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EFTA01366319

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and. if there is a finding of fraudulent activity, then the states can regulate or bar the sale of cocoa! securities in a particular case. While we are not aware of a state having used these powers to prohibit or restrict the sale of securities issued by blank check companies. other than the state of Idaho. certain state securities regulators view blank check companies unfavorably and might use these powers, or threaten to use these powers. to hinder the sale of securities of blank check companies in their states. Further, if we were no longer listed on NASDAQ, our securities would not be covered securities and we would be subject to regulation in each state in which we offer our securities. You will not be entitled to protections normally afforded to in% estors of many other blank check companies. Since the net proceeds of this offering and the sale of the private placement warrants are intended to be used to complete an initial business combination with a target business that has 32 not been identified, we may be deemed to be a "blank chock" company under the United States securities laws. However, because we will have net tangible assets in excess of $5.000,000 upon the successful completion of this offering and the sale of the private placement warrants and will file a Current Report on Form 8-K, including an audited balance sheet demonstrating this fact, we are exempt from rules promulgated by the SEC to protect investors in blank check companies, such as Rule 419. Accordingly, investors will not be afforded the benefits or protections of those rules. Among other things. this means our units will be immediately tradable and we will have a longer period of time to complete our business combination than do companies subject to Rule 419. Moreover, if this offering were subject to Rule 419, that rule would prohibit the release of any interest earned on funds held in the must account to us unless and until the funds in the trust account were relea

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