zSpace SPAC

Risk Factors Risks Related to zSpace's Business and Industry Following the Business Combination zSpace has a limited operating history at the current scale of its business and is still scaling up its monetization efforts, which makes it difficult to evaluate its current business and future prospects, and there is no assurance it will be able to scale its business for future growth Adverse general and industry-specific economic and market conditions, reductions IT spending or changes in the spending policies or budget priorities for government funding of K-12 school may reduce demand for zSpace's products and platform, which could harm its results of operations. zSpace has benefitted from the U.S. federal government's stimulus packages focused on educational initiatives approved as a result of the COVID-19 pandemic and there is no guarantee additional funding will be approved. zSpace's business is subject to seasonal sales and customer growth fluctuations which could result in volatility in zSpace's operating results some of which may not be immediately reflected in its financial position and results of operations. [We face risks related to our contracts with state and local government entities and, to a lesser extent, federal government agencies, as well as difficulties with contracting with large customers with substantial negotiating leverage, both of which could harm our results of operations. ● ● ● ● ● ● ● . ● ● ● ● ● State or local legislation may be adopted that limits or bans instruction in public schools that includes or promotes social or emotional learning, which could limit zSpace's ability to operate in those states and/or localities and have an adverse impact on its business, operating results, and financial condition. zSpace's business is highly competitive. Competition presents an ongoing threat to the success of its business. zSpace's future revenues and operating results will be harmed if zSpace is unable to acquire new customers, if its customers do not renew their contracts with it, or if it is unable to expand sales to its existing customers or develop new products that achieve market acceptance. zSpace's business is dependent on its ability to maintain and scale its product offerings and technical infrastructure, and any significant disruption in the availability of zSpace's platform could damage zSpace's reputation, result in a potential loss of customers and engagement, and adversely affect zSpace's business, operating results, and financial condition. If zSpace fails to maintain, enhance or protect its brand, zSpace's ability to expand its customer base will be impaired and its business, financial condition and results of operations may suffer. zSpace has experienced rapid growth and expects to in its growth for the foreseeable future. If zSpace fails to manage its growth effectively, its business, operating results, and financial condition would be adversely affected. If zSpace does not successfully anticipate market needs and develop products and services and platform enhancement that meet those needs, or if those products, services and platform enhancements do not gain market acceptance, its business, operating results, and financial condition will be adversely impacted. zSpace plans to continue expanding its international operations where it has limited operating experience and may be subject to increased business and economic risks that could seriously harm its business, operating results, and financial condition. If zSpace needs additional capital in the future, it may not be available on favorable terms, if at all. zSpace plans to continue to make acquisitions, which could harm its financial condition or results of operations and may adversely affect the price of its common stock. zSpace's business depends largely on its ability to attract and retain talented employees, including senior management. If zSpace loses the services of Paul Kellenberger, its Chief Executive Officer, or other members of its senior management team, zSpace may not be able to execute on its business strategy. zSpace's products, platform, and internal systems rely on software and hardware that is highly technical, and any errors, bugs, or vulnerabilities in these systems, or failures to address or mitigate technical limitations in zSpace's systems, could adversely affect its business. zSpace's current planned or expected future acquisitons may not sucessfully materialize or close, which would adversely IzSpace's business, financial condition and operating results zSpace X edtechx holdings 39

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