Hennessy Capital Investment Corp VII (ONEN) Risk Analysis

HVII's amended and restated memorandum and articles of association provide that, if HVII seeks shareholder approval, HVII will complete its initial business combination only if HVII receives approval pursuant to an ordinary resolution under HVII's amended and restated memorandum and articles of association and under Cayman Islands law, which requires the affirmative vote of a simple majority of the shareholders who attend and vote at a general meeting of the company, voting together as a single class and includes a unanimous written resolution. Pursuant to the letter agreement, HVII's initial shareholders, officers and directors have agreed to vote their founder shares as well as any public shares purchased during or after HVII's initial public offering (including in open market and privately negotiated transactions), in favor of HVII's initial business combination (except that any public shares such parties may purchase in compliance with the requirements of Rule 14e-5 under the Exchange Act would not be voted in favor of approving the business combination transaction). As a result, in addition to HVII's initial shareholders' founder shares and private placement shares held by HVII's sponsor, HVII would need only 6,178,334, or 32.5%, of the 19,000,000 public shares sold in its initial public offering to be voted in favor of an initial business combination (assuming all outstanding shares are voted, and the parties to the letter agreement do not acquire any Class A ordinary shares) in order to have HVII's initial business combination approved. HVII's initial shareholders own shares representing approximately 26.3% of HVII's outstanding ordinary shares (excluding the private placement shares). Assuming that only the holders of one-third of HVII's issued and outstanding ordinary shares, representing a quorum under HVII's amended and restated memorandum and articles of association, vote their shares at a general meeting of the company, HVII will not need any public shares in addition to HVII's founder shares to be voted in favor of an initial business combination in order to approve an initial business combination. Accordingly, if HVII seeks shareholder approval of its initial business combination, the agreement by HVII's initial shareholders to vote in favor of HVII's initial business combination will increase the likelihood that HVII will receive the requisite shareholder approval for such initial business combination.

At the time of an investment in HVII, investors will not be provided with an opportunity to evaluate the specific merits or risks of HVII's initial business combination. Since HVII's board of directors may complete an initial business combination without seeking shareholder approval, public shareholders may not have the right or opportunity to vote on the initial business combination, unless HVII seeks such shareholder vote. Accordingly, if HVII does not seek shareholder approval, investors' only opportunity to affect the investment decision regarding a potential business combination may be limited to exercising their redemption rights within the period of time (which will be at least 20 business days) set forth in HVII's tender offer documents mailed to HVII's public shareholders in which HVII describes its initial business combination. The amount of the deferred underwriting commissions payable to the underwriters will not be adjusted for any shares that are redeemed in connection with an initial business combination. The per-share amount HVII will distribute to shareholders who properly exercise their redemption rights will not be reduced by the deferred underwriting commission and after such redemptions, the per-share value of shares held by non-redeeming shareholders will reflect HVII's obligation to pay the deferred underwriting commissions.

HVII may seek to enter into a business combination transaction agreement with a minimum cash requirement for (i) cash consideration to be paid to the target or its owners, (ii) cash for working capital or other general corporate purposes or (iii) the retention of cash to satisfy other conditions. If too many public shareholders exercise their redemption rights, HVII would not be able to meet such closing condition and, as a result, would not be able to proceed with the business combination. Consequently, if accepting all properly submitted redemption requests would not allow HVII to satisfy a closing condition as described above, it would not proceed with such redemption and the related business combination and may instead search for an alternate business combination. Prospective targets will be aware of these risks and, thus, may be reluctant to enter into a business combination transaction with HVII.

If HVII's initial business combination agreement requires it to use a portion of the cash in the trust account to pay the purchase price, or requires it to have a minimum amount of cash at closing, the probability that its initial business combination would be unsuccessful is increased. If HVII's initial business combination is unsuccessful, shareholders would not receive their pro rata portion of the funds in the trust account until HVII liquidates the trust account. If shareholders are in need of immediate liquidity, they could attempt to sell their shares in the open market; however, at such time HVII's shares may trade at a discount to the pro rata amount per share in the trust account. In either situation, shareholders may suffer a material loss on their investment or lose the benefit of funds expected in connection with their exercise of redemption rights until HVII liquidates or they are able to sell their shares in the open market.

At the time HVII enters into an agreement for its initial business combination, it will not know how many shareholders may exercise their redemption rights, and therefore will need to structure the transaction based on its expectations as to the number of shares that will be submitted for redemption. If HVII's initial business combination agreement requires it to use a portion of the cash in the trust account to pay the purchase price, or requires it to have a minimum amount of cash at closing, HVII will need to reserve a portion of the cash in the trust account to meet such requirements, or arrange for third-party financing. In addition, if a larger number of shares are submitted for redemption than HVII initially expected, it may need to restructure the transaction to reserve a greater portion of the cash in the trust account or arrange for third-party financing. Raising additional third-party financing may involve dilutive equity issuances or the incurrence of indebtedness at higher than desirable levels. Furthermore, this dilution would increase to the extent that the anti-dilution provision of the Class B ordinary shares results in the issuance of Class A shares on a greater than one-to-one basis upon conversion of the Class B ordinary shares at the time of HVII's business combination. In addition, the underwriters have agreed to defer underwriting commissions equal to up to 4.0% of the gross proceeds of HVII's initial public offering, payable to the underwriters upon consummation of HVII's initial business combination. Upon the consummation of HVII's initial business combination, up to 4.0% of the deferred underwriting commissions, which will be reduced based on the percentage of total funds from the trust account released to pay redeeming public shareholders. Even though the deferred underwriting commissions are reduced in proportion to the amount of redemptions by HVII's public shareholders, if HVII's public shareholders exercise redemption rights with respect to a large number of shares, there may not be sufficient cash in the trust account to meet a minimum cash condition at closing of HVII's initial business combination and require additional third-party financing, which may result in dilutive equity issuances or the incurrence of indebtedness at higher than desirable levels. There are no redemption rights with respect to the share rights. The above considerations may limit HVII's ability to complete the most desirable business combination available to it or optimize its capital structure.

HVII has until the date that is 24 months from the closing of its initial public offering, or until such earlier liquidation date as its board of directors may approve, to consummate its initial business combination. If HVII does not consummate an initial business combination by such deadline, it may decide not to seek to extend the date by which it must consummate its initial business combination. If HVII does not seek to extend the date by which it must consummate its initial business combination, and it is unable to consummate its initial business combination within the applicable time period, it will, as promptly as reasonably possible but not more than ten business days thereafter, redeem the public shares for a pro rata portion of the funds held in the trust account, subject to its obligations under Cayman Islands law to provide for claims of creditors and the requirements of other applicable law. In such event, the share rights will be worthless.

The sponsor and HVII's directors, officers, advisors, or any of their respective affiliates may purchase HVII's units, Class A ordinary shares, or share rights or a combination thereof in privately negotiated transactions or in the open market either prior to or following the completion of HVII's initial business combination, although they are under no obligation to do so. If the sponsor or its affiliates engage in such transactions prior to the completion of HVII's initial business combination, the purchase will be at a price no higher than the price offered through the redemption process. Any such securities purchased by the sponsor or its affiliates, or any other third party that would vote at the direction of the sponsor or its affiliates, will not be voted in favor of approving HVII's initial business combination. However, they have no current commitments, plans, or intentions to engage in such transactions and have not formulated any terms or conditions for any such transactions. None of the funds in the trust account will be used to purchase HVII's units, Class A ordinary shares or share rights in such transactions. If they engage in such transactions, they will be restricted from making any such purchases when they are in possession of any material non-public information not disclosed to the seller or if such purchases are prohibited by Regulation M under the Exchange Act or other federal securities laws. Such a purchase may include a contractual acknowledgement that such shareholder, although still the record holder of ordinary shares, is no longer the beneficial owner thereof and therefore agrees not to exercise its redemption rights. In the event that the sponsor and HVII's directors, officers, advisors, or any of their affiliates purchase Class A ordinary shares in privately negotiated transactions from public shareholders who have already elected to exercise their redemption rights, such selling shareholders would be required to revoke their prior elections to redeem their Class A ordinary shares. The sponsor and its affiliates have entered into an agreement with HVII, pursuant to which they have agreed to waive their redemption rights with respect to their Class B ordinary shares and Class A ordinary shares. The purpose of such purchases would be to ensure that such shares would not be redeemed in connection with HVII's initial business combination. Any such purchases of HVII securities may result in the completion of HVII's initial business combination, which may not otherwise have been possible. Any such purchases will be reported pursuant to Section 13 and Section 16 of the Exchange Act to the extent such purchasers are subject to such reporting requirements. In addition, if such purchases are made, the public "float" of Class A ordinary shares or share rights and the number of beneficial holders of HVII securities may be reduced, possibly making it difficult to maintain the quotation, listing or trading of securities on a national securities exchange post-HVII's initial business combination. The sponsor and HVII's officers, directors, advisors, and/or any of their respective affiliates anticipate that they may identify public shareholders with whom the sponsor or HVII's officers, directors, advisors, or any of their respective affiliates may pursue privately negotiated purchases by either public shareholders contacting HVII directly or by HVII's receipt of redemption requests submitted by public shareholders following HVII's mailing of proxy materials in connection with HVII's initial business combination. To the extent that the sponsor or HVII's officers, directors, advisors, or any of their respective affiliates enter into a private purchase, they would identify and contact only potential selling public shareholders who have expressed their election to redeem their shares for a pro rata share of the trust account or vote against HVII's initial business combination, but only if such ordinary shares have not already been voted at the general meeting held to consider HVII's initial business combination. Such persons would select the public shareholders from whom to acquire shares based on the number of shares available, the negotiated price per share and such other factors as any such person may deem relevant at the time of purchase. The price per share paid in any such transaction may be different than, but not higher than, the amount per share a public shareholder would receive if it elected to redeem its shares in connection with HVII's initial business combination. The sponsor or HVII's officers, directors, advisors, or any of their respective affiliates will purchase shares only if such purchases comply with Regulation M under the Exchange Act and the other federal securities laws. Entering into any such arrangements may have an adverse effect on the price of HVII's securities. For example, as a result of these arrangements, an investor or holder may have the ability to effectively purchase shares at a price lower than market price and may therefore be more likely to sell the shares he owns, either prior to or immediately after the extraordinary general meeting.

HVII may choose not to hold a shareholder vote to approve its initial business combination unless the initial business combination would require shareholder approval under applicable Cayman Islands law or stock exchange listing requirements or if HVII decides to hold a shareholder vote for business or other legal reasons. Except as required by law, the decision as to whether HVII will seek shareholder approval of a proposed initial business combination or will allow shareholders to sell their shares to HVII in a tender offer will be made by HVII, solely in its 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 otherwise require HVII to seek shareholder approval. Even if HVII seeks shareholder approval, the holders of HVII's founder shares will participate in the vote on such approval. Accordingly, HVII may consummate its initial business combination even if holders of a majority of HVII's outstanding public shares do not approve of the initial business combination HVII consummates. Please see the section of this Report entitled "Business - Shareholders May Not Have the Ability to Approve HVII's Initial Business Combination" for additional information.

HVII will comply with the tender offer rules or proxy rules, as applicable, when conducting redemptions in connection with HVII's initial business combination. Despite HVII's compliance with these rules, if a shareholder fails to receive HVII's tender offer or proxy materials, as applicable, such shareholder may not become aware of the opportunity to redeem its shares. In addition, proxy materials or tender offer documents, as applicable, that HVII will furnish to holders of HVII's public shares in connection with the initial business combination will describe the various procedures that must be complied with in order to validly tender or redeem public shares. For example, HVII may require HVII's public shareholders seeking to exercise their redemption rights, whether they are record holders or hold their shares in "street name," to either tender their certificates to HVII's transfer agent prior to the date set forth in the tender offer documents mailed to such holders, or up to two business days prior to the vote on the proposal to approve the initial business combination in the event HVII distributes proxy materials, or to deliver their shares to the transfer agent electronically. In the event that a shareholder fails to comply with these or any other procedures, its shares may not be redeemed. See the section of this Report entitled "Business - Redemption Rights for Public Shareholders upon Completion of HVII's Initial Business Combination."

If HVII does not consummate an initial business combination within 24 months from the closing of its initial public offering, the proceeds then on deposit in the trust account, including interest earned on the funds held in the trust account and not previously released to HVII to pay permitted withdrawals, if any (less up to $100,000 of interest to pay dissolution expenses), will be used to fund the redemption of HVII's public shares, as further described herein. Any redemption of public shareholders from the trust account will be effected automatically by function of HVII's amended and restated memorandum and articles of association prior to any voluntary winding up. If HVII is required to wind up, liquidate the trust account and distribute such amount therein, pro rata, to HVII's public shareholders, as part of any liquidation process, such winding up, liquidation and distribution must comply with the applicable provisions of the Companies Act. In that case, investors may be forced to wait beyond such time from the closing of HVII's initial public offering, before the redemption proceeds of HVII's trust account become available to them, and they receive the return of their pro rata portion of the proceeds from HVII's trust account. HVII has no obligation to return funds to investors prior to the date of HVII's redemption or liquidation unless, prior thereto, HVII consummates its initial business combination or amends certain provisions of HVII's amended and restated memorandum and articles of association, and only then in cases where investors have sought to redeem their Class A ordinary shares. Only upon HVII's redemption or any liquidation will public shareholders be entitled to distributions if HVII does not complete its initial business combination and does not amend certain provisions of HVII's amended and restated memorandum and articles of association. HVII's amended and restated memorandum and articles of association provides that, if HVII winds up for any other reason prior to the consummation of its initial business combination, HVII will follow the foregoing procedures with respect to the liquidation of the trust account as promptly as reasonably possible but not more than ten business days thereafter, subject to applicable Cayman Islands law.

If, after HVII distributes the proceeds in the trust account to its public shareholders, HVII files a bankruptcy or winding-up petition or an involuntary bankruptcy or winding-up petition is filed against HVII that is not dismissed, any distributions received by shareholders could be viewed under applicable debtor/creditor and/or bankruptcy and/or insolvency laws as either a "preferential transfer" or a "fraudulent conveyance." As a result, a bankruptcy or insolvency court could seek to recover all amounts received by HVII's shareholders. In addition, HVII's board of directors may be viewed as having breached its fiduciary duty to HVII's creditors and/or having acted in bad faith, thereby exposing itself and HVII to claims of punitive damages, by paying public shareholders from the trust account prior to addressing the claims of creditors.

If, before distributing the proceeds in the trust account to HVII's public shareholders, HVII files a bankruptcy or winding-up petition or an involuntary bankruptcy or winding-up petition is filed against HVII that is not dismissed, the proceeds held in the trust account could be subject to applicable bankruptcy insolvency law, and may be included in HVII's bankruptcy or insolvency estate and subject to the claims of third parties with priority over the claims of HVII's shareholders. To the extent any bankruptcy or insolvency claims deplete the trust account, the per-share amount that would otherwise be received by HVII's shareholders in connection with its liquidation may be reduced.

If HVII is forced to enter into an insolvent liquidation, any distributions received by shareholders could be viewed as an unlawful payment if it was proved that immediately following the date on which the distribution was made, HVII was unable to pay its debts as they fall due in the ordinary course of business. As a result, a liquidator could seek to recover some or all amounts received by HVII's shareholders. Furthermore, HVII's directors may be viewed as having breached their fiduciary duties to HVII or its creditors and/or may have acted in bad faith, thereby exposing themselves and HVII to claims, by paying public shareholders from the trust account prior to addressing the claims of creditors. Claims may be brought against HVII for these reasons. HVII and its directors and officers who knowingly and willfully authorized or permitted any distribution to be paid out of HVII's share premium account while HVII was unable to pay its debts as they fall due in the ordinary course of business would be guilty of an offence and may be liable for a fine of $18,292.68 and imprisonment for five years in the Cayman Islands.

In accordance with Nasdaq corporate governance requirements, HVII is not required to hold an annual general meeting until no later than one year after its first fiscal year end following its listing on Nasdaq. As an exempted company, there is no requirement under the Companies Act for HVII to hold annual or extraordinary general meetings to appoint directors. Prior to the consummation of HVII's initial business combination, only holders of HVII's Class B ordinary shares will have the right to vote on the appointment or removal of directors.

It is possible that after HVII's initial business combination, a majority of HVII's directors and officers will reside outside of the United States and all of HVII's assets will be located outside of the United States. As a result, it may be difficult, or in some cases not possible, for investors in the United States to enforce their legal rights, to effect service of process upon all of HVII's directors or officers or to enforce judgments of United States courts predicated upon civil liabilities and criminal penalties on HVII's directors and officers under United States laws. In particular, there is uncertainty as to whether the courts of the Cayman Islands or any other applicable jurisdictions would recognize and enforce judgments of U.S. courts obtained against HVII or its directors or officers predicated upon the civil liability provisions of the securities laws of the United States or any state in the United States or entertain original actions brought in the Cayman Islands or any other applicable jurisdiction's courts against HVII or its directors or officers predicated upon the securities laws of the United States or any state in the United States. For a more detailed discussion, see Exhibit 4.2 of this Report captioned "Description of Securities."

Since the net proceeds of HVII's initial public offering and the sale of the private placement units are intended to be used to complete an initial business combination with a target business that has not been identified, HVII may be deemed to be a "blank check" company under the United States securities laws. However, because HVII has net tangible assets in excess of $5,000,000 and has filed a Current Report on Form 8-K, including an audited balance sheet demonstrating this fact, HVII is exempt from rules promulgated by the SEC to protect investors in SPACs, such as Rule 419. Accordingly, investors will not be afforded the benefits or protections of those rules. Among other things, this means HVII will have a longer period of time to complete its business combination than do companies subject to Rule 419. Moreover, if HVII's initial public offering were subject to Rule 419, that rule would prohibit the release of any interest earned on funds held in the trust account to HVII unless and until the funds in the trust account were released to HVII in connection with its completion of an initial business combination. For a more detailed comparison of HVII's offering to offerings that comply with Rule 419, please see the section of this Report entitled "Business - Overview."

The funds available to HVII outside of the trust account and the permitted withdrawals may not be sufficient to allow HVII to operate for at least the completion window, assuming that its initial business combination is not completed during that time. HVII believes that the funds available to it outside of the trust account and the permitted withdrawals will be sufficient to allow it to operate for at least the completion window; however, HVII cannot assure investors that its estimate is accurate. Of the funds available to HVII, it could use a portion of the funds available to it to pay fees to consultants to assist it with its search for a target business. HVII could also use a portion of the funds as a down payment or to fund a "no-shop" provision (a provision in letters of intent or merger agreements designed to keep target businesses from "shopping" around for transactions with other companies on terms more favorable to such target businesses) with respect to a particular proposed initial business combination, although HVII does not have any current intention to do so. If HVII entered into a letter of intent or merger agreement where it paid for the right to receive exclusivity from a target business and were subsequently required to forfeit such funds (whether as a result of its breach or otherwise), it might not have sufficient funds to continue searching for, or conduct due diligence with respect to, a target business. If HVII is unable to complete its initial business combination, its public shareholders may receive only approximately $10.00 per share on the liquidation of its trust account and its share rights will expire worthless.

HVII's placing of funds in the trust account may not protect those funds from third-party claims against it. Although HVII will seek to have all vendors, service providers, prospective target businesses and other entities with which it does business execute agreements with HVII waiving any right, title, interest or claim of any kind in or to any monies held in the trust account for the benefit of its public shareholders, such parties may not execute such agreements, or even if they execute such agreements they may not be prevented from bringing claims against the trust account, including, but not limited to, fraudulent inducement, breach of fiduciary responsibility or other similar claims, as well as claims challenging the enforceability of the waiver, in each case in order to gain advantage with respect to a claim against HVII's assets, including the funds held in the trust account. If any third party refuses to execute an agreement waiving such claims to the monies held in the trust account, HVII's management will perform an analysis of the alternatives available to it and will only enter into an agreement with a third party that has not executed a waiver if management believes that such third party's engagement would be significantly more beneficial to HVII than any alternative. Withum Smith+Brown, PC ("Withum"), HVII's independent registered public accounting firm, and the underwriters of HVII's initial public offering have not executed agreements with HVII waiving such claims to the monies held in the trust account. Examples of possible instances where HVII may engage a third party that refuses to execute a waiver include the engagement of a third party consultant whose particular expertise or skills are believed by management to be significantly superior to those of other consultants that would agree to execute a waiver or in cases where management is unable to find a service provider willing to execute a waiver. In addition, there is no guarantee that such entities will agree to waive any claims they may have in the future as a result of, or arising out of, any negotiations, contracts or agreements with HVII and will not seek recourse against the trust account for any reason. Upon redemption of HVII's public shares, if it is unable to complete its initial business combination within the prescribed timeframe, or upon the exercise of a redemption right in connection with its initial business combination, HVII will be required to provide for payment of claims of creditors that were not waived that may be brought against it within the 10 years following redemption. Accordingly, the per-share redemption amount received by public shareholders could be less than the $10.00 per share initially held in the trust account, due to claims of such creditors. Pursuant to the letter agreement, the form of which is filed as an exhibit to HVII's registration statement filed in connection with HVII's initial public offering, HVII's sponsor has agreed that it will be liable to HVII if and to the extent any claims by a third party (other than HVII's independent registered public accounting firm) for services rendered or products sold to HVII, or a prospective target business with which HVII has entered into a written letter of intent, confidentiality or similar agreement or business combination agreement, reduce the amount of funds in the trust account to below the lesser of (i) $10.00 per public share and (ii) the actual amount per public share held in the trust account as of the date of the liquidation of the trust account, if less than $10.00 per share due to reductions in the value of the trust assets, less permitted withdrawals, provided that such liability will not apply to any claims by a third party or prospective target business who executed a waiver of any and all rights to the monies held in the trust account (whether or not such waiver is enforceable) nor will it apply to any claims under HVII's indemnity of the underwriters of HVII's initial public offering against certain liabilities, including liabilities under the Securities Act. However, HVII has not asked its sponsor to reserve for such indemnification obligations, nor has it independently verified whether its sponsor has sufficient funds to satisfy its indemnity obligations and believes that its sponsor's only assets are securities of HVII. Therefore, HVII cannot assure investors that its sponsor would be able to satisfy those obligations. None of HVII's officers or directors will indemnify HVII for claims by third parties including, without limitation, claims by vendors and prospective target businesses.

In the event that the proceeds in the trust account are reduced below the lesser of (i) $10.00 per share and (ii) the actual amount per share held in the trust account as of the date of the liquidation of the trust account if less than $10.00 per share due to reductions in the value of the trust assets, in each case net of the interest that may be withdrawn to fund permitted withdrawals, and HVII's sponsor asserts that it is unable to satisfy its obligations or that it has no indemnification obligations related to a particular claim, HVII's independent directors would determine whether to take legal action against the sponsor to enforce its indemnification obligations. While it is currently expected that HVII's independent directors would take legal action on behalf of HVII against the sponsor to enforce its indemnification obligations, it is possible that the independent directors, in exercising their business judgment and subject to their fiduciary duties, may choose not to do so in any particular instance if, for example, the cost of such legal action is deemed by the independent directors to be too high relative to the amount recoverable or if the independent directors determine that a favorable outcome is not likely. If the independent directors choose not to enforce these indemnification obligations, the amount of funds in the trust account available for distribution to HVII's public shareholders may be reduced below $10.00 per share.

Unless HVII completes its initial business combination with an affiliated entity or its board cannot independently determine the fair market value of the target business or businesses, HVII is not required to obtain an opinion from an independent investment banking firm or another independent entity that commonly renders valuation opinions that the price it is paying is fair to the company from a financial point of view. If no opinion is obtained, HVII's shareholders will be relying on the judgment of its board of directors, who will determine fair market value based on standards generally accepted by the financial community. Such standards used will be disclosed in HVII's proxy materials or tender offer documents, as applicable, related to its initial business combination.

HVII's amended and restated memorandum and articles of association do not provide a specified maximum redemption threshold. HVII's initial proposed business combination may impose a minimum cash requirement for: (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 business combination. As a result, HVII may be able to complete its initial business combination even though a substantial majority of its public shareholders do not agree with the transaction and have redeemed their shares or, if HVII seeks shareholder approval of its initial business combination and does not conduct redemptions in connection with its initial business combination pursuant to the tender offer rules, have entered into privately negotiated agreements to sell their shares to HVII's sponsor, officers, directors or their affiliates. In the event the aggregate cash consideration HVII would be required to pay for all Class A ordinary shares that are validly submitted for redemption plus any amount required to satisfy cash conditions pursuant to the terms of the proposed initial business combination exceed the aggregate amount of cash available to HVII, it will not complete the initial business combination or redeem any shares, all Class A ordinary shares submitted for redemption will be returned to the holders thereof, and HVII instead may search for an alternate business combination.

In order to effectuate an initial business combination, SPACs have, in the recent past, amended various provisions of their charters and modified governing instruments. For example, SPACs have amended the definition of business combination, increased redemption thresholds and extended the time to consummate an initial business combination. Amending HVII's amended and restated memorandum and articles of association requires at least a special resolution of its shareholders as a matter of Cayman Islands law, meaning the approval of holders of at least two-thirds of HVII's ordinary shares who attend and vote at a general meeting of the company, and amending its share rights agreement requires a vote of holders of at least 50% of the public share rights and, solely with respect to any amendment to the terms of the private placement units or any provision of the share rights agreement with respect to the private placement rights, 50% of the number of the then outstanding private placement units (including the consent of Cohen & Company). In addition, HVII's amended and restated memorandum and articles of association requires it to provide its public shareholders with the opportunity to redeem their public shares for cash if HVII proposes an amendment to its amended and restated memorandum and articles of association (i) to modify the substance or timing of its obligation to provide for the redemption of its public shares in connection with an initial business combination or to redeem 100% of its public shares if HVII has not consummated its initial business combination within the completion window or (ii) with respect to any other provision relating to shareholders' rights or pre-initial business combination activity. Many SPACs have faced delisting of their securities following redemptions of shares by public shareholders in connection with proposed amendments to their corporate charters since, after redeeming a large number of publicly held shares, they no longer meet the continued listing requirements of the stock exchange. To the extent any such amendments would be deemed to fundamentally change the nature of any securities offered through HVII's registration statement filed in connection with its initial public offering, HVII would register, or seek an exemption from registration for, the affected securities. HVII cannot assure investors that it will not seek to amend its charter or governing instruments or extend the time to consummate an initial business combination in order to effectuate its initial business combination.

Each of the agreements related to HVII's initial public offering to which HVII is a party, other than the share rights agreement and the investment management trust agreement, may be amended or waived without shareholder approval. Such agreements are: the underwriting agreement; the letter agreement among HVII and its initial shareholders, sponsor, officers and directors; the registration rights agreement among HVII and its initial shareholders; the private placement units purchase agreement between HVII and its sponsor; and the administrative services agreement among HVII, its sponsor and an affiliate of its sponsor. These agreements contain various provisions that HVII's public shareholders might deem to be material. For example, the letter agreement and the underwriting agreement contain certain lock-up provisions with respect to the founder shares, private placement units and other securities held by HVII's initial shareholders, sponsor, officers and directors. Amendments to or waivers of such agreements would require the consent of the applicable parties thereto and would need to be approved by HVII's board of directors, which may do so for a variety of reasons, including to facilitate HVII's initial business combination. While HVII does not expect its board of directors to approve any amendment to or waiver of any of these agreements prior to its initial business combination, it may be possible that HVII's board of directors, in exercising its business judgment and subject to its fiduciary duties, chooses to approve one or more amendments to or waivers of any such agreement in connection with the consummation of HVII's initial business combination. Any amendment or waiver entered into in connection with the consummation of HVII's initial business combination will be disclosed in its proxy materials or tender offer documents, as applicable, related to such initial business combination, and any other material amendment to or waiver of any of HVII's material agreements will be disclosed in a filing with the SEC. Any such amendments or waivers would not require approval from HVII's shareholders, may result in the completion of HVII's initial business combination that may not otherwise have been possible, and may have an adverse effect on the value of an investment in HVII's securities. For example, amendments to or waivers of the lock-up provision discussed above may result in HVII's initial shareholders selling their securities earlier than they would otherwise be permitted, which may have an adverse effect on the price of HVII's securities.

HVII's amended and restated memorandum and articles of association provides that any of its provisions related to pre-initial business combination activity (including the requirement to deposit certain proceeds of HVII's initial public offering and the private placement of units into the trust account and not release such amounts except in specified circumstances, and to provide redemption rights to public shareholders as described herein and including to permit HVII to withdraw funds from the trust account such that the per share amount investors will receive upon any redemption or liquidation is substantially reduced or eliminated) may be amended if approved by special resolution, meaning holders of at least two-thirds of HVII's ordinary shares who attend and vote at a general meeting of the company, voting together as a single class, and corresponding provisions of the trust agreement governing the release of funds from HVII's trust account may be amended if approved by holders of at least two-thirds of HVII's ordinary shares who attend and vote at a general meeting of the company; provided that the provisions of HVII's amended and restated memorandum and articles of association governing the appointment or removal of directors prior to HVII's initial business combination and continuing the company in a jurisdiction outside the Cayman Islands, may only be amended by a special resolution passed by holders representing at least 90% of HVII's issued and outstanding Class B ordinary shares. HVII's initial shareholders, who collectively beneficially own approximately 26.3% of HVII's ordinary shares, will participate in any vote to amend HVII's amended and restated memorandum and articles of association and/or trust agreement and will have the discretion to vote in any manner they choose. As a result, HVII may be able to amend the provisions of its amended and restated memorandum and articles of association which govern its pre-initial business combination behavior more easily than some other SPACs, and this may increase HVII's ability to complete an initial business combination with which public shareholders do not agree. HVII's shareholders may pursue remedies against HVII for any breach of its amended and restated memorandum and articles of association. HVII's initial shareholders, officers and directors have agreed, pursuant to a letter agreement with HVII, that they will not propose any amendment to HVII's amended and restated memorandum and articles of association (i) to modify the substance or timing of HVII's obligation to provide for the redemption of HVII's public shares in connection with an initial business combination or to redeem 100% of HVII's public shares if HVII has not consummated its initial business combination within the completion window or (ii) with respect to any other provision relating to shareholders' rights or pre-initial business combination activity, unless HVII provides its public shareholders with the opportunity to redeem their Class A ordinary shares upon approval of any such amendment at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the trust account, divided by the number of then outstanding public shares. These agreements are contained in a letter agreement that HVII has entered into with its initial shareholders, officers and directors. HVII's shareholders are not parties to, or third-party beneficiaries of, these agreements and, as a result, will not have the ability to pursue remedies against HVII's sponsor, officers or directors for any breach of these agreements. As a result, in the event of a breach, HVII's shareholders would need to pursue a shareholder derivative action, subject to applicable law.

The federal proxy rules require that a proxy statement with respect to a vote on an initial business combination meeting certain financial significance tests include historical and/or pro forma financial statement disclosure in periodic reports. HVII will include the same financial statement disclosure in connection with its tender offer documents, whether or not they are required under the tender offer rules. These financial statements may be required to be prepared in accordance with, or be reconciled to, accounting principles generally accepted in the United States of America, or GAAP, or international financial reporting standards as issued by the International Accounting Standards Board, or IFRS, depending on the circumstances and the historical financial statements may be required to be audited in accordance with the standards of the Public Company Accounting Oversight Board (United States), or PCAOB. These financial statement requirements may limit the pool of potential target businesses HVII may acquire because some targets may be unable to provide such financial statements in time for HVII to disclose such statements in accordance with federal proxy rules and complete its initial business combination within the prescribed time frame.

HVII's initial shareholders own shares representing 26.3% of its issued and outstanding ordinary shares. Accordingly, they may exert a substantial influence on actions requiring a shareholder vote, potentially in a manner that shareholders do not support, including amendments to HVII's amended and restated memorandum and articles of association and approval of major corporate transactions. If HVII's initial shareholders purchase any additional ordinary shares in the aftermarket or in privately negotiated transactions, this would increase their control. Factors that would be considered in making such additional purchases would include consideration of the current trading price of HVII's Class A ordinary shares. In addition, HVII may not hold an annual general meeting to elect new directors prior to the completion of its initial business combination, in which case all of the current directors, who were elected by HVII's initial shareholders, will continue in office until at least the completion of the initial business combination. Prior to the consummation of HVII's initial business combination, only holders of its Class B ordinary shares will have the right to vote on the appointment or removal of directors. Holders of HVII's public shares will have no right to vote on the appointment or removal of directors during such time. Further, prior to the closing of HVII's initial business combination, only holders of its Class B ordinary shares will be entitled to vote on continuing HVII in a jurisdiction outside the Cayman Islands (including any special resolution required to adopt new constitutional documents as a result of HVII approving a transfer by way of continuation in a jurisdiction outside the Cayman Islands). These provisions of HVII's amended and restated memorandum and articles of association may only be amended if approved by a special resolution passed by the affirmative vote of at least 90% (or, where such amendment is proposed in respect of the consummation of HVII's initial business combination, two-thirds) of the votes cast by such shareholders as, being entitled to do so, vote in person or, where proxies are allowed, by proxy at the applicable general meeting of the company, voting together as a single class. As a result, shareholders will not have any influence over the appointment or removal of directors prior to HVII's initial business combination or any influence over its continuation in a jurisdiction outside the Cayman Islands prior to its initial business combination. Accordingly, HVII's initial shareholders will continue to exert control at least until the completion of its initial business combination.

Only holders of HVII's Class B ordinary shares have the right to vote on the appointment of directors. As a result, Nasdaq considers HVII to be a "controlled company" within the meaning of Nasdaq corporate governance standards. Under Nasdaq corporate governance standards, a company of which more than 50% of the voting power is held by an individual, group or another company is a "controlled company" and may elect not to comply with certain corporate governance requirements, including the requirements that: - HVII have a board that includes a majority of "independent directors," as defined under the rules of Nasdaq; and         - HVII have a compensation committee of its board that is comprised entirely of independent directors with a written charter addressing the committee's purpose and responsibilities.         - HVII have independent director oversight of its director nominations. HVII does not intend to utilize these exemptions and intends to comply with the corporate governance requirements of Nasdaq, subject to applicable phase-in rules. However, if HVII determines in the future to utilize some or all of these exemptions, shareholders will not have the same protections afforded to shareholders of companies that are subject to all of Nasdaq corporate governance requirements.

The Inflation Reduction Act of 2022, among other things, generally imposes a 1% U.S. federal excise tax (the "Excise Tax") on certain repurchases of stock by "covered corporations" (which include publicly traded domestic (i.e., U.S.) corporations and certain domestic subsidiaries of publicly traded foreign (i.e., non-U.S.) corporations). The Excise Tax is imposed on the repurchasing corporation itself, not its stockholders from which the stock is repurchased. The amount of the Excise Tax is generally 1% of the fair market value of the stock repurchased at the time of the repurchase. However, for purposes of calculating the Excise Tax, repurchasing corporations are permitted to net the fair market value of certain new stock issuances against the fair market value of stock repurchases during the same taxable year. In addition, certain exceptions apply to the Excise Tax. The U.S. Department of the Treasury (the "Treasury") has authority to provide regulations and other guidance to carry out, and prevent the abuse or avoidance of, the Excise Tax. On December 27, 2022, the Treasury issued a notice that provides interim operating rules for the Excise Tax, including rules governing the calculation and reporting of the Excise Tax. The Treasury issued proposed regulations on April 12, 2024, and final regulations on June 28, 2024, which generally adopt (but in some respects expand or modify) the rules and guidance set forth in the earlier notice. Although such notice and Treasury regulations clarify certain aspects of the Excise Tax, the interpretation and operation of certain other aspects of the Excise Tax remain unclear. HVII is currently not a "covered corporation" for purposes of the Excise Tax. If HVII were to become a "covered corporation" in the future, whether in connection with the consummation of its initial business combination with a U.S. company (including if HVII were to redomicile as a U.S. corporation in connection therewith) or otherwise, whether and to what extent HVII would be subject to the Excise Tax on a redemption of its shares would depend on a number of factors, including (i) whether the redemption is treated as a repurchase of stock for purposes of the Excise Tax, (ii) the fair market value of the redemption treated as a repurchase of stock, (iii) the structure of HVII's initial business combination, (iv) the nature and amount of any "PIPE" or other equity issuances (whether in connection with HVII's initial business combination or otherwise) issued within the same taxable year of a redemption treated as a repurchase of stock and (v) the content of any other guidance from the Treasury. The imposition of the Excise Tax on HVII as a result of redemptions by HVII could, however, reduce the amount of cash available to the target business in connection with HVII's initial business combination, which could cause investors in HVII's securities who do not redeem or the other shareholders of the combined company to economically bear the impact of such Excise Tax. However, HVII will not use the proceeds placed in the Trust Account, or the interest earned on the proceeds placed in the Trust Account, to pay for possible excise tax or any other fees or taxes that may be levied on the Company on any redemptions or stock buybacks by the Company pursuant to any current, pending or further rules or laws, including without limitation any Excise Tax, prior to release of such funds from the Trust Account following HVII's initial business combination.

HVII offered its units at an offering price of $10.00 per unit and the amount in its trust account is $10.00 per public share, implying an initial value of $10.00 per public share. However, prior to HVII's initial public offering, HVII's sponsor paid a nominal aggregate purchase price of $25,000 for the founder shares, or approximately $0.004 per share. As a result, the value of public shares may be significantly diluted upon the consummation of HVII's initial business combination, when the founder shares are converted into public shares. For example, the following table shows the dilutive effect of the founder shares on the implied value of the public shares upon the consummation of HVII's initial business combination assuming that HVII's equity value at that time is $190,000,000, which is the amount HVII would have for its initial business combination in the trust account assuming no interest is earned on the funds held in the trust account, and no public shares are redeemed in connection with HVII's initial business combination, and without taking into account any other potential impacts on HVII's valuation at such time, such as the trading price of HVII's public shares, the business combination transaction costs (including payment of $7,600,000 of deferred underwriting commissions), any equity issued or cash paid to the target's sellers or other third parties, or the target's business itself, including its assets, liabilities, management and prospects, as well as the value of HVII's public and private placement units. At such valuation, each of HVII's ordinary shares would have an implied value of $6.91 per share upon consummation of HVII's initial business combination, which is a 30.9% decrease as compared to the initial implied value per public share of $10.00. Public shares   19,000,000  Founder shares   6,708,333  Private placement shares   690,000  Total shares   26,398,333  Total funds in trust account available for initial business combination  $182,400,000  Initial implied value per share before initial business combination  $10.00  Implied value per share after initial business combination  $6.91

HVII's sponsor has invested an aggregate of $5,025,000, comprised of the $25,000 purchase price for the founder shares and the $5,000,000 purchase price for the private placement units. Assuming a trading price of $10.00 per share upon consummation of HVII's initial business combination, the 6,708,333 founder shares would have an aggregate implied value of $ 67,083,330. Even if the trading price of HVII's ordinary shares were as low as approximately $0.75 per share, and the private placement units are worthless, the value of the founder shares would be equal to the sponsor's initial investment in HVII. As a result, HVII's sponsor is likely to be able to make a substantial profit on its investment in HVII at a time when HVII's public shares have lost significant value. Accordingly, HVII's management team, which owns interests in HVII's sponsor, may be more willing to pursue a business combination with a riskier or less-established target business than would be the case if HVII's sponsor had paid the same per share price for the founder shares as HVII's public shareholders paid for their public shares.

Until HVII consummates its initial business combination, HVII intends to engage in the business of identifying and combining with one or more businesses. HVII's sponsor and its affiliates and HVII's officers and directors are, and may in the future become, affiliated with entities (such as operating companies or investment vehicles) that are engaged in a similar business, including other SPACs before HVII has entered into a definitive agreement regarding its initial business combination. HVII's officers and directors also may become aware of business opportunities which may be appropriate for presentation to HVII and the other entities to which they owe certain fiduciary or contractual duties. In addition, HVII's management team and sponsor are, and/or may in the future become affiliated with other SPACs or other entities that may have acquisition objectives that are similar to HVII's. Such entities may compete with HVII for acquisition opportunities. If such entity decides to pursue any such opportunity, HVII may be precluded from pursuing such opportunities. Subject to their fiduciary duties under Cayman Islands law, none of the members of HVII's management team who are also employed by HVII's sponsor or its affiliates have any obligation to present HVII with any opportunity for a potential business combination of which they become aware. HVII's management team and sponsor are also not prohibited from sponsoring, investing or otherwise becoming involved with, any other SPACs, including in connection with their initial business combinations, prior to HVII completing its initial business combination. Accordingly, they may have conflicts of interest in determining to which entity a particular business opportunity should be presented. These conflicts may not be resolved in HVII's favor and a potential target business may be presented to another entity prior to its presentation to HVII. HVII's amended and restated memorandum and articles of association provide that to the fullest extent permitted by applicable law: (i) no individual serving as a director or an officer shall have any duty, except and to the extent expressly assumed by contract, to refrain from engaging directly or indirectly in the same or similar business activities or lines of business as HVII; and (ii) HVII renounces any interest or expectancy in, or in being offered an opportunity to participate in, any potential transaction or matter which may be a corporate opportunity for any director or officer on the one hand, and HVII, on the other. For a complete discussion of HVII's officers' and directors' business affiliations and the potential conflicts of interest that investors should be aware of, please see the sections of this Report entitled "Directors, Executive Officers and Corporate Governance" and "Certain Relationships and Related Party Transactions, and Director Independence."

HVII has not adopted a policy that expressly prohibits its directors, officers, security holders or affiliates from having a direct or indirect pecuniary or financial interest in any investment to be acquired or disposed of by HVII or in any transaction to which HVII is a party or has an interest. In fact, HVII may enter into an initial business combination with a target business that is affiliated with its sponsor or its affiliates, its directors or officers, although it does not intend to do so. HVII does not have a policy that expressly prohibits any such persons from engaging for their own account in business activities of the types conducted by HVII. Accordingly, such persons or entities may have a conflict between their interests and those of HVII.

While there is no current intention to do so, and the members of HVII's management team and sponsor have not done so with any of their respective previously formed SPACs, HVII may approve an amendment or waiver of the letter agreement that would allow the sponsor to directly, or members of its sponsor to indirectly, transfer founder shares and private placement shares or membership interests in its sponsor in a transaction in which the sponsor removes itself as HVII's sponsor before identifying a business combination. As a result, there is a risk that HVII's sponsor and its officers and directors may divest their ownership or economic interests in HVII or in its sponsor, which would likely result in HVII's loss of certain key personnel, including Daniel J. Hennessy, Thomas D. Hennessy and Nicholas Geeza. There can be no assurance that any replacement sponsor or key personnel will successfully identify a business combination target for HVII, or, even if one is so identified, successfully complete such business combination.

If HVII seeks shareholder approval of its initial business combination and it does not conduct redemptions in connection with its initial business combination pursuant to the tender offer rules, its amended and restated memorandum and articles of association provide that a public shareholder, together with any affiliate of such shareholder or any other person with whom such shareholder is acting in concert or as a "group" (as defined under Section 13 of the Exchange Act), is restricted from seeking redemption rights with respect to more than an aggregate of 15% of the shares sold in HVII's initial public offering without HVII's prior consent, which are referred to as the "Excess Shares." However, HVII would not be restricting its shareholders' ability to vote all of their shares (including Excess Shares) for or against its initial business combination. The inability to redeem the Excess Shares will reduce the shareholder's influence over HVII's ability to complete its initial business combination and the shareholder could suffer a material loss on their investment in HVII if they sell Excess Shares in open market transactions. Additionally, the shareholder will not receive redemption distributions with respect to the Excess Shares if HVII completes its initial business combination. As a result, the shareholder will continue to hold that number of shares exceeding 15% and, in order to dispose of such shares, would be required to sell their ordinary shares in open market transactions, potentially at a loss. HVII may issue its shares to investors in connection with its initial business combination at a price which is less than the prevailing market price of its shares at that time. In connection with its initial business combination, HVII may issue shares to investors in private placement transactions (so-called PIPE transactions). The purpose of such issuances will be to enable HVII to provide sufficient liquidity to the post-business combination entity. The price of the shares HVII issues may therefore be less, and potentially significantly less, than the market price for its shares at such time. Any such issuances of equity securities could dilute the interests of HVII's existing shareholders.

HVII's units, Class A ordinary shares and share rights are currently listed on Nasdaq. HVII cannot assure investors that its securities will continue to be listed on Nasdaq in the future or prior to HVII's initial business combination, and if HVII is delisted from Nasdaq, it may harm HVII's ability to complete an initial business combination or an alternative initial business combination, as HVII may no longer be attractive as a merger partner if it is no longer listed on Nasdaq or another national securities exchange. In order to continue listing HVII's securities on Nasdaq prior to its initial business combination, HVII must maintain certain financial, distribution and share price levels. Generally, HVII must maintain a minimum market value of listed securities (generally $50,000,000), a minimum number of publicly held shares with a minimum market value (generally 1.1 million publicly held shares with a minimum of $15 million market value), a minimum bid price (generally $1.00 per share) and a minimum number of holders of its securities (generally 400 public holders). Additionally, in connection with HVII's initial business combination, HVII will be required to demonstrate compliance with Nasdaq's initial listing requirements, which are more rigorous than Nasdaq's continued listing requirements, in order to continue to maintain the listing of its securities on Nasdaq. For instance, to list on the Nasdaq Global Market, the public share price would generally be required to be at least $4.00 per share, the market value of its listed securities would generally be required to be at least $75 million, the number of unrestricted publicly held shares must be at least 1.1 million with an aggregate market value of at least $20 million and HVII would be required to have a minimum of 400 round lot holders (with at least 50% of such round lot holders holding securities with a market value of at least $2,500) of its securities. There is no assurance that HVII will be able to meet those initial listing requirements at that time. Additionally, HVII's units and share rights will not be traded after completion of HVII's initial business combination. If Nasdaq delists HVII's securities from trading on its exchange and HVII is not able to list its securities on another national securities exchange, it is expected that HVII's securities could be quoted on an over-the-counter market. If this were to occur, HVII could face significant material adverse consequences, including: - a limited availability of market quotations for HVII's securities;- reduced liquidity for HVII's securities;- a determination that Class A ordinary shares are "penny stock" which will require brokers trading in Class A ordinary shares to adhere to more stringent rules and possibly result in a reduced level of trading activity in the secondary trading market for HVII's securities;- institutional investors losing interest in HVII securities: - making HVII a less attractive acquisition vehicle to a target business in connection with an initial business combination;- a limited amount of news and analyst coverage; and - a decreased ability to issue additional securities or obtain additional financing in the future. The National Securities Markets Improvement Act of 1996, which is a federal statute, prevents or preempts the states from regulating the sale of certain securities, which are referred to as "covered securities." Because HVII's units, Class A ordinary shares and share rights are listed on Nasdaq, HVII's securities are covered securities. Although the states are preempted from regulating the sale of covered securities, the federal statute does allow the states to investigate companies if there is a suspicion of fraud, and, if there is a finding of fraudulent activity, then the states can regulate or bar the sale of covered securities in a particular case. While HVII is not aware of a state having used these powers to prohibit or restrict the sale of securities issued by SPACs, other than the State of Idaho, certain state securities regulators view SPACs unfavorably and might use these powers, or threaten to use these powers, to hinder the sale of securities of SPACs in their states. Further, if HVII were no longer listed on Nasdaq, its securities would not be covered securities and HVII would be subject to regulation in each state in which it offers its securities, including in connection with its initial business combination.

Pursuant to an agreement to be entered into concurrently with the issuance and sale of the securities in HVII's initial public offering, HVII's initial shareholders and their permitted transferees can demand that HVII register the private placement units and the Class A ordinary shares underlying such private placement units and the private placement rights included in such private placement units, the Class A ordinary shares issuable upon conversion of the founder shares, the private placement units that may be issued upon conversion of working capital loans and the Class A ordinary shares underlying such private placement units and the private placement rights included in such private placement units. HVII will bear the cost of registering these securities. The registration and availability of such a significant number of securities for trading in the public market may have an adverse effect on the market price of HVII's Class A ordinary shares. In addition, the existence of the registration rights may make HVII's initial business combination more costly or difficult to conclude. This is because the shareholders of the target business may increase the equity stake they seek in the combined entity or ask for more cash consideration to offset the negative impact on the market price of HVII's Class A ordinary shares that is expected when the securities owned by HVII's initial shareholders or holders of working capital loans or their respective permitted transferees are registered.

HVII's amended and restated memorandum and articles of association authorizes the issuance of up to 200,000,000 Class A ordinary shares, par value $0.0001 per share, 20,000,000 Class B ordinary shares, par value $0.0001 per share and 1,000,000 preference shares, par value $0.0001 per share. There are 180,310,000 and 13,291,667 authorized but unissued Class A ordinary shares and Class B ordinary shares, respectively, available for issuance, which amount does not take into account the Class A ordinary shares underlying the share rights and the private placement share rights reserved for issuance or the Class A ordinary shares issuable upon conversion of Class B ordinary shares. There are no preference shares issued and outstanding. Class B ordinary shares are convertible into Class A ordinary shares initially at a one-for-one ratio but subject to adjustment as set forth herein, including in certain circumstances in which HVII issues Class A ordinary shares or equity-linked securities related to its initial business combination. HVII may issue a substantial number of additional ordinary shares or preference shares to complete its initial business combination or under an employee incentive plan after completion of its initial business combination (although its amended and restated memorandum and articles of association provides that HVII may not issue securities that can vote with public shareholders on matters related to its pre-initial business combination activity). HVII may also issue Class A ordinary shares upon conversion of the Class B ordinary shares at a ratio greater than one-to-one at the time of its initial business combination as a result of the anti-dilution provisions contained in its amended and restated memorandum and articles of association. However, its amended and restated memorandum and articles of association provides, among other things, that prior to its initial business combination, HVII may not issue additional ordinary shares that would entitle the holders thereof to (i) receive funds from the trust account or (ii) vote on any initial business combination. These provisions of its amended and restated memorandum and articles of association, like all provisions of its amended and restated memorandum and articles of association, may be amended with the approval of its shareholders. However, its initial shareholders, officers and directors have agreed, pursuant to a letter agreement with HVII, that they will not propose any amendment to its amended and restated memorandum and articles of association (A) to modify the substance or timing of its obligation to provide for the redemption of its public shares in connection with an initial business combination or to redeem 100% of its public shares if HVII has not consummated its initial business combination within the completion window or (B) with respect to any other provision relating to shareholders' rights or pre-initial business combination activity, unless HVII provides its public shareholders with the opportunity to redeem their ordinary shares upon approval of any such amendment at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the trust account, including interest earned on the funds held in the trust account (which interest shall be net of permitted withdrawals and taxes payable), divided by the number of then outstanding public shares. The issuance of additional ordinary shares or preference shares: - may significantly dilute the equity interest of investors in the initial public offering, which dilution would increase if the anti-dilution provisions in the Class B ordinary shares resulted in the issuance of Class A ordinary shares on a greater than one-to-one basis upon conversion of the Class B ordinary shares;         - may subordinate the rights of holders of ordinary shares if preference shares are issued with rights senior to those afforded HVII's ordinary shares;         - could cause a change of control if a substantial number of HVII's ordinary shares are issued, which may affect, among other things, HVII's ability to use its net operating loss carry forwards, if any, and could result in the resignation or removal of its present officers and directors;         - may have the effect of delaying or preventing a change of control of HVII by diluting the share ownership or voting rights of a person seeking to obtain control of HVII; and         - may adversely affect prevailing market prices for HVII's units, Class A ordinary shares and/or share rights.

HVII's initial shareholders beneficially own 26.3% of its issued and outstanding ordinary shares (excluding the private placement shares). In addition, prior to its initial business combination, holders of the founder shares will have the right to appoint all of HVII's directors and may remove members of the board of directors for any reason. Holders of HVII's public shares will have no right to vote on the appointment of directors during such time. These provisions of its amended and restated memorandum and articles of association may only be amended by a special resolution passed by at least 90% of holders of HVII's ordinary shares who, being eligible, attend (in person or by proxy) and vote at a general meeting of the company. As a result, investors will not have any influence over the appointment of directors prior to HVII's initial business combination. Neither HVII's initial shareholders nor, to HVII's knowledge, any of its directors or officers, have any current intention to purchase additional securities, other than as disclosed in this Report. Factors that would be considered in making such additional purchases would include consideration of the current trading price of HVII's Class A ordinary shares. In addition, as a result of their substantial ownership in HVII, its initial shareholders may exert a substantial influence on other actions requiring a shareholder vote, potentially in a manner that investors do not support, including amendments to its amended and restated memorandum and articles of association and approval of major corporate transactions. If HVII's initial shareholders purchase any Class A ordinary shares in the aftermarket or in privately negotiated transactions, this would increase their influence over these actions. In addition, HVII's board of directors, whose members were appointed by Sponsor, is and will be divided into three classes, each of which will generally serve for a term of three years with only one class of directors being appointed in each year. HVII may not hold an annual general meeting to appoint new directors prior to the completion of its initial business combination, in which case all of the current directors will continue in office until at least the completion of the business combination. If there is an annual general meeting, as a consequence of HVII's "staggered" board of directors, only a minority of the board of directors will be considered for appointment and HVII's sponsor, because of their ownership position and control of Sponsor, will control the outcome, as only holders of HVII's Class B ordinary shares will have the right to vote on the appointment of directors and to remove directors prior to its initial business combination. Accordingly, holders of HVII's founder shares will exert significant influence over actions requiring a shareholder vote at least until the completion of its initial business combination.

The founder shares will automatically convert into Class A ordinary shares at the time of HVII's initial business combination, or at any time prior thereto at the option of the holder thereof, on a one-for-one basis, subject to adjustment as provided herein. In the case that additional Class A ordinary shares, or equity-linked securities, are issued or deemed issued in excess of the amounts sold in HVII's initial public offering and related to the closing of HVII's initial business combination, the ratio at which Class B ordinary shares shall convert into Class A ordinary shares will be adjusted (unless the holders of a majority of the outstanding Class B ordinary shares agree to waive such anti-dilution adjustment with respect to any such issuance or deemed issuance) so that the number of Class A ordinary shares issuable upon conversion of all Class B ordinary shares will equal, in the aggregate, on an as-converted basis, 25% of the total number of all ordinary shares outstanding upon completion of HVII's initial public offering plus all Class A ordinary shares and equity-linked securities issued or deemed issued in connection with HVII's initial business combination (excluding any shares or equity-linked securities issued, or to be issued, to any seller in the initial business combination or any private placement-equivalent units issued to HVII's sponsor or its affiliates upon conversion of loans made to HVII). This is different from some other similarly structured SPACs in which the initial shareholder will only be issued an aggregate of 20% of the total number of shares to be outstanding prior to the initial business combination. Additionally, the aforementioned adjustment will not take into account any Class A ordinary shares redeemed in connection with the business combination. Accordingly, the holders of the founder shares could receive additional Class A ordinary shares even if the additional Class A ordinary shares, or equity-linked securities convertible or exercisable for Class A ordinary shares, are issued or deemed issued solely to replace those shares that were redeemed in connection with the business combination. The foregoing may make it more difficult and expensive for HVII to consummate an initial business combination. Further, HVII's public shareholders may incur material dilution due to such anti-dilution adjustments that result in the issuance of Class A ordinary shares on a greater than one-to-one basis upon conversion.

HVII's share rights will be issued in registered form under a share right agreement between Odyssey Transfer and Trust Company, as share right agent, and HVII. The share right agreement provides that the terms of the share rights may be amended without the consent of any holder for the purpose of (i) curing any ambiguity or correct any mistake, including to conform the provisions of the share right agreement to the description of the terms of the share rights and the share right agreement attached as an exhibit to HVII's registration statement filed in connection with its initial public offering, or defective provision or (ii) adding or changing any provisions with respect to matters or questions arising under the share right agreement as the parties to the share right agreement may deem necessary or desirable and that the parties deem to not adversely affect the rights of the registered holders of the share rights, provided that the approval by the holders of at least a majority of then-outstanding public share rights is required to make any change that adversely affects the interests of the registered holders of public share rights. Accordingly, HVII may amend the terms of the public share rights in a manner adverse to a holder if holders of at least a majority of then-outstanding public share rights approve of such amendment and, solely with respect to any amendment to the terms of the private placement share rights or any provision of the share right agreement with respect to the private placement units, a majority of the number of then outstanding private placement units. Although HVII's ability to amend the terms of the public share rights with the consent of at least a majority of then outstanding public share rights is unlimited, examples of such amendments could be amendments to, among other things, convert the share rights into cash or another security, shorten the exercise period or decrease the number of HVII's Class A ordinary shares exchangeable upon conversion of a share right.

HVII's share right agreement provides that, subject to applicable law, (i) any action, proceeding or claim against HVII arising out of or relating in any way to the share right agreement, including under the Securities Act, will be brought and enforced in the courts of the State of New York or the United States District Court for the Southern District of New York, and (ii) that HVII irrevocably submits to such jurisdiction, which jurisdiction shall be the exclusive forum for any such action, proceeding or claim. HVII will waive any objection to such exclusive jurisdiction and that such courts represent an inconvenient forum. Notwithstanding the foregoing, these provisions of the share right agreement do not apply to suits brought to enforce any liability or duty created by the Exchange Act or any other claim for which the federal district courts of the United States of America are the sole and exclusive forum. Any person or entity purchasing or otherwise acquiring any interest in any of HVII's share rights shall be deemed to have notice of and to have consented to the forum provisions in HVII's share right agreement. If any action, the subject matter of which is within the scope the forum provisions of the share right agreement, is filed in a court other than a court of the State of New York or the United States District Court for the Southern District of New York (a "foreign action") in the name of any holder of HVII's share rights, such holder shall be deemed to have consented to: (A) the personal jurisdiction of the state and federal courts located within the State of New York or the United States District Court for the Southern District of New York in connection with any action brought in any such court to enforce the forum provisions (an "enforcement action"), and (B) having service of process made upon such share right holder in any such enforcement action by service upon such share right holder's counsel in the foreign action as agent for such share right holder. This choice-of-forum provision may limit a share right holder's ability to bring a claim in a judicial forum that it finds favorable for disputes with HVII, which may discourage such lawsuits. Alternatively, if a court were to find this provision of HVII's share right agreement inapplicable or unenforceable with respect to one or more of the specified types of actions or proceedings, HVII may incur additional costs associated with resolving such matters in other jurisdictions, which could materially and adversely affect HVII's business, financial condition and results of operations and result in a diversion of the time and resources of HVII's management and board of directors.

Except in cases where HVII is not the surviving company in a business combination, each holder of a share right will automatically receive one-twelfth (1/12) of one Class A ordinary share upon consummation of HVII's initial business combination. In the event HVII will not be the surviving company upon completion of HVII's initial business combination, each holder of a share right will be required to affirmatively convert its share rights in order to receive the one-twelfth (1/12) of one Class A ordinary share underlying each share right upon consummation of the business combination. HVII will not issue fractional shares in connection with an exchange of share rights. As a result, holders must hold share rights in multiples of 12 in order to receive Class A ordinary shares for all of their share rights upon closing of a business combination. If HVII is unable to complete an initial business combination within the required time period and HVII redeems the public shares for the funds held in the trust account, holders of share rights will not receive any of such funds for their share rights and the share rights will expire worthless.

Prior to HVII's initial public offering, there was no public market for any of HVII's securities. The public offering price of the units and the terms of the share rights were determined through discussions between HVII and the underwriters. In determining the size of HVII's initial public offering, management held customary organizational meetings with representatives of the underwriters, both prior to HVII's inception and thereafter, with respect to the state of capital markets, generally, and the amount the underwriters believed they reasonably could raise on HVII's behalf. Factors considered in determining the size of HVII's offering, prices and terms of the units, including the Class A ordinary shares and share rights underlying the units, include: - the history and prospects of companies whose principal business is the acquisition of other companies;         - prior offerings of those companies;         - HVII's prospects for acquiring an operating business;         - HVII's capital structure;         - an assessment of HVII's management and their experience in identifying operating companies;         - general conditions of the securities markets at the time of HVII's initial public offering; and         - other factors as were deemed relevant. Although these factors were considered, the determination of HVII's offering price is more arbitrary than the pricing of securities of an operating company in a particular industry since HVII has no historical operations or financial results.

The price of HVII's securities may vary significantly due to one or more potential business combinations and general market or economic conditions. Furthermore, an active trading market for HVII's securities may never develop or, if developed, it may not be sustained. Investors may be unable to sell their securities unless a market can be established and sustained.

HVII's amended and restated memorandum and articles of association contain provisions that may discourage unsolicited takeover proposals that shareholders may consider to be in their best interests. These provisions include the ability of the board of directors to designate the terms of and issue new series of preferred shares, which may make the removal of management more difficult and may discourage transactions that otherwise could involve payment of a premium over prevailing market prices for HVII's securities.

HVII's amended and restated memorandum and articles of association provide that unless HVII consents in writing to the selection of an alternative forum, the courts of the Cayman Islands shall have exclusive jurisdiction over any claim or dispute arising out of or in connection with the amended and restated memorandum and articles of association or otherwise related in any way to each shareholder's shareholding in HVII, including but not limited to: (i) any derivative action or proceeding brought on behalf of HVII; (ii) any action asserting a claim of breach of any fiduciary or other duty owed by any current or former director, officer or other employee to HVII or its shareholders; (iii) any action asserting a claim arising pursuant to any provision of the Companies Act or the amended and restated memorandum and articles of association; or (iv) any action asserting a claim against HVII governed by the internal affairs doctrine (as such concept is recognized under the laws of the United States) and that each shareholder irrevocably submits to the exclusive jurisdiction of the courts of the Cayman Islands over all such claims or disputes. The forum selection provision in the amended and restated memorandum and articles of association does not apply to actions or suits brought to enforce any liability or duty created by the Securities Act, Exchange Act, or any claim for which the federal district courts of the United States are, as a matter of the laws of the United States, the sole and exclusive forum for determination of such a claim. HVII's amended and restated memorandum and articles of association also provide that, without prejudice to any other rights or remedies that HVII may have, each of its shareholders acknowledges that damages alone would not be an adequate remedy for any breach of the selection of the courts of the Cayman Islands as exclusive forum and that accordingly HVII shall be entitled, without proof of special damages, to the remedies of injunction, specific performance or other equitable relief for any threatened or actual breach of the selection of the courts of the Cayman Islands as exclusive forum. This choice of forum provision may increase a shareholder's cost and limit the shareholder's ability to bring a claim in a judicial forum that it finds favorable for disputes with HVII or its directors, officers or other employees, which may discourage lawsuits against HVII and its directors, officers and other employees. Any person or entity purchasing or otherwise acquiring any of HVII's shares or other securities, whether by transfer, sale, operation of law or otherwise, shall be deemed to have notice of and have irrevocably agreed and consented to these provisions. There is uncertainty as to whether a court would enforce such provisions, and the enforceability of similar choice of forum provisions in other companies' charter documents has been challenged in legal proceedings. It is possible that a court could find this type of provision to be inapplicable or unenforceable, and if a court were to find this provision in the amended and restated memorandum and articles of association to be inapplicable or unenforceable in an action, HVII may incur additional costs associated with resolving the dispute in other jurisdictions, which could have an adverse effect on its business and financial performance.

HVII issued share rights that convert into up to 1,583,333 shares of Class A ordinary shares as part of the units offered in HVII's initial public offering and, simultaneously with the closing of its initial public offering, HVII issued an aggregate of 690,000 private placement units at a price of $10.00 per unit in a private placement to HVII's sponsor and underwriters. In addition, if HVII's sponsor makes any working capital loans, up to $2,500,000 of such loans may be convertible, at the option of the lender, into private placement units at a price of $10.00 per unit of the post business combination entity. To the extent HVII issues Class A ordinary shares to effectuate a business combination, the potential for the issuance of a substantial number of additional shares of Class A ordinary shares upon exercise of these share rights and private placement rights could make HVII a less attractive acquisition vehicle to a target business. Such share rights would increase the number of issued and outstanding Class A ordinary shares and reduce the value of the Class A ordinary shares issued to complete the business combination. Therefore, HVII's share rights and private placement rights may make it more difficult to effectuate a business combination or increase the cost of acquiring the target business.

An investment in HVII's securities may result in uncertain U.S. federal income tax consequences. For instance, because there are no authorities that directly address instruments similar to the units HVII issued in its initial public offering, the allocation an investor makes with respect to the purchase price of a unit among the Class A ordinary share and the share right included in each unit could be challenged by the IRS or courts. Furthermore, the U.S. federal income tax consequences of a cashless exercise of share rights are unclear under current law. It is also unclear whether the redemption rights with respect to HVII's Class A ordinary shares suspend the running of the holding period of a U.S. Holder (as defined in the section of HVII's final prospectus filed in connection with its initial public offering entitled "Taxation - Material United States Federal Income Tax Considerations - General") for purposes of determining whether any gain or loss realized by such U.S. Holder on the sale or exchange of Class A ordinary shares is long-term capital gain or loss and for purposes of determining whether any dividends HVII pays would be considered "qualified dividends" for U.S. federal income tax purposes. See the section of HVII's final prospectus filed in connection with its initial public offering entitled "Taxation - Material United States Federal Income Tax Considerations" for a summary of the U.S. federal income tax considerations of an investment in HVII's securities. Prospective investors are urged to consult their tax advisors with respect to these and other tax consequences related to purchasing, holding or disposing of HVII's securities.

HVII is an exempted company incorporated under the laws of the Cayman Islands. As a result, it may be difficult for investors to effect service of process within the United States upon HVII's directors or executive officers, or enforce judgments obtained in the United States courts against HVII's directors or officers. HVII's corporate affairs and the rights of shareholders will be governed by HVII's amended and restated memorandum and articles of association, the Companies Act (as the same may be supplemented or amended from time to time) and the common law of the Cayman Islands. HVII will also be subject to the federal securities laws of the United States. The rights of shareholders to take action against the directors, actions by minority shareholders and the fiduciary responsibilities of HVII's directors to HVII under Cayman Islands law are to a large extent governed by the common law of the Cayman Islands. The common law of the Cayman Islands is derived in part from comparatively limited judicial precedent in the Cayman Islands as well as from English common law, the decisions of whose courts are of persuasive authority, but are not binding on a court in the Cayman Islands. The rights of HVII's shareholders and the fiduciary responsibilities of HVII's directors under Cayman Islands law are different from what they would be under statutes or judicial precedent in some jurisdictions in the United States. In particular, the Cayman Islands has a different body of securities laws as compared to the United States, and certain states, such as Delaware, may have more fully developed and judicially interpreted bodies of corporate law. In addition, Cayman Islands companies may not have standing to initiate a shareholders derivative action in a Federal court of the United States. For a more detailed discussion of the principal differences between the provisions of the Companies Act applicable to HVII and, for example, the laws applicable to companies incorporated in the United States and their shareholders, see the section of HVII's final prospectus on filed in connection with its initial public offering entitled "Description of Securities - Certain Differences in Corporate Law." Shareholders of Cayman Islands exempted companies like HVII have no general rights under Cayman Islands law to inspect corporate records or to obtain copies of the register of members of these companies. HVII's directors have discretion under HVII's amended and restated memorandum and articles of association to determine whether or not, and under what conditions, HVII's corporate records may be inspected by HVII's shareholders, but are not obliged to make them available to HVII's shareholders. This may make it more difficult for shareholders to obtain the information needed to establish any facts necessary for a shareholder motion or to solicit proxies from other shareholders in connection with a proxy contest. HVII has been advised by Appleby (Cayman) Ltd., HVII's Cayman Islands legal counsel, that the courts of the Cayman Islands are unlikely (i) to recognize or enforce against HVII judgments of courts of the United States predicated upon the civil liability provisions of the federal securities laws of the United States or any state; and (ii) in original actions brought in the Cayman Islands, to impose liabilities against HVII predicated upon the civil liability provisions of the federal securities laws of the United States or any state, so far as the liabilities imposed by those provisions are penal in nature. In those circumstances, although there is no statutory enforcement in the Cayman Islands of judgments obtained in the United States, the courts of the Cayman Islands will recognize and enforce a foreign money judgment of a foreign court of competent jurisdiction without retrial on the merits based on the principle that a judgment of a competent foreign court imposes upon the judgment debtor an obligation to pay the sum for which judgment has been given provided certain conditions are met. For a foreign judgment to be enforced in the Cayman Islands, such judgment must be final and conclusive and for a liquidated sum, and must not be in respect of taxes or a fine or penalty, inconsistent with a Cayman Islands judgment in respect of the same matter, impeachable on the grounds of fraud or obtained in a manner, or be of a kind the enforcement of which is, contrary to natural justice or the public policy of the Cayman Islands (awards of punitive or multiple damages may well be held to be contrary to public policy). A Cayman Islands Court may stay enforcement proceedings if concurrent proceedings are being brought elsewhere. As a result of all of the above, public shareholders may have more difficulty in protecting their interests in the face of actions taken by HVII's management team or controlling shareholders than they would as public shareholders of a United States company.

Prior to HVII's initial business combination, only holders of HVII's founder shares will have the right to vote on the appointment of directors and to continue HVII in a jurisdiction outside the Cayman Islands. Holders of HVII's public shares will not be entitled to vote on the appointment of directors or to continue HVII in a jurisdiction outside the Cayman Islands during such time. In addition, prior to HVII's initial business combination, holders of a majority of HVII's founder shares may remove a member of the board of directors for any reason. Accordingly, public shareholders will not have any say in the management of HVII prior to the consummation of an initial business combination.