UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

(Mark One)

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

For the fiscal period ended December 31, 2021

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

For the transition period from to

Commission file number: 001-39841

KAIROS ACQUISITION CORP.

(Exact name of registrant as specified in its charter)

Cayman Islands

N/A

(State or other jurisdiction

of incorporation or organization)

(I.R.S. Employer

Identification No.)

c/o Ellenoff Grossman & Schole LLP

1345 Avenue of the Americas

New York, NY

10105

(Address of principal executive offices)

(Zip Code)

Registrant’s telephone number, including area code: (917) 783-4057

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

Title of Each Class:	Trading Symbol(s)	Name of Each Exchange on Which Registered:
Units, each consisting of one Class A ordinary share and one-half of one redeemable warrant	KAIRU	The Nasdaq Capital Market
Class A ordinary shares, par value $0.0001 per share	KAIR	The Nasdaq Capital Market
Redeemable warrants included as part of the units, each whole warrant exercisable for one share of Class A ordinary share at an exercise price of $11.50 per share	KAIRW	The Nasdaq Capital Market

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

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

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

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

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

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

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

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

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

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

The aggregate market value of the Class A ordinary shares outstanding, other than shares held by persons who may be deemed affiliates of the registrant, computed by reference to the closing price for the Class A ordinary shares on June 30, 2021, as reported on the Nasdaq Capital Market was $248,514,000.

As of March 30, 2022, there were 27,600,000 Class A ordinary shares, par value $0.0001 per share and 6,900,000 Class B ordinary shares, par value $0.0001 per share, of the registrant issued and outstanding.

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TABLE OF CONTENT

		PAGE
	Cautionary Note Regarding Forward-Looking Statements	ii
PART I
Item 1.	Business	1
Item 1A.	Risk Factors	19
Item 1B.	Unresolved Staff Comments	21
Item 2.	Properties	21
Item 3.	Legal Proceedings	21
Item 4.	Mine Safety Disclosures	21

PART II
Item 5.	Market for Registrant’s Common Equity, Related Shareholder Matters and Issuer Purchases of Equity Securities	22
Item 6.	Reserved	22
Item 7.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	22
Item 7A.	Quantitative and Qualitative Disclosures About Market Risk	28
Item 8.	Financial Statements and Supplementary Data	28
Item 9.	Changes in and Disagreements with Accountants on Accounting and Financial Disclosure	28
Item 9A.	Controls and Procedure	28
Item 9B.	Other Information	29
Item 9C.	Disclosure Regarding Foreign Jurisdictions that Prevent Inspections	29

PART III
Item 10.	Directors, Executive Officers and Corporate Governance	30
Item 11.	Executive Compensation	36
Item 12.	Security Ownership of Certain Beneficial Owners and Management and Related Shareholder Matters	37
Item 13.	Certain Relationships and Related Transactions, and Director Independence	38
Item 14.	Principal Accountant Fees and Services	41

PART IV
Item 15.	Exhibit and Financial Statement Schedules	42
Item 16.	Form 10-K Summary	42

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CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

This Report (as defined below), including, without limitation, statements under “Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations,” includes forward-looking statements within the meaning of Section 27A of the Securities Act (as defined below) and Section 21E of the Exchange Act (as defined below). These forward-looking statements can be identified by the use of forward-looking terminology, including the words “believes,” “estimates,” “anticipates,” “expects,” “intends,” “plans,” “may,” “will,” “potential,” “projects,” “predicts,” “continue,” or “should,” or, in each case, their negative or other variations or comparable terminology. There can be no assurance that actual results will not materially differ from expectations. Such statements include, but are not limited to, any statements relating to our ability to consummate any acquisition or other business combination and any other statements that are not statements of current or historical facts. These statements are based on management’s current expectations, but actual results may differ materially due to various factors, including, but not limited to:

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our ability to complete our initial business combination;

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

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

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our potential ability to obtain additional financing to complete our initial business combination;

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

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our pool of prospective target businesses;

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

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our public securities’ potential liquidity and trading;

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the lack of a market for our securities;

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

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our financial performance.

The forward-looking statements contained in this Report are based on our current expectations and beliefs concerning future developments and their potential effects on us. Future developments that may affect us may not be those that we have anticipated. These forward-looking statements involve a number of risks, uncertainties (some of which are beyond our control) or other assumptions that may cause actual results or performance to be materially different from those expressed or implied by these forward-looking statements. These risks and uncertainties include, but are not limited, to those factors described under “Item 1A. Risk Factors.” Should one or more of these risks or uncertainties materialize, or should any of our assumptions prove incorrect, actual results may vary in material respects from those projected in these forward-looking statements. We undertake no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as may be required under applicable securities laws. These risks and others described under “Item 1A. Risk Factors” may not be exhaustive.

Unless otherwise stated in this Report, or the context otherwise requires, references to:

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“amended and restated memorandum and articles of association” are to our amended and restated memorandum and articles of association;

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“board of directors” or “board” are to the board of directors of the Company;

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“Class A ordinary shares” are to the Class A ordinary shares of the Company, par value $0.0001 per share;

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“Class B ordinary shares” are to the Class B ordinary shares of the Company, par value $0.0001 per share;

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“Continental” are to Continental Stock Transfer & Trust Company, trustee of our trust account (as defined below) and warrant agent of our public warrants (as defined below);

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“DGCL” are to the Delaware General Corporation Law;

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“DWAC System” are to the Depository Trust Company’s Deposit/Withdrawal At Custodian System;

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“equity linked securities” are to any securities of our company which are convertible into or exchangeable or exercisable for, ordinary shares of our company;

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“Exchange Act” are to the Securities Exchange Act of 1934, as amended;

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“FINRA” are to the Financial Industry Regulatory Authority;

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“founder shares” are to our Class B ordinary shares initially purchased by our sponsor in a private placement prior to our initial public offering, a portion of which were transferred to HS Chronos, and, unless the context otherwise requires, our Class A ordinary shares issued upon the conversion thereof as provided herein;

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“GAAP” are to the accounting principles generally accepted in the United States of America;

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“HS Chronos” are to HS Chronos LLC, an affiliate of Vikas Singhal, our director, and Michael Millette, our board observer;

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“HS Chronos Working Capital Loan” are to the working capital loan that HS Chronos granted us in the principal amount up to $1,500,000 on November 16, 2021;

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“IFRS” are to the International Financial Reporting Standards, as issued by the International Accounting Standards Board;

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“initial business combination” are to a merger, capital share exchange, asset acquisition, stock purchase, reorganization or similar business combination with one or more businesses;

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“initial public offering” are to the initial public offering that was consummated by the Company on January 8, 2021;

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“initial shareholders” are to the holders of our founder shares prior to our initial public offering;

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“Investment Company Act” are to the Investment Company Act of 1940, as amended;

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“JOBS Act” are to the Jumpstart Our Business Startups Act of 2012;

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“letter agreement” are to the letter agreement entered into on January 5, 2021, by and among the Company, its officers, directors, Kairos Alpha Acquisition LLC and HS Chronos LLC;

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“management” or our “management team” are to our officers and directors;

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“Nasdaq” are to the Nasdaq Capital Market;

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“ordinary shares” are to our Class A ordinary shares and our Class B ordinary shares;

iii

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“PCAOB” are to the Public Company Accounting Oversight Board (United States);

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“public shares” are to our Class A ordinary shares offered as part of the units in our initial public offering (whether they are subscribed for in our initial public offering or thereafter in the open market);

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“public shareholders” are to the holders of our public shares;

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“public warrants” are to the redeemable warrants sold as part of the units in our initial public offering (whether they are subscribed for in our initial public offering or in the open market);

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“private placement” are to the private placement of an aggregate of 8,020,000 warrants being purchased by our sponsor and HS Chronos which occurred simultaneously with the completion of our initial public offering at an average purchase price of $1.00 per warrant for a total purchase price of $8.02 million;

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“private placement warrants” are to the warrants issued to our sponsor and HS Chronos in the private placement closing simultaneously with the closing of our initial public offering;

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“Registration Statement” are to the Form S-1 initially filed with the SEC December 21, 2020, as amended;

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“Report” are to this Annual Report on Form 10-K for the fiscal period ended December 31, 2021;

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“Sarbanes-Oxley Act” are to the Sarbanes-Oxley Act of 2002;

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“SEC” are to the U.S. Securities and Exchange Commission;

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“Securities Act” are to the Securities Act of 1933, as amended;

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“sponsor” are to Kairos Alpha Acquisition LLC, a Delaware limited liability company;

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“trust account” are to the trust account in which an amount of $276,000,000 ($10.00 per unit) from the net proceeds of the sale of the units (as defined below) in the initial public offering and the private placement warrants was placed following the closing of the initial public offering;

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“units” are to the units sold in our initial public offering (whether they are subscribed for in our initial public offering or in the open market), which consist of one public share and one-third of one public warrant;

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“we,” “us,” “Company” or “our company” are to Kairos Acquisition Corp., a Cayman Islands exempted company; and

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“Withum” are to WithumSmith+Brown, PC, our independent registered public accounting firm.

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PART I

Item 1.Business.

General

We are a blank check company incorporated on August 26, 2020 as a Cayman exempted company that seek to effect an initial business combination, with one or more businesses or assets. To date, our efforts have been limited to organizational activities as well as activities related to our initial public offering. We have generated no operating revenues to date and we will not generate operating revenues until we consummate our initial business combination.

Since our initial public offering, we have concentrated our acquisition efforts on business merger targets within the insurance and InsurTech (as defined below) sectors where our experience and access to public markets can be a catalyst for accelerating growth. We place particular emphasis on regulated insurance or reinsurance companies, distributors or technology and insurance service providers that focus on specialty lines of business or that target product or customer niches where a differentiated service offering and the advent of new technologies have created, or are expected to create, a sustainable competitive advantage. Our acquisition strategy seeks to capitalize on the significant mergers and acquisitions and insurance expertise and relationships of our management team. We believe that our management team, comprised of both executives and investors in the insurance industry, is well positioned to identify acquisition opportunities that will be suitable for the public markets.

We are not, however, required to complete our initial business combination with an insurance or InsurTech business and, as a result, we may pursue a business combination outside of that industry. We are seeking to acquire established businesses that we believe are fundamentally sound but potentially in need of access to capital, or financial, operational, strategic or managerial support, to maximize value. We are also seeking to identify and acquire businesses which may leverage our management team’s knowledge of and experience with insurance consolidation strategies, which may allow us to participate in the management and development of our company beyond the consummation of the business combination. We do not intend to acquire start-up companies, companies with speculative business plans or companies that are excessively leveraged, unless we have confidence after substantial due diligence that those companies would generate consistent financial and operating metrics that would allow them to perform well as publicly-traded small cap companies.

Initial Public Offering

On January 8, 2021, we consummated our initial public offering of 24,000,000 units. Each unit consists of one public share, and one-half public warrant, with each whole warrant entitling the holder thereof to purchase one public share for $11.50 per share. The units were sold at a price of $10.00 per unit, generating gross proceeds to us of $240 million.

Simultaneously with the closing of the initial public offering, we completed the private sale of an aggregate of 7,300,000 private placement warrants to our sponsor and HS Chronos at a purchase price of $1.00 per private placement warrant, generating gross proceeds of $7,300,000.

On January 12, 2021, the underwriters exercised their over-allotment option in full and purchased an additional 3,600,000 units, which were sold at an offering price of $10.00 per unit, generating gross proceeds of $36,000,000. In connection with the exercise of the over-allotment option, we sold an additional 720,000 public warrants to our sponsor and HS Chronos LLC, generating gross proceeds of $720,000.

A total of $276.0 million, comprised of the proceeds from the initial public offering, the underwriters’ exercise of over-allotment option in full and those of the sale of the private placement warrants was placed in the trust account with Continental, acting as trustee.

It is the responsibility of our sponsor and management team to complete our initial business combination. Our management team is led by Peter Bang, our Chief Executive Officer, and Jerry Michael de St. Paer, our Chief Financial Officer, who have many years of experience in investment banking, advising financial services and financial technology companies globally in capital markets and M&A transactions, and operating management experience in the insurance industry. We must complete our initial business combination by January 8, 2023, within 24 months from the closing of our initial public offering. If our initial business combination is not consummated by January 8, 2023, or during any extended time that we have been allowed pursuant to amended and restated memorandum and articles

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of association to consummate a business combination beyond the 24 months from the closing of our initial public offering (an “Extension Period”), then our existence will terminate, and we will distribute all amounts in the trust account.

Insurance and InsurTech Sector

We broadly define the insurance sector (or insurance related services and companies) to include, but not be limited to:

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Insurance and/or reinsurance carriers, in any sector including property-casualty, title, mortgage, life, annuity and health, insurance run-off managers, and fronting companies;

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Insurance distribution companies, including retail agents, insurance brokers, wholesalers, managing general agencies, managing general underwriters or dually-licensed distribution companies, such as registered investment advisors, mortgage brokers or other entities where insurance distribution is a core ancillary component of their business;

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Insurance service providers, including claims or cost management, claims adjustors, disaster recovery service providers, business processing, policy administration and premium payment facilitation, data and technology providers, and asset managers; and

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InsurTech companies, including those focused on using technology to maximize savings and efficiency, launch growth opportunities and innovate new risk selection processes.

Insurance is a significant sector within the global economy. The insurance sector has experienced significant changes in recent years, principally as a result of:

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Ongoing regulatory changes that influence the landscape of market participants.

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Structural changes that provide opportunities to acquire non-core businesses and full niches as traditional market participants shift focus.

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Changes in capital availability post the financial crisis.

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Recent catastrophe events.

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Net technologies, supported by massively increased data availability and workflow processing capabilities, which have improved capital efficiency, created risk transfer and risk management tools, improved access to businesses, formed stronger and deeper customer bonds and retention, and provided sophistication of risk analytics.

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Long-term global demographic and macroeconomic trends, which create opportunities for acquisition in a variety of insurance subsectors and geographies.

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Emerging companies and novel business models challenging incumbents by focusing on how customers acquire new services and interact with existing services.

We believe the current pandemic creates unique opportunities for our company amid the challenging market backdrop, among each of the traditional carriers, the insurance services and the InsurTech sectors. We have observed traditional carriers experiencing balance sheet stress from increased claims activity, corporate bond impairments and defaults, investment portfolio losses, rating agency and regulatory actions and as a result, they are faced with potentially limited access to capital. Companies in the insurance services sector generally tend to be resilient in the current environment, but their growth rates are impacted by the decline in economic activity, and their access to permanent capital may also be constrained. While long-term fundamental growth drivers for InsurTech companies remain strong, their short-term revenue prospects are often severely impacted, and they continue to need growth capital to satisfy their cash burn rates, which their current venture and private equity backers may be unwilling to fund in the current environment. Additionally,

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InsurTech companies may have more attractive valuations and be more receptive to a permanent capital solution through the public markets. As such, we believe the COVID-19 pandemic is increasing our opportunity set.

We are focused on identifying target companies which, among other things, are well positioned to benefit from these developments, especially those that have developed their own proprietary technology platforms or are in a position to benefit from the efficiencies offered by third party InsurTech providers.

In addition, the development of the insurance linked securities market, and improved access to traditional reinsurance companies through fronting relationships, has created a more consistent supply of risk capital at lower cost, flattening the peaks of traditional market pricing cycles and thereby providing an opportunity to cut long-term operating costs of those insurance and reinsurance companies who utilize reinsurance as a significant form of contingent capital. These forms of contingent capital has also allowed innovative InsurTech start-ups to develop innovative and disruptive risk transfer products, sharing in the economics of the underwriting results enabled by advanced risk management using newly available massive data sets and computing power.

Business Strategy

We employ a thematic acquisition strategy, and are focused on long-term shareholder value growth and building a leading franchise specialized in the insurance industry. Our strategy is to:

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target a company with differentiated technology focused on select component(s) of the insurance value chain such as distribution, underwriting, and/or claims management,

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fully leverage the strategic and transactional experience and broad network of our executive officers and board members to identify potential investment opportunities and successfully execute acquisition transactions,

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deliver creative approaches to transaction sourcing, while exercising pricing discipline, and

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utilize an understanding of global financial markets and events, financing, restructuring and overall corporate strategy options.

We seek to capitalize on the significant insurance industry experience and network of our executive officers and board members, in particular Peter Bang, our Chief Executive Officer, and Jerry de St. Paer, our Chief Financial Officer, to identify, evaluate and acquire one or more insurance and/or InsurTech businesses, although we may pursue a business combination outside of that industry. If we elect to pursue an investment outside of that industry, our management’s expertise related to that industry may not be directly applicable to its evaluation or acquisition, and the information contained in this Report regarding that industry might not be relevant to an understanding of the business that we elect to acquire.

Members of our management team have extensive experience in the insurance industry generally, as well as financial services companies in a public company environment, including:

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sourcing, structuring, acquiring and selling businesses;

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fostering relationships with sellers, capital providers and target management teams;

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negotiating transactions favorable to investors;

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executing transactions in multiple geographies and under varying economic and financial market conditions;

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accessing the capital markets, including financing businesses and helping companies transition to public ownership;

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operating companies, setting and changing strategies, and identifying, monitoring and recruiting world-class talent;

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acquiring and integrating companies; and

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developing and growing companies, both organically and through acquisitions and strategic transactions and expanding the product range and geographic footprint of a number of target businesses.

In addition to assisting in the sourcing of a potential transaction, members of our management team may join the acquired company as a board member or in a senior executive capacity or assist in the operation of the acquired company in order to enhance shareholder value by improving the operational performance of the combined company and undertaking broader strategic initiatives.

Hudson Structured Capital Management (“HSCM”)

HSCM is an investment adviser with discretionary authority over a number of funds. Founded in 2016 by Michael Millette, a board observer of our company, HSCM focuses on investments in the Re/Insurance and Transportation sectors. HSCM’s team has deep experience in sourcing and structuring bespoke transactions in all lines of insurance and reinsurance. With more than 260 years of combined experience, HSCM and its team have built strong relationships across the sector and have become industry leaders in providing structured solutions for risk transfer in private insurance and reinsurance markets.

Mr. Millette and Mr. Singhal, one of our directors, have fiduciary obligations to HSCM and their respective affiliates and to certain other companies and clients. As a result, they have a duty to offer acquisition opportunities to certain HSCM clients or other entities. We do not expect these duties to present a significant conflict of interest with our search for an initial business combination as Messrs. Bang and de St. Paer are primarily responsible for searching out the combination and seeking board approval of it. We believe this conflict of interest is naturally mitigated, to some extent, by the differing nature of the acquisition targets HSCM typically considers most attractive for their clients and the types of acquisitions we expect to find most attractive.

Competitive Strengths

The sourcing, valuation, diligence and execution capabilities of our management team provide us with significant pipelines of opportunities from which to evaluate and select a business that will benefit from our expertise. We believe we have the following competitive strengths:

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Management Operating and Investing Experience. Our executive officers and directors have significant experience in the insurance and other related industries. Throughout their careers, Mr. Bang and Mr. de St. Paer have advised, consulted and invested in companies across the insurance ecosystem. Mr. Bang has advised on over 115 completed transactions in the financial services space representing over $94 billion in transaction value, including 48 merger and acquisition transactions. In addition to serving in various board and advisory roles, Mr. de St. Paer has served in senior executive position at XL Capital Ltd (then NYSE: XL), Equitable Financial Corp. (“The Equitable”), and AXA Group and he served as a board member of Alliance Bernstein and a board member and finance committee chair of Donaldson, Lufkin & Jenrette. Of our directors, Mr. Lummis was Chief Executive Officer of AQR Re and Chief Operating Officer and Chief Financial Officer of Renaissance Re Holdings Ltd.; Mr. Motamed was Chairman and Chief Executive Officer of CNA Financial Corporation; and Ms. Sutherland currently serves on the board of Ascot and certain of its subsidiaries. Bolstering the industry experience of our executive officers, our directors offer CEO-level operating experience and partner-level investing experience at leading private equity firms. We believe that the breadth of their combined experiences provides us with a competitive advantage in evaluating businesses and acquisition opportunities in our target industry.

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Established Deal Sourcing Network. As a result of their extensive experience in the insurance industry, our management team and board members have developed a broad array of relationships in the industry. Our unique structure, whereby every board member is investing significant personal capital into the sponsor, creates a highly aligned incremental economic structure that well compensates board members to directly contribute to target company sourcing efforts. We believe that these relationships are important in generating acquisition opportunities for us. In addition to any potential acquisition opportunities that we may identify on our own, we anticipate that other target acquisition candidates may be brought to our attention from various unaffiliated sources, including investment market participants, private equity funds and large business enterprises seeking to divest non-core assets or divisions.

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Execution and Structuring Capabilities. Our executive officers’ and board members’ combined experience and expertise allow them to execute transactions possessing structural attributes that create an attractive investment thesis. Those types of

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transactions are typically complex and require creativity, deep industry knowledge and expertise, rigorous due diligence, and extensive negotiations and documentation. We believe that by focusing our investment activities on these types of transactions, we are able to generate investment opportunities with attractive risk/return profiles based on their valuations and structural characteristics.

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Innovation Capabilities. We believe our executive officers’ and board members’ strong track record of establishing new business models and identifying emerging opportunities may be critical to long-term shareholder value creation. For example, our management and investors in our sponsor have been involved in some of the most innovative and successful businesses in the insurance and InsurTech industry, including RLI, Renaissance Re, Athene, CRC, AXA, Arch and Essent, either as a private equity investor, investment banking advisor, board member or senior executive.

Investment Criteria

We have identified the following criteria in evaluating business transaction opportunities. No individual criterion will entirely determine a decision to pursue a particular opportunity. Further, any particular business transaction opportunity which we ultimately determine to pursue may not meet one or more of these criteria:

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History of Free Cash Flow Generation. We seek to acquire one or more businesses or assets that have a history of, or potential for, strong, stable free cash flow generation, with predictable and recurring revenue streams.

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Value Enhancement from our Capabilities. We seek to acquire one or more businesses and assets where the collective capabilities of our executive officers and board members can be leveraged to tangibly improve the operation and market position of the target.

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Committed and Capable Management Team. We seek to acquire one or more businesses or assets that have strong, experienced management teams or those that provide a platform for us to assemble an effective and experienced management team. We are focused on management teams with a proven track record of driving revenue growth, enhancing profitability and creating value for their shareholders.

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Diversified Customer and Supplier Base. We seek to acquire one or more businesses or assets that have a diversified customer and supplier base, which are generally better able to endure economic downturns, industry consolidation, changing business preferences and other factors that may negatively impact their customers, suppliers and competitors.

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Opportunities for Add-On Acquisitions. We seek to acquire one or more businesses or assets that we can grow both organically and through acquisitions. In addition, we believe that our ability to source proprietary opportunities and execute transactions will help the business we acquire grow through acquisition, and thus serve as a platform for further add-on acquisitions.

Given these criteria, we believe growth insurance platforms, asset light/technology-driven models, specialty risk providers, distribution businesses and insurance risk managers have the best opportunities to outperform in the current environment. To this end, we focus on acquisition opportunities with enterprise value greater than $750 million and have no intent to acquire start-ups or companies with speculative business plans, unless after substantial due diligence, we determine that those companies would generate consistent financial and operating metrics that would allow them to perform well as publicly traded companies.

Our Acquisition Process

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

We are not prohibited from pursuing an initial business combination with a company that is affiliated with our initial shareholders, founder, officers or directors. In the event we seek to complete our initial business combination with a business that is affiliated with our initial shareholders, founder, officers or directors, we, or a committee of independent and disinterested directors, will obtain an

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opinion from an independent investment banking firm that is a member of FINRA or from an independent accounting firm, that such an initial business combination is fair to our company from a financial point of view.

Each of our officers and directors have an economic interest in one of our initial shareholders and directly or indirectly own our securities, and accordingly, they have a conflict of interest in determining whether a particular target business is an appropriate business with which to effectuate our initial business combination. Further, each of our officers and directors may have a conflict of interest with respect to evaluating a particular business combination if the retention or resignation of any such officers and directors was included by a target business as a condition to any agreement with respect to our initial business combination.

Our initial shareholders and their principals may from time to time become aware of potential business opportunities, one or more of which we may desire to pursue, for a business combination.

Each of our officers and directors presently has, and any of them in the future may have additional, fiduciary, contractual or other obligations or duties to one or more other entities pursuant to which such officer or director is or will be required to present a business combination opportunity to such entities. Our 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 us; and (ii) we renounce 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 one hand, and us, on the other. Accordingly, if any of our officers or directors becomes aware of a business combination opportunity which is suitable for one or more entities to which he or she has fiduciary, contractual or other obligations or duties, he or she will honor these obligations and duties to present such business combination opportunity to such entities first, and only present it to us if such entities reject the opportunity and he or she determines to present the opportunity to us.

Effecting Our Initial Business Combination

We are not presently engaged in, and we will not engage in, any operations until we consummate our initial business combination. We intend to effectuate our initial business combination using cash from the proceeds of our initial public offering and the private placement, our shares, debt or a combination of these as the consideration to be paid in our initial business combination.

If we pay for our initial business combination using equity or debt securities, or we do not use all of the funds released from the trust account for payment of the purchase price in connection with our business combination or for redemptions or purchases of our ordinary shares, we may apply the balance of the cash released to us from the trust account for general corporate purposes, including for maintenance or expansion of operations of acquired businesses, the payment of principal or interest due on indebtedness incurred in consummating our initial business combination, to fund the purchase of other companies or for working capital.

Although our management will continue to assess the risks inherent in a particular target business with which we may combine, we cannot assure you that this assessment will result in our identifying all risks that a target business may encounter. Furthermore, some of those risks may be outside of our control, meaning that we can do nothing to control or reduce the chances that those risks will adversely impact a target business.

We may seek to raise additional funds through a private offering of debt or equity securities to finance our initial business combination, and we may effectuate an initial business combination using the proceeds of such offering rather than using the amounts held in the trust account. Subject to compliance with applicable securities laws, we would consummate such financing only simultaneously with the consummation of our business combination. In the case of an initial business combination funded with assets other than the trust account assets, our tender offer documents or proxy materials disclosing the business combination would disclose the terms of the financing and, only if required by law or Nasdaq, we would seek shareholder approval of such financing. There are no prohibitions on our ability to raise funds privately or through loans in connection with our initial business combination.

Other Acquisition Considerations

Unless we complete our initial business combination with an affiliated entity, or our board of directors cannot independently determine the fair market value of the target business or businesses, we are not required to obtain an opinion from an independent

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investment banking firm, another independent firm that commonly renders valuation opinions for the type of company we are seeking to acquire or from an independent accounting firm that the price we are paying for a target is fair to our company from a financial point of view. If no opinion is obtained, our shareholders will be relying on the business judgment of our board of directors, which will have significant discretion in choosing the standard used to establish the fair market value of the target or targets, and different methods of valuation may vary greatly in outcome from one another. Such standards used will be disclosed in our tender offer documents or proxy solicitation materials, as applicable, related to our initial business combination.

Members of our management team have made significant investments in our sponsor and directly and indirectly own our ordinary shares and/or private placement warrants, and, accordingly, have a conflict of interest in determining whether a particular target business is an appropriate business with which to effectuate our initial business combination. Further, each of our officers and directors may have a conflict of interest with respect to evaluating a particular business combination if the retention or resignation of any such officers and directors was included by a target business as a condition to any agreement with respect to our initial business combination.

Each of our directors and officers presently has, and in the future any of our directors and our officers may have additional, fiduciary or contractual obligations to other entities pursuant to which such officer or director is or will be required to present acquisition opportunities to such entity. Accordingly, subject to his or her fiduciary duties under Cayman Islands law, if any of our officers or directors becomes aware of an acquisition opportunity which is suitable for an entity to which he or she has then current fiduciary or contractual obligations, he or she will need to honor his or her fiduciary or contractual obligations to present such acquisition opportunity to such entity, and only present it to us if such entity rejects the opportunity. Our amended and restated memorandum and articles of association provide that, subject to his or her fiduciary duties under Cayman Islands law, no director or officer shall be disqualified or prevented from contracting with our company nor shall any contract or transaction entered into by or on behalf of our company in which any director shall have an interest be liable to be avoided. A director shall be at liberty to vote in respect of any contract or transaction in which he or she is interested provided that the nature of such interest shall be disclosed at or prior to its consideration or any vote thereon by the board of directors. We do not believe, however, that any fiduciary duties or contractual obligations of our directors or officers would materially undermine our ability to complete our business combination.

Our officers have agreed not to become an officer or director of any other special purpose acquisition company with a class of securities registered under the Exchange Act until we have entered into a definitive agreement regarding our initial business combin

SEC Form 10-K filed by Kairos Acquisition Corp.