\nor other complications in the design, certification, manufacture, and production of our aircraft and related technology. These delays\ncould negatively impact our progress towards commercialization or result in delays in increasing production capacity. If we encounter\ndifficulties in scaling our production, if we fail to procure the key enabling technologies from our suppliers (e.g., batteries, power\nelectronics, electric motors, etc.) which meet the required performance parameters, if our aircraft technologies and components do not\nmeet our expectations, or if such technologies fail to perform as expected, are inferior to those of our competitors or are perceived\nas less safe than those of our competitors, we may not be able to achieve our performance targets in aircraft range, speed, payload and\nnoise or launch products on our anticipated timelines, and our business, financial condition and results of operations could be materially\nand adversely impacted.\n\n \n\n16\n\n \n\n \n\n*Adverse publicity stemming from any incident\ninvolving us or our competitors, or an incident involving any air travel service or unmanned flight based on eVTOL technologies, could\nhave a material adverse effect on our business, financial condition and results of operations.*\n\n* *\n\nElectric aircraft are based on complex technology that requires skilled\npilot operation and maintenance. Like any aircraft, they may experience operational or process failures and other problems, including\nadverse weather conditions, unanticipated collisions with foreign objects, manufacturing or design defects, pilot error, software malfunctions,\ncyber-attacks or other intentional acts that could result in potential safety risks. Any actual or perceived safety issues with our aircraft,\nother electric aircraft or eVTOL aircraft, unmanned flight based on autonomous technology or the RAM industry generally may result in\nsignificant reputational harm to our business, in addition to tort liability, increased safety infrastructure and other costs that may\narise. The electric aircraft industry has faced multiple prototype-related accidents.\n\n \n\nWe are also subject to risk of adverse publicity stemming from any\npublic incident involving the company, our employees or our brand. If our personnel, our prototype aircraft, or the personnel or vehicles\nof one of our competitors, were to be involved in a public incident, accident or catastrophe, the public perception of the RAM industry\nor eVTOL vehicles specifically could be adversely affected, resulting in decreased customer demand for our aircraft, significant reputational\nharm or potential legal liability, which could cause a material adverse effect on sales, business and financial condition. The insurance\nwe carry may be inapplicable or inadequate to cover any such incident, accident or catastrophe. If our insurance is inapplicable or not\nadequate, we may be forced to bear substantial losses from an incident or accident.\n\n \n\n*Our business plans require a significant\namount of capital. In addition, our future capital needs may require us to sell additional equity or debt securities that may adversely\naffect the market price of our shares and dilute our shareholders or introduce covenants that may restrict its operations.*\n\n* *\n\nWe expect our expenditures\nto continue to be significant in the foreseeable future as we expand our development, certification, production and commercial launch,\nand that our level of capital expenditures will be significantly affected by customer demand for our services. The fact that we have a\nlimited operating history and are entering a new industry means we have no historical data on the demand for its aircraft. As a result,\nour future capital requirements will be uncertain and actual capital requirements may be different from those we currently anticipate.\nWe may seek equity or debt financing to finance a portion of its capital expenditures. Such financing might not be available to us in\na timely manner or on terms that are acceptable, or at all.\n\n \n\nOur ability to obtain the\nnecessary financing to carry out our business plan is subject to a number of factors, including general market conditions and investor\nacceptance of our industry and business model. These factors may make the timing, amount, terms and conditions of such financing unattractive\nor unavailable to us. If we are unable to raise sufficient funds, we will have to significantly reduce our spending, delay or cancel our\nplanned activities or substantially change our corporate structure. We might not be able to obtain any funding, and we might not have\nsufficient resources to conduct our business as projected, both of which could mean that we would be forced to curtail or discontinue\nour operations. We may seek to raise such capital through the issuance of additional shares or debt securities with conversion rights\n(such as convertible bonds and option rights). An issuance of additional shares or debt securities with conversion rights could potentially\nreduce the market price of our shares, and we currently cannot predict the amounts and terms of such future offerings.\n\n \n\nIn addition, our future capital\nneeds and other business reasons could require us to sell additional equity or debt securities or obtain a credit facility. The sale of\nadditional equity or equity-linked securities could dilute our shareholders. In addition, such dilution may arise from the acquisition\nor investments in companies in exchange, fully or in part, for newly issued shares, options granted to our business partners or from the\nexercise of stock options by our employees in the context of existing or future share option programs or the issuance of shares to employees\nin the context of existing or future employee participation programs. The incurrence of indebtedness would result in increased debt service\nobligations and could result in operating and financing covenants that would restrict our operations.\n\n \n\nIf we cannot raise additional\nfunds when we need or want them, our operations and prospects could be negatively affected.\n\n \n\n17\n\n \n\n \n\n*If we are unable to successfully design\nand manufacture our aircraft, our business will be harmed.*\n\n* *\n\nWe are currently developing\nplans to expand our primary manufacturing infrastructure near Toronto, Ontario, and we plan to begin production of our certified aircraft\nin 2029 at the earliest. We may not be able to successfully develop and certify a full-scale aircraft. We may also not be able to successfully\ndevelop commercial-scale manufacturing capabilities internally or supply chain relationships with our intended Tier 1 suppliers. Our production\nfacilities and the production facilities of our outsourcing parties and suppliers may be harmed or rendered inoperable by natural or man-made\ndisasters, including earthquakes, flooding, fire and power outages, or by health epidemics, which may render it difficult or impossible\nfor us to manufacture our aircraft for some period of time.\n\n \n\n*If the Cavorite X7 eVTOL aircraft we build\nfails to perform as expected our ability to develop, market, and sell our aircraft could be harmed.*\n\n* *\n\nWe have not yet produced a\nfull-scale Cavorite X7 aircraft. Although we are satisfied with the flight testing of our 50%-scale prototype, there is no guarantee that\nthe full-scale aircraft will perform as we anticipate. Our aircraft may contain defects in design and manufacture that may cause them\nnot to perform as expected or that may require design changes and/or repairs. Our Cavorite X7 aircraft may be impacted by various performance\nfactors that could impair customer satisfaction, such as excessive noise, turbulent air during flight, foreign object damage, fan stall\nor wing flutter, overloading, hail and bird strike, or adverse icing accumulation. If our Cavorite X7 aircraft fails to perform as expected,\nwe may need to delay delivery of initial aircraft, which could adversely affect our brand in our target markets and could adversely affect\nour business, prospects, and results of operations.\n\n \n\n*Our Cavorite X7 aircraft require complex\nsoftware, hybrid electric power systems, battery technology and other technology systems that remain in development and need to be commercialized\nin coordination with our vendors and suppliers to complete serial production. The failure of advances in technology and of manufacturing\nat the rates we project may impact our ability to increase the volume of our production or drive down end user pricing.*\n\n* *\n\nOur Cavorite X7 will use a\nsubstantial amount of third-party and in-house software codes and complex hardware to operate. Our software and hardware may contain errors,\nbugs or vulnerabilities, and our systems are subject to certain technical limitations that may compromise our ability to meet our objectives.\nSome errors, bugs or vulnerabilities inherently may be difficult to detect and may only be discovered after the code has been implemented.\nWe have a limited frame of reference by which to evaluate the long-term performance of our software and hardware systems and our aircraft,\nand we may be unable to detect and fix any defects in the aircraft prior to commencing commercial operations. The development and on-going\nmonitoring of such advanced technologies is inherently complex, and we will need to coordinate with our vendors and suppliers in order\nto complete full-scale production. Our potential inability to develop the necessary software and technology systems may harm our competitive\nposition or delay the certification or manufacture of our aircraft.\n\n \n\nWe are relying on third-party\nsuppliers to develop a number of emerging technologies for use in our products, including lithium-based battery technology. Many of these\ntechnologies are already commercially viable, and our survey of commercially available products has already yielded promising results.\nHowever, the final cell design of our potential suppliers may not be able to meet the safety, technological, economical or operational\nrequirements to support the regulatory requirements and performance assumed in our business plan.\n\n \n\nWe are also relying on third-party\nsuppliers to commercialize these technologies (such as battery cell technology) at the volume and costs they require to launch and ramp-up\nour production. Our suppliers may not be able to meet the production timing, volume requirements or cost requirements we have assumed\nin our business plan. Our third-party suppliers could face other challenges, such as the lack of raw materials or machinery, the breakdown\nof tools in production or the malfunctioning of technology as they ramp up production. As a result, our business plan could be significantly\nimpacted, and we may incur significant delays in production and full commercialization, which could adversely affect our business, prospects,\nand results of operations.\n\n \n\n*Our Cavorite X7 aircraft will make extensive\nuse of lithium-based battery cells, which have been observed to catch fire or vent smoke and flame.*\n\n* *\n\nThe battery packs within our\nCavorite X7 aircraft will use lithium-based cells. On rare occasions, lithium-based cells can rapidly release the energy they contain\nby venting smoke and flames in a manner that can ignite nearby materials as well as other lithium-based cells. While the battery pack\nis designed to contain any single cell’s release of energy without spreading to neighboring cells, a failure of battery packs in\nour aircraft could occur or batteries could catch fire during production or testing, which could result in bodily injury or death and\ncould subject us to lawsuits, regulatory challenges or redesign efforts, all of which would be time consuming and expensive and could\nharm our brand image. Also, negative public perceptions regarding the suitability of lithium-based cells for automotive applications,\nthe social and environmental impacts of cobalt mining, or any future incident involving lithium-based cells, such as a vehicle or other\nfire, could seriously harm our business and reputation.\n\n \n\n18\n\n \n\n \n\n*We will rely on third-party suppliers and\nstrategic parties for the provision and development of key emerging technologies, components and materials used in our Cavorite X7 aircraft,\nsuch as the lithium-based batteries that will help to power the aircraft, a significant number of which may be single or limited source\nsuppliers. If any of these prospective suppliers or strategic parties choose to not do business with us at all, or insist on terms that\nare commercially disadvantageous, we may have significant difficulty in procuring and producing our aircraft, and our business prospects\nwould be harmed.*\n\n* *\n\nThird-party suppliers and\nstrategic parties will provide key components and technology to the Cavorite X7 aircraft. Collaborations with strategic parties are necessary\nto successfully commercialize our existing and future products. If we are unable to identify or enter into agreements with strategic parties\nfor the development of key technology or if such strategic parties insist on terms that are commercially disadvantageous, including for\nexample the ability to freely commercialize jointly owned intellectual property, we may have significant difficulty in procuring and producing\nour aircraft or technologies, components or materials used in our aircraft.\n\n \n\nIn addition to our collaborations,\nwe will be substantially reliant on our relationships with our suppliers for the parts and components in our aircraft. If any of these\nprospective suppliers choose to not do business with us at all, or insist on terms that are commercially disadvantageous, we may have\nsignificant difficulty in procuring and producing our aircraft, and our business prospects would be harmed. If our suppliers experience\nany delays in providing us with or developing necessary components, or if our suppliers are unable to deliver necessary components in\na timely manner and at prices and volumes acceptable to us, we could experience delays in manufacturing our aircraft and delivering on\nour timelines, which could have a material adverse effect on our business, prospects and operating results.\n\n \n\nWhile we plan to obtain components\nfrom multiple sources whenever possible, we may purchase many of the components used in our Cavorite X7 aircraft from a single source.\nWhile we believe that we may be able to establish alternate supply relationships and can obtain replacement components for our single\nsource components, we may be unable to do so in the short term, or at all, at prices or quality levels that are acceptable to us. In addition,\nwe could experience delays if our suppliers do not meet agreed upon timelines or experience capacity constraints. Any disruption in the\nsupply of components, whether or not from a single source supplier, could temporarily disrupt production of our aircraft until an alternative\nsupplier is able to supply the required material. Changes in business conditions, unforeseen circumstances, governmental changes, and\nother factors beyond our control or which we do not presently anticipate, could also affect our suppliers’ ability to deliver components\nto us on a timely basis. Any of the foregoing could materially and adversely affect our results of operations, financial condition and\nprospects.\n\n \n\n*If any of our suppliers become economically\ndistressed or go bankrupt, we may be required to provide substantial financial support or take other measures to ensure supplies of components\nor materials, which could increase our costs, affect our liquidity or cause production disruptions.*\n\n* *\n\nWe expect to purchase various\ntypes of equipment, raw materials and manufactured component parts from our suppliers. If these suppliers experience substantial financial\ndifficulties, cease operations, or otherwise face business disruptions, we may be required to provide substantial financial support to\nensure supply continuity or may have to take other measures to ensure components and materials remain available. Any disruption could\naffect our ability to deliver aircraft and could increase our costs and negatively affect our liquidity and financial performance.\n\n \n\n*We may not succeed in establishing, maintaining\nand strengthening our brand, which would materially and adversely affect customer acceptance of our services, reducing our anticipated\nsales, revenue and forecasts.*\n\n* *\n\nOur business and prospects\nheavily depend on our ability to develop, maintain and strengthen our brand and sell consumers on the safety, convenience and cost-effectiveness\nof our RAM services. If we are not able to establish, maintain and strengthen our brand, we may lose the opportunity to build a critical\nmass of customers. Our ability to develop, maintain and strengthen our brand will depend heavily on the success of our marketing efforts.\nWhen it launches, we expect the RAM industry to be intensely competitive, with a strong first-mover advantage, and we will not be the\nfirst to deliver viable eVTOL aircraft to service this market. If we do not develop and maintain a strong brand, our business, prospects,\nfinancial condition and operating results will be materially and adversely impacted.\n\n \n\n19\n\n \n\n \n\n*Our business depends substantially on the\ncontinuing efforts of our key employees and qualified personnel; our operations may be severely disrupted if we lose their services.*\n\n* *\n\nOur success depends substantially\non the continued efforts of our key employees and qualified personnel, and our operations may be severely disrupted if we lose their services.\nAs we build our brand and become more well known, the risk that competitors or other companies may poach our key talented personnel increases.\nThe failure to attract, integrate, train, motivate and retain these personnel could seriously harm our business and prospects. The design,\nassembly, testing, production and certification of our aircraft requires highly skilled personnel for which there is currently a shortage\nin the aerospace workforce in North America. We intend to work with third parties to attract talented workers; however, if we are unable\nto hire, train, and retain qualified personnel, our business could be harmed, and we may be unable to implement our growth plans.\n\n \n\n*Our business may be adversely affected by labor and union activities\nin the future.*\n\n* *\n\nAlthough none of our employees\nare currently represented by a labor union, it is not uncommon throughout the aircraft industry generally for many employees at aircraft\ncompanies to belong to a union, which can result in higher employee costs and increased risk of work stoppages. We may also directly and\nindirectly depend upon other companies with unionized work forces, such as parts suppliers and trucking and freight companies, and work\nstoppages or strikes organized by such unions could have a material adverse impact on our business, financial condition or operating results.\n\n \n\n*Failure of information security and privacy\nconcerns could subject us to penalties, damage our reputation and brand, and harm our business and results of operations.*\n\n* *\n\nWe expect to face significant\nchallenges with respect to information security and privacy, including the storage, transmission and sharing of confidential information.\nWe will transmit and store confidential and private information of our customers, such as personal information, including names, accounts,\nuser IDs and passwords, and payment or transaction related information.\n\n \n\nWe intend to adopt strict\ninformation security policies and deploy advanced measures to implement the policies, including, among others, advanced encryption technologies.\nHowever, advances in technology, an increased level of sophistication of our services, an increased level of expertise of hackers, new\ndiscoveries in the field of cryptography or others can still result in a compromise or breach of the measures that we use. If we are unable\nto protect our systems, and hence the information stored in our systems, from unauthorized access, use, disclosure, disruption, modification\nor destruction, such problems or security breaches could cause a loss, give rise to our liabilities to the owners of confidential information\nor even subject us to fines and penalties. In addition, complying with various laws and regulations could cause us to incur substantial\ncosts or require that we change our business practices, including our data practices, in a manner adverse to our business.\n\n \n\nCompliance with required information\nsecurity laws and regulations could be expensive and may place restrictions on the conduct of our business and the manner in which we\ninteract with our customers. Any failure to comply with applicable regulations could also result in regulatory enforcement actions against\nus, and misuse of or failure to secure personal information could also result in violation of data privacy laws and regulations, proceedings\nagainst us by governmental entities or others, and damage to our reputation and credibility, and could have a negative impact on revenues\nand profits.\n\n \n\nSignificant capital and other\nresources may be required to protect against information security breaches or to alleviate problems caused by such breaches or to comply\nwith our privacy policies or privacy-related legal obligations. The resources required may increase over time as the methods used by hackers\nand others engaged in online criminal activities are increasingly sophisticated and constantly evolving. Any failure or perceived failure\nby us to prevent information security breaches or to comply with privacy policies or privacy-related legal obligations, or any compromise\nof security that results in the unauthorized release or transfer of personally identifiable information or other customer data, could\ncause our customers to lose trust in us and could expose us to legal claims. Any perception by the public that online transactions or\nthe privacy of user information are becoming increasingly unsafe or vulnerable to attacks could inhibit the growth of online retail and\nother online services generally, which may reduce the number of orders we receive.\n\n \n\n20\n\n \n\n \n\n*We are subject to cybersecurity risks to\nour operational systems, security systems, infrastructure, integrated software in our aircraft and customer data processed by us or third-party\nvendors.*\n\n* *\n\nWe are at risk for interruptions,\noutages and breaches of the following systems, which are either owned by us or operated by our third-party vendors or suppliers:\n\n \n\n \n●\noperational systems, including business, financial, accounting, product development, data processing or production processes;\n\n \n \n \n\n \n●\nfacility security systems;\n\n \n \n \n\n \n●\naircraft technology including powertrain, avionics and flight control software;\n\n \n \n \n\n \n●\nthe integrated software in our aircraft; or\n\n \n \n \n\n \n●\ncustomer data.\n\n \n\nThe occurrence of any such\nincident could disrupt our operational systems, result in loss of intellectual property, trade secrets or other proprietary or competitively\nsensitive information, compromise personal information of customers, employees, suppliers, or others, jeopardize the security of our facilities\nor affect the performance of in-product technology and the integrated software in our aircraft.\n\n \n\nMoreover, there are inherent\nrisks associated with developing, improving, expanding and updating the current systems, such as the disruption of our data management,\nprocurement, production execution, finance, supply chain and sales and service processes. These risks may affect our ability to manage\nour data and inventory, procure parts or supplies or manufacture, deploy, and deliver our aircraft, adequately protect our intellectual\nproperty or achieve and maintain compliance with, or realize available benefits under, applicable laws, regulations and contracts. We\ncannot be sure that these systems upon which we rely, including those of our third-party vendors or suppliers, will be effectively implemented,\nmaintained or expanded as planned. If these systems do not operate as we expect them to, we may be required to expend significant resources\nto make corrections or find alternative sources for performing these functions.\n\n \n\nAny unauthorized access to\nor control of our aircraft or our systems or any loss of data could result in legal claims or proceedings. In addition, regardless of\ntheir veracity, reports of unauthorized access to our aircraft, their systems or data, as well as other factors that may result in the\nperception that our aircraft, their systems or data are capable of being “hacked,” could negatively affect our brand and harm\nour business, prospects, financial condition and operating results.\n\n \n\n*We face risks related to natural disasters, health epidemics\nand other outbreaks, which could significantly disrupt our operations.*\n\n \n\nOur manufacturing or customer\nservice facilities or operations could be adversely affected by events outside of our control, such as natural disasters, wars, health\nepidemics, and other calamities. Although we have servers that are hosted in an offsite location, our backup system does not capture data\non a real-time basis, and we may be unable to recover certain data in the event of a server failure. We cannot necessarily ensure that\nany backup systems will be adequate to protect us from the effects of fire, floods, typhoons, earthquakes, power loss, telecommunications\nfailures, break-ins, war, riots, terrorist attacks or similar events. Any of the foregoing events may give rise to interruptions, breakdowns,\nsystem failures, technology platform failures or internet failures, which could cause the loss or corruption of data or malfunctions of\nsoftware or hardware as well as adversely affect our ability to provide services.\n\n \n\n21\n\n \n\n \n\nRisks Related to our Intellectual Property\n\n \n\n*We may not be able to prevent others from\nunauthorized use of our intellectual property, which could harm our business and competitive position.*\n\n* *\n\nWe may not be able to prevent\nothers from unauthorized use of our intellectual property, which could harm our business and competitive position. We rely on a combination\nof patents, trade secrets, employee and third-party nondisclosure agreements, copyrights, trademarks, intellectual property licenses,\nand other contractual rights to establish and protect our rights in our technology. Despite our efforts to protect our proprietary rights,\nthird parties may attempt to copy or otherwise obtain and use our intellectual property or seek court declarations that they do not infringe\nupon our intellectual property rights or those rights are not enforceable. Monitoring unauthorized use of our intellectual property is\ndifficult and costly, and the steps we have taken or will take are aimed to prevent misappropriation. From time to time, we may have to\nresort to litigation to enforce our intellectual property rights, which could result in substantial costs and diversion of our resources,\nincluding significant amounts of time from our key executives and management, and may not have the desired outcome.\n\n \n\nPatent, trademark, and trade-secret\nlaws vary significantly throughout the world. Some countries do not protect intellectual property rights to the same extent as do the\nlaws of the United States, Canada, and European Union. Therefore, we may not be able to secure certain intellectual property rights\nin some jurisdictions, and our intellectual property rights may not be as strong or as easily enforced outside of North America and the\nEuropean Union. Failure to adequately protect our intellectual property rights could result in our competitors offering similar products,\npotentially resulting in the loss of some of our competitive advantage and a decrease in our revenue which could adversely affect our\nbusiness, prospects, financial condition and operating results.\n\n \n\n*Our patent applications may not issue as\npatents, which may have a material adverse effect on our ability to prevent others from commercially exploiting products similar to ours.*\n\n* *\n\nWe cannot be certain that\nwe are the first inventor of the subject matter to which we have filed or plan to file a particular patent application, or if we are the\nfirst party to file such a patent application. If another party has filed a patent application for the same subject matter as we have,\nor similar subject matter is otherwise publicly disclosed, we may not be entitled to the protection sought by the patent application.\n\n \n\nFurther, the scope of protection\nof issued patent claims is often difficult to determine. As a result, we cannot be certain that the patent applications that we file will\nissue, or that our issued patents will afford protection against competitors with similar technology or will cover certain aspects of\nour products. In addition, our competitors may design around our issued patents, which may adversely affect our business, prospects, financial\ncondition or operating results.\n\n \n\n*As our patents may expire and may not be\nextended, our patent applications may not be granted and our patent rights may be contested, circumvented, invalidated or limited in scope,\nour patent rights may not protect us effectively. In particular, we may not be able to prevent others from developing or exploiting competing\ntechnologies.*\n\n* *\n\nWe cannot assure you that\nwe will be granted patents pursuant to our pending applications or those we plan to file in the future. Even if our patent applications\nsucceed and we are issued patents in accordance with them, these patents could be contested, circumvented or invalidated in the future.\nIn addition, the rights granted under any issued patents may not provide meaningful protection or competitive advantages. The claims under\nany patents that issue from our patent applications may not be broad enough to prevent others from developing technologies that are similar\nor that achieve results similar to us. The intellectual property rights of others could also bar us from licensing and exploiting any\npatents that are issued from our pending applications. Numerous patents and pending patent applications owned by others exist in the fields\nin which we have developed and are developing our technology. These patents and patent applications might have priority over our patent\napplications and could result in refusal of or invalidation of our patent applications. Finally, in addition to those who may claim priority,\nany of our existing or pending patents may also be challenged by others on the basis that they are otherwise invalid or unenforceable.\n\n \n\n22\n\n \n\n \n\n*We may need to defend ourselves against\npatent or trademark infringement claims, which may be time-consuming and would cause us to incur substantial costs.*\n\n* *\n\nCompanies, organizations,\nor individuals, including our competitors, may hold or obtain patents, trademarks or other proprietary rights that would prevent, limit\nor interfere with our ability to make, use, develop, sell, lease, or market our aircraft or components, which could make it more difficult\nfor us to operate our business. From time to time, we may receive communications from holders of patents (including non-practicing entities\nor other patent licensing organizations), trademarks or other intellectual property regarding their proprietary rights. Companies holding\npatents or other intellectual property rights may bring suits alleging infringement of such rights or otherwise assert their rights and\nurge us to take licenses. Our applications and uses of trademarks relating to our design, software or artificial intelligence technologies\ncould be found to infringe upon existing trademark ownership and rights. In addition, if we are determined to have infringed upon a third\nparty’s intellectual property rights, we may be required to do one or more of the following:\n\n \n\n \n●\ncease manufacturing our aircraft, or discontinue use of certain components in our aircraft, or offering services that incorporate or use the challenged intellectual property;\n\n \n \n \n\n \n●\npay substantial damages;\n\n \n \n \n\n \n●\nseek a license from the holder of the infringed intellectual property right, which license may not be available on reasonable terms, or at all;\n\n \n \n \n\n \n●\nredesign our aircraft; or\n\n \n \n \n\n \n●\nestablish and maintain alternative branding for our aircraft or services.\n\n \n\nIn the event of a successful\nclaim of infringement against us and our failure or inability to obtain a license to the infringed technology or other intellectual property\nright, our business, prospects, operating results and financial condition could be materially and adversely affected. In addition, any\nlitigation or claims, whether or not valid, could result in substantial costs, negative publicity and diversion of resources and management\nattention.\n\n \n\n*We may be subject to damages resulting from\nclaims that we or our employees have wrongfully used or disclosed alleged trade secrets of our employees’ former employers.*\n\n* *\n\nMany of our employees were\npreviously employed by other aeronautics, aircraft or transportation companies or by suppliers to these companies. We may be subject to\nclaims that us or these employees have inadvertently or otherwise used or disclosed trade secrets or other proprietary information of\nformer employers. Litigation may be necessary to defend against these claims. If we fail in defending such claims, in addition to paying\nmonetary damages, we may lose valuable intellectual property rights or personnel. A loss of key personnel or our work-product could hamper\nor prevent our ability to commercialize our products, which could severely harm our business. Even if we are successful in defending against\nthese claims, litigation could result in substantial costs and demand on management resources.\n\n \n\nRisks Related to the Regulatory Environment in Which We Operate\n\n \n\n*We are subject to substantial regulation\nand unfavorable changes to, or our failure to comply with, these regulations could substantially harm our business and operating results.*\n\n* *\n\nOur eVTOL aircraft, our planned\noperation of RAM services, and in certain jurisdictions our local AOCs, will be subject to substantial regulation in the jurisdictions\nin which we intend our eVTOL aircraft to operate. We expect to incur significant costs in complying with these regulations. Regulations\nrelated to the eVTOL industry, including aircraft certification, production certification, passenger operation, flight operation, airspace\noperation, security regulation and vertiport regulation are currently evolving, and we face risks associated with the development and\nevolution of these regulations.\n\n \n\n23\n\n \n\n \n\nOur aircraft must be initially\ncertified by the TCAA organization in order to be used for commercial purposes in Canada. Furthermore, we must also seek type certification\nunder the FAA for the aircraft to be used for commercial services in the United States. For commercial use in Europe, the European\nUnion Aviation Safety Agency must also grant type certification for our aircraft. Rigorous testing and the use of approved materials and\nequipment are among the requirements for achieving certification. Our failure to obtain or maintain certification for our aircraft or\ninfrastructure would have a material adverse effect on our business and operating results. In addition to obtaining and maintaining certification\nof our aircraft, our third-party air carriers will need to obtain and maintain operational authority necessary to provide the envisioned\nRAM services. A transportation or aviation authority may determine that we and/or our third-party air carriers cannot manufacture, provide,\nor otherwise engage in the services as we contemplated and upon which we based our projections. The inability to implement the envisioned\nRAM services could materially and adversely affect our results of operations, financial condition, and prospects.\n\n \n\nTo the extent the laws change,\nour aircraft may not comply with applicable American, European, international, federal, provincial, state or local laws, which would have\nan adverse effect on our business. Compliance with changing regulations could be burdensome, time-consuming, and expensive. To the extent\ncompliance with new regulations is cost prohibitive, our business, prospects, financial condition and operating results would be adversely\naffected.\n\n \n\n*It is intended for third-party air carriers\nto operate the Cavorite X7 aircraft in Canada, the U.S. and Europe. These third-party air carriers are subject to substantial regulation\nand laws, and unfavorable changes to, or the third-party air carriers’ failure to comply with, these regulations and/or laws could\nsubstantially harm our business and operating results.*\n\n* *\n\nThird-party air carriers are\nsubject to substantial regulation and laws, and unfavorable changes to, or the third-party air carriers’ failure to comply with,\nthese regulations or laws could substantially harm our business and operating results. Further, although third-party air carriers may\nhave experience in providing air transportation services, they will initially have limited experience in operating our unique Cavorite\nX7 hybrid eVTOL aircraft. Although we will screen potential air operators who wish to purchase and use our aircraft, our arrangements\nwith third-party air carriers may not adequately address the operating requirements of our customers to their satisfaction. Given that\nour business and our brand will be affiliated with these third-party air carriers, we may experience harm to our reputation if these third-party\nair carriers provide customers with poor service, receive negative publicity, or experience accidents or safety incidents.\n\n \n\n*We are or will be subject to anti-corruption,\nanti-bribery, anti-money laundering, financial and economic sanctions and similar laws, and non-compliance with such laws can subject\nus to administrative, civil and criminal fines and penalties, collateral consequences, remedial measures and legal expenses, all of which\ncould adversely affect our business, results of operations, financial condition and reputation.*\n\n* *\n\nWe are or will be subject\nto anti-corruption, anti-bribery, anti-money laundering, financial and economic sanctions and similar laws and regulations in various\njurisdictions in which we conduct or in the future may conduct activities, including Canada’s *Proceeds of Crime (Money Laundering)\nand Terrorist Financing Act* (PCMLTA), U.S. Foreign Corrupt Practices Act (FCPA), European anti-bribery and corruption laws, and\nother anti-corruption laws and regulations. The PCMLTA, FCPA and European anti-bribery and corruption laws prohibit us and our officers,\ndirectors, employees and business partners acting on our behalf, including agents, from corruptly offering, promising, authorizing or\nproviding anything of value to a “foreign official” for the purposes of influencing official decisions or obtaining or retaining\nbusiness or otherwise obtaining favorable treatment. The PCMLTA also requires companies to make and keep books, records and accounts that\naccurately reflect transactions and dispositions of assets and to maintain a system of adequate internal accounting controls. A violation\nof these laws or regulations could adversely affect our business, results of operations, financial condition and reputation. Our policies\nand procedures designed to ensure compliance with these regulations may not be sufficient and our directors, officers, employees, representatives,\nconsultants, agents, and business partners could engage in improper conduct for which we may be held responsible.\n\n \n\n24\n\n \n\n \n\nNon-compliance with anti-corruption,\nanti-bribery, anti-money laundering or financial and economic sanctions laws could subject us to whistleblower complaints, adverse media\ncoverage, investigations, and severe administrative, civil and criminal sanctions, collateral consequences, remedial measures and legal\nexpenses, all of which could materially and adversely affect our business, results of operations, financial condition and reputation.\nIn addition, changes in economic sanctions laws in the future could adversely impact our business and investments in our shares.\n\n \n\n*We may be subject to governmental export\nand import control laws and regulations as we expand our suppliers and commercial operations outside Canada, the U.S. and Europe.*\n\n* *\n\nOur Cavorite X7 aircraft may\nbe subject to export control and import laws and regulations, which must be made in compliance with these laws and regulations. For example,\nwe may require licenses to import or export our aircraft, components or technologies to our production facilities and may experience delays\nin obtaining the requisite licenses to do so. Audits in connection with the application for licenses may increase areas of noncompliance\nthat could result in delays or additional costs. If we fail to comply with these laws and regulations, we and certain of our employees\ncould be subject to additional audits, substantial civil or criminal penalties, including the possible loss of export or import privileges,\nfines, which may be imposed on us and responsible employees or managers and, in extreme cases, the incarceration of responsible employees\nor managers.\n\n \n\nRisks Related to Our Organization and Structure\n\n \n\n*British Columbia law and our Articles contain\ncertain provisions, including anti-takeover provisions, that limit the ability of shareholders to take certain actions and could delay\nor discourage takeover attempts that shareholders may consider favorable.*\n\n* *\n\nOur Articles and the BCBCA\ncontain provisions that could have the effect of rendering more difficult, delaying, or preventing an acquisition deemed undesirable by\nour Board and therefore depress the trading price of our Class A ordinary shares. These provisions could also make it difficult for shareholders\nto take certain actions, including electing directors who are not nominated by the current members of the Board or taking other corporate\nactions, including effecting changes in our management. Among other things, our Articles include provisions regarding:\n\n \n\n \n●\nthe limitation of the liability of, and the indemnification of, our directors and officers;\n\n \n \n \n\n \n●\nthe exclusive right of our Board to expand the Board by appointing one or more directors to the Board by up to 1/3 of the number of current directors or to fill casual vacancies created upon the resignation, death, or removal of a director up to the number of directors who were elected or appointed as directors at the last shareholder meeting, which prevents shareholders from being able to fill vacancies on our Board;\n\n \n \n \n\n \n●\nthe procedures for the conduct and scheduling of Board and shareholder meetings; and\n\n \n \n \n\n \n●\nadvance notice procedures with which shareholders must comply to nominate candidates to our Board or to propose matters to be acted upon at a shareholders’ meeting, which could preclude shareholders from bringing matters before annual or special meetings of shareholders and delay changes in our Board and also may discourage or deter a potential acquirer from conducting a solicitation of proxies to elect the acquirer’s own slate of directors or otherwise attempting to obtain control of us.\n\n \n\nThese provisions, alone or\ntogether, could delay or prevent hostile takeovers and changes in control or changes in our Board or management.\n\n \n\nAny provision of our Articles\nor British Columbia law that has the effect of delaying or preventing a change in control could limit the opportunity for shareholders\nto receive a premium for their Class A ordinary Shares and could also affect the price that some investors are willing to pay for Class\nA ordinary Shares.\n\n \n\n25\n\n \n\n \n\n \n\n*Our management team may not successfully or efficiently operate\nas a public company.*\n\n* *\n\nAs a public company, we have\nincurred increased obligations relating to our reporting, procedures, and internal controls. These obligations and attendant scrutiny\nrequire investments of significant time and energy from our executives and could divert their attention away from the day-to-day\nmanagement of our business, which in turn could adversely affect our financial condition or operating results.\n\n \n\nThe members of our management\nteam have extensive experience leading complex organizations. However, they have limited experience managing a publicly traded company,\ninteracting with public company investors, and complying with the increasingly complex laws, rules and regulations that specifically govern\npublic companies.\n\n \n\n*We will incur significant expenses and administrative\nburdens as a public company, which could have an adverse effect on our business, financial condition and results of operations.*\n\n* *\n\nAs a public company we face\nincreased legal, accounting, administrative and other costs and expenses. The Sarbanes-Oxley Act of 2002 (the “Sarbanes-Oxley\nAct”), including the requirements of Section 404, as well as rules and regulations subsequently implemented by the SEC, the\nDodd-Frank Wall Street Reform and Consumer Protection Act of 2010 and the rules and regulations promulgated and to be promulgated\nthereunder, Public Company Accounting Oversight Board (the “PCAOB”) and the securities exchanges, impose additional reporting\nand other obligations on public companies. Compliance with public company requirements increases costs and makes certain activities more\ntime-consuming. Risks associated with our status as a public company may make it more difficult to attract and retain qualified persons\nto serve on the Board or as executive officers. The additional reporting and other obligations imposed by these rules and regulations\nincreases legal and financial compliance costs and the costs of related legal, accounting and administrative activities. These increased\ncosts will require us to divert a significant amount of money that could otherwise be used to expand the business and achieve strategic\nobjectives. Advocacy efforts by shareholders and third parties may also prompt additional changes in governance and reporting requirements,\nwhich could further increase costs.\n\n \n\n*We will need to improve our operational\nand financial systems to support our expected growth, increasingly complex business arrangements, and rules governing revenue and expense\nrecognition and any inability to do so will adversely affect our billing and reporting.*\n\n* *\n\nTo manage the expected growth\nof our operations and increasing complexity, we will need to improve our operational and financial systems, procedures, and controls and\ncontinue to increase systems automation to reduce reliance on manual operations. Any inability to do so will affect our manufacturing\noperations, customer billing and reporting. Our current and planned systems, procedures and controls may not be adequate to support our\ncomplex arrangements and the rules governing revenue and expense recognition for our future operations and expected growth. Delays or\nproblems associated with any improvement or expansion of our operational and financial systems and controls could adversely affect our\nrelationships with our customers, cause harm to our reputation and brand and could also result in errors in our financial reporting, as\nwell as other reporting obligations. We expect that complying with these rules and regulations may substantially increase our legal and\nfinancial compliance costs and will make some activities more time-consuming and costly.\n\n  \n\n*We will be an “emerging growth company,”\nand our reduced SEC reporting requirements may make our shares less attractive to investors.*\n\n* *\n\nWe will be an “emerging growth company” as defined in the\nJumpstart Our Business Startups Act of 2012 (“JOBS Act”). We will remain an “emerging growth company”\nuntil the earliest to occur of (i) the last day of the fiscal year (a) following the fifth anniversary of the closing of\nthe Initial Public Offering, (b) in which we have total annual gross revenue of at least $USD 1.235 billion or (c) in which\nwe are deemed to be a large accelerated filer, which means the market value of our Class A ordinary shares held by non-affiliates exceeds\n$USD 700 million as of the last business day of our prior second fiscal quarter, and (ii) the date on which we issued more\nthan $USD 1.0 billion in non-convertible debt during the prior three-year period. We intend to take advantage of exemptions from\nvarious reporting requirements that are applicable to most other public companies, such as an exemption from the provisions of Section 404(b) of\nthe Sarbanes-Oxley Act requiring our independent registered public accounting firm provide an attestation report on the effectiveness\nof our internal control over financial reporting and reduced disclosure obligations regarding executive compensation in our periodic reports\nand proxy statements and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and shareholder\napproval of any golden parachute payments not previously approved. We cannot predict if investors will find our shares less attractive\nbecause we intend to rely on certain of these exemptions and benefits under the JOBS Act. If some investors find our shares less attractive\nas a result, there may be a less active, liquid and/or orderly trading market for our shares and the market price and trading volume of\nour shares may be more volatile and decline significantly.\n\n \n\n26\n\n \n\n \n\nRisks Related to Taxes\n\n \n\n*Our ability to utilize our net operating\nloss and tax credit carryforwards to offset future taxable income may be subject to certain limitations, including losses as a result\nof the Business Combination.*\n\n* *\n\nWe have incurred, and we are\nlikely to continue incurring significant tax losses, which may be limited in our usability under Canadian and other tax laws, in particular\nfollowing the Amalgamation and other significant shareholder changes. Although we neither expect the Business Combination nor any of the\nownership changes in the course of past financing rounds to result in a forfeiture of our Canadian tax loss attributes, the realization\nof future tax savings from such tax loss attributes will be limited under the Tax Act following the Amalgamation and will depend on the\ntax authorities’ acceptance of their continued availability and our ability to generate future taxable income in Canada against\nwhich such losses can be offset.\n\n \n\n*We are subject to Canadian and United States\ntax on our worldwide income.*\n\n* *\n\nWe are deemed to be a resident\nof Canada for Canadian federal income tax purposes by virtue of existing under the BCBCA, subject to the application of an applicable\ntax treaty or convention. Accordingly, subject to an applicable tax treaty or convention, we will be subject to Canadian taxation\non our worldwide income, in accordance with the rules set forth in the Income Tax Act (Canada) (the “Tax Act”) generally applicable\nto corporations residing in Canada.\n\n \n\nNotwithstanding that we will\nbe deemed to be a resident of Canada for Canadian federal income tax purposes, we will also be treated as a U.S. corporation for\nU.S. federal income tax purposes, pursuant to Section 7874(b) of the Code, and will be subject to U.S. federal income\ntax on our worldwide income under applicable U.S. inversion rules. As a result, subject to an applicable tax treaty or convention, we\nwill be subject to taxation both in Canada and the U.S., which could have a material adverse effect on our business, financial condition\nand results of operations. Accordingly, all prospective shareholders and investors should consult with their own tax advisors in this\nregard.\n\n \n\n*Dividends, if ever paid, on our Class A ordinary shares will\nbe subject to Canadian or United States withholding tax.*\n\n* *\n\nIt is currently anticipated\nthat we will not pay any dividends on the Class A ordinary shares in the foreseeable future. To the extent dividends are paid, dividends\nreceived by holders of our Class A ordinary shares who are not residents of the U.S. and who are residents of Canada for purposes\nof the Tax Act will be subject to U.S. withholding tax. Any dividends may not qualify for a reduced rate of withholding tax under\nthe U.S.-Canada income tax treaty (“Canada-U.S. Tax Convention”). In addition, a Canadian foreign tax credit or a deduction\nin respect of such U.S. withholding taxes paid may not be available.\n\n \n\nDividends received by shareholders\nwho are residents of the U.S. will not be subject to U.S. withholding tax but will be subject to Canadian withholding tax. Any\ndividends may not qualify for a reduced rate of withholding tax under the Canada-U.S. Tax Convention. For U.S. federal income tax\npurposes, a U.S. holder may elect for any taxable year to receive either a credit or a deduction for all foreign income taxes paid\nby the holder during the year. Dividends paid by us will be characterized as U.S. source income for purposes of the foreign tax credit\nrules under the Code. Accordingly, U.S. holders generally will not be able to claim a credit for any Canadian tax withheld unless,\ndepending on the circumstances, they have an excess foreign tax credit limitation due to other foreign source income that is subject to\na low or zero rate of foreign tax. Subject to certain limitations, a U.S. holder should be able to take a deduction for the U.S. holder’s\nCanadian tax paid, provided that the U.S. holder has not elected to credit other foreign taxes during the same taxable year.\n\n \n\n27\n\n \n\n \n\nDividends received by non-U.S. holders\nwho are not residents of Canada for purposes of the Tax Act will be subject to U.S. withholding tax and will also be subject to Canadian\nwithholding tax. These dividends may not qualify for a reduced rate of U.S. withholding tax under any income tax treaty otherwise\napplicable to our shareholders, subject to examination of the relevant treaty. These dividends may, however, qualify for a reduced rate\nof Canadian withholding tax under any income tax treaty otherwise applicable to our shareholders, subject to examination of the relevant\ntreaty.\n\n \n\nEach holder of our Class A\nordinary Shares should seek tax advice, based on such shareholder’s particular facts and circumstances, from an independent tax\nadvisor.\n\n \n\n*The transfer of our Class A ordinary shares\nmay be subject to U.S. estate and generation-skipping transfer tax.*\n\n* *\n\nBecause our Class A ordinary\nshares will be treated as shares of a U.S. domestic corporation for U.S. federal income tax purposes, the U.S. estate and\ngeneration-skipping transfer tax rules generally may apply to a non-U.S. holder’s ownership and transfer of our Class A ordinary\nshares.\n\n \n\n*Changes in tax laws may affect our shareholders and other investors.*\n\n* *\n\nThere can be no assurance\nthat our Canadian and U.S. federal income tax treatment or an investment in us will not be modified, prospectively or retroactively,\nby legislative, judicial or administrative action, in a manner adverse to us or our shareholders or other investors.\n\n \n\nRisks Related to Ownership of Our Securities\n\n \n\n*An active market for our securities may not persist, which would\nadversely affect the liquidity and price of our securities.*\n\n* *\n\nThe price of our securities\nmay vary significantly due to factors specific to us as well as to general market or economic conditions. Our Class A ordinary shares\nmay be thinly traded; therefore, our share price may fluctuate more than the stock market as a whole. Without a larger public float, our\nClass A ordinary shares will be less liquid than the shares of companies with broader public ownership. Trading of a relatively small\nvolume of our Class A ordinary shares may have a greater effect on the trading price than would be the case if our public float were larger.\nAccordingly, an active trading market for our securities may never develop or, if developed, it may not be sustained. You may be unable\nto sell your securities unless a market can be established and sustained.\n\n \n\n*Our failure to meet Nasdaq’s continued listing requirements\ncould result in a delisting of our securities.*\n\n* *\n\nIf we fail to satisfy Nasdaq’s\ncontinued listing requirements, such as the corporate governance requirements or the minimum closing bid price requirement, Nasdaq may\ntake steps to delist our securities. Such a delisting would likely have a negative effect on the price of our shares and would impair\nyour ability to sell or purchase our shares when you wish to do so.\n\n \n\n28\n\n \n\n \n\nThere can be no assurance\nthat we will be able to maintain compliance with Nasdaq’s continued listing standards. In the event that we are unable to sustain\ncompliance with all applicable requirements for continued listing on Nasdaq, our Class A ordinary shares may be delisted from Nasdaq.\nIf Nasdaq delists our securities from trading on its exchange and we are not able to list our securities on another national securities\nexchange, we expect our securities could be quoted on an over-the-counter market. If this were to occur, we could face significant material\nadverse consequences, including:\n\n \n\n●a\nlimited availability of market quotations for our securities;\n\n \n\n●reduced\nliquidity for our securities;\n\n \n\n●a\ndetermination that our Class A ordinary shares are “penny stock” which will require brokers trading in the Class A ordinary\nshares to adhere to more stringent rules and possibly result in a reduced level of trading activity in the secondary trading market for\nour securities;\n\n \n\n●a\nlimited amount of news and analyst coverage; and\n\n \n\n●a\ndecreased ability to issue additional securities or obtain additional financing in the future.\n\n \n\n*If securities or certain industry analysts\ndo not publish research or reports about our business or publish negative reports about our business, our share price and trading volume\ncould decline.*\n\n* *\n\nThe trading market for our\nshares will depend on the research and reports that securities or industry analysts publish about us or our business. We will not have\nany control over such analysts. If one or more of the analysts who cover us downgrade our shares or change their opinion of our shares,\nthe share price would likely decline. If one or more of these analysts cease coverage of us or we or fail to regularly publish reports\non us, we could lose visibility in the financial markets, which could cause our share price or trading volume to decline.\n\n \n\n*The price of our Class A ordinary shares may decline, and you\ncould lose all or part of your investment as a result.*\n\n* *\n\nThe trading price of our Class\nA ordinary shares is likely to be volatile. The stock market has experienced extreme volatility. This volatility often has been unrelated\nor disproportionate to the operating performance of particular companies. You may not be able to resell your Class A ordinary shares at\nan attractive price due to a number of factors such as those listed in “*Risks Related to Our Business and Industry*”\nand the following:\n\n \n\n●results\nof operations that vary from the expectations of securities analysts and investors;\n\n \n\n●results\nof operations that vary from our competitors;\n\n \n\n●changes\nin expectations as to our future financial performance, including financial estimates and investment recommendations by securities analysts\nand investors;\n\n \n\n29\n\n \n\n \n\n●declines\nin the market prices of stocks generally;\n\n \n\n●strategic\nactions by us or our competitors;\n\n \n\n●announcements\nby us or our competitors of significant contracts, acquisitions, joint ventures, other strategic relationships or capital commitments;\n\n \n\n●announcements\nof estimates by third parties of actual or anticipated changes in the size of our customer base or the level of customer engagement;\n\n \n\n●any\nsignificant change in our management;\n\n \n\n●changes\nin general economic or market conditions or trends in our industry or markets;\n\n \n\n●changes\nin business or regulatory conditions, including new laws or regulations or new interpretations of existing laws or regulations applicable\nto our business;\n\n \n\n●additional\nsecurities being sold or issued into the market by us or any of the existing shareholders or the anticipation of such sales, including\nif we issue shares to satisfy restricted stock unit related tax obligations or if existing shareholders sell shares into the market when\napplicable “lock-up” periods end;\n\n \n\n●investor\nperceptions of the investment opportunity associated with our Class A ordinary shares relative to other investment alternatives;\n\n \n\n●the\npublic’s response to press releases or other public announcements by us or third parties, including our filings with the SEC;\n\n \n\n●litigation\ninvolving us, our industry, or both, or investigations by regulators into our operations or those of our competitors;\n\n \n\n●guidance,\nif any, that we provide to the public, any changes in this guidance or our failure to meet this guidance;\n\n \n\n●the\ndevelopment and sustainability of an active trading market for our Class A ordinary shares;\n\n \n\n●actions\nby institutional or activist shareholders;\n\n \n\n●developments\nin new legislation and pending lawsuits or regulatory actions, including interim or final rulings by judicial or regulatory bodies;\n\n \n\n●changes\nin accounting standards, policies, guidelines, interpretations or principles; and\n\n \n\n●other\nevents or factors, including those resulting from pandemics, natural disasters, war, acts of terrorism or responses to these events.\n\n \n\n30\n\n \n\n \n\nThese broad market and industry\nfluctuations may adversely affect the market price of our Class A ordinary shares, regardless of our actual operating performance. In\naddition, price volatility may be greater if the public float and trading volume of our Class A ordinary shares is low. In the past, following\nperiods of market volatility, shareholders have instituted securities class action litigation. If we are involved in securities litigation,\nit could have a substantial cost and divert resources and the attention of executive management from our business regardless of the outcome\nof such litigation.\n\n  \n\n*Because there are no current plans to pay\ncash dividends on our Class A ordinary shares for the foreseeable future, you may not receive any return on investment unless you sell\nyour Class A ordinary shares at a price greater than what you paid for it.*\n\n* *\n\nWe intend to retain future\nearnings, if any, for future operations, expansion and debt repayment, and there are no current plans to pay any cash dividends for the\nforeseeable future. The declaration, amount and payment of any future dividends on our Class A ordinary shares will be at the sole discretion\nof our Board. Our Board may take into account general and economic conditions, our financial condition and results of operations, our\navailable cash and current and anticipated cash needs, capital requirements, contractual, legal, tax and regulatory restrictions, implications\nof the payment of dividends by us to our shareholders or by our subsidiaries to us and such other factors as our Board may deem relevant.\nAs a result, you may not receive any return on an investment in our Class A ordinary shares unless you sell your Class A ordinary shares\nfor a price greater than that which you paid for it.\n\n \n\n*If our company were to dissolve or wind-up operations, holders\nof our Class A ordinary shares would not receive a liquidation preference.*\n\n \n\nIf we were to wind up or dissolve\nand liquidate and distribute our assets, our Class A ordinary shares would share in our assets only after we satisfy any amounts we owe\nto our creditors and preferred equity holders, including the holders of our Series A Preferred Shares (described below). If our liquidation\nor dissolution were attributable to our inability to profitably operate our business, then it is likely that we would have material liabilities\nat the time of liquidation or dissolution. Accordingly, it is unlikely that sufficient assets would remain available after the payment\nof our creditors and preferred equity holders to enable holders of Class A ordinary shares to receive any liquidation distribution with\nrespect to any Class A ordinary shares.\n\n \n\n*We may require substantial additional funding.\nRaising additional capital could cause dilution to our existing shareholders.*\n\n* *\n\nThe percentage of our Class\nA ordinary shares owned by current shareholders may be diluted in the future because of equity issuances for acquisitions, capital market\ntransactions or otherwise, including, without limitation, equity awards that we may grant to our directors, officers and employees, and\nexercise of our Warrants.\n\n \n\n31\n\n \n\n \n\nTo the extent that we raise\nadditional capital through the sale of equity or convertible debt, the ownership interests of our shareholders will be diluted. In addition,\nthe terms of any equity or convertible debt we agree to issue may include liquidation or other preferences that adversely affect the rights\nof our shareholders. Convertible debt financing, if available, may involve agreements that include covenants limiting or restricting our\nability to take specific actions, such as incurring additional debt, making capital expenditures, and declaring dividends, and may impose\nlimitations on our ability to acquire, sell or license intellectual property rights and other operating restrictions that could adversely\nimpact our ability to conduct our business.\n\n \n\nWe currently have an effective\nshelf registration statement on Form S-3 filed with the Securities and Exchange Commission (the “SEC”), which we may use\nto offer from time to time Class A ordinary shares, preferred shares, debt securities, warrants, units and any combination of the foregoing\nsecurities (the “Shelf Registration Statement”, and the prospectus contained therein, the “Prospectus”). On February\n14, 2025, we entered into a sales agreement (the “Sales Agreement”) relating to the offer and sale of our Class A ordinary\nshares from time to time through or to JonesTrading Institutional Services LLC (“Jones”), acting as sales agent in “at\nthe market” offerings as defined in Rule 415 under the Securities Act (the “ATM Offering”). In connection with the\nentry into the Sales Agreement, we filed a prospectus supplement, dated March 25, 2025 (the “Original Prospectus Supplement”)\nto the accompanying Prospectus dated March 25, 2025 (collectively, the “Prior Prospectus”) to register Class A ordinary shares\nissuable pursuant to the Sales Agreement. Under the Prior Prospectus, we registered up to $USD 6.25 million of our Class A ordinary shares\nto be sold in the ATM Offering. On June 27, 2025, we filed a prospectus supplement to the Prospectus to increase the maximum aggregate\noffering price of the Class A ordinary shares issuable under the Sales Agreement to up to an additional aggregate $USD 16.5 million of\nClass A ordinary shares, which did not include any prior sales made pursuant to the Sales Agreement. On\nOctober 31, 2025, the Company filed a prospectus supplement to increase the maximum aggregate offering price of the Class A ordinary\nshares issuable under the Sales Agreement to $USD 50 million of Class A ordinary shares. On May 26, 2026, the Company filed a prospectus\nsupplement to decrease the maximum aggregate offering price of the Class A ordinary shares issuable under the Sales Agreement to $USD\n28 million of Class A ordinary shares.\n\n  \n\nAdditional funds may not be\navailable when we need them on terms that are acceptable to us, or at all. If adequate funds are not available to us on a timely basis,\nwe may be required to curtail or cease our operations. Raising additional funding through debt or equity financing is likely to be difficult\nor unavailable altogether given the stage of our technology. Furthermore, the issuance of additional securities, whether equity or debt,\nby us, or the possibility of such issuance, may cause the market price of our common stock to decline further and existing stockholders\nmay not agree with our financing plans or the terms of such financings.\n\n \n\nPursuant to our Articles,\nwe are also authorized to issue an unlimited number of preferred shares, of which 4,500 preferred shares have been designated as our Series\nA Preferred Shares, which are convertible into Class A ordinary shares. Such Series A Preferred Shares are senior to our Class A ordinary\nshares in terms of dividend priority and liquidation preference. Any preferred shares that we issue in the future may rank ahead of our\nClass A ordinary shares in terms of dividend priority or liquidation preference and may have greater voting rights than our Class A ordinary\nshares. In addition, such preferred shares may contain provisions allowing those shares to be converted into Class A ordinary shares,\nwhich could dilute the value of our Class A ordinary shares to current shareholders and could adversely affect the market price, if any,\nof our Class A ordinary shares. In addition, the preferred shares could be utilized, under certain circumstances, as a method of discouraging,\ndelaying or preventing a change in control of the Company.\n\n \n\n32\n\n \n\n \n\n*Future sales, or the perception of future sales, by us or our\nshareholders in the public market could cause the market price for our Class A ordinary shares to decline.*\n\n* *\n\nThe sale of our Class A ordinary\nshares in the public market, including Class A ordinary shares issued upon the exercise of Warrants, or the perception that such sales\ncould occur, could harm the prevailing market price of our Class A ordinary shares and make it difficult for us to raise funds through\nsecurities offerings in the future. These sales, or the possibility that these sales may occur, also might make it more difficult for\nus to sell equity securities in the future at a time and at a price that it deems appropriate.\n\n  \n\nIn the future, we may also\nissue our securities in connection with investments or acquisitions. The amount of Class A ordinary shares issued in connection with an\ninvestment or acquisition could constitute a material portion of the then-outstanding Class A ordinary shares. Any issuance of additional\nsecurities in connection with investments or acquisitions may result in additional dilution to our shareholders.\n\n \n\nOn April 4, 2025, a registration\nstatement on Form S-3 was declared effective by the SEC, registering certain Class A ordinary shares for resale (the “Resale Registration\nStatement”). Certain securityholders may sell large amounts of our Class A ordinary shares in the open market or in privately negotiated\ntransactions pursuant to the Resale Registration Statement, which could have the effect of increasing the volatility in our Class A ordinary\nshare price or putting significant downward pressure on the price of our Class A ordinary shares.\n\n \n\n*There is no guarantee\nthat the Public Warrants will ever be in the money; they may expire worthless or the terms of warrants may be amended.*\n\n* *\n\nThe exercise price for the Public Warrants is $USD 11.50 per Class A ordinary\nshare. There is no guarantee that the Public Warrants will ever be in the money prior to their expiration, and as such, the Public Warrants\nmay expire worthless.\n\n \n\nIn addition, our Public Warrants were issued in registered form under the\nWarrant Agreement between Continental Stock Transfer & Trust Company, as warrant agent, and Pono. The Warrant Agreement provides\nthat the terms of the warrants may be amended without the consent of any holder to cure any ambiguity or correct any defective provision,\nbut requires the approval by the holders of at least a majority of the then outstanding Public Warrants to make any other change. Accordingly,\nwe may amend the terms of the warrants in a manner adverse to a holder if holders of at least a majority of the then outstanding Public\nWarrants approve of such amendment. Although our ability to amend the terms of the warrants with the consent of at least a majority of\nthe then outstanding Public Warrants is unlimited, examples of such amendments could be amendments to, among other things, increase the\nexercise price of the warrants, shorten the exercise period or decrease the number of shares and their respective affiliates and associates\nhave of Class A ordinary shares purchasable upon exercise of a Public Warrant.\n\n \n\n*Our Warrant Agreement\ndesignates the courts of the State of New York or the United States District Court for the Southern District of New York\nas the sole and exclusive forum for certain types of actions and proceedings that may be initiated by holders of our Public Warrants,\nwhich could limit the ability of Public Warrant holders to obtain a favorable judicial forum for disputes with us.*\n\n* *\n\nOur\nWarrant Agreement provides that, subject to applicable law, (i) any action, proceeding or claim against the Company arising out of\nor relating in any way to the Warrant agreement, including under the Securities Act, will be brought and enforced in the courts of the\nState of New York or the United States District Court for the Southern District of New York, and (ii) that we irrevocably\nsubmit to such jurisdiction, which jurisdiction shall be the exclusive forum for any such action, proceeding or claim. We will waive any\nobjection to such exclusive jurisdiction and that such courts represent an inconvenient forum.\n\n \n\n33\n\n \n\n \n\nNotwithstanding\nthe foregoing, these provisions of the Warrant Agreement will not apply to suits brought to enforce any liability or duty created by the\nExchange Act or any other claim for which the federal district courts of the United States of America are the sole and exclusive\nforum. Any person or entity purchasing or otherwise acquiring any interest in any of our warrants shall be deemed to have notice of and\nto have consented to the forum provisions in the Warrant Agreement. If any action, the subject matter of which is within the scope the\nforum provisions of the Warrant Agreement, is filed in a court other than a court of the State of New York or the United States\nDistrict Court for the Southern District of New York (a “foreign action”) in the name of any holder of our Public Warrants,\nsuch holder shall be deemed to have consented to: (x) the personal jurisdiction of the state and federal courts located in the State\nof New York in connection with any action brought in any such court to enforce the forum provisions (an “enforcement action”),\nand (y) having service of process made upon such Public Warrant holder in any such enforcement action by service upon such Public\nWarrant holder’s counsel in the foreign action as agent for such Public Warrant holder.\n\n \n\nThis\nchoice-of-forum provision may limit a Public Warrant holder’s ability to bring a claim in a judicial forum that we find favorable\nfor disputes with the Company, which may discourage such lawsuits. Alternatively, if a court were to find this provision of our Warrant\nAgreement inapplicable or unenforceable with respect to one or more of the specified types of actions or proceedings, we may incur additional\ncosts associated with resolving such matters in other jurisdictions, which could materially and adversely affect our business, financial\ncondition and results of operations and result in a diversion of the time and resources of our management and Board.\n\n \n\n*We may redeem the\nunexpired warrants prior to their exercise at a time that is disadvantageous to warrant holders, thereby making their warrants worthless.*\n\n* *\n\nWe\nhave the ability to redeem outstanding warrants at any time after they become exercisable and prior to their expiration, at a price of\n$0.01 per warrant, provided that the last reported sales price of the Class A ordinary shares equals or exceeds $18.00 per share for any\n20 trading days within a 30 trading-day period ending on the third trading day prior to the date we send the notice of redemption\nto the warrant holders. If and when the warrants become redeemable by us, we may exercise its redemption right even if we are unable to\nregister or qualify the underlying securities for sale under all applicable state securities laws. Additionally, ninety (90) days\nafter the warrants become exercisable, we may redeem all (but not less than all) of the outstanding warrants at $0.01 per warrant upon\na minimum of 30 days’ prior written notice of redemption (during which time the holders may exercise their warrants prior to\nredemption for the number of shares set forth in the table under the section captioned “*Description of Securities — Warrants — Redemption\nof Warrants — Redemption of Warrants for Class A Ordinary Shares*”) if the following conditions are satisfied:\n(i) the last reported sale prices of the Class A ordinary shares equals or exceeds $18.00 per share (as may be adjusted for stock\nsplits, stock dividends, reorganizations, recapitalizations or the like) on the trading day prior to the date of the notice; (ii) the\nprivate placement warrants are also concurrently exchanged at the same price as the outstanding Public Warrants; and (iii) there\nis an effective registration statement covering the issuance of Class A ordinary shares issuable upon exercise of the warrants and a current\nprospectus relating thereto available throughout the 30-day period after written notice of redemption is given. In either case, redemption\nof the outstanding warrants could force you (i) to exercise your warrants and pay the exercise price therefor at a time when it may\nbe disadvantageous for you to do so, (ii) to sell your warrants at the then-current market price when you might otherwise wish to\nhold your warrants or (iii) to accept the nominal redemption price which, at the time the outstanding warrants are called for redemption,\nis likely to be substantially less than the market value of your warrants.\n\n \n\n34"}