UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

(Mark One)

☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 31, 2021

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from _____________ to _____________

SEC File No. 001-40934

Industrial Human Capital, Inc.

(Exact name of registrant as specified in its charter)


Delaware		86-2127945
(State of incorporation or organization)		(I.R.S. Employer Identification No.)

501 Brickell Key Drive, Suite 300, Miami,

FL 33131

33131

(Address of principal executive offices)

(Zip Code)

Registrant’s telephone number : (888) 798-9100

Securities to be registered pursuant to Section 12(b) of the Act:


Title of each class registered	Trading Symbol(s)	Name of each exchange on which each class is registered
Common Stock, $0.0001 par value	AXH	The New York Stock Exchange
Warrants	AXHW	The New York Stock Exchange
Units	AXHU	The New York Stock Exchange

Securities registered pursuant to Section 12(g) of the Act: None

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☐ No ☒

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes ☐ No ☒

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging company. See the definitions of “large accelerated filer,” “accelerated filer”, “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.




Large accelerated filer	☐	Accelerated filer	☐
Non-accelerated filer	☒	Smaller reporting company	☒
Emerging growth company	☒

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act ☐

Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. §7262(b)) by the registered public accounting firm that prepared or issued its audit report.

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act.) Yes ☒ No ☐

The aggregate market value of the common stock held by non-affiliates of the registrant, based on the closing price of a share of common stock on December 31, 2021, as reported by The New York Stock Exchange on such date was approximately $142,600,000. The registrant has elected to use December 31, 2021 as the calculation date, which was the last trading date of the registrant’s most recently completed fiscal year, because on June 30, 2021 (the last business day of the registrant’s second fiscal quarter), the registrant was a privately-held company. This calculation does not reflect a determination that certain persons are affiliates of the registrant for any other purpose.

As of March 25, 2022, the registrant had 14,375,000 shares of common stock outstanding.

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TABLE OF CONTENTS


PART I		4

Item 1.	Description of Business	4
Item 1A.	Risk Factors	17
Item 1B.	Unresolved Staff Comments	53
Item 2.	Properties	53
Item 3.	Legal Proceedings	53
Item 4.	Mine Safety Disclosures	53

PART II		54

Item 5.	Market for Registrant’s Common Equity, Related Stockholder Matters and Small Business Issuer Purchases of Equity Securities	54
Item 6.	Reserved	54
Item 7.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	54
Item 7A.	Quantitative and Qualitative Disclosures about Market Risk	59
Item 8.	Financial Statements	60
Item 9.	Changes in and Disagreements with Accountants on Accounting and Financial Disclosures	60
Item 9A.	Controls and Procedures	60
Item 9B.	Other Information	61
Item 9C.	Disclosure Regarding Foreign Jurisdictions That Prevent Inspections	61

PART III		62

Item 10.	Directors, Executive Officers and Corporate Governance	62
Item 11.	Executive Compensation	66
Item 12.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	67
Item 13.	Certain Relationships and Related Transactions, and Director Independence	68
Item 14.	Principal Accountant Fees and Services	71

PART IV		72

Item 15.	Exhibits	72

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CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

This Annual Report on Form 10-K ("Form 10-K"), the other reports, statements, and information that we have previously filed or that we may subsequently file with the Securities and Exchange Commission (“SEC”), and public announcements that we have previously made or may subsequently make, contain “forward-looking statements” within the meaning of the federal securities laws, including the Private Securities Litigation Reform Act of 1995, which statements involve substantial risks and uncertainties. Unless the context is otherwise, the forward-looking statements included or incorporated by reference in this Form 10-K and those reports, statements, information and announcements address activities, events or developments that Industrial Human Capital, Inc. (referred to throughout this Form 10-K as “we,” “us,” “our,” the “Company” or “IHC”), expects or anticipates will or may occur in the future. Forward-looking statements generally relate to future events or our future financial or operating performance. In some cases, you can identify forward-looking statements because they contain words such as “may,” “might,” “will,” “should,” “expects,” “plans,” “anticipates,” “could,” “intends,” “target,” “projects,” “contemplates,” “believes,” “estimates,” “predicts,” “potential” or “continue” or the negative of these words or other similar terms or expressions that concern our expectations, strategy, plans or intentions. Forward-looking statements contained in this Form 10-K include, but are not limited to, statements about:

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our ability to select an appropriate target business or businesses in our target industry or otherwise;

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our ability to complete our initial Business Combination in our target industry or otherwise;

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our expectations around the performance of the prospective target business or businesses in the light industrial staffing industry;

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our success in retaining or recruiting, or changes required in, our officers, key employees or directors following our initial Business Combination;

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our officers and directors allocating their time to other businesses and potentially having conflicts of interest with our business or in approving our initial Business Combination, as a result of which they would then receive expense reimbursements;

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our potential ability to obtain additional financing to complete our initial Business Combination;

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our pool of prospective target businesses in the light industrial staffing industry;

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our ability to consummate an initial Business Combination due to the uncertainty resulting from the recent COVID-19 pandemic;

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the ability of our officers and directors to generate a number of potential Business Combination opportunities;

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our public securities’ potential liquidity and trading;

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the lack of a market for our securities;

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the use of proceeds not held in the trust account or available to us from interest income on the trust account balance;

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the trust account not being subject to claims of third parties; or

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our financial performance.

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The forward-looking statements contained in this Form 10-K are based on our current expectations and beliefs concerning future developments and their potential effects on us. There can be no assurance that future developments affecting us will be those that we have anticipated. These forward-looking statements involve a number of risks, uncertainties (some of which are beyond our control) or other assumptions that may cause actual results or performance to be materially different from those expressed or implied by these forward-looking statements. These risks and uncertainties include, but are not limited to, those factors described under the section of Form 10-K entitled “Risk Factors.” Should one or more of these risks or uncertainties materialize, or should any of our assumptions prove incorrect, actual results may vary in material respects from those projected in these forward-looking statements. We undertake no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as may be required under applicable securities laws.

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PART I

ITEM 1. BUSINESS

We are a newly organized, blank check company incorporated as a Delaware corporation for the purpose of effecting a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or similar Business Combination with one or more businesses (the “Business Combination”). Since completing our initial public offering (“IPO”), we have engaged in confidential discussions with various potential Business Combination partners. Nevertheless, as of the date of this Form 10-K, we have not entered into a binding agreement with any specific Business Combination target.

As of December 31, 2021, we had not commenced any operations. All activity for the period from February 16, 2021 (inception) through December 31, 2021 relates to our formation and the IPO. We will not generate any operating revenues until after the completion of our initial Business Combination, at the earliest. We have generated and will generate non-operating income in the form of interest income on cash and cash equivalents from the proceeds derived from the IPO.

Our Sponsor is ShiftPixy Investments, Inc. (the “Sponsor”), a wholly owned subsidiary of ShiftPixy, Inc. (“ShiftPixy”).

The registration statement for our IPO was declared effective on October 19, 2021. On October 22, 2021, we consummated our IPO of 10,000,000 units (the “Units” and, with respect to the common stock included in the Units being offered, the “Public Shares”) at $10.00 per Unit, generating gross proceeds of $100 million, and incurring offering costs of approximately $11.3 million. On October 22, 2021, the underwriters exercised the over-allotment option to purchase an additional 1,500,000 Units (the “Over-Allotment Units”), generating gross proceeds of approximately $15 million, and incurred additional offering costs of approximately $150,000 in underwriting fees (the “Over-Allotment”). Simultaneously with the closing of our IPO, we consummated the private placement (“Private Placement”) of 4,639,102 warrants at a price of $1.00 per warrant (“Private Placement Warrants”) to the Sponsor, generating gross proceeds of $4,639,102. Each Unit consisted of one Public Share and a warrant to purchase one Public Share at a price of $11.50.

Following the closing of the IPO on October 22, 2021, $116,725,000 ($10.15 per Unit) from the net proceeds sold in the IPO, including the proceeds of the sale of the Private Placement Warrants, was deposited in a trust account with Continental Stock Transfer & Trust Company acting as trustee (“Trust Account”) and has been invested only in U.S. government treasury obligations with a maturity of 185 days or less or in money market funds meeting certain conditions under Rule 2a-7 under the Investment Company Act of 1940, as amended (the “Investment Company Act”), which invest only in direct U.S. government treasury obligations.

After the payment of underwriting discounts and commissions (excluding the deferred portion equal to 3% of the IPO in underwriting discounts and commissions, which amount will be payable upon consummation of our initial Business Combination if consummated) and $1,776,783 in cash expenses relating to the IPO, approximately $1,300,000 of the net proceeds of the IPO and Private Placement was not deposited into the Trust Account and was retained by us for working capital purposes. The net proceeds deposited into the Trust Account remain on deposit in the Trust Account earning interest. As of December 31, 2021, there was approximately $116,700,000 in investments and cash held in the Trust Account and $495,521 of cash held outside the Trust Account available for working capital purposes. As of December 31, 2021, none of the funds had been withdrawn from the Trust Account to pay tour income taxes. On April 9, 2021, Alliance Global Partners/A.G.P. (“AGP”), the representative of the underwriters of our IPO, purchased an aggregate of 750,000 Founder Shares at a purchase price of $9,639. Transaction costs amounted to $11,261,640 consisting of: i) costs paid in cash of $1,776,783 including $1,150,000 of underwriting commissions, and $626,783 of other cash offering costs and $9,484,857 of non-cash costs representing excess fair value attributable to the representative shares transferred to AGP.

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If we have not completed a Business Combination within 12 months from the closing of our IPO, or October 22, 2022, we will (i) (i) cease all operations except for the purpose of winding up, (ii) as promptly as reasonably possible but not more than ten business days thereafter, redeem the Public Shares, at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the Trust Account including interest earned on the funds held in the Trust Account and not previously released to us to pay our taxes (less up to $100,000 of interest to pay dissolution expenses), divided by the number of then outstanding Public Shares, which redemption will completely extinguish public stockholders’ rights as stockholders (including the right to receive further liquidating distributions, if any), subject to applicable law, and (iii) as promptly as reasonably possible following such redemption, subject to the approval of our remaining stockholders and our board of directors, dissolve and liquidate, subject in the case of clauses (ii) and (iii) above to our obligations under Delaware law to provide for claims of creditors and the requirements of other applicable law. There will be no redemption rights or liquidating distributions with respect to our warrants, which will expire worthless if we fail to complete our initial Business Combination within the 12-month time period.

Business Strategy

Our business strategy is to target, identify and complete our initial Business Combination with one or more companies that provide staffing services across a broad range within the light industrial sector, including companies that provide construction and construction management services, warehousing and product fulfillment, facilities management services, operation and maintenance services, and environmental services.

We believe that small to medium sized temporary light industrial staffing services companies present an attractive set of opportunities to pursue a roll-up Business Combination. We were created as a vehicle to conduct a “roll-up” acquisition in the light industrial staffing industry. We believe that we will be able to leverage the ShiftPixy mobile human capital management technology to consolidate disparate and antiquated legacy operating platforms and assure rapid continuity and elevated employee engagement on a new, state of the art, on-demand labor platform.

We also believe that the recent decline in revenues in the light industrial temporary staffing sector prompted by the COVID-19 pandemic presents a highly favorable buying opportunity, with many acquisition targets being valued at low or distressed levels, or at levels below those typically commanded by publicly traded companies. We believe that we will have an immediate, unique opportunity to consolidate a national footprint of light industrial staffing companies, and enhance the value of these acquisitions through a mutually beneficial relationship with ShiftPixy. While we are an entirely separate company from ShiftPixy with a fully independent Board, (and no overlapping directors aside from our CEO, Scott Absher), we believe that we will benefit in the future from entering into a contractual relationship with ShiftPixy whereby we gain access to ShiftPixy’s technology platform and human capital management resources and expertise, which we anticipate will provide significant service level enhancements to our future clients at favorable pricing and favorable operating costs for the Company. As set forth above, any contracts between the Company and ShiftPixy will be negotiated on an arms’-length basis, and will be subject to Board approval. After the initial Business Combination, we hope to create synergies and improve financial results through the elimination of redundant overhead costs, coupled with cost savings expected by using a more automated on-demand labor platform and cost savings from reduced workers’ compensation premiums resulting from a larger employee platform and more widely spread risk exposure (depending upon applicable state laws).

We believe there are a large number of companies providing light industrial services that can benefit from our expertise and that of ShiftPixy’s management, with opportunities for significant value creation upon completion of a Business Combination and a public listing for the combined target companies. We also believe that businesses providing industrial staffing services will eventually benefit from attractive economic and industry trends, post COVID-19. We anticipate that market forces will be mixed in the near term from the combination of continued COVID-19 related factors that are depressing the market and the anticipated increase in demand that is likely to follow the lifting of pandemic restrictions.

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Industry Opportunity

While we may acquire a business or businesses in any industry, our current focus is on companies that provide staffing solutions in the light industrial sector in North America. We believe that our target industry is attractive for a number of reasons, including the following:

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Fragmentation of small and mid-sized operators negatively impacted by COVID-19. The light industrial staffing business is well known to our management and that of our Sponsor. While there are several large players in this market space, there are also a significant number of small and mid-sized companies, often owned or operated by aging owners nearing retirement age who rely on their companies to generate a significant source of income and potential retirement funds for them. Many of these operators provide services locally, are heavily reliant on a relatively small client base, and have built fixed overhead costs to support pre-COVID-19 business levels that have proven difficult to reduce. We believe that the financial uncertainty created by this combination of factors will make this population amenable to competitive purchase offers.

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Lack of technology among small and mid-sized operators necessary to maximize business operations. Many of our potential acquisition targets have invested relatively little in the technology we believe to be critical to acquiring, integrating, and streamlining larger staffing operations. Based on our experience, we believe that the ability of potential targets to access ShiftPixy’s technology will facilitate leaner overhead and better deployment of human capital resources, which should result in favorable sales opportunities and reduced costs. Our goal is to use this technology platform as a consistent infrastructure system which will include standardized and “best practices” billings, human capital management, and accounting systems and eliminate legacy technology dependencies.

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Inability of individual operators to take advantage of economies of scale due to relatively small size and fragmentation. Our acquisition targets are likely to have a relatively fixed cost structure. We believe that acquiring and consolidating these targets will present a significant opportunity to eliminate redundant costs by leveraging a unified, consistently applied fixed cost structure on a combination of operators. Our goal is to reduce redundant costs and improve the combined entity’s profitability through the integration of acquired companies and the utilization of a highly leverageable technology staffing solution facilitated by ShiftPixy.

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Reduced staffing costs of sales and administrative expenses through improved workers compensation rates and insurance costs. We believe that, depending upon the laws, rules and regulations in the various states in which we ultimately operate, the acquired staffing companies will have improved access to workers’ compensation and other insurance products at a lower average cost per billed staffing dollar due to the resulting larger pool of light industrial workers, as compared to individual staffing companies.

Acquisition Criteria

Consistent with our strategy, we have identified the following general criteria and guidelines that we believe are important in evaluating prospective target businesses. We will use these criteria and guidelines in evaluating acquisition opportunities, but we may decide to enter into our initial Business Combination with a target business or businesses that do not meet these criteria and guidelines. We intend to focus on companies that provide value-added services that we believe:

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have market leadership positions in their respective products and services;

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have an attractive risk profile, including revenues under long-term contracts and/or a strong backlog of business;

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have attractive organic and inorganic growth opportunities which may be accelerated with our expertise and/or access to a public listing;

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can benefit from an improved capital structure or streamlined ownership structure;

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would benefit from ShiftPixy’s technology solutions; and

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offer an attractive risk-adjusted return for our stockholders.

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The light industrial staffing industry is highly fragmented with many small and mid-sized operators located in every major market across the United States. We believe that many operators in this sector have taken their growth as far as possible utilizing only their own resources. We believe that COVID-19 has served as a “wake-up call” for these operators to examine critically the asset value and limited potential of their businesses as stand-alone entities, and are likely to make them motivated sellers in the current economic climate.

Our goal is to implement a “roll-up” strategy to form a consolidated, national footprint from a collective of regional operators, which will operate under a new national brand that will be supported by the ShiftPixy human capital management platform. We expect implementation of this platform to enhance greatly the value of our acquisition targets, by providing technology that will allow them to operate more efficiently through favorable operating costs, accommodate more clients, and fill positions more easily. Once fully implemented, integration of the ShiftPixy technology platform should allow for seamless human capital management, from paperless onboarding to shift placement and worksite employee time management. We believe that this approach will assure immediate continuity of operations without requiring a reconciliation of legacy operating platforms to determine the best or surviving technology to run the newly consolidated group.

These criteria are not intended to be exhaustive. Any evaluation relating to the merits of a particular initial Business Combination may be based, to the extent relevant, on these general guidelines as well as other considerations, factors and criteria that from time to time our management may deem relevant. In evaluating a prospective target business, we expect to conduct a thorough due diligence review that will encompass, among other things, meetings with incumbent management and employees, document reviews and inspection of facilities, as applicable, as well as a review of financial and other information that will be made available to us.

Initial Business Combination

NYSE rules require that we must complete one or more business combinations having an aggregate fair market value of at least 80% of the value of the assets held in the Trust Account at the time of our signing a definitive agreement in connection with our initial Business Combination. Our board of directors will make the determination as to the fair market value of our initial Business Combination. If our board of directors is not able to independently determine the fair market value of our initial Business Combination, we will obtain an opinion from an independent investment banking firm or another independent entity that commonly renders valuation opinions with respect to the satisfaction of such criteria. While we consider it unlikely that our board of directors will not be able to make an independent determination of the fair market value of our initial Business Combination, it may be unable to do so if it is less familiar or experienced with the business of a particular target or if there is a significant amount of uncertainty as to the value of a target’s assets or prospects. Additionally, pursuant to NYSE rules, any initial business combination must be approved by a majority of our independent directors.

We are not prohibited from consummating an initial Business Combination with an entity that is affiliated with the representative, our Sponsor, officers or directors, provided, however, that, pursuant to our amended and restated certificate of incorporation, if we do, we, or a committee of our independent directors, must obtain an opinion from an independent investment banking firm or another independent entity that commonly renders valuation opinions that our initial Business Combination is fair to our company from a financial point of view.

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We anticipate structuring our initial Business Combination so that the post-transaction company in which our public stockholders own shares will own or acquire 100% of the equity interests or assets of the target business or businesses. We may, however, structure our initial Business Combination such that the post-transaction company owns or acquires less than 100% of such interests or assets of the target business in order to meet certain objectives of the prior owners of the target business, the target management team or stockholders or for other reasons, but we will only complete such Business Combination if the post-transaction company owns or acquires 50% or more of the outstanding voting securities of the target or otherwise acquires a controlling interest in the target sufficient for it not to be required to register as an investment company under the Investment Company Act of 1940, as amended (the “Investment Company Act”). Even if the post-transaction company owns or acquires 50% or more of the voting securities of the target, our stockholders prior to the Business Combination may collectively own a minority interest in the post-transaction company, depending on valuations ascribed to the target and us in the Business Combination transaction. For example, we could pursue a transaction in which we issue a substantial number of new shares in exchange for all of the outstanding capital stock, shares or other equity interests of a target. In this case, we would acquire a 100% controlling interest in the target. However, as a result of the issuance of a substantial number of new shares, our stockholders immediately prior to our initial Business Combination could own less than a majority of our issued and outstanding shares subsequent to our initial Business Combination. If less than 100% of the equity interests or assets of a target business or businesses are owned or acquired by the post-transaction company, the portion of such business or businesses that is owned or acquired is what will be valued for purposes of the 80% fair market value test. If the Business Combination involves more than one target business, the 80% fair market value test will be based on the aggregate value of all of the target businesses and we will treat the target businesses together as our initial Business Combination for purposes of a tender offer or for seeking stockholder approval, as applicable.

To the extent we effect our initial Business Combination with a company or business that may be financially unstable or in its early stages of development or growth, we may be affected by numerous risks inherent in such company or business. Although our management will endeavor to evaluate the risks inherent in a particular target business, we cannot assure you that we will properly ascertain or assess all significant risk factors.

In evaluating a prospective target business, we expect to conduct a thorough due diligence review which will encompass, among other things, meetings with incumbent management and employees, document reviews, inspection of facilities, as well as a review of financial, operational, legal and other information which will be made available to us.

The time required to select and evaluate a target business and to structure and complete our initial Business Combination, and the costs associated with this process, are not currently ascertainable with any degree of certainty. Any costs incurred with respect to the identification and evaluation of a prospective target business with which our initial Business Combination is not ultimately completed will result in our incurring losses and will reduce the funds we can use to complete another Business Combination. Further, our Sponsor’s corporate parent, ShiftPixy, is not formally constrained in any way from pursuing acquisitions or Business Combinations that could be suitable transactions for us. While we do not believe it is likely that ShiftPixy will compete against us for suitable acquisition targets based upon our management’s understanding of ShiftPixy’s current business model, it is possible that a potential Business Combination could arise that would be suitable for us and ShiftPixy, giving rise to a conflict of interest. If such a circumstance were to occur, we anticipate that our board of directors would recuse any conflicted members of our management from taking any role in the consideration of such a transaction and, to the extent necessary, retain appropriate qualified, non-conflicted personnel to advise us in accordance with the provisions of our amended and restated certificate of incorporation relating to transactions with affiliates. Such an eventuality could increase the costs associated with evaluating a target business. Our board of directors has established a code of ethics that includes a conflict of interest policy intended to ensure timely disclosure and avoidance of activities and relationships that conflict with the interests of the Company.

Sourcing of Potential Initial Business Combination Targets

All of our officers are employed by our Sponsor’s corporate parent, ShiftPixy, and as a result, are continuously made aware of potential business opportunities in the light industrial staffing industry, one or more of which we may desire to pursue for an initial Business Combination. Members of our management team have spent significant portions of their careers working with businesses in the staffing services industry and have developed a wide network of professional services contacts and business relationships in that industry. The members of our board of directors also have significant executive management and public company experience and bring additional relationships that further broaden our industry network.

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This network has provided our management team with a flow of referrals that have resulted in numerous transactions in connection with other companies. We believe that the network of contacts and relationships of our management team will provide us with an important source of acquisition opportunities. In addition, we anticipate that target business candidates will be brought to our attention from various unaffiliated sources, including investment market participants, private equity groups, investment banks, consultants, accounting firms and large business enterprises.

Members of our management team and our independent directors directly or indirectly own Founder Shares and/or placement warrants and, accordingly, may have a conflict of interest in determining whether a particular target business is an appropriate business with which to effectuate our initial Business Combination. Further, each of our officers and directors may have a conflict of interest with respect to evaluating a particular Business Combination if the retention or resignation of any such officers and directors were included by a target business as a condition to any agreement with respect to our initial Business Combination.

In addition, each of our officers and directors presently has, and any of them in the future may have additional, fiduciary or contractual obligations to other entities pursuant to which such officer or director is or will be required to present a Business Combination opportunity to such entity. As discussed above, however, we do not believe that the fiduciary duties or contractual obligations of our officers or directors will materially affect our ability to complete our initial Business Combination. Our Sponsor and our officers and directors may also pursue other business or investment ventures during the period in which we are seeking an initial Business Combination.

Our amended and restated certificate of incorporation provides that we renounce our interest in any corporate opportunity offered to any director or officer unless such opportunity is expressly offered to such person solely in his or her capacity as a director or officer of our Company and such opportunity is one we are legally and contractually permitted to undertake and would otherwise be reasonable for us to pursue, and to the extent the director or officer is permitted to refer that opportunity to us without violating another legal obligation.

Redemption Rights for Public Stockholders Upon Completion of Our Business Combination

We will provide our public stockholders with the opportunity to redeem all or a portion of their Public Shares upon the completion of our initial Business Combination at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the Trust Account calculated as of two business days prior to the consummation of the initial Business Combination, including interest earned on the funds held in the Trust Account (less up to $100,000 of interest to pay dissolution expenses), divided by the number of then outstanding Public Shares, subject to the limitations described herein. The representative, our Sponsor, directors and officers have entered into a letter agreement with us, pursuant to which they have agreed to waive their redemption rights with respect to any Founder Shares and any Public Shares held by them in connection with the completion of our initial Business Combination.

Manner of Conducting Redemptions

We will provide our public stockholders with the opportunity to redeem all or a portion of their Public Shares upon the completion of initial Business Combination either (i) in connection with a stockholder meeting called to approve the Business Combination or (ii) by means of a tender offer. The decision as to whether we will seek stockholder approval of a proposed Business Combination or conduct a tender offer will be made by us, solely in our discretion, and will be based on a variety of factors such as the timing of the transaction and whether the terms of the transaction would require us to seek stockholder approval under applicable law or stock exchange listing requirement. Under NYSE, asset acquisitions and stock purchases would not typically require stockholder approval while direct mergers with our company where we do not survive and any transactions where we issue more than 20% of our outstanding common stock or seek to amend our amended and restated certificate of incorporation require stockholder approval. If we structure a Business Combination with a target company in a manner that requires stockholder approval, we will not have discretion as to whether to seek a stockholder vote to approve the proposed Business Combination. We may conduct redemptions without a stockholder vote pursuant to the tender offer rules of the SEC unless stockholder approval is required by law or stock exchange listing requirements or we choose to seek stockholder approval for business or other legal reasons. So long as we maintain a listing for our securities on the NYSE, we will be required to comply with such rules.

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If stockholder approval of the transaction is required by law or stock exchange listing requirement, or we decide to obtain stockholder approval for business or other legal reasons, we will, pursuant to our amended and restated certificate of incorporation:

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conduct the redemptions in conjunction with a proxy solicitation pursuant to Regulation 14A of the Exchange Act, which regulates the solicitation of proxies, and not pursuant to the tender offer rules; and

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file proxy materials with the SEC.

Upon the public announcement of our initial Business Combination, our Sponsor or we will terminate any plan established in accordance with Rule 10b5-1 to purchase shares of our common stock in the open market if we elect to redeem our Public Shares through a tender offer, to comply with Rule 14e-5 under the Exchange Act.

If we seek stockholder approval, we will complete our initial Business Combination only if a majority of the outstanding shares of common stock present and entitled to vote at the meeting to approve the Business Combination when a quorum is present are voted in favor of the initial Business Combination. A quorum for such meeting will consist of the holders present in person or by proxy of shares of outstanding capital stock of the Company representing a majority of the voting power of all outstanding shares of capital stock of the Company entitled to vote at such meeting. Our initial stockholders will count toward this quorum and pursuant to the letter agreement, the representative, our Sponsor, officers and directors have agreed to vote any Founder Shares held by them and any Public Shares acquired during or after our IPO (including in open market and privately negotiated transactions) in favor of our initial Business Combination. For purposes of seeking approval of the majority of our outstanding shares of common stock voted, non-votes will have no effect on the approval of our initial Business Combination once a quorum is obtained. As a result, in addition to our initial stockholders’ Founder Shares, we would need only 718,751, or 6.25%, of the 11,500,000 Public Shares sold in our IPO to be voted in favor of an initial Business Combination (assuming only the minimum number of shares representing a quorum are voted) in order to have our initial Business Combination approved. We intend to give approximately 30 days (but not less than 10 days nor more than 60 days) prior written notice of any such meeting, if required, at which a vote shall be taken to approve our initial Business Combination. These quorum and voting thresholds, and the voting agreements of our initial stockholders, may make it more likely that we will consummate our initial Business Combination. Each public stockholder may elect to redeem its Public Shares irrespective of whether they vote for or against the proposed transaction.

If a stockholder vote is not required and we do not decide to hold a stockholder vote for business or other legal reasons, we will, pursuant to our amended and restated certificate of incorporation:

conduct the redemptions pursuant to Rule 13e-4 and Regulation 14E of the Exchange Act, which regulate issuer tender offers; and

file tender offer documents with the SEC prior to completing our initial Business Combination which contain substantially the same financial and other information about the initial Business Combination and the redemption rights as is required under Regulation 14A of the Exchange Act, which regulates the solicitation of proxies.

In the event we conduct redemptions pursuant to the tender offer rules, our offer to redeem will remain open for at least 20 business days, in accordance with Rule 14e-1(a) under the Exchange Act, and we will not be permitted to complete our initial Business Combination until the expiration of the tender offer period. In addition, we will not redeem any Public Shares unless our net tangible assets will be at least $5,000,001 either immediately prior to or upon consummation of our initial Business Combination and after payment of underwriters’ fees and commissions (so that we are not subject to the SEC’s “penny stock” rules) or any greater net tangible asset or cash requirement which may be contained in the agreement relating to our initial business combination. If public stockholders tender more shares than we have offered to purchase, we will withdraw the tender offer and not complete the initial Business Combination.

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Our amended and restated certificate of incorporation provides that we may not redeem our Public Shares unless our net tangible assets are at least $5,000,001 either immediately prior to or upon consummation of our initial Business Combination and after payment of underwriters’ fees and commissions (so that we are not subject to the SEC’s “penny stock” rules) or any greater net tangible asset or cash requirement which may be contained in the agreement relating to our initial Business Combination. For example, the proposed Business Combination may require: (i) cash consideration to be paid to the target or its owners, (ii) cash to be transferred to the target for working capital or other general corporate purposes or (iii) the retention of cash to satisfy other conditions in accordance with the terms of the proposed initial Business Combination. In the event the aggregate cash consideration we would be required to pay for all shares of common stock that are validly submitted for redemption plus any amount required to satisfy cash conditions pursuant to the terms of the proposed Business Combination exceed the aggregate amount of cash available to us, we will not complete the Business Combination or redeem any shares, and all shares of common stock submitted for redemption will be returned to the holders thereof.

Limitation on Redemption upon Completion of Our initial Business Combination If We Seek Stockholder Approval

Notwithstanding the foregoing, if we seek stockholder approval of our initial Business Combination and we do not conduct redemptions in connection with our initial Business Combination pursuant to the tender offer rules, our amended and restated certificate of incorporation provides that a public stockholder, together with any affiliate of such stockholder or any other person with whom such stockholder is acting in concert or as a “group” (as defined under Section 13 of the Exchange Act), will be restricted from seeking redemption rights with respect to more than an aggregate of 15% of the shares sold in our IPO, which we refer to as the “Excess Shares.” Such restriction shall also be applicable to our affiliates. We believe this restriction will discourage stockholders from accumulating large blocks of shares, and subsequent attempts by such holders to use their ability to exercise their redemption rights against a proposed initial Business Combination as a means to force us or our management to purchase their shares at a significant premium to the then-current market price or on other undesirable terms. Absent this provision, a public stockholder holding more than an aggregate of 15% of the shares sold in our IPO could threaten to exercise its redemption rights if such holder’s shares are not purchased by us or our management at a premium to the then-current market price or on other undesirable terms. By limiting our stockholders’ ability to redeem no more than 15% of the shares sold in our IPO without our prior consent, we believe we will limit the ability of a small group of stockholders to unreasonably attempt to block our ability to complete our initial Business Combination, particularly in connection with an initial Business Combination with a target that requires as a closing condition that we have a minimum net worth or a certain amount of cash. However, we would not be restricting our stockholders’ ability to vote all of their shares (including Excess Shares) for or against our initial Business Combination.

Tendering Share Certificates in Connection with a Tender Offer or Redemption Rights

We may require our public stockholders seeking to exercise their redemption rights, whether they are record holders or hold their shares in “street name,” to either tender their certificates to our transfer agent up to two business days prior to the vote on the proposal to approve the initial Business Combination, or to deliver their shares to the transfer agent electronically using the Depository Trust Company’s DWAC (Deposit/Withdrawal At Custodian) System, at the holder’s option. The proxy materials that we will furnish to holders of our Public Shares in connection with our initial Business Combination will indicate whether we are requiring public stockholders to satisfy such delivery requirements. Accordingly, a public stockholder would have up to two days prior to the vote on the Business Combination to tender its shares if it wishes to seek to exercise its redemption rights. Given the relatively short exercise period, it is advisable for stockholders to use electronic delivery of their Public Shares.

There is a nominal cost associated with the above-referenced tendering process and the act of certificating the shares or delivering them through the DWAC System. The transfer agent will typically charge the tendering broker and it would be up to the broker whether or not to pass this cost on to the redeeming holder. However, this fee would be incurred regardless of whether or not we require holders seeking to exercise redemption rights to tender their shares. The need to deliver shares is a requirement of exercising redemption rights regardless of the timing of when such delivery must be effectuated.

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The foregoing is different from the procedures used by many special purpose acquisition companies. In order to perfect redemption rights in connection with their business combinations, many blank check companies would distribute proxy materials for the stockholders’ vote on an initial Business Combination, and a holder could simply vote against a proposed Business Combination and check a box on the proxy card indicating such holder was seeking to exercise his or her redemption rights. After the initial Business Combination was approved, the company would contact such stockholder to arrange for him or her to deliver his or her certificate to verify ownership. As a result, the stockholder then had an “option window” after the completion of the initial Business Combination during which he or she could monitor the price of the company’s stock in the market. If the price rose above the redemption price, he or she could sell his or her shares in the open market before actually delivering his or her shares to the company for cancellation. As a result, the redemption rights, to which stockholders were aware they needed to commit before the stockholder meeting, would become “option” rights surviving past the completion of the Business Combination until the redeeming holder delivered its certificate. The requirement for physical or electronic delivery prior to the meeting ensures that a redeeming holder’s election to redeem is irrevocable once the initial Business Combination is approved.

Any request to redeem such shares, once made, may be withdrawn at any time up to the date of the stockholder meeting. Furthermore, if a holder of a public share delivered its certificate in connection with an election of redemption rights and subsequently decides prior to the applicable date not to elect to exercise such rights, such holder may simply request that the transfer agent return the certificate (physically or electronically). It is anticipated that the funds to be distributed to holders of our Public Shares electing to redeem their shares will be distributed promptly after the completion of our initial Business Combination.

If our initial Business Combination is not approved or completed for any reason, then our public stockholders who elected to exercise their redemption rights would not be entitled to redeem their shares for the applicable pro rata share of the Trust Account. In such case, we will promptly return any certificates delivered by public holders who elected to redeem their shares.

If our initial proposed Business Combination is not completed, we may continue to try to complete a Business Combination with a different target until 12 months from the closing of our IPO.

Redemption of Public Shares and Liquidation if no initial Business Combination

Our amended and restated certificate of incorporation provides that we will have only 12 months from the closing of our IPO to complete our initial Business Combination. If we are unable to complete our initial Business Combination within such 12-month period, we will: (i) cease all operations except for the purpose of winding up, (ii) as promptly as reasonably possible but not more than ten business days thereafter, redeem the Public Shares, at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the Trust Account including interest earned on the funds held in the Trust Account and not previously released to us to pay our taxes (less up to $100,000 of interest to pay dissolution expenses), divided by the number of then outstanding Public Shares, which redemption will completely extinguish public stockholders’ rights as stockholders (including the right to receive further liquidating distributions, if any), subject to applicable law, and (iii) as promptly as reasonably possible following such redemption, subject to the approval of our remaining stockholders and our board of directors, dissolve and liquidate, subject in the case of clauses (ii) and (iii) above to our obligations under Delaware law to provide for claims of creditors and the requirements of other applicable law. There will be no redemption rights or liquidating distributions with respect to our warrants, which will expire worthless if we fail to complete our initial Business Combination within the 12-month time period.

The representative, our Sponsor, officers and directors have entered into a letter agreement with us, pursuant to which they have waived their rights to liquidating distributions from the Trust Account with respect to any Founder Shares held by them if we fail to complete our initial Business Combination within 12 months from the closing of our IPO. However, if our Sponsor, officers or directors acquire Public Shares in or after our IPO, they will be entitled to liquidating distributions from the Trust Account with respect to such Public Shares if we fail to complete our initial Business Combination within 12 months from the closing of our IPO.

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The representative, our Sponsor, officers and directors have agreed, pursuant to a written agreement with us, that they will not propose any amendment to our amended and restated certificate of incorporation (i) to modify the substance or timing of our obligation to allow redemption in connection with our initial Business Combination or certain amendments to our charter prior thereto or to redeem 100% of our Public Shares if we do not complete our initial Business Combination within 12 months from our IPO or (ii) with respect to any other provision relating to stockholders’ rights or pre-initial business combination activity, unless we provide our public stockholders with the opportunity to redeem their shares of common stock upon approval of any such amendment at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the Trust Account including interest earned on the funds held in the Trust Account and not previously released to us to pay our taxes divided by the number of then outstanding Public Shares. However, we may not redeem our Public Shares unless our net tangible assets are at least $5,000,001 either immediately prior to or upon consummation of our initial Business Combination and after payment of underwriters’ fees and commissions (so that we are not subject to the SEC’s “penny stock” rules). If this optional redemption right is exercised with respect to an excessive number of Public Shares such that we cannot satisfy the net tangible asset requirement (described above), we would not proceed with the amendment or the related redemption of our Public Shares at such time.

We expect that all costs and expenses associated with implementing our plan of dissolution, as well as payments to any creditors, will be funded from amounts remaining out of the approximately $800,000 of proceeds held outside the Trust Account, although we cannot assure you that there will be sufficient funds for such purpose. We will depend on sufficient interest being earned on the proceeds held in the Trust Account to pay any tax obligations we may owe. However, if those funds are not sufficient to cover the costs and expenses associated with implementing our plan of dissolution, to the extent that there is any interest accrued in the Trust Account not required to pay taxes, we may request the trustee to release to us an additional amount of up to $100,000 of such accrued interest to pay those costs and expenses.

If we were to expend all of the net proceeds of our IPO and the sale of the placement warrants, other than the proceeds deposited in the Trust Account, and without taking into account interest, if any, earned on the Trust Account, the per-share redemption amount received by stockholders upon our dissolution would be approximately $10.15. The proceeds deposited in the Trust Account could, however, become subject to the claims of our creditors which would have higher priority than the claims of our public stockholders. We cannot assure you that the actual per-share redemption amount received by stockholders will not be substantially less than $10.15. Under Section 281(b) of the DGCL, our plan of dissolution must provide for all claims against us to be paid in full or make provision for payments t

SEC Form 10-K filed by Industrial Human Capital Inc.