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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

SCHEDULE 14A

Proxy Statement Pursuant to Section 14(a) of the

Securities Exchange Act of 1934

(Amendment No. 10)

 

 

Filed by the Registrant  ☒

Filed by a Party other than the Registrant  ☐

Check the appropriate box:

 

  Preliminary Proxy Statement
  Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))
  Definitive Proxy Statement
  Definitive Additional Materials
  Soliciting Material Pursuant to §240.14a-12

FAR PEAK ACQUISITION CORPORATION

(Name of Registrant as Specified in Its Charter)

Not Applicable

(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

Payment of Filing Fee (Check the appropriate box):

  No fee required.
  Fee paid previously with preliminary materials.
  Fee computed on table in exhibit required by Item 25(b) per Exchange Act Rules 14a-6(i)(1) and 0-11.

 

 

 


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PRELIMINARY PROXY STATEMENT

SUBJECT TO COMPLETION, OCTOBER 3, 2022

FAR PEAK ACQUISITION CORPORATION

511 6th Ave #7342

New York, New York 10011

NOTICE OF EXTRAORDINARY GENERAL MEETING OF SHAREHOLDERS

TO BE HELD VIRTUALLY ON                  , 2022

TO THE SHAREHOLDERS OF FAR PEAK ACQUISITION CORPORATION:

NOTICE IS HEREBY GIVEN that an extraordinary general meeting of shareholders (the “Special Meeting”) of Far Peak Acquisition Corporation, a Cayman Islands exempted company (“FPAC”), will be held virtually at 9:00 a.m. New York City time, on                  , 2022. You are cordially invited to attend the meeting, which will be held for the following purposes:

 

  (a)

Proposal No. 1 — The Business Combination Proposal — to consider and vote upon, as an ordinary resolution, the Business Combination, pursuant to the Business Combination Agreement, dated as of July 8, 2021 (the “Business Combination Agreement,” as amended by three amendment agreements, dated as of March 7, 2022 (“Amendment No. 1”), May 6, 2022 (“Amendment No. 2”), and June 29, 2022 (“Amendment No. 3”) and as hereafter amended), by and among FPAC, Bullish, a Cayman Islands exempted company (“Bullish”), BMC1, a Cayman Islands exempted company and a direct wholly owned subsidiary of Bullish (“Merger Sub 1”), BMC2, a Cayman Islands exempted company and a direct wholly owned subsidiary of Bullish (“Merger Sub 2”, and together with Merger Sub 1 the “Merger Subs”), and Bullish Global, a Cayman Islands exempted company (“Bullish Global”), whereby on the Closing Date FPAC will merge with and into Merger Sub 1, with Merger Sub 1 as the surviving entity in the merger, and, after giving effect to such merger, continuing as a wholly owned subsidiary of Bullish (the “Initial Merger”). Following the Initial Merger, Merger Sub 2 will merge with and into Bullish Global, with Bullish Global as the surviving entity in the merger, and, after giving effect to such merger, continuing as a wholly owned subsidiary of Bullish (the “Acquisition Merger” and, together with the Initial Merger and the other transactions contemplated by the Business Combination Agreement, the “Business Combination”).

 

  (b)

Proposal No. 2 — The Merger Proposal — to consider and vote upon, as a special resolution, a proposal to approve and authorize the Plan of Merger (made in accordance with the provisions of Section 233 of the Cayman Companies Act and included as Annex C to the accompanying proxy statement/prospectus) and to authorize the Initial Merger of FPAC with and into Merger Sub 1 with Merger Sub 1 surviving the Initial Merger.

 

  (c)

Proposal No. 3 — The Organizational Documents Proposals — to consider and vote upon six separate proposals to approve the material differences between the amended and restated memorandum and articles of association of Bullish to be in effect following the consummation of the Business Combination and FPAC’s current amended and restated memorandum and articles of association (the “Organizational Documents Proposals”), specifically:

 

   

Proposal No. 3 — The Organizational Documents Proposal A — a special resolution, to approve that the name of the new public entity will be “Bullish” as opposed to “Far Peak Acquisition Corp.”

 

   

Proposal No. 3 — The Organizational Documents Proposal B — a special resolution, to approve that Bullish will have (i) 4,000,000,000 Class A Ordinary Shares authorized; (ii) 950,000,000 Class B Ordinary Shares authorized and (iii) 50,000,000 preference shares authorized, as opposed to FPAC having 500,000,000 Class A ordinary shares authorized, 50,000,000 Class B ordinary shares authorized and 5,000,000 preference shares authorized.

 

   

Proposal No. 3 — The Organizational Documents Proposal C — a special resolution, to approve that Bullish will not have a classified board.


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Proposal No. 3 — The Organizational Documents Proposal D — a special resolution, to approve that Bullish will require any amendments to its Articles of Association to be by special resolution rather than certain matters being eligible for amendment by ordinary resolution.

 

   

Proposal No. 3 — The Organizational Documents Proposal E — a special resolution, to approve that Bullish’s corporate existence will be perpetual as opposed to FPAC’s corporate existence terminating if a business combination is not consummated by FPAC within a specified period of time.

 

   

Proposal No. 3 — The Organizational Documents Proposal F — a special resolution, to approve that Bullish’s constitutional documents will not include the various provisions applicable only to special purpose acquisition corporations that FPAC’s amended and restated memorandum and articles of association contains.

 

  (d)

Proposal No. 4 — The Adjournment Proposal — to consider and vote upon, as an ordinary resolution, a proposal to approve the adjournment of the Special Meeting to a later date or dates, if necessary, to permit further solicitation and vote of proxies if, based upon the tabulated vote at the time of the Special Meeting, any of the condition precedent proposals would not be duly approved and adopted by our shareholders or we determine that one or more of the closing conditions under the Business Combination Agreement is not satisfied or waived.

The Special Meeting will be convened virtually on                 , 2022, New York City time, at 9:00 a.m. Shareholders may attend, vote and examine the list of FPAC Shareholders entitled to vote at the Special Meeting by visiting https://www.cstproxy.com/farpeak/2022 and entering the control number found on their proxy card, voting instruction form or notice included in their proxy materials. In light of public health concerns regarding the coronavirus (COVID-19), the Special Meeting will be held in a virtual meeting format only. You will not be able to attend the Special Meeting physically.

The board of directors of FPAC (the “FPAC Board”) has established                  , 2022, as the record date for the Special Meeting. Only holders of record of shares of FPAC’s Class A ordinary shares and Class B ordinary shares (collectively, “FPAC Shares”) at the close of business on                 , 2022, are entitled to notice of and to vote and have their votes counted at the Special Meeting and any further adjournments or postponements of the Special Meeting.

We will provide you with the proxy statement/prospectus and a proxy card in connection with the solicitation of proxies to be voted at the Special Meeting and at any adjournment of the Special Meeting. Whether or not you plan to attend the Special Meeting, we urge you to read the proxy statement/prospectus carefully. Please pay particular attention to the section entitled “Risk Factors.”

After careful consideration, the FPAC Board has determined that each of the Business Combination Proposal, the Merger Proposal, the Organizational Documents Proposals and the Adjournment Proposal are in the best interests of FPAC and its shareholders and unanimously recommends that you vote or give instruction to vote “FOR” each of those proposals.

The Business Combination is conditioned on the approval of the Business Combination Proposal and the Merger Proposal. If our shareholders do not approve the Business Combination Proposal and the Merger Proposal, then the Business Combination may not be consummated. The six separate proposals in the Organizational Proposals are conditioned on the approval of the Business Combination Proposal and the Merger Proposal at the Special Meeting. If the Business Combination Proposal and the Merger Proposal are not approved, the Organizational Documents Proposals will not be presented at the Special Meeting. The Adjournment Proposal is not conditioned on the approval of any other proposal.

Concurrently with the execution of the Business Combination Agreement, FPAC’s Sponsor, Far Peak LLC (“Sponsor”), entered into a Voting Agreement pursuant to, and on the terms and subject to the conditions of which, our Sponsor has unconditionally and irrevocably agreed, among other things, to vote its shares of FPAC, and take certain other actions, in support of the Business Combination. As of the date hereof, the Sponsor owns approximately 13.7% of FPAC’s total outstanding ordinary shares.


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Pursuant to FPAC’s Amended and Restated Memorandum and Articles of Association, a holder (a “Public Shareholder”) of FPAC’s Class A ordinary shares (“Public Shares”) may request that FPAC redeem all or a portion of its Public Shares (which would otherwise become Class A Ordinary Shares of Bullish in the Business Combination) for cash if the Business Combination is consummated. As a Public Shareholder, you will be entitled to receive cash for any public shares to be redeemed only if you:

(i)    (a) hold Public Shares or (b) hold Public Shares through Units and you elect to separate your Units into the underlying Public Shares and Public Warrants prior to exercising your redemption rights with respect to the Public Shares; and

(ii)    prior to 5:00 p.m., New York City time, on                  , 2022, two business days prior to the Special Meeting, (a) submit a written request to Continental Stock Transfer & Trust Company, FPAC’s transfer agent (the “transfer agent”), that FPAC redeem your Public Shares for cash and (b) deliver your Public Shares to the transfer agent, physically or electronically, through The Depository Trust Company (“DTC”).

Holders of Units must elect to separate the underlying Public Shares and Public Warrants prior to exercising redemption rights with respect to the Public Shares. If holders hold their Units in an account at a brokerage firm or bank, holders must notify their broker or bank that they elect to separate the Units into the underlying Public Shares and Public Warrants, or if a holder holds Units registered in its own name, the holder must contact the transfer agent directly and instruct it to do so. Public Shareholders may elect to redeem all or a portion of their Public Shares even if they vote for the Business Combination Proposal. If the Business Combination is not consummated, the Public Shares will not be redeemed for cash. If the Business Combination is consummated and a Public Shareholder properly exercises its right to redeem its Public Shares and timely delivers its shares to the transfer agent, we will redeem each public share for a per-share price, payable in cash, equal to the aggregate amount then on deposit in the trust account established in connection with the Initial Public Offering (the “Trust Account”), calculated as of two business days prior to the consummation of the Business Combination, including interest earned on the funds held in the Trust Account and not previously released to FPAC to pay its taxes, divided by the number of then issued and outstanding Public Shares. For illustrative purposes, as of June 30, 2022, this would have amounted to approximately $10.00 per public share. If a Public Shareholder exercises its redemption rights, then it will be exchanging its redeemed Public Shares for cash and will no longer own such shares. Any request to redeem Public Shares, once made, may be withdrawn at any time until the deadline for submitting redemption requests and thereafter, with our consent, until the Closing (as defined below). If a holder of a public share delivers its shares in connection with an election to redeem and subsequently decides prior to the deadline for submitting redemption requests not to elect to exercise such rights, it may simply request that FPAC instruct its transfer agent to return the shares (physically or electronically). The holder can make such request by contacting the transfer agent, at the address or email address listed in this proxy statement/prospectus. See “The Extraordinary General Meeting of FPAC Shareholders — Redemption Rights” in the proxy statement/prospectus for a detailed description of the procedures to be followed if you wish to redeem your Public Shares for cash.

Notwithstanding the foregoing, a holder of Public Shares, together with any affiliate of such Public Shareholder or any other person with whom such Public Shareholder is acting in concert or as a “group” (as defined in Section 13(d)(3) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)), will be restricted from redeeming its Public Shares with respect to more than an aggregate of 15% of the Public Shares. Accordingly, if a Public Shareholder, alone or acting in concert or as a group, seeks to redeem more than 15% of the Public Shares, then any such shares in excess of that 15% limit would not be redeemed for cash.

All FPAC Shareholders are cordially invited to attend the Special Meeting, which will be held in a virtual format. You will not be able to physically attend the Special Meeting. To ensure your representation at the Special Meeting, however, you are urged to complete, sign, date and return the proxy card accompanying the proxy statement/prospectus as soon as possible. If you are a shareholder of record holding FPAC Shares, you may also cast your vote at the Special Meeting electronically by visiting https://www.cstproxy.com/farpeak/2022. If your shares are held in an account at a brokerage firm or bank, you must instruct your broker or bank on how to vote your shares or, if you wish to attend the Special Meeting


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and vote electronically, obtain a proxy from your broker or bank. If you do not vote or do not instruct your broker or bank how to vote, it will have no effect on certain proposals because such action would not count as a vote cast at the Special Meeting.

Your vote is important regardless of the number of shares you own. Whether you plan to attend the Special Meeting or not, please sign, date and return the proxy card accompanying the proxy statement/prospectus as soon as possible in the envelope provided. If your shares are held in “street name” or are in a margin or similar account, you should contact your broker to ensure that votes related to the shares you beneficially own are properly counted.

If you have any questions or need assistance voting your FPAC Shares, please contact Morrow Sodali LLC, our proxy solicitor, by calling (800) 662-5200, or banks and brokers can call collect at (203) 658-9400, or by emailing FPAC.info@investor.morrowsodali.com. This notice of Special Meeting and the proxy statement/prospectus relating to the Business Combination will be available at                 .

Thank you for your participation. We look forward to your continued support.

 

                , 2022

 

By Order of the Board of Directors,

    
    

Thomas W. Farley

    

Chairman of the Board

IF YOU RETURN YOUR PROXY CARD WITHOUT AN INDICATION OF HOW YOU WISH TO VOTE, YOUR SHARES WILL BE VOTED IN FAVOR OF EACH OF THE PROPOSALS. TO EXERCISE YOUR REDEMPTION RIGHTS, YOU MUST (I) IF YOU HOLD FPAC CLASS A ORDINARY SHARES THROUGH UNITS, ELECT TO SEPARATE YOUR UNITS INTO THE UNDERLYING FPAC CLASS A ORDINARY SHARES AND PUBLIC WARRANTS PRIOR TO EXERCISING YOUR REDEMPTION RIGHTS WITH RESPECT TO THE PUBLIC SHARES, (II) SUBMIT A WRITTEN REQUEST TO THE TRANSFER AGENT THAT YOUR PUBLIC SHARES BE REDEEMED FOR CASH AND (III) DELIVER YOUR FPAC CLASS A ORDINARY SHARES TO THE TRANSFER AGENT, PHYSICALLY OR ELECTRONICALLY USING THE DTC’S DWAC (DEPOSIT WITHDRAWAL AT CUSTODIAN) SYSTEM, IN EACH CASE, IN ACCORDANCE WITH THE PROCEDURES AND DEADLINES DESCRIBED IN THE PROXY STATEMENT/PROSPECTUS. IF THE BUSINESS COMBINATION IS NOT CONSUMMATED, THEN THE PUBLIC SHARES WILL NOT BE REDEEMED FOR CASH. IF YOU HOLD THE SHARES IN STREET NAME, YOU WILL NEED TO INSTRUCT THE ACCOUNT EXECUTIVE AT YOUR BANK OR BROKER TO WITHDRAW THE SHARES FROM YOUR ACCOUNT IN ORDER TO EXERCISE YOUR REDEMPTION RIGHTS. SEE “EXTRAORDINARY GENERAL MEETING OF FPAC SHAREHOLDERS — REDEMPTION RIGHTS” IN THE PROXY STATEMENT/PROSPECTUS FOR MORE SPECIFIC INSTRUCTIONS.


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The information in this proxy statement/prospectus is not complete and may be changed. We may not issue these securities until the registration statement filed with the Securities and Exchange Commission, of which this proxy statement/prospectus is a part, is declared effective. This proxy statement/prospectus does not constitute an offer to sell these securities and it is not soliciting an offer to buy these securities in any state where the offer or sale is not permitted.

 

SUBJECT TO COMPLETION, OCTOBER 3, 2022

PRELIMINARY PROXY STATEMENT/PROSPECTUS

 

LOGO

Bullish

PROXY STATEMENT OF

FAR PEAK ACQUISITION CORPORATION

PROSPECTUS FOR UP TO 168,305,105 CLASS A ORDINARY SHARES, 27,199,998 WARRANTS AND 27,199,998 CLASS A ORDINARY SHARES ISSUABLE UPON EXERCISE OF WARRANTS OF BULLISH

The board of directors of Far Peak Acquisition Corporation, a Cayman Islands exempted company (“FPAC”), has unanimously approved the Business Combination Agreement, dated as of July 8, 2021 (the “Business Combination Agreement,” as amended by Amendment No. 1, dated as of March 7, 2022, Amendment No. 2, dated as of May 6, 2022, and Amendment No. 3, dated as of June 29, 2022, and as hereafter amended), by and among FPAC, Bullish, a Cayman Islands exempted company (“Bullish”), BMC1, a Cayman Islands exempted company and a direct wholly owned subsidiary of Bullish (“Merger Sub 1”), BMC2, a Cayman Islands exempted company and a direct wholly owned subsidiary of Bullish (“Merger Sub 2”, and together with Merger Sub 1, the “Merger Subs”), and Bullish Global, a Cayman Islands exempted company (“Bullish Global”), which, among other things, provides for the merger of FPAC with Merger Sub 1, with Merger Sub 1 as the surviving entity in the merger, and, after giving effect to such merger, continuing as a wholly owned subsidiary of Bullish (the “Initial Merger”) and, following the Initial Merger, the merger of Bullish Global and Merger Sub 2, with Bullish Global as the surviving entity in the merger, and, after giving effect to such merger, continuing as a wholly owned subsidiary of Bullish (the “Acquisition Merger” and, together with the Initial Merger and the other transactions contemplated by the Business Combination Agreement, the “Business Combination” or the “Transactions”). As a result of and upon consummation of the Business Combination, each of FPAC and Bullish Global will become a wholly-owned subsidiary of Bullish, as described in this proxy statement/prospectus and Bullish will become a new public company owned by the prior FPAC Shareholders and the prior Bullish Global shareholders. Certain terms are defined in the section of this proxy statement/prospectus captioned “Frequently Used Terms.”

Pursuant to the Business Combination Agreement, upon the consummation of the Business Combination (i) each outstanding Class A and Class B Ordinary Share of FPAC will be converted into one Class A ordinary share (the “Class A Ordinary Shares”) of Bullish, which will have one vote per share, and (ii) each outstanding warrant of FPAC (“FPAC Warrant”) will be converted into one warrant of Bullish (“Bullish Warrant”) that entitles the holder thereof to purchase one Class A Ordinary Share of Bullish in lieu of one Class A ordinary share of FPAC and otherwise upon substantially the same terms and conditions. Accordingly, this proxy statement/prospectus covers the issuance by Bullish of an aggregate of up to 69,750,000 Class A Ordinary Shares to FPAC Shareholders, 27,199,998 Warrants, and 27,199,998 Class A Ordinary Shares issuable upon exercise of warrants.

In addition, as part of the Business Combination, certain Bullish Global shareholders currently owning approximately 93.11% of the issued and outstanding ordinary shares of Bullish Global will receive Class B ordinary shares of Bullish (“Class B Ordinary Shares”) entitling them to ten votes per share and the remaining issued and outstanding ordinary shares of Bullish Global will be exchanged into Class A Ordinary Shares of Bullish. The number of Class A and Class B Ordinary Shares to be issued to the shareholders of Bullish Global will be determined pursuant to the “Exchange Ratio” as defined in the Business Combination Agreement and will depend in part on the Digital Asset Market Value (as defined in the Business Combination Agreement) to be held by Bullish Global at the closing of the Business Combination. This proxy statement/prospectus covers up to 80,273,472 Class A Ordinary Shares to be issued in exchange for outstanding Class C common shares of Bullish Global held by non-affiliates of Bullish Global based on the 52-week high price of the Digital Asset Market Value as of December 31, 2021. In addition, this proxy statement/prospectus covers up to (i) 15,907,196 Class A Ordinary Shares issuable in connection with options of Bullish’s Class A Ordinary Shares in exchange for outstanding options of Bullish Global’s Class C common shares and (ii) 2,374,437 Class A Ordinary Shares issuable in connection with restricted stock units of Bullish’s Class A Ordinary Shares in exchange for outstanding restricted stock units of Bullish Global’s Class C common shares, based on the 52-week high price of the Digital Asset Market Value as of December 31, 2021.

Based on the 20-day average price of the Digital Asset Market Value as of July 31, 2022 (the date used in the pro forma financial information in respect of the Business Combination is provided in this proxy statement/prospectus), the shareholders of Bullish Global would have received 156,642,839 Class A Ordinary Shares (including 44,027,223 Class A Ordinary Shares to be issued in exchange for outstanding Class C common shares of Bullish Global held by non-affiliates of Bullish Global) and 482,123,225 Class B Ordinary Shares. Such shares (assuming that no FPAC Shareholders elect to redeem their ordinary shares underlying the units sold in FPAC’s initial public offering (“Public Shares”) for cash in connection therewith as permitted by FPAC’s memorandum and articles of association and excluding the warrants) would collectively represent approximately 90.16% of Bullish’s issued and outstanding Class A and Class B Ordinary Shares and 98.62% of the combined voting power of Bullish’s Class A and Class B Ordinary Shares. Class B Ordinary Shares shall automatically convert into Class A Ordinary Shares on a one-for-one basis (a) at any time and from time to time at the option of the holders thereof; and (b) immediately prior to the consummation of a transfer of such Class B Ordinary Shares to any third party (other than to specified transferees). Based on an estimate of the high and low prices of the digital assets that may be held by Bullish Global at closing over the 52-week period ended July 31, 2022, the percentage of Bullish equity to be received by the shareholders of Bullish Global, assuming no redemptions, would range from 94.67% to 89.53%.


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Certain investors (the “PIPE Investors”) had subscribed for an aggregate of 30,000,000 Class A Ordinary Shares of Bullish at $10.00 per share for gross proceeds of $300,000,000 concurrently with the effective time of the Business Combination (the “PIPE Investment”). Under their terms, the PIPE Subscription Agreements expired and terminated on July 8, 2022. As a result, the Business Combination will proceed without the PIPE Investment. No efforts were made by FPAC or Bullish Global management to extend the PIPE Investment expiration date. The PIPE Investment was never a closing condition of the Business Combination. As of June 2022, two of the five placement agents used for the PIPE Investment have resigned. J.P. Morgan Securities LLC and Nomura Securities International, Inc., have provided notices of resignation. Jefferies LLC, Berenberg Capital Markets LLC and Galaxy Digital Partners LLC remain as placement agents. The PIPE Investors have not been notified of such resignations. The services being provided by the placement agents in connection with the PIPE Investment were substantially complete at the time of their resignations. The PIPE Investment was not contingent upon any continued involvement of the placement agents in the transactions and each of the PIPE Investors had specifically disclaimed reliance on any statement, representation or warranty made by, among others, each of the placement agents in determining to participate in the PIPE Investment.

In addition, it is anticipated that, upon completion of the Business Combination, based on the above assumptions: (1) Public Shareholders will own 60,000,000 Class A Ordinary Shares or approximately 8.47% of Bullish’s outstanding Ordinary Shares or 1.19% of the voting power; (2) FPAC’s Sponsor and the Initial Shareholders will own 7,800,000 Class A Ordinary Shares or approximately 1.10% of Bullish’s outstanding Ordinary Shares or 0.15% of the voting power (in addition, the BR Investors (as defined herein) will hold 1,950,000 Class A Ordinary Shares as transferred by the FPAC Sponsor).

In addition, after the Business Combination, Public Shareholders will hold 20,000,000 formerly Public Warrants and there will be 6,699,998 formerly Private Placement Warrants held between FPAC’s Sponsor and the BR Investors.

Proposals to approve the Business Combination Agreement and the other matters discussed in this proxy statement/prospectus will be presented at the special meeting of FPAC Shareholders scheduled to be held virtually on                  , 2022.

FPAC’s Units, Class A ordinary shares and warrants are currently listed on The New York Stock Exchange (“NYSE”), under the symbols “FPACU,” “FPAC,” and “FPACW,” respectively. Bullish will apply for listing, to be effective at the time of the Business Combination, of its Class A Ordinary Shares and warrants on the NYSE under the symbols “BULL” and “BULLW,” respectively. Bullish will not have units traded following consummation of the Business Combination. Bullish will be a “controlled company” pursuant to NYSE listing rules.

FPAC is an “emerging growth company” as defined in the Jumpstart Our Business Startups Act of 2012 and has elected to comply with certain reduced public company reporting requirements.

Bullish, a Cayman Islands exempted company, was incorporated solely for the purpose of effectuating the Business Combination in which, as described above, it will succeed to the business of Bullish Global. Bullish Global is, and upon consummation of the Business Combination, Bullish will be, a holding company that, through its subsidiaries, operates a blockchain-based cryptocurrency trading platform referred to herein as the “Bullish Exchange” or the “Exchange.” These subsidiaries include Bullish (GI) Limited (“Bullish Gibraltar”), a subsidiary that is incorporated in Gibraltar and regulated by the Gibraltar Financial Services Commission, and which operates the Exchange, Bullish HK Limited, a subsidiary that is incorporated in Hong Kong, Bullish Capital, a subsidiary that is incorporated in the Cayman Islands that holds the treasury unit of Bullish referred to herein as “Bullish Treasury”, and other subsidiaries incorporated in the Cayman Islands, Delaware and Singapore. See “Business of Bullish – Corporate History and Structure” for more information. Unless the context requires otherwise, (i) references to Bullish Global (or Bullish Group) refer to Bullish Global and its subsidiaries as of the date of the proxy statement/prospectus, (ii) references herein to Bullish (or Bullish Group) refer to Bullish and its subsidiaries as they will be constituted following the consummation of the Business Combination, and (iii) references to Bullish Exchange refer to trading platform operated by Bullish Gibraltar.

Bullish Global and its subsidiaries in the Cayman Islands, Gibraltar, and the United States maintain bank accounts and balances with banks in the United States. The Singapore subsidiary has local currency bank accounts in Singapore for its operational needs as a group service company. The Hong Kong subsidiary currently maintains Hong Kong dollar denominated current and savings accounts in amounts determined to be necessary to support its operational needs in Hong Kong as a group service company. The aggregate balance as of July 31, 2022 was HK$1.8 million (equivalent to US$0.2 million), and such balance has not changed materially as of the date of this proxy statement/prospectus.

Bullish’s Hong Kong subsidiary, Bullish HK Limited, is a services company established to perform services for other entities in the Bullish Group, including in respect of the Bullish Exchange. Currently, such services — engineering and development, cybersecurity, sales and relationship management, custody operations (which include coordinating with the Exchange’s third-party custody service provider for the administration of digital assets in custodial wallets), and technology operations services as well as shared group support services such as marketing, finance, human resources, legal and compliance, and risk management — are predominantly being provided by Bullish HK Limited and supported by B1 Services HK Limited, a subsidiary of Block.one, pursuant to the Master Services Agreement. Bullish HK Limited is expected to take over providing such services once the relevant resources are transferred to it pursuant to the Contribution Agreement. Both B1 Services HK Limited and Bullish HK Limited are based in Hong Kong and provide services out


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of Hong Kong. Hong Kong based services are integral to Bullish’s business operations although Bullish continues to work on geographical diversification to reduce country concentration risk. The Hong Kong ServiceCos provide operational and support services across various functions. The Hong Kong ServiceCos employ fewer than 50% of Bullish’s personnel and hold fewer than 10% of the vendor contracts identified in the Contribution Agreement as being material to Bullish’s business operations. Although Hong Kong based services are integral to Bullish’s business operations, over 50% of Bullish’s personnel are already located outside of Hong Kong, including the Cayman Islands, U.S., Singapore and Gibraltar, and provide services including every major function of Bullish such as engineering and development, other technology functions, cybersecurity, marketing, legal, compliance and risk management.

None of Bullish’s customers’ digital assets or Bullish Gibraltar’s own digital assets are held with the Hong Kong ServiceCos and to Bullish’s knowledge, none of Bullish’s third-party custody providers are based in, or custody any of Bullish’s customers’ digital assets or Bullish Gibraltar’s own digital assets, in Hong Kong. It is Bullish’s policy that (i) only Bullish Gibraltar is permitted to hold customers’ digital assets; and (ii) a Bullish Group entity may only hold its own digital assets, meaning no Bullish Group entity may hold digital assets on behalf of another Bullish Group entity (apart from Bullish Gibraltar holding Bullish Capital assets that have been deployed to the Exchange which form part of Bullish Gibraltar’s customers’ assets). If a Bullish Group entity wishes to hold its own digital assets, it is required to go through an internal approval process, including board approvals and establishment of account control procedures. As of the date of this proxy statement/prospectus, the Hong Kong ServiceCos have not set up any wallets or accounts to hold digital assets.

The People’s Republic of China (“PRC”) government imposes controls on the convertibility of Renminbi, the national currency of the PRC, into foreign currencies and, in certain cases, the remittance of currency out of mainland China. Although Bullish has no business operations in mainland China, if such control were to extend to Hong Kong, or if by any case Bullish were to become subject to such oversight or discretion in the future, it may restrict the ability of its Hong Kong subsidiary to remit currency maintained in Hong Kong to its offshore entities in order for its offshore entities to pay dividends or make other payments or otherwise satisfy its foreign-currency-denominated obligations. The Hong Kong government has not issued similar laws or regulations for companies that are incorporated in or conduct businesses in Hong Kong. Other than the above, there is no regulatory oversight by authorities in mainland China or Hong Kong over the flow of funds among Bullish, Bullish Global, or their respective subsidiaries, or any distributions or dividends to their investors as of the date of this proxy statement/prospectus, and we do not expect there will be such regulatory oversight before or after the completion of the Business Combination.

Hong Kong is a Special Administrative Region of the PRC and enjoys its own limited autonomy as defined by the Basic Law of Hong Kong. Hong Kong’s legal system, which is different from that of mainland China, is based on common law and has its own laws and regulations, but some of the national laws of the PRC are made applicable in Hong Kong under the Basic Law. It has been speculated that there may be increased alignment between PRC laws and regulations and the Basic Law or that PRC laws and regulations will be applied directly in Hong Kong. If certain PRC laws and regulations relevant to Bullish’s business operations were to become applicable in Hong Kong in the future, Bullish may face legal and operational risks and uncertainties relating to its operations in Hong Kong. Depending on the extent of the risks and uncertainties, Bullish may determine it must relocate operations in Hong Kong to another jurisdiction, which could result in disruption of business, additional costs and expenses, and loss of key personnel, any of which could adversely affect its financial condition and results of operations.

The position on cryptocurrency businesses in mainland China is significantly less permissive than Hong Kong. The central bank in mainland China has recently announced a ban on cryptocurrency trading activities. In addition, the Chinese government recently announced that it would increase supervision of mainland Chinese companies listed offshore. Under the new measures, the Chinese government will improve regulation of cross-border data flows and security, police illegal activity in the securities market and punish fraudulent securities issuances, market manipulation and insider trading. It will also monitor sources of funding for securities investment and control leverage ratios. The Cyberspace Administration of China (“CAC”) has also opened a cybersecurity probe into several large U.S.-listed technology companies focusing on anti-monopoly and financial technology regulation and, more recently with the passage of the PRC Data Security Law, how companies collect, store, process and transfer data. If the recent PRC regulatory actions on data security or other data-related laws and regulations were to apply to Bullish, it could become subject to certain cybersecurity and data privacy obligations, including the potential requirement to conduct a cybersecurity review for its listing on a foreign stock exchange, and the failure to meet such obligations could result in penalties and other regulatory actions against it and may materially and adversely affect its business and results of operations.

Bullish does not maintain operations in mainland China, does not generate revenues from mainland China, and does not intend to provide services in mainland China. Bullish does not intend to provide customer services to potential customers located in mainland China, and does not intend to conduct sales and marketing activities or other communication with residents in mainland China. Accordingly, Bullish believes that the laws and regulations of the PRC that do not apply in Hong Kong, including the recent developments on cryptocurrency and cybersecurity laws and regulations of the PRC, do not currently have any material impact on Bullish’s business, financial condition and results of operations or the listing of Bullish’s securities, notwithstanding the fact that Bullish maintains a subsidiary in Hong Kong. However, if certain PRC laws and regulations were to become applicable in Hong Kong in the future, the application of such laws and regulations may have a material adverse impact on Bullish’s business, financial condition and results of operations and Bullish’s ability to offer or continue to offer securities to investors, any of which may cause the value of Bullish’s securities to significantly decline or become worthless.


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In addition, as Bullish’s auditor is located in the United States, the auditor is subject to laws in the United States pursuant to which the Public Company Accounting Oversight Board (“PCAOB”) may conduct inspections to assess the auditor’s compliance with the PCAOB’s standards and rules and it is not subject to the determinations by the PCAOB on December 16, 2021 that the PCAOB is unable to inspect or investigate completely PCAOB-registered public accounting firms headquartered in mainland China and in Hong Kong because of positions taken by PRC authorities in such jurisdictions. Bullish does not believe that PRC laws or regulations relating to the PCAOB’s access to auditor files currently apply to Bullish. If because of a position taken by an authority in a foreign jurisdiction, any PRC laws or regulations relating to the PCAOB’s access to auditor files were to apply to Bullish or its auditor or other reasons result in the PCAOB being unable to fully inspect or investigate Bullish’s auditor, Bullish’s securities may be delisted or prohibited from being traded “over-the-counter” pursuant to the Holding Foreign Companies Accountable Act (“HFCA Act”), which will materially and adversely affect the value and/or liquidity of your investment. On June 22, 2021, the U.S. Senate passed a bill which would reduce the number of consecutive non-inspection years required for triggering the prohibitions under the Holding Foreign Companies Accountable Act (“HFCA Act”) from three years to two. On February 4, 2022, the U.S. House of Representatives passed a bill which contained, among other things, an identical provision. On August 26, 2022, the PCAOB, the China Securities Regulatory Commission (“CSRC”) and the Ministry of Finance of China (“MOF”) signed a Statement of Protocol, which aims to empower the PCAOB to inspect and investigate registered public accounting firm headquartered in mainland China and Hong Kong. It remains uncertain how the agreement will be implemented in practice.

As Bullish currently does not have any business operations in mainland China, it is not required to obtain any permission or approval from the CSRC, CAC or any other PRC governmental authority to operate its business or to list its securities on a U.S. securities exchange or issue securities to foreign investors. In the event that Bullish inadvertently concluded that relevant permissions or approvals were not required or that applicable laws, regulations, or interpretations change and it is required to obtain such permissions or approvals in the future, any failure by Bullish to maintain or obtain such permissions or approvals could result in enforcement and other action by the PRC government, including investigations, penalties, fines and orders, which action could significantly limit or completely hinder its ability to operate and offer or continue to offer securities to investors and could cause the value of such securities to significantly decline or be worthless.

For a detailed description of risks relating to doing business in Hong Kong, see “Risk Factors — Risks Relating to Doing Business in Hong Kong.”

Bullish funds its subsidiaries’ cash requirements through a combination of intercompany loans, capital injection and intercompany service fees. Bullish generally aims to provide its service companies, such as its Hong Kong subsidiary, with adequate working capital and liquidity to pay its bills, as opposed to depositing surplus cash. Bullish also closely monitors its foreign exchange exposures to hedge against possible currency exchange losses. See “Note to the Consolidated Financial Statements — 2 Summary of Principal Accounting Policies — 2.10 Financial Liabilities and Equity — (iv) Financial Liabilities — Foreign Exchange Gains and Losses”. Since January 1, 2022 to July 31, 2022, there have been no dividends by any of the subsidiaries to Bullish, and there have been no dividends declared by Bullish Global to its shareholders. During the same period, there were intra-group loans by Bullish Global to Bullish Capital, the Cayman Islands subsidiary that holds the treasury unit of Bullish (“Bullish Treasury”) of US$300 million, of which US$275 million had been repaid. Also, payments with respect to intra-group group services were made to (1) the United States subsidiary from Bullish Global of US$13 million and from Bullish Gibraltar of US$20 million, (2) the Hong Kong subsidiary from Bullish Global of US$0.4 million and from Bullish Gibraltar of US$2 million, and (3) the Singapore subsidiary from Bullish Global of US$2 million. Bullish Treasury also contributed US$0.8 billion (net of withdrawal) to the Liquidity Pools on the Bullish Exchange operated by Bullish Gibraltar. See “Selected Historical Consolidated Financial Information of Bullish Global” and “Selected Unaudited Pro Forma Condensed Financial Statements”.

This proxy statement/prospectus provides you with detailed information about the Business Combination and other matters to be considered at the extraordinary general meeting of FPAC Shareholders. The FPAC Board encourages you to carefully read this entire document and the documents incorporated by reference. You should also carefully consider the risk factors described in “Risk Factors.”

These securities have not been approved or disapproved by the Securities and Exchange Commission (the “SEC”) or any state securities commission nor has the SEC or any state securities commission passed upon the accuracy or adequacy of this proxy statement/prospectus. Any representation to the contrary is a criminal offense.

This proxy statement/prospectus is dated                  , 2022, and is first being mailed to FPAC securityholders on or about                 , 2022.


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TABLE OF CONTENTS

 

     Page  

ADDITIONAL INFORMATION

     i  

ABOUT THIS PROXY STATEMENT/PROSPECTUS

     i  

INDUSTRY AND MARKET DATA

     i  

FREQUENTLY USED TERMS

     1  

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

     7  

QUESTIONS AND ANSWERS ABOUT THE PROPOSALS

     11  

SUMMARY TERM SHEET

     31  

SUMMARY

     36  

SELECTED HISTORICAL CONSOLIDATED FINANCIAL INFORMATION OF FPAC

     67  

SELECTED HISTORICAL CONSOLIDATED FINANCIAL INFORMATION OF BULLISH GLOBAL

     70  

SELECTED UNAUDITED PRO FORMA CONDENSED FINANCIAL STATEMENTS

     72  

RISK FACTORS

     75  

INFORMATION ABOUT THE PARTIES TO THE BUSINESS COMBINATION

     167  

EXTRAORDINARY GENERAL MEETING OF FPAC SHAREHOLDERS

     168  

THE BUSINESS COMBINATION PROPOSAL

     174  

UNAUDITED PRO FORMA COMBINED FINANCIAL INFORMATION

     239  

THE MERGER PROPOSAL

     253  

THE ORGANIZATIONAL DOCUMENT PROPOSALS

     254  

THE ADJOURNMENT PROPOSAL

     265  

OTHER INFORMATION RELATED TO FPAC

     266  

FPAC’S MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

     274  

INFORMATION RELATED TO BULLISH

     279  

BUSINESS OF BULLISH

     280  

BULLISH GLOBAL’S MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

     311  

MANAGEMENT OF BULLISH FOLLOWING THE BUSINESS COMBINATION

     341  

DIRECTOR AND EXECUTIVE COMPENSATION

     347  

BENEFICIAL OWNERSHIP OF SECURITIES

     357  

CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS

     361  

MATERIAL U.S. FEDERAL INCOME TAX CONSIDERATIONS

     363  

DESCRIPTION OF BULLISH SECURITIES

     376  

APPRAISAL OR DISSENTERS’ RIGHTS

     391  

EXPERTS

     391  

LEGAL MATTERS

     391  

OTHER SHAREHOLDER COMMUNICATIONS

     391  

DELIVERY OF DOCUMENTS TO SHAREHOLDERS

     391  

ENFORCEABILITY OF CIVIL LIABILITIES IN THE CAYMAN ISLANDS

     392  

ENFORCEABILITY OF CIVIL LIABILITIES IN HONG KONG

     392  

WHERE YOU CAN FIND MORE INFORMATION

     393  

INDEX TO FINANCIAL STATEMENTS

     F-1  

ANNEXES

  

Annex A: Business Combination Agreement

     A-1  

Annex A-1: Form of PIPE Subscription Agreement

     A-1-1  

Annex A-2: Lock-Up Agreement

     A-2-1  

Annex A-3: Letter Agreement Amendment

     A-3-1  

Annex A-4: Form of Side Letter Agreement

     A-4-1  

Annex A-5: Target Voting Agreement

     A-5-1  

Annex A-6: Sponsor Voting Agreement

     A-6-1  

 

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     Page  

Annex A-7: Form of Registration Rights Agreement

     A-7-1  

Annex A-8: Non-Competition Agreement

     A-8-1  

Annex A-9: Standstill Agreement

     A-9-1  

Annex A-10: Indemnification Agreement

     A-10-1  

Annex A-11: Sponsor Release

     A-11-1  

Annex B: Form of Amended and Restated Memorandum and Articles of Association of Bullish

     B-1  

Annex C: Plan of Merger

     C-1  

Annex D: Opinion of Duff & Phelps

     D-1  

 

 

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ADDITIONAL INFORMATION

If you have questions about the Special Meeting, or if you need to obtain copies of this proxy statement/prospectus, the enclosed proxy card or other documents incorporated by reference in this proxy statement/prospectus, you may contact FPAC’s proxy solicitor listed below. You will not be charged for any of the documents you request.

Morrow Sodali LLC

470 West Avenue, Suite 3000

Stamford, CT 06902

Tel: (800) 662-5200

Banks and brokers call collect: (203) 658-9400

Email: FPAC.info@investor.morrowsodali.com

In order for you to receive timely delivery of the documents in advance of the Special Meeting to be held virtually on                  , 2022, you must request the information no later than four business days prior to the date of the Special Meeting, by                 , 2022.

For a more detailed description of the information incorporated by reference in the proxy statement/prospectus and how you may obtain it, see the section captioned “Where You Can Find More Information” beginning on page 393 of this proxy statement/prospectus.

 

 

ABOUT THIS PROXY STATEMENT/PROSPECTUS

This document, which forms part of a registration statement on Form F-4 filed with the SEC by Bullish (File No. 333-260659), constitutes a prospectus of Bullish under Section 5 of the U.S. Securities Act of 1933, as amended, or the Securities Act, with respect to the Class A Ordinary Shares to be issued to FPAC Shareholders, the warrants to acquire Class A Ordinary Shares to be issued to FPAC Warrant holders, the Class A Ordinary Shares underlying such Warrants, and the Class A Ordinary Shares issuable in exchange for outstanding Class C common shares of Bullish Global held by non-affiliates of Bullish Global, if the Business Combination described herein is consummated. This document also constitutes a notice of meeting and a proxy statement under Section 14(a) of the U.S. Securities Exchange Act of 1934, as amended, or the Exchange Act, with respect to the extraordinary general meeting of FPAC Shareholders at which FPAC Shareholders will be asked to consider and vote upon a proposal to approve the Business Combination by the approval and adoption of the Business Combination Agreement, among other matters.

 

 

INDUSTRY AND MARKET DATA

In this proxy statement/prospectus, Bullish relies on and refers to industry data, information and statistics regarding the markets in which it competes from research as well as from publicly available information, industry and general publications and research and studies conducted by third parties. Bullish has supplemented this information where necessary with its own internal estimates and information, taking into account publicly available information about other industry participants and the management’s best view as to information that is not publicly available. This information appears in “Business of Bullish” in this proxy statement/prospectus. Bullish has taken such care as it considers reasonable in the extraction and reproduction of information from such data from third-party sources.

Industry publications, research, studies and forecasts generally state that the information they contain has been obtained from sources believed to be reliable, but that the accuracy and completeness of such information is not guaranteed. Forecasts and other forward-looking information obtained from these sources are subject to the same qualifications and uncertainties as the other forward-looking statements in this proxy statement/prospectus. These forecasts and forward-looking information are subject to uncertainty and risk due to a variety of factors, including those described under “Risk Factors.” These and other factors could cause results to differ materially from those expressed in the forecasts or estimates from independent third parties and Bullish.

 

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FREQUENTLY USED TERMS

Unless otherwise stated or unless the context otherwise requires, in this document:

“2022 Omnibus Incentive Plan” means the 2022 omnibus incentive plan of Bullish to be adopted by Bullish’s board of directors upon the consummation of the Business Combination.

“Acquisition Merger” means, following the Initial Merger, the merger of Bullish Global and Merger Sub 2, with Bullish Global as the surviving entity in the merger and, after giving effect to such merger, continuing as a wholly owned subsidiary of Bullish.

“Adjournment Proposal” means a proposal to adjourn the Meeting to a later date or dates, if necessary, to permit further solicitation and vote of proxies if, based upon the tabulated vote at the time of the Meeting, there are not sufficient votes to approve the Business Combination Proposal.

“Amended and Restated Memorandum and Articles of Association” means the amended and restated memorandum and articles of association of Bullish to be adopted prior to consummation of the Business Combination.

“Anchor Subscriber” means the PIPE Investor, an affiliate of Softbank Corp., who had subscribed for 7,500,000 Class A Ordinary Shares of Bullish for an aggregate purchase price of $75,000,000, and had also entered into a Securities Purchase Agreement with Bullish and Far Peak LLC pursuant to which the Anchor Subscriber was expected to purchase, for $1.00 per warrant, from the Sponsor or the BR Investors, 3,000,000 outstanding warrants. Due to the expiration of the Securities Purchase Agreement under its terms on July 8, 2022, the Anchor Subscriber will no longer be purchasing warrants from the Sponsor or the BR Investors.

“bitcoin” or “BTC” means the native digital asset on the Bitcoin network.

“Bitcoin” means the protocol and blockchain network as initially introduced in a white paper titled Bitcoin: A Peer-to-Peer Electronic Cash System by Satoshi Nakamoto.

“Block.one” means block.one, a Cayman Islands exempted company, and where the context permits, includes its subsidiaries (other than Bullish and Bullish Global and their subsidiaries).

“Block.one Lock-up Agreement” means the Lock-Up Agreement, dated as of July 8, 2021, to be effective upon Closing, by and between Block.one and Bullish.

“BR Investors” means certain funds and accounts managed by subsidiaries of BlackRock, Inc. who invested in FPAC at the time of the Initial Public Offering.

“Bullish” means Bullish, a Cayman Islands exempted company. Bullish is referred to as “Pubco” in the Business Combination Agreement and certain other transaction documents.

“Bullish Capital” means Bullish Capital, a subsidiary that is incorporated in the Cayman Islands that holds the treasury unit of Bullish.

“Bullish Exchange” means the cryptocurrency trading platform launched and operated by Bullish (GI) Limited, a wholly owned subsidiary of Bullish Global.

“Bullish Gibraltar” means Bullish (GI) Limited, the operator of the Bullish Exchange.

“Bullish Global” means Bullish Global, a Cayman Islands exempted company.

“Bullish Treasury” means the separate treasury unit operated by Bullish Capital to manage Bullish’s financial capital.

 

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“Bullish Warrants” means the warrants into which the FPAC Warrants will be converted pursuant to the Business Combination.

“Business Combination” or “Transactions” means the Mergers and other transactions contemplated by the Business Combination Agreement.

“Business Combination Agreement” means the Business Combination Agreement, dated as of July 8, 2021 (as amended by Amendment No. 1, dated as of March 7, 2022, Amendment No. 2, dated as of May 6, 2022, and Amendment No. 3, dated as of June 29, 2022 and as hereafter amended), by and among FPAC, Merger Sub 1, Merger Sub 2, Bullish and Bullish Global, and attached hereto as Annex A.

“Business Combination Proposal” means a proposal to approve the Business Combination Agreement and the Transactions.

“Class A Ordinary Shares” means the Class A ordinary shares, par value $0.00001 per share, of Bullish, each entitled to one vote.

“Class B Ordinary Shares” means the Class B ordinary shares, par value $0.00001 per share, of Bullish, each entitled to ten votes.

“Closing” means the closing of the Transactions.

“Closing Date” means the date of the Closing.

“Code” means the Internal Revenue Code of 1986, as amended.

“Companies Act” means the Companies Act of the Cayman Islands (As Revised).

“Continental” means Continental Stock Transfer & Trust Company, the transfer agent and trustee of FPAC.

“Contribution Agreement” means the Contribution Agreement, dated as of July 8, 2021, by and among Bullish Global, Block.one and certain of their respective affiliates.

“COVID-19” means SARS-CoV-2 or COVID-19, and any evolutions or mutations thereof or related or associated epidemics, pandemic or disease outbreaks.

“COVID-19 Measures” means any quarantine, “shelter in place,” “stay at home,” workforce reduction, social distancing, shut down, closure, sequester, safety or similar laws, guidelines or recommendations promulgated by any applicable governmental authority, including the Centers for Disease Control and Prevention and the World Health Organization, in each case, in connection with or in response to COVID-19 or any other epidemics, pandemics or disease outbreaks, including the CARES Act and Families First Act, for similarly situated companies.

“DeFi” means decentralized finance, a term used to describe blockchain-based technologies that can be used to facilitate financial operations with cryptocurrencies such as exchanging.

“digital assets” or “cryptocurrency” means cryptocurrencies, blockchain-based tokens, and other similar blockchain-based asset equivalents.

“Digital Asset Market Value” means, as of the date of the Company Closing Statement (as defined in the Business Combination Agreement), the market value equivalent of Digital Assets set forth on the Company Closing Statement calculated as provided for in the Business Combination Agreement.

“DLT” means distributed ledger technology.

“EOS” means the digital asset named EOS, which is the native token of the EOS public blockchain.

 

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“EOSIO” means the EOSIO open-source blockchain software initially developed by Block.one.

“EOSIO IP Contribution Deed” means the intellectual property contribution deed dated December 18, 2020 between Block.one and Bullish Global, where Block.one has assigned and licensed to Bullish Global certain intellectual property relating to EOSIO.

“Ether” or “ETH” means the native digital asset on the Ethereum network.

“Ethereum” means a decentralized global computing platform of that name that supports smart contract transactions and peer-to-peer applications.

“Exchange Act” means the Securities Exchange Act of 1934, as amended.

“Exchange IP Contribution Deed” means the intellectual property contribution deed dated December 18, 2020, between Block.one and Bullish Global, where Block.one has assigned and licensed to Bullish Global certain intellectual property relating to the Bullish Exchange.

“Founder Shares” means Class B ordinary shares of FPAC, 9,750,000 of which are currently outstanding and were issued to the Initial Shareholders prior to the Initial Public Offering of FPAC.

“FPAC” means Far Peak Acquisition Corporation, a Cayman Islands exempted company.

“FPAC Board” means the board of directors of FPAC.

“FPAC Shareholders” means the shareholders of FPAC.

“FPAC Warrant” means a warrant to purchase Public Shares and simultaneous private placements and each of which will convert into one Bullish Warrant pursuant to its terms upon consummation of the Business Combination.

“Full Launch” means the opening of Bullish Exchange to the public in selected jurisdictions with a strategy of targeting institutional and advanced retail customers, which commenced on December 21, 2021.

“GFSC” means the Gibraltar Financial Services Commission.

“Hong Kong ServiceCos” means Bullish HK Limited and B1 Services HK Limited.

“Hybrid Order Book” means the Bullish Exchange’s order book which integrates a traditional central limit order book and automated market-making liquidity.

“IASB” means the International Accounting Standards Board.

“IFRS” means the International Financial Reporting Standards.

“Indemnification Agreement” means the Indemnification Agreement, dated as of July 8, 2021, to be effective upon Closing, by and between Block.one and Bullish.

“Initial Merger” means the merger of FPAC with Merger Sub 1, with Merger Sub 1 as the surviving entity in the merger and, after giving effect to such merger, continuing as a wholly owned subsidiary of Bullish.

“Initial Public Offering” means the initial public offering of Units of FPAC, consummated on December 2, 2020.

 

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“Initial Shareholders” means the Sponsor and the independent members of the FPAC Board, each of whom is a holder of Founder Shares.

“IP Contribution Deeds” means the Exchange IP Contribution Deed and the EOSIO IP Contribution Deed.

“JOBS Act” means the Jumpstart Our Business Startups Act.

“Launch” means the Soft Launch and/or the Full Launch as the context indicates.

“Letter Agreement Amendment” means the amendment, dated as of July 8, 2021, by and between the Sponsor, FPAC, certain insiders of FPAC and Bullish, which amends that certain Letter Agreement, dated as of December 2, 2020, by and among the Sponsor and those certain insiders of FPAC.

“LINK” means the digital asset on the Ethereum network that powers the Chainlink Network.

“Liquidity Pools” means the liquidity pools of the Bullish Exchange which act as market makers in the Hybrid Order Book and the lenders to customers using margin trading services (for trading pairs leveraging standard Liquidity Pools).

“Loan Financing Arrangements” means Bullish Global’s loan arrangements with (i) Galaxy Digital LLC in a principal amount of $75,000,000 entered into on January 5, 2022, the amount of which has been fully repaid by Bullish Global on June 16, 2022, (ii) NYDIG Funding LLC in a principal amount of $150,000,000 entered into on January 13, 2022, as amended by an amendment agreement dated May 11, 2022, the amount of which has been fully repaid by Bullish Global on June 27, 2022 and (iii) Silvergate Bank in a principal amount of $225,000,000 entered into on March 28, 2022.

“LTC” means the native digital asset on the Litecoin Network.

“Master Services Agreement” means the Amended and Restated Master Services Agreement, dated as of July 8, 2021, by and among Bullish Global, Block.one and certain of their respective affiliates.

“Merger Proposal” means a proposal to approve the Initial Merger.

“Merger Sub 1” or “BMC1” means BMC1, a Cayman Islands exempted company and a direct wholly owned subsidiary of Bullish.

“Merger Sub 2” or “BMC2” means BMC2, a Cayman Islands exempted company and a direct wholly owned subsidiary of Bullish.

“Mergers” means the Initial Merger and the Acquisition Merger.

“Morrow” means Morrow Sodali LLC, the professional proxy solicitation firm engaged by FPAC.

“Non-Competition Agreement” means the agreement, dated as of July 8, 2021, to be affective upon Closing, by and between Block.one and Brendan Blumer.

“NYSE” means The New York Stock Exchange.

“Ordinary Shares” means the ordinary shares, par value $0.00001 per share, of Bullish, including Class A Ordinary Shares and Class B Ordinary Shares, unless otherwise specified.

“Organizational Documents” means the formation documents of any of the entities listed herein, including the memorandum and articles of association, as they may be amended.

 

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“Organizational Documents Proposal” means a proposal to approve the proposed articles following the consummation of the Business Combination.

“Outside Date” means the Outside Date as defined in the Business Combination after which FPAC or Bullish Global may terminate the Business Combination Agreement in accordance with the terms described therein.

“PIPE Investment” meant the investment of certain investors (the “PIPE Investors”) for an aggregate of 30,000,000 Class A Ordinary Shares of Bullish at $10.00 per share for gross proceeds of $300,000,000 concurrently with the effective time of the Business Combination. Under their terms, the PIPE Subscription Agreements expired and terminated on July 8, 2022. As a result, the Business Combination will proceed without the PIPE Investment.

“PIPE Investors” means the investors in the PIPE Investment.

“PIPE Subscription Agreement” means each share subscription agreement, dated as of July 8, 2021, entered into by a PIPE Investor pursuant to which such PIPE Investor had committed to subscribe for and purchase Class A Ordinary Shares of Bullish. Under their terms, the PIPE Subscription Agreements expired and terminated on July 8, 2022. As a result, the Business Combination will proceed without the PIPE Investment.

“Private Placement Warrants” means the FPAC Warrants owned by the Sponsor and the BR Investors and issued by FPAC simultaneously with the consummation of the Initial Public Offering (and subsequently pursuant to commitments made at the time of the Initial Public Offering).

“proxy statement/prospectus” means the proxy statement/prospectus included in the Registration Statement on Form F-4 (Registration No. 333-260659), filed with the SEC.

“Public Shareholders” means the holders of Public Shares.

“Public Shares” means the Class A ordinary shares of FPAC issued as part of the Units sold in the Initial Public Offering.

“Public Warrants” means the FPAC Warrants included in the Units sold in the Initial Public Offering, each of which is exercisable for one Class A ordinary share of FPAC, in accordance with its terms.

“Redemption” means the right of the holders of FPAC Class A ordinary shares to have their shares redeemed in accordance with the procedures set forth in this proxy statement/prospectus.

“Registration Rights Agreement” means the Registration Rights Agreement, to be entered into on or prior to the closing of the Acquisition Merger, by and between Bullish, the Sponsor, the BR Investors, certain securityholders of FPAC and certain security holders of Bullish Global.

“Resigned Placement Agents” means J.P. Morgan Securities LLC and Nomura Securities International, Inc. who delivered notices of resignation to FPAC and Bullish for their roles as placement agents in connection with the PIPE Investment.

“SEC” means the U.S. Securities and Exchange Commission.

“SAB 121” means the Staff Accounting Bulletin No. 121 released by SEC effective on April 11, 2022.

“Securities Act” means the Securities Act of 1933, as amended.

 

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“Senior Management” and “Senior Managers” refer to those persons named as officers of Bullish Global, and following the consummation of the Business Combination, of Bullish, in the section titled “Management of Bullish Following the Business Combination.”

“Side Letters” means the side letters entered into concurrently with the execution of the Business Combination Agreement by the BR Investors amending such BR Investors’ subscription agreement, dated November 12, 2020, by and between such BR Investors, FPAC and the Sponsor.

“Soft Launch” means Bullish Exchange’s initial launch stage using real assets with select institutional customers on an invite-only basis.

“Special Meeting” means the extraordinary general meeting of FPAC Shareholders, to be held virtually on                  , 2022, at https://www.cstproxy.com/farpeak/2022.

“Sponsor” or “FPAC Sponsor” means Far Peak LLC, a Cayman Islands exempted limited liability company controlled by Thomas W. Farley.

“Sponsor Release” means the Release Agreement, dated as of July 8, 2021, to be effective upon Closing, by and between the Sponsor and FPAC.

“Sponsor Voting Agreement” means the Sponsor Voting Agreement, dated as of July 8, 2021, by and between FPAC, the Sponsor, Bullish Global and Bullish.

“stablecoin” means a type of digital asset and cryptocurrency that is pegged to a “stable” underlying asset such as fiat money or a commodity, including other types of cryptocurrencies. The value of the asset may fluctuate based on the volatility of the underlying asset.

“Standstill Agreement” means the Standstill Agreement, dated as of July 8, 2021, to be effective upon Closing, by and between Bullish, Block.one, Brendan Blumer and Kokuei Yuan.

“Target Voting Agreement” means the Target Voting Agreement, dated as of July 8, 2021, by and between FPAC, Block.one, Bullish Global and Bullish.

“Trading Volume” means the total U.S. dollar equivalent value of matched trades transacted between a buyer and seller through the Bullish Exchange platform during the period of measurement. Trading Volume represents the product of the quantity of assets transacted and the trade price at the time the transaction was executed.

“Trust Account” means the trust account that holds a portion of the proceeds of the Initial Public Offering and the concurrent sale of the Private Placement Warrants.

“Units” means units issued in the Initial Public Offering, each consisting of one Class A ordinary share of FPAC and one-third of one FPAC Warrant.

“U.S.” and “United States” means the United States of America.

“U.S. dollar,” “US$” and “$” mean the legal currency of the United States.

“USDC” refers to the stablecoin issued by Circle Internet Financial Limited and Coinbase Global Inc., who are members of the CENTRE Consortium that administers the CENTRE network providing development, governance and compliance functions for the network.

“USDT” or “Tether” means the stablecoin issued by Tether Limited.

“U.S. GAAP” means United States generally accepted accounting principles.

 

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CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

Certain statements in this proxy statement/prospectus may constitute “forward-looking statements.” Bullish’s forward-looking statements include, but are not limited to, statements regarding Bullish or its management team’s expectations, hopes, beliefs, intentions or strategies regarding the future. In addition, any statements that refer to projections, forecasts or other characterizations of future events or circumstances, including any underlying assumptions, are forward-looking statements. The words “anticipate,” “appear,” “approximate,” “believe,” “continue,” “could,” “estimate,” “expect,” “foresee,” “intends,” “may,” “might,” “plan,” “possible,” “potential,” “predict,” “project,” “seek,” “should,” “would,” and similar expressions (or the negative version of such words or expressions) may identify forward-looking statements, but the absence of these words does not mean that a statement is not forward-looking. Forward-looking statements in this proxy statement/prospectus may include, for example, statements about:

 

   

the ability to consummate the Business Combination;

 

   

the expected benefits of the Business Combination;

 

   

Bullish’s financial performance following the Business Combination, including financial projections and business metrics and any underlying assumptions thereunder;

 

   

Bullish’s mission, goals and strategies;

 

   

Bullish’s future business development, financial conditions and results of operations;

 

   

trends in, and expected growth and market size of, cryptocurrencies;

 

   

expected changes in Bullish’s revenues, costs or expenditures;

 

   

Bullish’s expectations regarding demand for and market acceptance of its products and services;

 

   

Bullish’s expectations regarding its relationships with clients and third-party business partners;

 

   

competition in Bullish’s industry;

 

   

relevant regulations in the jurisdictions in which Bullish operates;

 

   

general economic and business conditions in the markets where Bullish operates;

 

   

the impact of COVID-19 and any COVID-19 Measures on Bullish’s business and the actions Bullish may take in response thereto; and

 

   

the outcome of any known and unknown litigation and regulatory proceedings.

You should not place undue reliance on these forward-looking statements in deciding how to vote your proxy or instruct how your vote should be cast on the Proposals set forth in this proxy statement/prospectus and any investment decision regarding Bullish’s Class A Ordinary Shares or Bullish Warrants listed on the NYSE. The forward-looking statements contained in this proxy statement/prospectus are based primarily on current expectations and projections about future events and trends that may affect our business, financial condition and operating results. The outcome of the events described in these forward-looking statements is subject to risks, uncertainties and other factors, including as described in the section titled “Risk Factors” and elsewhere in this proxy statement/prospectus and/or contained in any other material filed with the SEC.

In addition, statements that “we believe” and similar statements reflect beliefs and opinions on the relevant subject. These statements are based on information available to us as of the date of this proxy statement/prospectus. While we believe that information provides a reasonable basis for these statements, that information may be limited or incomplete. Our statements should not be read to indicate that we have conducted an exhaustive inquiry into, or review of, all relevant information. These statements are inherently uncertain, and investors are cautioned not to unduly rely on these statements.

 

 

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The forward-looking statements made in this proxy statement/prospectus relate only to events as of the date on which the statements are made. We undertake no obligation to update any forward-looking statements made in this proxy statement/prospectus to reflect events or circumstances after the date of this proxy statement/prospectus or to reflect new information or the occurrence of unanticipated events, except as required by law. We may not actually achieve the plans, intentions or expectations disclosed in our forward-looking statements, and you should not place undue reliance on our forward-looking statements.

The risk factors and cautionary language discussed in this proxy statement/prospectus provide examples of risks, uncertainties and events that may cause actual results to differ materially from the expectations described by FPAC, Bullish, or Bullish Global in such forward-looking statements, including among other things:

 

   

As an early stage company entering a highly competitive market with limited operating history, the operations of Bullish are nascent, unproven and subject to material legal, regulatory, operational, reputational, financial, tax, market, credit and other risks.

 

   

Bullish has only recently commenced the Full Launch of the Bullish Exchange.

 

   

Bullish does not have experience operating as a U.S. public company and may not be able to adequately develop and implement the governance, compliance, risk management and control infrastructure and culture required for a public company, including compliance with the Sarbanes Oxley Act.

 

   

Bullish’s strategy and focus on delivering high-quality, regulated, easy-to-use, and secure cryptocurrency-related financial services may not maximize short-term or medium-term financial results.

 

   

Bullish expects its operating expenses to increase in the foreseeable future and may not be able to achieve profitability or achieve positive cash flow from operations on a consistent basis, if at all.

 

   

Any significant disruption in Bullish’s planned products and services, in its information technology systems, or in any of the blockchain networks it supports, could result in a loss of customers or own funds and/or assets and adversely impact Bullish.

 

   

Bullish’s sales and marketing strategy is not fully tested or proven and may not be effective.

 

   

Bullish currently relies on Block.one to provide essential functions and resources to support its business and operations.

 

   

Bullish plans to rely on external vendors and third-party service providers to provide critical outsourcing functions.

 

   

Bullish’s internal governance, risk management and compliance program, policies, systems and controls are continuing to be developed and have not been fully embedded and tested. The existing processes and controls may not be adequate or effective to mitigate risk or ensure compliance.

 

   

Any strategic investments that Bullish makes or enters into could require significant management attention, disrupting the business and harming its financial condition.

 

   

The underlying blockchain technology used by Bullish is unproven and untested in a real operational environment of the scale and complexity currently contemplated.

 

   

The future development and growth of digital assets is subject to a variety of factors that are difficult to predict and evaluate. If digital assets do not grow as Bullish expects, Bullish’s business, operating results and financial condition could be adversely affected.

 

   

Cyberattacks and security breaches of Bullish’s platform, or those impacting Bullish’s customers or third parties, could adversely impact Bullish’s brand and reputation and its business, operating results and financial condition.

 

 

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The legal and regulatory treatment of the digital assets included in Bullish’s business lines is unclear, may be subject to inconsistent recognition or treatment in different jurisdictions and fast, unpredictable and retrospective changes, which may adversely impact Bullish’s business and operations and financial condition.

 

   

Bullish is subject to a multi-jurisdictional legal and regulatory environment, which can be complex and conflicting, and its regulatory compliance framework may not be sufficient to mitigate all relevant legal and regulatory compliance risks across the relevant jurisdictions.

 

   

Bullish may become a party to material litigation and other legal proceedings, including actions by regulators, government and law enforcement authorities, private actions on both individual and class basis, actions against or from employees, as well as other counter-parties.

 

   

Bullish will obtain and process a large amount of sensitive customer data. Any real or perceived improper use of, disclosure of, or access to such data could harm Bullish’s reputation, as well as have an adverse effect on Bullish’s business.

 

   

Third parties may make claims or bring legal proceedings against Bullish for alleged infringement of their intellectual property rights and consequences could include having to cease offering Bullish’s products or services.

 

   

The U.S. federal income tax and non-U.S. tax treatment of digital assets is unclear, and future developments regarding the treatment of digital assets for U.S. federal income and non-U.S. tax purposes could adversely impact Bullish’s business.

 

   

Bullish depends on talented, experienced and committed personnel to operate and grow Bullish’s business and may incur increased operational costs to recruit, train, motivate, and/or retain them. If Bullish is unable to do so, Bullish’s business, financial condition, results of operations and prospects may be adversely affected.

 

   

Bullish is exposed to potential fraud risk and physical security threats, both internally and externally, which could result in loss of assets for Bullish and its customers, as well as risk to the safety of Bullish’s personnel.

In addition, Bullish faces various legal and operational risks associated with doing business in Hong Kong, which could result in a material change in the operations of Bullish in Hong Kong following the Business Combination, cause the value of Bullish’s securities to significantly decline or become worthless, and significantly limit or completely hinder its ability to accept foreign investments and offer or continue to offer securities to foreign investors. These risks include, but are not limited to:

 

   

The business, financial condition and results of operations of Bullish, and/or the value of Bullish’s securities or Bullish’s ability to offer or continue to offer securities to investors may be materially and adversely affected to the extent that the laws and regulations of the PRC become applicable to Bullish.

 

   

The PRC government has significant oversight and discretion over the manner in which companies incorporated under the laws of PRC must conduct their business activities. Although Bullish has no business operations in mainland China and none of its subsidiaries are incorporated in mainland China, if it were to become subject to such oversight or discretion, there may be a material change in its operations and/or the value of Bullish’s securities, which would materially affect the interests of the investors.

 

   

Implementation of the National Security Law in Hong Kong involves uncertainty, and the recent policy pronouncements by the PRC government regarding business activities of U.S.-listed Chinese businesses may negatively impact Bullish’s existing and future operations in Hong Kong.

 

   

Bullish’s securities may be delisted or prohibited from being traded “over-the-counter” under the Holding Foreign Companies Accountable Act if any PRC laws or regulations relating to the PCAOB’s

 

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access to auditor files were to apply to Bullish or its auditor or other reasons result in the PCAOB being unable to fully inspect or investigate Bullish’s auditor. The delisting or the cessation of trading “over-the-counter” of Bullish securities, or the threat of them being delisted or prohibited, may materially and adversely affect the value and/or liquidity of your investment. Additionally, if the PCAOB were unable to conduct full inspections or investigations of Bullish’s auditor, it would deprive Bullish’s investors of the benefits of such inspections or investigations.

 

   

Bullish may be required to obtain regulatory licenses or approvals in order to provide some or all of the Exchange services to Hong Kong customers which it currently does not have, or it may be required to obtain such licenses or approvals in the near future.

 

   

Increases in labor costs may adversely affect Bullish’s business and results of operations.

Before a shareholder grants its proxy or instructs how its vote should be cast on the Business Combination Proposal, the Merger Proposal, the Organizational Documents Proposals or the Adjournment Proposal, it should be aware that the occurrence of the events described in the “Risk Factors” section and elsewhere in this proxy statement/prospectus may adversely affect FPAC, Bullish and/or Bullish Global.

 

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QUESTIONS AND ANSWERS ABOUT THE PROPOSALS

The following are answers to certain questions that you may have regarding the Special Meeting. FPAC urges you to read carefully the remainder of this document because the information in this section may not provide all the information that might be important to you in determining how to vote. Additional important information is also contained in the annexes to, and the documents incorporated by reference in, this proxy statement/prospectus.

Q: Why am I receiving this proxy statement/prospectus?

A: On July 8, 2021, FPAC entered into a Business Combination Agreement by and among (i) FPAC, (ii) Bullish, (iii) Merger Sub 1, (iv) Merger Sub 2 and (v) Bullish Global. Pursuant to the Business Combination Agreement FPAC needs the approval of its shareholders to approve the Business Combination. Under the terms of the Business Combination Agreement, on the Closing Date, FPAC will engage in the Initial Merger. Following the Initial Merger, Merger Sub 2 will merge with and into Bullish Global, with Bullish Global as the surviving entity in the merger, and, after giving effect to such merger continuing as a wholly owned subsidiary of Bullish.

The Business Combination must be adopted by the FPAC Shareholders in accordance with Cayman Islands law and FPAC’s Memorandum and Articles of Association. FPAC is holding a Special Meeting to obtain that approval. FPAC Shareholders will also be asked to vote on certain other matters described in this proxy statement/prospectus at the Special Meeting and to approve the adjournment of the Special Meeting, if necessary or appropriate, to solicit additional proxies in the event there are not sufficient votes at the time of the Special Meeting to adopt the Business Combination Agreement and thereby approve the Business Combination.

THE VOTE OF FPAC SHAREHOLDERS IS IMPORTANT. FPAC SHAREHOLDERS ARE URGED TO SUBMIT THEIR PROXIES AS SOON AS POSSIBLE AFTER CAREFULLY REVIEWING THIS PROXY STATEMENT/PROSPECTUS AND CAREFULLY CONSIDERING EACH OF THE PROPOSALS BEING PRESENTED AT THE MEETING.

Q: Why is FPAC proposing the Business Combination?

A: FPAC was formed for the purpose of effecting a merger, capital stock exchange, asset acquisition, stock purchase or other similar business combination with one or more operating businesses.

Based on its due diligence investigations of Bullish Global and the industries in which it operates, including the financial and other information provided by Bullish Global in the course of FPAC’s due diligence investigations, the FPAC Board believes that the Business Combination with Bullish Global is in the best interests of FPAC and its shareholders. However, there can be no assurances of this.

Although the FPAC Board believes that the Business Combination with Bullish Global presents an attractive business combination opportunity and is in the best interests of FPAC and its shareholders, the FPAC Board did consider certain potentially material negative factors in arriving at that conclusion. See “The Business Combination Proposal — FPAC’s Board of Directors’ Reasons for the Approval of the Business Combination” for a discussion of the factors considered by the FPAC Board in making its decision.

Q: When and where will the Special Meeting take place?

A: The Special Meeting will be convened in a virtual format on                 , 2022, at 9:00 a.m., New York City time, in a virtual format. Shareholders may attend, vote and examine the list of FPAC Shareholders entitled to vote at the Special Meeting by visiting https://www.cstproxy.com/farpeak/2022 and entering the control number found on their proxy card, voting instruction form or notice that they previously received.

 

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Q: What is the record date for the Special Meeting?

A: The record date for the Special Meeting is                 , 2022. Only holders of record of FPAC Shares at the close of business on                 , 2022, are entitled to notice of the Special Meeting and to vote at the convened Special Meeting and any further adjournments or postponements of the Special Meeting.

Q: What matters will be considered at the Special Meeting?

A: The FPAC Shareholders will be asked to consider and vote on the following proposals:

 

   

a proposal to adopt the Business Combination Agreement and approve the Business Combination (the “Business Combination Proposal”);

 

   

a proposal to approve the Plan of Merger (the “Merger Proposal”);

 

   

a proposal to approve the proposed organizational documents (the “Organizational Documents Proposal”); and

 

   

a proposal to approve the adjournment of the Special Meeting to a later date or dates, if necessary, to permit further solicitation and vote of proxies if, based upon the tabulated vote at the time of the Special Meeting, any of the condition precedent proposals would not be duly approved and adopted by FPAC Shareholders or FPAC determines that one or more of the closing conditions under the Business Combination Agreement is not satisfied or waived (the “Adjournment Proposal”).

Q: Is my vote important?

A: Yes. The Business Combination cannot be completed unless the Business Combination Agreement is adopted by the FPAC Shareholders holding a majority of the votes cast on the Business Combination Proposal, and the Merger Proposal and the Organizational Documents Proposals are approved by FPAC Shareholders holding two-thirds of the votes cast on such proposal. Only FPAC Shareholders as of the close of business on                 , 2022, the record date for the Special Meeting, are entitled to vote at the Special Meeting. The FPAC Board unanimously recommends that such FPAC Shareholders vote “FOR” the approval of the Business Combination Proposal, “FOR” the approval of the Merger Proposal, “FOR” the approval of the Organizational Documents Proposals and “FOR” the approval of the Adjournment Proposal.

Q: Do any of FPAC’s directors or officers have interests in the Business Combination that may differ from or be in addition to the interests of FPAC Shareholders?

A: Yes. FPAC’s executive officers and directors have interests in the Business Combination that are different from, or in addition to, the interests of FPAC Shareholders generally. These interests include, among other things, the interests listed below. The FPAC Board, including FPAC’s independent directors, with their outside counsel, reviewed and considered these interests during the negotiation of the Business Combination Agreement and in evaluating and approving, as members of the FPAC Board, the Business Combination Agreement and the Transactions, including the Business Combination. In particular, the FPAC Board considered that Thomas W. Farley, FPAC’s Chief Executive Officer, President and Chairman, will become Chief Executive Officer of Bullish and would be entering into an employment agreement effective upon the Closing of the Business Combination, and that Mr. Farley negotiated certain key aspects of his compensation to be set forth in that employment agreement prior to the signing of the Business Combination Agreement. Mr. Farley’s employment agreement is not a condition to the Closing of the Business Combination. Additionally, at the direction of the FPAC Board, Mr. Farley refrained from negotiating any such personal compensation matters until agreement on the valuation terms of the Business Combination Agreement had been reached among the parties, and then only under the supervision of the FPAC Board’s and the independent directors’ outside counsel.

 

   

As noted above, at or immediately following the Closing, Mr. Farley, FPAC’s President, Chief Executive Officer and Chairman, will become the Chief Executive Officer of Bullish and has entered

 

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into an employment agreement dated December 13, 2021, effective at the Closing, with a subsidiary of Bullish that will provide for cash and incentive compensation. See “Director and Officer Compensation – Bullish Executive Officer and Director Compensation Following the Business Combination – Thomas W. Farley Employment Agreement” for a description of Mr. Farley’s employment agreement.

 

   

At or immediately following the Closing, David W. Bonanno, FPAC’s Chief Financial Officer and Secretary, and a member of the Board, will become the Chief Financial Officer of Bullish and has entered into an employment agreement dated February 8, 2022, with a subsidiary of Bullish that will provide for cash and incentive compensation. See “Director and Officer Compensation - Bullish Executive Officer and Director Compensation Following the Business Combination - David W. Bonanno Employment Agreement” for a description of Mr. Bonanno’s employment agreement. Discussion respecting Bullish’s employment of Mr. Bonanno did not commence until September 2021 after the negotiation and execution of the Business Combination Agreement, and FPAC Board’s approval and its recommendation in favor thereof and the Transactions, including the Business Combination.

 

   

If FPAC is unable to complete its initial business combination by March 7, 2023, FPAC will: (i) cease all operations except for the purpose of winding up, (ii) as promptly as reasonably possible but not more than 10 business days thereafter, redeem the Public Shares and (iii) as promptly as reasonably possible following such redemption, subject to the approval of FPAC’s remaining shareholders and the FPAC Board, liquidate and dissolve, subject in each case to FPAC’s obligations under Cayman Islands law to provide for the claims of creditors and the requirements of other applicable law. There will be no redemption rights nor liquidating distributions, with respect to the Founder Shares if FPAC fails to complete its initial business combination by March 7, 2023. FPAC’s Sponsor purchased the Founder Shares prior to the Initial Public Offering for an aggregate purchase price of $25,000 and transferred 70,000 Founder Shares to each of FPAC’s three independent directors. In addition, as described below, upon completion of the Business Combination, certain of such Founder Shares will be transferred for nominal value, and may be forfeited or subjected to extended lock-up restrictions.

In addition, simultaneously with the closing of the Initial Public Offering, FPAC consummated the sale of 7,000,000 Private Placement Warrants at a price of $1.50 per warrant, 3,500,000 to the Sponsor and 3,500,000 to the BR Investors. In January 2022, March 2022 and May 2022, pursuant to commitments made by FPAC’s Sponsor and the BR Investors at the time of the Initial Public Offering, FPAC sold, in each of three similar transactions, an additional 33,333 Private Placement Warrants to each of the Sponsor and the BR Investors at a price of $1.50 per warrant. FPAC’s Sponsor’s aggregate investment in Private Placement Warrants was $5,400,000. The Private Placement Warrants will be exercisable commencing 30 days following the Closing for one share of Class A Ordinary Shares of Bullish at $11.50 per share. If FPAC does not consummate a business combination transaction by March 7, 2023, then the FPAC Warrants held by FPAC’s Sponsor will be worthless. However, the Founder Shares and Private Placement Warrants are subject to certain contractual obligations that will be completed upon the consummation of the Business Combination. These are described in greater detail below under “The Business Combination Proposal – Ancillary Agreements Related to the Business Combination.”

In addition, in accordance with the Letter Agreement Amendment, the FPAC Sponsor agreed that (a)(i) at the Closing of the Business Combination, it would forfeit for cancellation 1,950,000 Class A Ordinary Shares of Bullish (including 390,000 to which the BR Investors would otherwise be entitled) at the Closing of the Business Combination if more than 15,000,000 Class A ordinary shares of FPAC are validly tendered for redemption and not withdrawn, or (ii) if no such forfeiture occurs, be subject to additional lock-up restrictions with respect to such 1,950,000 Class A Ordinary Shares of Bullish (including 390,000 that will be transferred to the BR Investors as described below in “Business Combination Proposal – BlackRock Side Letter”), and (b) at the closing of the Business Combination, it would forfeit, or cause the BR Investors to forfeit, for cancellation, 500,000 Private Placement Warrants (400,000 will be forfeited by the Sponsor and 100,000 by the BR Investors). Additionally,

 

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subject to the terms of the prior sentence, FPAC’s Sponsor will be subject to a lock-up of the Ordinary Shares to be received in exchange for the Founder Shares until one year following the Business Combination or if Bullish completes a liquidation, merger, share exchange or other similar transaction that results in all of Bullish’s shareholders having the right to exchange their Ordinary Shares for cash, securities or other property; provided that if the Ordinary Shares have traded at a price equal to or greater than $12.00 per share within any 20 trading days within a 30-trading day period commencing at least 150 days after the initial Business Combination, the Ordinary Shares to be received in exchange for the Founder Shares shall be released from the Sponsor Lock-up.

Giving effect to the foregoing transfers and forfeitures, upon completion of the Business Combination, assuming no redemptions and a Digital Asset Market Value (as defined in the Business Combination Agreement) of $2.84 billion, based on the average value over a 20-day period as of July 31, 2022, it is expected that FPAC’s Sponsor will hold approximately 1.07% of the outstanding Class A Ordinary Shares of Bullish, which based on an assumed $10.00 per share value would have an aggregate value of approximately $75,900,000. In addition, following the Closing, and giving effect to the transfers and forfeitures described above, FPAC’s Sponsor will hold 3,199,999 Bullish Warrants (for which the Sponsor would have paid an aggregate of $3,000,000). Based on the $0.33 per warrant value of FPAC’s Public Warrants as of July 31, 2022, such 3,199,999 Bullish Warrants would have a value of $1,055,999.67.

As a result of the difference in the purchase price of approximately $0.003 per share that FPAC’s Sponsor paid for the Founder Shares, as compared to the purchase price of $10.00 per unit sold in FPAC’s Initial Public Offering, FPAC’s Sponsor may earn a positive rate of return on its investment even if the share price of Bullish’s Class A Ordinary Shares falls significantly below the per share value implied in the Business Combination of $10.00 per share and the public stockholders of FPAC experience a negative rate of return.

 

   

Pursuant to the BR Subscription Agreements, FPAC’s Sponsor agreed to transfer 1,950,000 Founder Shares (which will convert into 1,950,000 Class A Ordinary Shares of Bullish) to the BR Investors at the price the Sponsor originally paid for such shares (which as noted above, was nominal). Pursuant to the Securities Purchase Agreement, FPAC’s Sponsor agreed to sell, or cause the BR Investors to sell, 3,000,000 Private Placement Warrants to the Anchor Subscriber for $1.00 per warrant (2,400,000 would have been transferred by the Sponsor and 600,000 by the BR Investors). However, due to the expiration of the Securities Purchase Agreement under its terms on July 8, 2022, the Anchor Subscriber will no longer be purchasing warrants from the Sponsor or the BR Investors.

 

   

FPAC’s Sponsor, officers and directors will lose their entire investment in FPAC if FPAC does not complete a business combination by March 7, 2023. The independent directors each received 70,000 Founder Shares concurrently with FPAC’s Initial Public Offering. The 70,000 Founder Shares currently held by each director, if unrestricted and freely tradeable would be valued at $700,000, based on an assumed $10.00 per share value. Founder Shares do not have the redemption rights of Public Shares if FPAC is unable to complete its initial business combination by March 7, 2023, nor will they receive any liquidating distributions if FPAC liquidates.

 

   

FPAC’s Initial Shareholders and its officers and directors have agreed to waive their rights to liquidating distributions from the Trust Account with respect to their Founder Shares if FPAC fails to complete a business combination by March 7, 2023.

 

   

In order to protect the amounts held in the Trust Account, FPAC’s Sponsor has agreed that it will be liable to FPAC if and to the extent any claims by a vendor for services rendered or products sold to FPAC, or a prospective target business with which it has entered into a transaction agreement, reduce the amount of funds in the Trust Account. This liability will not apply with respect to any claims by a third party who executed a waiver of any right, title, interest or claim of any kind in or to any monies held in the Trust Account or to any claims under FPAC’s indemnity of the underwriters of this offering against certain liabilities, including liabilities under the Securities Act.

 

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Following the Closing, FPAC’s Sponsor would be entitled to the repayment of any working capital loans and advances that have been made to FPAC and which remain outstanding. As of the date of this proxy statement/prospectus, FPAC’s Sponsor has not made any advances to FPAC for working capital expenses. If FPAC does not complete an initial business combination within the required period, FPAC may use a portion of its working capital held outside the Trust Account to repay the working capital loans, but no proceeds held in the Trust Account would be used to repay the working capital loans.

 

   

Following the consummation of the Business Combination, FPAC’s officers and directors will be indemnified as discussed under “The Business Combination Proposal — Indemnification”.

 

   

Upon the Closing, subject to the terms and conditions of the Business Combination Agreement, the Sponsor, FPAC’s officers and directors, and their respective affiliates may be entitled to reimbursement for any reasonable out-of-pocket expenses related to identifying, investigating and consummating an initial business combination, and repayment of any other loans, if any, and on such terms as to be determined by FPAC from time to time, made by the Sponsor or certain of our officers and directors to finance transaction costs in connection with an intended initial business combination. As of the date of this proxy statement/prospectus, neither the Sponsor nor any director or officer of FPAC has extended any loan to FPAC, incurred any out-of-pocket expense reimbursable by FPAC, or has any entitlement to any fee upon completion of the Business Combination.

Each of FPAC’s officers and directors presently has fiduciary or contractual obligations to other entities pursuant to which such officer or director is required to present a business combination opportunity to such entity. FPAC’s Amended and Restated Articles of Incorporation provide that FPAC renounces its interest in any corporate opportunity offered to any director or officer unless such opportunity is expressly offered to such person solely in his or her capacity as a director or officer of FPAC and such opportunity is one FPAC is legally and contractually permitted to undertake and would otherwise be reasonable for FPAC to pursue, and to the extent the director or officer is permitted to refer that opportunity to FPAC without violating another legal obligation. FPAC does believe, however, that neither the fiduciary duties or contractual obligations of its officers or directors, nor the waiver of the corporate opportunities doctrine in its Restated Articles of Incorporation, materially impacted its search for an acquisition target nor will materially impact its ability to complete the proposed Business Combination. In fact, as described below under “The Business Combination Proposal — Background of the Business Combination,” FPAC was able to identify approximately 50 potential business combination candidates and engage in discussions with 34 potential targets other than Bullish Global in a relatively short period following its Initial Public Offering.

The existence of financial and personal interests of FPAC’s directors and officers may result in a conflict of interest on the part of one or more of them between what they may believe is best for FPAC and what they may believe is best for themselves in determining whether or not to grant a waiver in a specific situation. See the sections entitled “Risk Factors” and “The Business Combination Proposal — Interests of FPAC’s Directors and Officers in the Business Combination” for a further discussion of this and other risks.

Q: If my shares are held in “street name” by my bank, brokerage firm or other nominee, will my bank, brokerage firm or other nominee automatically vote those shares for me?

A: No. A “broker non-vote” occurs when a broker submits a proxy that states that the broker does not vote for some or all of the proposals because the broker has not received instructions from the beneficial owners on how to vote on the proposals and does not have discretionary authority to vote in the absence of instructions. Under the relevant rules, brokers are not permitted to vote on any of the matters to be considered at the Special Meeting. As a result, your Public Shares will not be voted on any matter unless you affirmatively instruct your broker, bank or nominee how to vote your shares in one of the ways indicated by your broker, bank or other nominee. You should instruct your broker to vote your shares in accordance with directions you provide.

 

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Q: What FPAC Shareholder vote is required for the approval of each proposal brought before the Special Meeting? What will happen if I fail to vote or abstain from voting on each proposal?

A: The Business Combination Proposal. Approval of the Business Combination Proposal must be approved by an ordinary resolution as a matter of Cayman Islands law, being the affirmative vote of at least a simple majority of the votes cast by the holders of the issued ordinary shares present virtually or represented by proxy at the Special Meeting and entitled to vote on such matter. Failure to vote, abstentions and broker non-votes, while considered present for the purposes of establishing a quorum, will have no effect on the outcome of the proposal.

FPAC’s Sponsor, which owns 9,540,000 of FPAC’s outstanding shares, has agreed to vote its shares in favor of the Business Combination and take certain other actions in support of the Transactions. In addition, members of the FPAC Board, owning in the aggregate 210,000 of FPAC’s outstanding shares, have agreed with FPAC to vote in favor of the Business Combination. Accordingly, if all of its outstanding shares were to be voted, FPAC would need the affirmative vote of 25,125,001, or approximately 41.9%, of the 60,000,000 outstanding Public Shares, at the Special Meeting to approve the Business Combination. In the event that only the minimum number of shares necessary for a quorum are voted, a minimum of 17,437,501 shares (and only 7,687,501 Public Shares, or 12.8% of the Public Shares) will be required to approve the Business Combination Proposal.

The Merger Proposal. Approval of the Merger Proposal must be approved by a special resolution under Cayman Islands law, being the affirmative vote of at least a two-thirds (2/3) majority of the votes cast by the holders of the issued ordinary shares present virtually or represented by proxy at the Special Meeting and entitled to vote on such matter. Accordingly, if all of its outstanding shares were to be voted, FPAC would need the affirmative vote of 36,750,000 or approximately 61.25%, of the 60,000,000 outstanding Public Shares, at the Special Meeting to approve the Merger Proposal. Failure to vote, abstentions and broker non-votes will have no effect on the outcome of the proposal. In the event that only the minimum number of shares necessary for a quorum are voted, a minimum of 23,250,001 shares (and only 13,500,001 Public Shares, or 22.5% of the Public Shares) will be required to approve the Merger Proposal.

The Organizational Documents Proposals. Approval of the six separate Organizational Documents Proposals must be approved by special resolutions under Cayman Islands law, being the affirmative vote of at least a two-thirds (2/3) majority of the votes cast by the holders of the issued ordinary shares present virtually or represented by proxy at the Special Meeting and entitled to vote on such matter. Accordingly, if all of its outstanding shares were to be voted, FPAC would need the affirmative vote of 36,750,000 or approximately 61.25%, of the 60,000,000 outstanding Public Shares, at the Special Meeting to approve the Organizational Documents Proposal. Failure to vote, abstentions and broker non-votes will have no effect on the outcome of the proposal. In the event that only the minimum number of shares necessary for a quorum are voted, a minimum of 23,250,001 shares (and only 13,500,001 Public Shares, or 22.5% of the Public Shares) will be required to approve the Organizational Documents Proposals.

The Adjournment Proposal. Approval of the Adjournment Proposal requires the affirmative vote of at least a simple majority of the votes cast by FPAC Shareholders present virtually or represented by proxy at the Special Meeting and entitled to vote thereon. Failure to vote, abstentions and broker non-votes have no effect on the outcome of the proposal. In the event that only the minimum number of shares necessary for a quorum are voted, a minimum of 17,437,501 shares (and only 7,687,501 Public Shares, or 12.8% of the Public Shares) will be required to approve the Adjournment Proposal.

Q: What will Bullish Global’s equity holders receive in connection with the Business Combination?

A: Subject to, and in accordance with, the terms and conditions of the Business Combination Agreement, in connection with the Acquisition Merger, (i) (a) each outstanding Bullish Global Class B preference share will automatically convert into one Bullish Global Class C common share and (b) thereafter each issued and outstanding Bullish Global Class C common share will convert automatically into such number of Class A Ordinary Shares of Bullish that is equal to the Exchange Ratio (see the section entitled “The Business

 

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Combination Proposal — Consideration” beginning on page 174), (ii) each issued and outstanding Bullish Global Class A common share will convert automatically into such number of Class B Ordinary Shares of Bullish that is equal to the Exchange Ratio, (iii) each Bullish Global restricted stock unit award will cease to represent the right to acquire Bullish Global Class C common shares and will be cancelled in exchange for a right to acquire a number of Class A Ordinary Shares of Bullish under the 2022 Omnibus Incentive Plan equal to the product of (a) the number of Bullish Global Class C common shares subject to such Bullish Global restricted stock unit award as of immediately prior to the effective time of the Acquisition Merger and (b) the Exchange Ratio, and (iv) each Bullish Global option award will cease to represent the right to purchase Bullish Global Class C common shares and will be cancelled in exchange for an option to purchase a number of Class A Ordinary Shares of Bullish under the 2022 Omnibus Incentive Plan equal to the product of (a) the number of Bullish Global Class C common shares subject to such Bullish Global option award as of immediately prior to the effective time of the Acquisition Merger, and (b) the Exchange Ratio, at an exercise price per share equal to (x) the exercise price per share of such Bullish Global option award, divided by (y) the Exchange Ratio. The Class A Ordinary Shares of Bullish will have voting rights of one vote per share and the Class B Ordinary Shares of Bullish will have voting rights of ten votes per share. The following assumes a no redemption scenario and a $10.00 per share value of Bullish Ordinary Shares to be issued in connection with the Business Combination. Bullish Global equity holders will receive Bullish Ordinary Shares with an assumed value of $6,387,660,634 in the aggregate, consisting of (i) Bullish Class A Ordinary Shares with an assumed value of $1,566,428,386 in the aggregate (to Bullish Global Class B Preference shareholders), and (ii) Bullish Class B Ordinary Shares with an assumed value of $4,821,232,248 in the aggregate (to Block.one). FPAC’s Public Shareholders will receive Bullish Class A Ordinary Shares with an assumed value of $600,000,000 in the aggregate, assuming no redemptions. The Sponsor will transfer for nominal value 1,950,000 Founder Shares (with an assumed value of $19,500,000) to the BR Investors at the Closing. Giving effect to such transfer, the Sponsor and FPAC directors and officers will receive Bullish Class A Ordinary Shares with an assumed value of $78,000,000 in aggregate for their Founder Shares. Additionally, 1,950,000 FPAC Founder Share held by the Sponsor (including 390,000 otherwise transferable to the BR Investors) are subject to forfeiture in certain redemption scenarios, and assuming a value of $10.00 per share, these shares have a value of $19,500,000 in aggregate. The Sponsor will also hold 3,199,999 Bullish Warrants that will become exercisable after the closing of the Business Combination, which, based on the $0.33 per warrant value of FPAC’s Public Warrants as of July 31, 2022, would have a value of $1,055,999.67 in the aggregate.

Q: What equity stake will current FPAC Shareholders and Bullish equity holders hold in Bullish immediately after the consummation of the Business Combination?

A: It is anticipated that, upon completion of the Business Combination, assuming no redemptions and a Digital Asset Market Value (as defined in the Business Combination Agreement) of US$2.84 billion, based on the average value over a 20-day period as of July 31, 2022: (1) Public Shareholders will own 60,000,000 Class A Ordinary Shares or approximately 8.47% of Bullish’s outstanding Ordinary Shares; (2) FPAC’s Sponsor and certain other investors1 will own 9,750,000 Class A Ordinary Shares or approximately 1.38% of Bullish’s outstanding Ordinary Shares; and (3) the current shareholders of Bullish Global will own 156,642,839 Class A Ordinary Shares and 482,123,225 Class B Ordinary Shares or approximately 90.16% of Bullish’s outstanding Ordinary Shares, including all Class B Ordinary Shares. Class B Ordinary Shares shall automatically convert into Class A Ordinary Shares on a one-for-one basis (a) at any time and from time to time at the option of the holders thereof; and (b) immediately prior to the consummation of a transfer of such Class B Ordinary Shares to any

 

1 

The directors of FPAC will hold 210,000 Class A Ordinary Shares and the FPAC Sponsor will have sold to the BR Investors 1,950,000 Class A Ordinary Shares in the No Redemption scenario and 1,560,000 Class A Ordinary Shares in the Maximum Redemption scenario. BR Investors also have ownership reported in groups 1 and 2 of this answer. See (“Beneficial Ownership of Securities — Security Ownership of Certain Beneficial Owners and Management of Bullish”).

 

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third party (other than to specified transferees). Based on an estimate of the high and low prices of the digital assets that may be held by Bullish Global at closing over the 52-week period ended July 31, 2022, the percentage of Bullish equity to be received by the shareholders of Bullish Global, assuming no redemptions, may range from 94.67% to 89.53%.

Public Shareholders will hold 20,000,000 formally Public Warrants after the Business Combination and there will be 6,699,998 formally Private Warrants held between FPAC’s Sponsor and the BR Investors. Upon completion of the Business Combination, Bullish will be a “controlled company’’ pursuant to the NYSE listing rules.

 

     Assuming No Redemption     Assuming Maximum Redemption  

Shareholders

   Ownership in
Shares
     Equity%     Voting%     Ownership in
Shares
     Equity%     Voting%  

Bullish Global shareholders

     638,766,063        90.16     98.62     638,766,063        98.72     99.83

FPAC Class A Shareholders

     60,000,000        8.47     1.19     490,000        0.07     0.01

FPAC Class B Shareholders

     9,750,000        1.38     0.19     7,800,000        1.21     0.16
  

 

 

    

 

 

   

 

 

   

 

 

    

 

 

   

 

 

 
     708,516,063        100.00     100.00     647,056,063        100.00     100.00
  

 

 

    

 

 

   

 

 

   

 

 

    

 

 

   

 

 

 

Does not include 20,000,000 Public Warrants and 6,699,998 Private Placement Warrants that will become exercisable 30 days after the Closing.

Q: How will FPAC Shareholders ownership percentages be impacted assuming no redemptions, maximum redemptions and interim redemption levels, as well as the Sponsor’s total potential ownership interest in Bullish, assuming exercise and conversion of all securities?

The table below shows how FPAC Shareholders will be diluted based on different redemption levels and the outstanding convertible equity of Bullish Global and the Warrants.

Ownership

 

    Redemptions  
    0%     25%     50%     75%     Maximum
Redemptions
 

Number of Shares Redeemed

    —         14,877,500       29,755,000       44,632,500       59,510,000  

Shares Held

         

Bullish Global shareholders

   
638,766,063
 
    638,766,063       638,766,063       638,766,063       638,766,063  

FPAC Class A Shareholders

    60,000,000       45,122,500       30,245,000       15,367,500       490,000  

FPAC Class B Shareholders

    9,750,000       9,750,000       7,800,000       7,800,000       7,800,000  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total Shares

    708,516,063       693,638,563       676,811,063       661,933,563       647,056,063  

Bullish Global shareholders

    90.16     92.09     94.38     96.50     98.72

FPAC Class A Shareholders

    8.47     6.50     4.47     2.32     0.07

FPAC Class B Shareholders

    1.38     1.41     1.15     1.18     1.21
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total

    100.00 %      100.00 %      100.00 %      100.00 %      100.00 % 

Warrants potentially held by redeeming shareholders(1)

    —         4,959,167       9,918,333       14,877,500       19,836,667  

(A) Value of Warrants potentially held by redeeming shareholders (July 31)(1)

    —       $ 1,636,525     $ 3,273,050     $ 4,909,575     $ 6,546,100  

FPAC Class B Shareholders

    9,750,000       9,750,000       7,800,000       7,800,000       7,800,000  

(B) Value of FPAC Class B Shares @ $10

  $ 97,500,000     $ 97,500,000     $ 78,000,000     $ 78,000,000     $ 78,000,000  

 

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1.

FPAC will have 20,000,000 Public Warrants outstanding, irrespective of the number of shareholders who tender shares for redemption. The Units issued in the IPO may have been separated and there is no guarantee that a redeeming shareholder will still hold Public Warrants. Additionally, holders of outstanding Units must elect to separate the Units into the underlying Public Shares and Public Warrants prior to exercising redemption rights with respect to the Public Shares.

 

    Redemptions  
    0%     25%     50%     75%     Maximum
Redemptions
 

Private Placement Warrants

    6,699,998       6,699,998       6,699,998       6,699,998       6,699,998  

(C) Value of Private Placement Warrants

  $ 2,210,999     $
2,210,999
 
  $
2,210,999
 
  $
2,210,999
 
  $
2,210,999
 
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

(A + B + C) Total Value of Dilutive Securities

  $ 99,710,999     $ 101,347,524     $ 83,484,049     $ 85,120,574     $ 86,757,099  

Apeiron Advisory Ltd (Issued Options)

    9,642,464       9,642,464       9,642,464       9,642,464       9,642,464  

ESOPs - Executives Issued Options

    15,233,095       14,913,229       14,551,438       14,231,572       13,911,705  

ESOPs - Employees Issued Options

    5,071,876       5,071,876       5,071,876       5,071,876       5,071,876  

ESOPs - Employees Issued RSUs

    1,053,129       1,053,129       1,053,129       1,053,129       1,053,129  

Unallocated Options Pool

    22,568,683       22,888,549       23,250,340       23,570,206       23,890,073  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total Bullish Options

    53,569,247       53,569,247       53,569,247       53,569,247       53,569,247  

(D) Value of Bullish Options

    535,692,470       535,692,470       535,692,470       535,692,470       535,692,470  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

(A + B + C + D) Total Value of Dilutive Securities

  $ 635,403,469     $ 637,039,994     $ 619,176,519     $ 620,813,044     $ 622,449,569  

Note: Max redemptions scenario excludes 490,000 FPAC Class A shares and 9,750,000 FPAC Class B shares. However, 1,950,000 FPAC Class B shares are subject to forfeiture over certain redemption amounts. The number of Bullish shares to be held by Bullish Global shareholders is the same in all scenarios.

Q: What was the PIPE Investment?

A: Concurrently with the execution and delivery of the Business Combination Agreement, certain institutional investors, referred to as the PIPE Investors, had entered into subscription agreements, pursuant to which Bullish had agreed to issue an aggregate of 30,000,000 Bullish’s Class A Ordinary Shares, at a purchase price of $10.00 per share concurrently with the Closing. Under their terms, the PIPE Subscription Agreements expired and terminated on July 8, 2022. As a result, the Business Combination will proceed without the PIPE Investment. No efforts were made by FPAC or Bullish Global management to extend the PIPE Investment expiration date. The PIPE Investment was never a closing condition of the Business Combination. One PIPE Investor, referred to as the Anchor Subscriber, who had subscribed for 7,500,000 Class A Ordinary Shares of Bullish for an aggregate purchase price of $75,000,000, had also entered into a Securities Purchase Agreement with Bullish and Far Peak LLC pursuant to which the Anchor Subscriber would have purchased, for $1.00 per warrant, from the Sponsor or the BR Investors, 3,000,000 outstanding Private Placement Warrants. Due to the expiration of the Securities Purchase Agreement under its terms on July 8, 2022, the Anchor Subscriber will no longer be purchasing warrants from the Sponsor or the BR Investors.

 

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Q: What are the potential impacts on the Business Combination and Related Transactions resulting from the resignation of FPAC’s IPO Underwriter?

A: On May 20, 2022, FPAC received a letter from Wells Fargo Securities, LLC (the “IPO underwriter”), which was the sole underwriter of FPAC’s December 2020 IPO, in which the IPO underwriter gratuitously waived its entitlement to all or any part of the approximately $15.4 million deferred underwriting discount from the IPO. This fee was agreed between FPAC and the IPO underwriter in the IPO underwriting agreement signed by the parties on December 2, 2020, and was earned in full upon completion of the IPO but payment was conditioned upon the closing of FPAC’s business combination. Following the IPO, there has been no engagement of the IPO underwriter by FPAC, including for any financial or merger-related advisory services. The underwriting services being provided by the IPO underwriter prior to such resignation were complete at the time of FPAC’s initial public offering. Without limiting the generality of the foregoing, the IPO underwriter has not acted for FPAC (or Bullish) in any role with respect the Business Combination, including the related PIPE Investment, and has not been involved in the preparation of any disclosure included herein, including any analysis underlying disclosure. Notwithstanding that lack of any role (which the IPO underwriter acknowledges in its letter), the IPO underwriter advised FPAC “for the avoidance of doubt” that it resigns, or ceases or refuses to act in, every office, capacity and relationship with respect to the Transaction. In addition, in its letter, the IPO underwriter disclaimed any responsibility for any portion of the registration statement of which this proxy statement/prospectus is a part. See “Risk Factors—Risks Related to FPAC”.

Q: What are the potential impacts on the Business Combination and Related Transactions resulting from the resignation of FPAC’s Placement Agents?

A: On June 1, 2022 and June 10, 2022, J.P. Morgan Securities LLC (“JPM”) and Nomura Securities International, Inc. (“Nomura” and together with JPM, the “Resigned Placement Agents”), respectively, delivered to FPAC and Bullish notices of resignation of their roles as placement agents in connection with the PIPE Investment. Each of the Resigned Placement Agents waived any right to receive placement fees due at the time, pursuant to an engagement letter, dated May 17, 2021, among JPM, FPAC, Jefferies LLC, Nomura, Berenberg Capital Markets LLC and Galaxy Digital Partners LLC (the “Engagement Letter”), which agreement related to the PIPE Investment. In addition, each of the Resigned Placement Agents has delivered notices of resignation to the SEC pursuant to Section 11(b)(1) under the Securities Act. See “Summary — Recent Developments” and “Risk Factors—Risks Related to FPAC”.

As a result of these resignations, the associated waiver of fees, and the subsequent expiration of the PIPE Subscription Agreements, the transactions fees payable by FPAC and Bullish at the consummation of the Business Combination will be reduced by approximately $6 million. The services being provided by the Resigned Placement Agents prior to such resignations were substantially complete at the time of their resignations and FPAC and Bullish have not considered engaging and do not intend to engage additional placement agents. Under their terms, the PIPE Subscription Agreements expired and terminated on July 8, 2022. As a result, the Business Combination will proceed without the PIPE Investment. No efforts were made by FPAC or Bullish Global management to extend the PIPE Investment expiration date. The PIPE Investment was never a closing condition of the Business Combination. Any contemplated post-transaction financing arrangements are not impacted by the resignation of the Resigned Placement Agents or the expiration of the PIPE Subscription Agreements.

The resignation of the Resigned Placement Agents and the waiver of fees for services that have already been rendered is unusual. FPAC shareholders may be more likely to elect to redeem their shares, increasing the possibility that FPAC may not have sufficient funds to meet the condition of FPAC having at least $5,000,001 in net tangible assets after giving effect to the payment of amounts that FPAC will be required to pay to redeeming shareholders upon consummation of the Business Combination. See “Summary — Sources and Uses of Funds”, “Unaudited Pro Forma Combined Financial Information” and “Risk Factors—Risks Related to FPAC—The

 

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resignation of FPAC’s placement agents and the IPO Underwriter may indicate that they may be unwilling to be associated with the disclosure in this proxy statement/prospectus or the underlying business analysis related to the transaction”.

Q: What happens to the funds deposited in the trust account after consummation of the Business Combination?

A: A total of $600,000,000, including approximately $15.4 million of underwriters’ deferred discount, from the net proceeds of the Initial Public Offering and the concurrent sale of the Private Placement Warrants was placed in the Trust Account maintained by Continental Stock Transfer & Trust Company (“Continental”), FPAC’s transfer agent, acting as trustee. As of June 30, 2022, there were investments and cash held in the Trust Account of $600,676,688. These funds will not be released until the earlier of Closing or the redemption of FPAC’s Public Shares if FPAC is unable to complete an initial business combination by March 7, 2023, although FPAC may withdraw the interest earned on the funds held in the Trust Account to pay franchise and income taxes.

Q: Do I have redemption rights?

A: If you are a Public Shareholder, you have the right to request that FPAC redeem all or a portion of your Public Shares for cash, provided that you follow the procedures and deadlines described elsewhere in this proxy statement/prospectus under the heading “The Special Meeting — Redemption Rights.” Public Shareholders may elect to redeem all or a portion of their Public Shares even if they vote for the Business Combination Proposal. We sometimes refer to these rights to elect to redeem all or a portion of the Public Shares into a pro rata portion of the cash held in the Trust Account as “redemption rights.” If you wish to exercise your redemption rights, please see the answer to the question: “How do I exercise my redemption rights?

Notwithstanding the foregoing, a Public Shareholder, together with any affiliate of such Public Shareholder or any other person with whom such Public Shareholder is acting in concert or as a “group” (as defined in Section 13(d)(3) of the Exchange Act), will be restricted from redeeming its Public Shares with respect to more than an aggregate of 15% of the Public Shares. Accordingly, if a Public Shareholder, alone or acting in concert or as a group, seeks to redeem more than 15% of the Public Shares, then any such shares in excess of that 15% limit would not be redeemed for cash.

FPAC’s Initial Shareholders and its other directors at the time of the Initial Public Offering entered into the insider letter agreement, pursuant to which they agreed to waive their redemption rights with respect to their Founder Shares in connection with the completion of a business combination.

Q: What happens if a substantial number of the Public Shareholders vote in favor of the Business Combination Proposal and exercise their redemption rights?

A: FPAC Shareholders who vote in favor of the Business Combination may also nevertheless exercise their redemption rights. Accordingly, the Business Combination may be consummated even though the funds available from the Trust Account and the number of Public Shareholders is reduced as a result of redemptions by Public Shareholders. However, the consummation of the Business Combination is conditioned upon, among other things, FPAC having at least $5,000,001 in net tangible assets after giving effect to the payment of amounts that FPAC will be required to pay to redeeming shareholders upon consummation of the Business Combination. In addition, with fewer Public Shares and Public Shareholders, the trading market for Class A Ordinary Shares of Bullish may be less liquid than the market for FPAC’s Class A ordinary shares was prior to consummation of the Business Combination and Bullish may not be able to meet the listing standards of the NYSE. In addition, with less funds available from the Trust Account, the working capital infusion from the Trust Account into Bullish’s business will be reduced. As a result, the proceeds will be greater in the event that no Public Shareholders exercise redemption rights with respect to their Public Shares for a pro rata portion of the Trust Account as opposed to the scenario in which Public Shareholders exercise the maximum allowed redemption rights.

 

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Q: How do I exercise my redemption rights?

A: If you are a public shareholder and wish to exercise your right to redeem your Public Shares, you must:

(i) (a) hold Public Shares or (b) hold Public Shares through Units and elect to separate your Units into the underlying Public Shares and Public Warrants prior to exercising your redemption rights with respect to the Public Shares; and

(ii) prior to 5:00 p.m., New York City time, on                  , 2022, the second business day prior to the Special Meeting, (a) submit a written request to Continental that FPAC redeem your Public Shares for cash and (b) deliver your Public Shares to Continental, physically or electronically through The Depository Trust Company (“DTC”).

The address of Continental is listed under the question “Whom do I call if I have questions about the Special Meeting or the Business Combination?” below.

Holders of Units must elect to separate the underlying Public Shares and Public Warrants prior to exercising redemption rights with respect to the Public Shares. If holders hold their Units in an account at a brokerage firm or bank, holders must notify their broker or bank that they elect to separate the Units into the underlying Public Shares and Public Warrants, or if a holder holds Units registered in its own name, the holder must contact Continental directly and instruct it to do so.

Any Public Shareholder will be entitled to request that their Public Shares (which would become shares of Class A Ordinary Shares of Bullish in the Initial Merger) be redeemed for a per-share price, payable in cash, equal to the aggregate amount then on deposit in the Trust Account, calculated as of two business days prior to the consummation of the Business Combination, including interest earned on the funds held in the Trust Account and not previously released to FPAC to pay its taxes, divided by the number of then-issued and outstanding Public Shares. For illustrative purposes, as of June 30, 2022 this would have amounted to approximately $10.00 per public share. However, the proceeds deposited in the Trust Account could become subject to the claims of FPAC’s creditors, if any, which could have priority over the claims of FPAC Shareholders, regardless of whether such Public Shareholders vote for or against the Business Combination Proposal. Therefore, the per-share distribution from the Trust Account in such a situation may be less than originally anticipated due to such claims. Your vote on any proposal other than the Business Combination Proposal will have no impact on the amount you will receive upon exercise of your redemption rights. It is anticipated that the funds to be distributed to Public Shareholders electing to redeem their Public Shares will be distributed promptly after the consummation of the Business Combination.

If you are a holder of Public Shares, you may exercise your redemption rights by submitting your request in writing to Continental at the address listed under the question “Whom do I call if I have questions about the Special Meeting or the Business Combination?” below.

Any request for redemption, once made by a holder of Public Shares, may be withdrawn at any time up to the deadline for submitting redemption requests, which is 5:00 p.m., New York City time, on                  , 2022, the second business day prior to the Special Meeting, and thereafter with FPAC’s consent, until the Closing. If you deliver your shares for redemption to Continental and later decide prior to the deadline for submitting redemption requests not to elect redemption, you may request that FPAC instruct Continental to return the shares to you (physically or electronically). You may make such request by contacting Continental at the phone number or address listed at the end of this section.

Any corrected or changed written exercise of redemption rights must be received by FPAC’s secretary prior to the deadline for submitting redemption requests. No request for redemption will be honored unless the holder’s stock has been delivered (either physically or electronically) to Continental by 5:00 p.m., New York City time, on                 , 2022.

 

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If you are a holder of Public Shares and you exercise your redemption rights, it will not result in the loss of any FPAC Warrants that you may hold.

Q: If I am a holder of Units, can I exercise redemption rights with respect to my units?

A: No. Holders of outstanding Units must elect to separate the Units into the underlying Public Shares and Public Warrants prior to exercising redemption rights with respect to the Public Shares. If you hold your Units in an account at a brokerage firm or bank, you must notify your broker or bank that you elect to separate the Units into the underlying Public Shares and Public Warrants, or if you hold Units registered in your own name, you must contact Continental, FPAC’s transfer agent, directly and instruct it to do so. If you fail to cause your Units to be separated and delivered to Continental, FPAC’s transfer agent, by 5:00 p.m., New York City time, on                 , 2022, the second business day before the special meeting, you will not be able to exercise your redemption rights with respect to your Public Shares.

Q: Will the number of warrants outstanding be adjusted based on the level of redemptions?

A: No, if you are a holder of Public Shares and you exercise your right to Redemption, such exercise will not result in the loss of any warrants that you may hold. As of July 31, 2022, FPAC’s warrants had a market value of $0.33 per warrant. FPAC has 20,000,000 Public Warrants outstanding, and irrespective of the number of shareholders who tender shares for redemption, Bullish Warrants with an assumed value of approximately US$6.6 million of warrants will be issued to the holders of the Public Warrants. The fact that the warrants will remain outstanding even if a shareholder decides to redeem could incentive shareholders to redeem their ordinary shares, which would lower the cash available in the Trust Account.

Public Warrants may only be exercised for a whole number of shares. No fractional shares will be issued upon exercise of the Public Warrants.

Q: How are fractional warrants treated upon separation and conversion of the FPAC Units?

A: No fractional warrants will be issued upon separation of the units and only whole warrants will trade. The warrants will expire five years after the completion of the Business Combination, at 5:00 p.m., New York City time, or earlier upon redemption or liquidation.

Upon the Closing, each outstanding FPAC Warrant shall automatically represent the right to purchase one Class A Ordinary Share of Bullish in lieu of one Ordinary Share of FPAC at a price of $11.50 per share, such right is exercisable beginning 30 days after the Closing of the Business Combination and continuing until expiration. A warrant holder may exercise its warrants only for a whole number of Class A Ordinary Shares. This means only a whole warrant may be exercised at a given time by a warrant holder. If, upon exercise of the warrants, a holder would be entitled to receive a fractional interest in a share, Bullish will, upon exercise, round down to the nearest whole number the number of Class A Ordinary Shares of Bullish to be issued to the warrant holder.

Q: How does the FPAC Board recommend that I vote?

A: The FPAC Board recommends that the FPAC Shareholders vote “FOR” the approval of the Business Combination Proposal, “FOR” the approval of the Merger Proposal, “FOR” the approval of the Organizational Documents Proposals and “FOR” the approval of the Adjournment Proposal. For more information regarding how the FPAC Board recommends that the FPAC Shareholders vote, see the section entitled “The Business Combination Proposal — FPAC’s Board of Directors’ Reasons for the Approval of the Business Combination” beginning on page 211.

Q: What are the FPAC’s Board of Directors’ reasons for the approval of the Business Combination?

A: The FPAC Board, with the assistance of its advisors, considered several factors, including the following, in its determination to approve the Business Combination with Bullish Global.

 

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In considering the commercial rationale, the FPAC Board considered that the market and demand for cryptocurrency has significantly grown and Bullish Global has invested in creating innovative products and services, which the Board believes makes Bullish well positioned to participate in this market. The FPAC Board considered Bullish Global’s range of planned products and services as well as its differentiated approach to providing liquidity on its exchange in periods of high volatility through the Liquidity Pools. In addition, Bullish Global has extensive capital resources, which the Board anticipates will provide it with a meaningful competitive advantage in attracting customers and trading volumes once operations commence. Additionally, Bullish Global’s commitment to operate in a regulated and compliant manner was an important factor to the FPAC Board in considering its commercial rationale for the Business Combination.

The FPAC Board considered that Bullish Global’s balance sheet indicates that it is in good financial health and has no debt or material contingent liabilities, as of July 2, 2021. The Board also believes that Bullish Global has a strong existing management team that has extensive experience in blockchain, cryptocurrency, and financial service technology, which will be strengthened through the addition of Thomas W. Farley who will join the Bullish executive team as its Chief Executive Officer. The Business Combination has received strong support from Bullish Global shareholders and had received significant private capital support from the PIPE Investors, including participation from existing investors in Bullish Global (all PIPE commitments expired under their terms on July 8, 2022).

The FPAC Board also considered the risks associated with the Business Combination, risks associated with Bullish Global’s business operations and technology, risks associated with the cryptocurrency industry as a whole, and the risks associated with the post-closing corporate governance.

The FPAC Board believes that the Business Combination Agreement is fair, advisable and in the best interests of FPAC and the FPAC Shareholders and is a product of arm’s-length negotiations among the parties. In addition, the FPAC Board obtained a fairness opinion from Duff & Phelps which stated the consideration being paid in the Business Combination was fair to FPAC from a financial point of view. The overall assumptions in the Duff & Phelps fairness opinion assumed the completion of the Business Combination as originally contemplated, including the concurrent PIPE Investment. The opinion’s conclusion and the Financial Projections (as defined therein) did not however assume any PIPE Investment. The factors considered by the FPAC Board are discussed in greater detail in the section entitled “The Business Combination Proposal — FPAC’s Board of Directors’ Reasons for Approval of the Business Combination.

Q: What material negative factors did the FPAC Board consider in connection with the Business Combination?

A: Although the FPAC Board believes that the Business Combination with Bullish will provide FPAC Shareholders with an opportunity to participate in a combined company with significant growth potential, the FPAC Board did consider certain potentially material negative factors in arriving at that conclusion, such as the risk that Bullish Global has no operating history in the highly competitive cryptocurrency industry and faces significant risk related to its business, strategy and operations, the risk that Bullish Global’s business will depend on the continued acceptance of cryptocurrency as an alternative to fiat currencies and the prices and volume of transactions in cryptocurrencies, the risk that the amount of equity to be issued to Bullish Global’s existing shareholders as well as the dual-class structure of Bullish’s Ordinary Shares will have the effect of concentrating voting power with the holders of Bullish’s Class B Ordinary Shares, which will limit an investor’s ability to influence the outcome of important transactions, including a change in control, the risk that FPAC Shareholders would not approve the Business Combination and the risk that significant numbers of FPAC Shareholders would exercise their redemption rights, among other risks, as set forth elsewhere in this proxy statement/prospectus.

Q: May the Sponsor and the other Initial Shareholders purchase Public Shares or warrants prior to the Special Meeting?

A: At any time prior to the Special Meeting, during a period when they are not then aware of any material non-public information regarding FPAC or its securities and subject to any applicable securities laws and

 

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regulations, the Initial Shareholders, Bullish and/or its affiliates may purchase shares and/or warrants from investors, or they may enter into transactions with such investors and others to provide them with incentives to acquire Public Shares or vote their Public Shares in favor of the Business Combination Proposal. The purpose of such share purchases and other transactions would be to increase the likelihood that (i) the proposals presented for approval at the Special Meeting are approved and/or (ii) FPAC has at least $5,000,001 in net tangible assets after giving effect to the payment of amounts that FPAC will be required to pay to redeeming shareholders upon consummation of the Business Combination. Any such stock purchases and other transactions may thereby increase the likelihood of obtaining shareholder approval of the Business Combination. This may result in the completion of FPAC’s Business Combination in a way that may not otherwise have been possible. While the exact nature of any such incentives has not been determined as of the date of this proxy statement/prospectus, they might include, without limitation, arrangements to protect such investors or holders against potential loss in value of their shares, including the granting of put options and the transfer to such investors or holders of shares or rights owned by the Initial Shareholders for nominal value.

Entering into any such arrangements may have a depressive effect on Public Shares. 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 and may therefore be more likely to sell the shares it owns, either prior to or immediately after the Special Meeting.

If such transactions are effected, the consequence could be to cause the Business Combination to be approved in circumstances where such approval could not otherwise be obtained. Purchases of Public Shares by the persons described above would allow them to exert more influence over the approval of the proposals to be presented at the Special Meeting and would likely increase the chances that such proposals would be approved. As of the date of this proxy statement/prospectus, there have been no such discussions and no agreements to such effect have been entered into with any such investor or holder.

Q: Who is entitled to vote at the Special Meeting?

A: The FPAC Board has established                 , 2022, as the record date for the Special Meeting. All holders of record of FPAC Shares as of the close of business on the record date are entitled to receive notice of, and to vote at, the Special Meeting, provided that those shares remain outstanding on the date of the Special Meeting. Attendance at the Special Meeting is not required to vote. See the section entitled “Questions and Answers About the Business Combination and the Special Meeting — How can I vote my shares without attending the Special Meeting?” beginning on page 27 for instructions on how to vote your FPAC Shares without attending the Special Meeting.

Q: How many votes do I have?

A: Each FPAC Shareholder of record is entitled to one vote for each FPAC Share held by such holder as of the close of business on the record date. As of the close of business on the record date, there were                  outstanding FPAC Shares.

Q: What constitutes a quorum for the Special Meeting?

A: A quorum is the minimum number of shareholders necessary to hold a valid meeting.

A quorum will exist at the Special Meeting with respect to each matter to be considered at the Special Meeting if the holders of outstanding FPAC Shares representing a majority of the issued shares entitled to vote at the Special Meeting are present virtually or represented by proxy at the Special Meeting.

Q: What will happen to FPAC as a result of the Business Combination?

A: FPAC will merge with and into Merger Sub 1, with Merger Sub 1 surviving as a wholly owned subsidiary of Bullish.

 

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Q: What is Bullish?

A: Bullish is a Cayman Islands exempted company formed for the purpose of effecting the Business Combination. Following the Business Combination, Bullish will be the holding company for its subsidiaries operating the Bullish Exchange.

Q: Who will be the management team of Bullish following the Business Combination?

A: Upon consummation of the Business Combination, Brendan Blumer will be appointed as Chairman of the Board and Thomas W. Farley will be appointed as Chief Executive Officer. Bullish has determined that this structure, with separate Chairman and Chief Executive Officer roles, is in the best interests of Bullish at this time. David W. Bonanno will be appointed as Chief Financial Officer upon completion of the Business Combination. For further information on these and other directors and officers of Bullish, see the section entitled “Management of Bullish following the Business Combination” beginning on page 248.

Q: What will happen to my FPAC Shares as a result of the Business Combination?

A: If the Business Combination is completed, each FPAC share will be cancelled and exchanged for one Class A Ordinary Share of Bullish. See the section entitled “The Business Combination Proposal — Consideration” beginning on page 174.

Q: Where will the Ordinary Shares of Bullish that FPAC Shareholders receive in the Business Combination be publicly traded?

A: Assuming the Business Combination is completed, the Class A Ordinary Shares of Bullish issued in connection with the Business Combination will be listed and traded on the NYSE under the ticker symbol “BULL” and the Bullish Warrants will be listed and traded on the NYSE under the ticker symbol “BULLW.”

Q: What happens if the Business Combination is not completed?

A: If the Business Combination Agreement is not adopted by FPAC Shareholders or if the Business Combination is not completed for any other reason by the Outside Date (as defined in the Business Combination Agreement), then FPAC will seek to consummate an alternative initial business combination prior to March 7, 2023. If FPAC does not consummate an initial business combination by March 7, 2023, it will cease all operations except for the purpose of winding up and redeem its Public Shares and liquidate the Trust Account, in which case its Public Shareholders may only receive approximately $10.00 per share and FPAC’s Warrants will expire worthless.

Q: How can I vote my shares at the Special Meeting?

A: FPAC Shares held directly in your name as the shareholder of record of such FPAC Shares as of the close of business on                 , 2022, the record date, may be voted electronically at the Special Meeting. If you choose to attend the Special Meeting, you will need to visit https://www.cstproxy.com/farpeak/2022 and enter the control number found on your proxy card, voting instruction form or notice that you previously received. You may vote during the Special Meeting by following the instructions available on the meeting website during the meeting. If you are a beneficial owner of FPAC Shares but not the shareholder of record of such FPAC Shares, you will also need to obtain a legal proxy for the meeting provided by your bank, broker, or nominee. Please note that if your shares are held in “street name” by a broker, bank or other nominee and you wish to vote at the Special Meeting, you will not be permitted to vote electronically at the Special Meeting unless you first obtain a legal proxy issued in your name from the record owner. To request a legal proxy, please contact your broker, bank or other nominee holder of record. It is suggested you do so in a timely manner to ensure receipt of your legal proxy prior to the Special Meeting.

 

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Q: How can I vote my shares without attending the Special Meeting?

A: If you are a shareholder of record of FPAC Shares as of the close of business on                 , 2022, the record date, you can vote by proxy via the internet, by telephone or by mail by following the instructions provided in the enclosed proxy card. Please note that if you hold your shares in “street name,” which means your shares are held of record by a broker, bank or nominee, you should contact your broker to ensure that votes related to the shares you beneficially own are properly counted. In this regard, you must provide the broker, bank or nominee with instructions on how to vote your shares, or otherwise follow the instructions provided by your bank, brokerage firm or other nominee.

Q: What is a proxy?

A: A proxy is a legal designation of another person to vote the stock you own. If you are a shareholder of record of FPAC Shares as of the close of business on the record date, and you vote by phone, by internet or by signing, dating and returning your proxy card in the enclosed postage-paid envelope, you designate two of FPAC’s officers as your proxies at the Special Meeting, each with full power to act without the other and with full power of substitution.

Q: What is the difference between holding shares as a shareholder of record and as a beneficial owner?

A: If your FPAC Shares are registered directly in your name with Continental you are considered the shareholder of record with respect to those shares, and access to proxy materials is being provided directly to you. If your shares are held in a stock brokerage account or by a bank or other nominee, then you are considered the beneficial owner of those shares, which are considered to be held in street name. Access to proxy materials is being provided to you by your broker, bank or other nominee who is considered the shareholder of record with respect to those shares.

Direct holders (shareholders of record). For FPAC Shares held directly by you, please complete, sign, date and return each proxy card (or cast your vote by telephone or internet as provided on each proxy card) or otherwise follow the voting instructions provided in this proxy statement/prospectus in order to ensure that all of your FPAC Shares are voted.

Shares in “street name.” For FPAC Shares held in “street name” through a bank, brokerage firm or other nominee, you should follow the procedures provided by your bank, brokerage firm or other nominee to vote your shares.

Q: If an FPAC Shareholder gives a proxy, how will the FPAC Shares covered by the proxy be voted?

A: If you provide a proxy, regardless of whether you provide that proxy by phone, via the internet or by completing and returning the applicable enclosed proxy card, the individuals named on the enclosed proxy card will vote your FPAC Shares in the way that you indicate when providing your proxy in respect of the FPAC Shares you hold. When completing the internet or telephone processes or the proxy card, you may specify whether your FPAC Shares should be voted for or against, or should be abstained from voting on all, some or none of the specific items of business to come before the Special Meeting.

Q: How will my FPAC Shares be voted if I return a blank proxy?

A: If you sign, date and return your proxy and do not indicate how you want your FPAC Shares to be voted, then your FPAC Shares will be voted “FOR” the approval of the Business Combination Proposal, “FOR” the approval of the Merger Proposal, “FOR” the approval of the Organizational Documents Proposals and “FOR” the approval of the Adjournment Proposal, if it is submitted to a vote.

 

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Q: Can I change my vote after I have submitted my proxy?

A: Yes. If you are a shareholder of record of FPAC Shares as of the close of business on the record date, whether you vote by telephone, internet or mail, you can change or revoke your proxy on or before                , 2022, in one of the following ways:

 

   

submit a new proxy card bearing a later date;

 

   

vote again by telephone or the internet at a later time;

 

   

give written notice of your revocation to FPAC’s Corporate Secretary, which notice must be received by FPAC’s Corporate Secretary prior to the vote at the Special Meeting; or

 

   

vote electronically at the Special Meeting by visiting https://www.cstproxy.com/farpeak/2022 and entering the control number found on your proxy card, voting instruction form or notice that you previously received. Please note that your attendance at the Special Meeting will not alone serve to revoke your proxy.

If your shares are held in “street name” by your broker, bank or another nominee as of the close of business on the record date, you must follow the instructions of your broker, bank or other nominee to revoke or change your voting instructions.

Q: Where can I find the voting results of the Special Meeting?

A: The preliminary voting results are expected to be announced at the Special Meeting. In addition, within four business days following certification of the final voting results, FPAC will file the final voting results of its Special Meeting with the SEC in a Current Report on Form 8-K.

Q: Are FPAC Shareholders able to exercise dissenters’ rights or appraisal rights with respect to the matters being voted upon at the Special Meeting?

A: No. As a matter of Cayman Island law, dissenters to a merger often have appraisal rights, including the right to be paid the fair market value of their shares, which, if necessary, may ultimately be determined by the court. However, with regard to the Business Combination Agreement, section 239 of the Companies Act provides that dissent rights are not available in circumstances where an open market exists for the shares on a recognized exchange, which is the case, or the consideration under the merger consists of shares listed on a recognized exchange, which will ultimately be the case following consummation of the Business Combination.

FPAC Shareholders may vote against the Business Combination Proposal if they are not in favor of the adoption of the Business Combination Agreement.

Q: Are there any risks that I should consider as an FPAC Shareholder in deciding how to vote or whether to exercise my redemption rights?

A: Yes. You should read and carefully consider the risk factors set forth in the section entitled “Risk Factors” beginning on page 75. You also should read and carefully consider the risk factors of FPAC and Bullish contained in the documents that are incorporated by reference herein.

Q: What happens if I sell my FPAC Shares before the Special Meeting?

A: The record date for FPAC Shareholders entitled to vote at the Special Meeting is earlier than the date of the Special Meeting. If you transfer your FPAC Shares before the record date, you will not be entitled to vote at the Special Meeting. If you transfer your FPAC Shares after the record date but before the Special Meeting, you will, unless special arrangements are made, retain your right to vote at the Special Meeting.

 

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Q: What are the material U.S. federal income tax consequences of the Business Combination to me?

A: The U.S. federal income tax consequences of the Business Combination are discussed in more detail in the section entitled “Material U.S. Federal Income Tax Consequences.” The discussion of the material U.S. federal income tax consequences contained in this proxy statement/prospectus is intended to provide only a general discussion and is not a complete analysis or description of all potential U.S. federal income tax consequences of the Business Combination’s foreign, state or local tax laws.

TAX MATTERS ARE COMPLICATED, AND THE TAX CONSEQUENCES OF THE BUSINESS COMBINATION WILL DEPEND ON THE FACTS OF YOUR OWN SITUATION. YOU SHOULD CONSULT YOUR OWN TAX ADVISOR AS TO THE SPECIFIC TAX CONSEQUENCES OF THE BUSINESS COMBINATION TO YOU IN YOUR PARTICULAR CIRCUMSTANCES.

Q: When is the Business Combination expected to be completed?

A: Subject to the satisfaction or waiver of the conditions described in the section entitled “The Business Combination Agreement — Conditions to the Consummation of the Transaction” beginning on page 131, including the adoption of the Business Combination Agreement by the FPAC Shareholders at the Special Meeting, the Business Combination is expected to close in the third quarter of 2022. However, it is possible that factors outside the control of both companies could result in the Business Combination being completed at a later time, or not being completed at all.

Q: Who will solicit and pay the cost of soliciting proxies?

A: FPAC has engaged a professional proxy solicitation firm, Morrow Sodali LLC (“Morrow”), to assist in soliciting proxies for the Special Meeting. FPAC has agreed to pay Morrow a fee of $40,000, plus disbursements. FPAC will reimburse Morrow for reasonable out-of-pocket expenses and will indemnify Morrow and its affiliates against certain claims, liabilities, losses, damages and expenses. FPAC will also reimburse banks, brokers and other custodians, nominees and fiduciaries representing beneficial owners of FPAC ordinary shares for their expenses in forwarding soliciting materials to beneficial owners of our ordinary shares and in obtaining voting instructions from those owners. FPAC’s management team may also solicit proxies by telephone, by facsimile, by mail, on the internet or in person. They will not be paid any additional amounts for soliciting proxies.

Q: What are the conditions to completion of the Business Combination?

A: Consummation of the Transactions is subject to customary closing conditions, including approval by the FPAC Shareholders and Bullish Global or certain regulatory approvals from governmental authorities. The Business Combination Agreement also contains other conditions, including, among others: (i) the Contribution Agreement and Master Services Agreement being in full force and effect and no material breach of such agreements being continuing and uncured; (ii) Bullish’s initial listing application with the NYSE having been conditionally approved and the Class A Ordinary Shares of Bullish to be issued pursuant to the Business Combination Agreement having been approved for listing on the NYSE; (iii) FPAC having at least $5,000,001 of net tangible assets following the exercise of redemption rights by the holders of FPAC’s Class A ordinary shares issued in FPAC’s Initial Public Offering; (iv) the effectiveness of the Form F-4 and the absence of any issued or pending stop order by the SEC; and (v) Bullish having been approved by the GFSC as a Controller (as defined in Section 131(3) of the Gibraltar Financial Services Act 2019) with respect to the DLT license held by Bullish Gibraltar. As of the date of this proxy statement/prospectus, Bullish has obtained the approval for Bullish as a Controller with respect to the DLT license.

Q: What should I do now?

A: You should read this proxy statement/prospectus carefully in its entirety, including the annexes, and return your completed, signed and dated proxy card(s) by mail in the enclosed postage-paid envelope or submit your

 

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voting instructions by telephone or via the internet as soon as possible so that your FPAC Shares will be voted in accordance with your instructions.

Q: What should I do if I receive more than one set of voting materials?

A: Shareholders may receive more than one set of voting materials, including multiple copies of this proxy statement/prospectus and multiple proxy cards or voting instruction cards. For example, if you hold your shares in more than one brokerage account, you will receive a separate voting instruction card for each brokerage account in which you hold shares. If you are a holder of record and your shares are registered in more than one name, you will receive more than one proxy card. Please complete, sign, date and return each proxy card and voting instruction card that you receive in order to cast a vote with respect to all of your FPAC Shares.

Q: Whom do I call if I have questions about the Special Meeting or the Business Combination?

A: If you have questions about the Special Meeting or the Business Combination, or desire additional copies of this proxy statement/prospectus or additional proxies, you may contact:

Morrow Sodali LLC

470 West Avenue, Suite 3000

Stamford, CT 06902

Tel: (800) 662-5200

Banks and brokers call collect: (203) 658-9400

Email: FPAC.info@investor.morrowsodali.com

You also may obtain additional information about FPAC from documents filed with the SEC by following the instructions in the section entitled “Where You Can Find More Information.” If you are a holder of Public Shares and you intend to seek redemption of your shares, you will need to deliver your Public Shares (either physically or electronically) to Continental Stock Transfer & Trust Company, FPAC’s transfer agent, at the address below prior to 5:00 p.m., New York City time, on                  , 2022, the second business day before the Special Meeting. If you have questions regarding the certification of your position or delivery of your stock, please contact:

Mark Zimkind

Continental Stock Transfer & Trust Company

One State Street Plaza, 30th Floor

New York, NY 10004

Email: mzimkind@continentalstock.com

 

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SUMMARY TERM SHEET

This summary term sheet, together with the sections entitled “Questions and Answers About the Proposals” and “Summary,” summarizes certain information contained in this proxy statement/prospectus, but does not contain all of the information that is important to you. You should read this proxy statement/prospectus, including the attached Annexes and the accompanying financial statements of FPAC and Bullish Global, carefully and in its entirety for a more complete understanding of the matters to be considered at the Special Meeting.

 

   

FPAC is a special purpose acquisition company formed for the purpose of effecting a merger, capital stock exchange, asset acquisition, stock purchase or similar business combination with one or more businesses.

 

   

On December 7, 2020, FPAC completed the Initial Public Offering of 55,000,000 Units and on December 21, 2020, the underwriters exercised their overallotment option in part, resulting in an additional 5,000,000 Units issued, both at a price of $10.00 per Unit, generating proceeds to FPAC of $600,000,000. Each Unit consisted of one Class A ordinary shares and one-third of one redeemable warrant, with each whole warrant exercisable for one Class A ordinary share at a price of $11.50 per share. Simultaneously with the closing of the Initial Public Offering, FPAC closed the private sale of an aggregate of 7,000,000 Private Placement Warrants at $1.50 per warrant generating gross proceeds, before expenses, of $10,500,000 (and in January 2022, March 2022 and May 2022, pursuant to commitments made at the time of the Initial Public Offering, FPAC completed three sales of Private Placement Warrants, each for an additional 66,666 Private Placement Warrants at $1.50 per warrant for aggregate gross proceeds of approximately $100,000). The Private Placement Warrants are identical to the warrants included in the Units sold in the Initial Public Offering, except that, so long as they are held by their initial purchasers or their permitted transferees, the Private Placement Warrants (i) will not be redeemable by FPAC, (ii) may not, subject to certain limited exceptions, be transferred, assigned or sold until 30 days after FPAC completes its initial business combination and (iii) may be exercised by the holders on a cashless basis. For more information regarding the Private Placement Warrants, please see the section entitled “Description of Bullish Securities.”

 

   

Bullish Global, through its subsidiary, Bullish Gibraltar operates an innovative regulated cryptocurrency trading platform and aims to become a leading cryptocurrency-focused fintech platform that combines the benefit of technological innovation and blockchain expertise with traditional financial services. See Business of Bullish,” “Bullish Global’s Management’s Discussion and Analysis of Financial Condition and Results of Operations,” and “Management after the Business Combination.”

 

   

Pursuant to the Business Combination Agreement, the parties have agreed that, on the terms and subject to the conditions set forth therein, at the Closing, (i) in connection with the Initial Merger, FPAC will merge with and into Merger Sub 1, with Merger Sub 1 as the surviving entity and, after giving effect to such Initial Merger, continuing as a wholly owned subsidiary of Bullish, and (ii) following the Initial Merger, in connection with the Acquisition Merger, Merger Sub 2 will merge with and into Bullish Global, with Bullish Global as the surviving entity in the merger, and, after giving effect to such Acquisition Merger, continuing as a wholly owned subsidiary of Bullish.

 

   

Unless waived by the parties to the Business Combination Agreement, consummation of the Transactions is subject to customary closing conditions, including approval by FPAC’s and Bullish Global’s shareholders and certain regulatory approvals from governmental authorities. The Business Combination Agreement also contains other conditions, including, among others: (i) the Contribution Agreement and Master Services Agreement being in full force and effect and no material breach of such agreements being continuing and uncured; (ii) Bullish’s initial listing application with the NYSE having been conditionally approved and the Class A Ordinary Shares of Bullish to be issued pursuant to the Business Combination Agreement having been approved for listing on the NYSE; and

 

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(iii) Bullish having been approved by the GFSC as a Controller (as defined in Section 131(3) of the Gibraltar Financial Services Act 2019) with respect to the DLT license held by Bullish Gibraltar. As of the date of this proxy statement/prospectus, Bullish has obtained the approval for Bullish as a Controller with respect to the DLT license.

 

   

For more information about the closing conditions to the Business Combination, please see the section entitled “The Business Combination Proposal — The Business Combination — Conditions to Closing of the Business Combination.”

 

   

The Business Combination Agreement may be terminated at any time prior to the consummation of the Mergers (whether before or after the required FPAC Shareholder vote has been obtained) by written consent of FPAC and Bullish Global and in certain other circumstances, including, but not limited to if: (i) the conditions to the closing of the Initial Merger have not been satisfied by the Outside Date, and such delay is not due to the breach of the Business Combination Agreement by the party seeking to terminate, (ii) a governmental entity shall have issued an order or taken any other action permanently restraining, enjoining or otherwise prohibiting the transactions, and such order or other action has become final and non-appealable and (iii) the Business Combination and other related proposals are not approved by FPAC Shareholders at the duly convened meeting of FPAC Shareholders. For more information about the termination rights under the Business Combination Agreement, please see the section entitled “The Business Combination Proposal — The Business Combination Agreement — Termination.

 

   

Subject to, and in accordance with, the terms and conditions of the Business Combination Agreement, in connection with the Initial Merger, (i) every issued and outstanding Class A and Class B ordinary share of FPAC will convert automatically into one Class A Ordinary Share of Bullish, (ii) each issued and outstanding FPAC Warrant will convert automatically into one Bullish Warrant and (iii) each issued and outstanding Unit will convert automatically into one Class A Ordinary Share of Bullish and one-third of one Bullish Warrant.

 

   

Subject to, and in accordance with, the terms and conditions of the Business Combination Agreement, in connection with the Acquisition Merger, (i) (a) each outstanding Bullish Global Class B preference share will automatically convert into one Bullish Global Class C common share and (b) thereafter each issued and outstanding Bullish Global Class C common share will convert automatically into such number of Class A Ordinary Shares of Bullish that is equal to the Exchange Ratio (as described below and more fully defined in the Business Combination Agreement), (ii) each issued and outstanding Bullish Global Class A common share will convert automatically into such number of Class B Ordinary Shares of Bullish that is equal to the Exchange Ratio (see the section entitled “The Business Combination Proposal — Consideration” beginning on page 174), (iii) each Bullish Global restricted stock unit award will cease to represent the right to acquire Bullish Global Class C common shares and will be cancelled in exchange for a right to acquire a number of Class A Ordinary Shares of Bullish under the 2022 Omnibus Incentive Plan equal to the product of (a) the number of Bullish Global Class C common shares subject to such Bullish Global restricted stock unit award as of immediately prior to the effective time of the Acquisition Merger and (b) the Exchange Ratio, and (iv) each Bullish Global option award will cease to represent the right to purchase Bullish Global Class C common shares and will be cancelled in exchange for an option to purchase a number of Class A Ordinary Shares of Bullish under the 2022 Omnibus Incentive Plan equal to the product of (a) the number of Bullish Global Class C common shares subject to such Bullish Global option award as of immediately prior to the effective time of the Acquisition Merger, and (b) the Exchange Ratio, at an exercise price per share equal to (x) the exercise price per share of such Bullish Global option award, divided by (y) the Exchange Ratio. The Class A Ordinary Shares of Bullish will have voting rights of one vote per share and the Class B Ordinary Shares of Bullish will have voting rights of ten votes per share.

 

   

Concurrently with the execution and delivery of the Business Combination Agreement, the PIPE Investors had entered into Subscription Agreements pursuant to which the PIPE Investors had

 

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committed (the “PIPE Investment”) to subscribe for and purchase, for an aggregate purchase price of $300,000,000, Class A Ordinary Shares of Bullish (at $10.00 per share). Under their terms, the PIPE Subscription Agreements expired and terminated on July 8, 2022. As a result, the Business Combination will proceed without the PIPE Investment. No efforts were made by FPAC or Bullish Global management to extend the PIPE Investment expiration date. The PIPE Investment was never a closing condition of the Business Combination. One PIPE Investor, referred to as the Anchor Subscriber, who had subscribed for 7,500,000 Class A Ordinary Shares of Bullish for an aggregate purchase price of $75,000,000, had also entered into a Securities Purchase Agreement with Bullish and Far Peak LLC pursuant to which the Anchor Subscriber would have purchased, for $1.00 per Warrant, from the Sponsor and the BR Investors, a total of 3,000,000 outstanding Private Placement Warrants. Due to the expiration of the Securities Purchase Agreement under its terms on July 8, 2022, the Anchor Subscriber will no longer be purchasing warrants from the Sponsor or the BR Investors.

The following diagram illustrates the ownership of FPAC and Bullish Global, as of the date of this proxy statement/prospectus.

LOGO

 

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The following diagram illustrates the ownership of Bullish after the Closing of the Business Combination.

LOGO

 

   

The FPAC Board considered several factors in its determination to approve the Business Combination with Bullish Global. In considering the commercial rationale, the FPAC Board considered that the market and demand for cryptocurrency has significantly grown and Bullish Global has invested in creating innovative products and services which the Board believes makes Bullish well positioned to participate in this market. The FPAC Board considered Bullish Global’s range of planned products and services as well as its differentiated approach to providing liquidity on its exchange in periods of high volatility through the Liquidity Pools. In addition, Bullish Global has extensive capital resources which the Board anticipates will provide it with a meaningful competitive advantage in attracting customers and trading volumes once operations commence. Additionally, Bullish Global’s commitment to operate in a regulated and compliant manner was an important factor to the FPAC Board in considering its commercial rationale for the Business Combination. The FPAC Board assessed Bullish Global’s balance sheet, concluding that it is in good financial health and has no debt or material contingent liabilities, as of July 2, 2021. The FPAC Board also believes that Bullish Global has a strong existing management team that has extensive experience in blockchain, cryptocurrency, and financial service technology, which will be strengthened through the addition of Thomas W. Farley who will join the Bullish executive team as its Chief Executive Officer. The Business Combination in general has strong sponsorship from its shareholders and had received significant private capital commitments from the PIPE Investors, including participation from existing investors in Bullish Global (all PIPE commitments expired under their terms on July 8, 2022).

 

   

The FPAC Board also considered, in its deliberations, the risks associated with the Business Combination, the risks associated with Bullish Global’s business operations and technology, the risks associated with the cryptocurrency industry as a whole, the risks associated with the Launch of the Bullish Exchange, and the risks associated with the post-closing corporate governance. The FPAC Board believes that the Business Combination Agreement is fair, advisable and in the best interests of FPAC and the FPAC Shareholders and is a product of arm’s-length negotiations among the parties. In addition, the FPAC Board obtained a fairness opinion from Duff & Phelps which stated the consideration being paid in the Business Combination was fair to FPAC from a financial point of view.

 

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Pursuant to FPAC’s Memorandum and Articles of Association, a Public Shareholder may request that FPAC redeem all or a portion of such shareholder’s Public Shares for cash if the Business Combination is consummated. Holders of Units must elect to separate the Units into the underlying Public Shares and warrants prior to exercising redemption rights with respect to the Public Shares. If holders hold their Units through a broker, bank or other nominee, holders must notify their broker, bank or other nominee that they elect to separate the Units into the underlying Public Shares and warrants, or if a holder holds Units registered in its own name, the holder must contact Continental Stock Transfer & Trust Company, N.A., FPAC’s transfer agent, directly and instruct it to do so. Public Shareholders may elect to redeem their Public Shares even if they vote “FOR” the Business Combination Proposal or any other proposal. If the Business Combination is not consummated, the Public Shares will be returned to the respective holder, broker, bank or other nominee. If the Business Combination is consummated, and if a Public Shareholder properly exercises its right to redeem all or a portion of the Public Shares that it holds, including by timely delivering its shares to FPAC’s transfer agent, FPAC will redeem such Public Shares for a per-share price, payable in cash, equal to the pro rata portion of the Trust Account, calculated as of two business days prior to the consummation of the Business Combination, including interest (net of taxes payable). For illustrative purposes, as of June 30, 2022, this would have amounted to approximately $10.00 per outstanding public share. If a Public Shareholder properly exercises its redemption rights in full, then it will be electing to exchange all of its Public Shares for cash and will not own any Public Shares of the post-Business Combination company. Holders of FPAC’s outstanding warrants do not have redemption rights in connection with the Business Combination. Please see the section entitled “Extraordinary General Meeting of FPAC Shareholders — Redemption Rights.”

 

   

In addition to voting on the proposal to approve and adopt the Business Combination Agreement and approve the Business Combination (see the “Business Combination Proposal”), at the Special Meeting, FPAC Shareholders will be asked to vote upon:

 

   

the Merger Proposal;

 

   

the Organizational Documents Proposals ; and

 

   

a proposal to adjourn the Special Meeting to a later date or dates, if necessary, to permit further solicitation and vote of proxies in the event there are insufficient votes for, or for any other reason in connection with, the approval of one or more of the other proposals at the Special Meeting.

 

   

See “The Business Combination Proposal,” The Merger Proposal,” and “The Adjournment Proposal.” The Business Combination is conditioned on the approval of the Business Combination Proposal and the Merger Proposal. If FPAC Shareholders do not approve the Business Combination Proposal and the Merger Proposal or if any other proposal is not approved by FPAC Shareholders and FPAC and Bullish Global do not waive the applicable closing condition under the Business Combination Agreement, then the Business Combination may not be consummated. The six separate proposals in the Organizational Documents Proposals are conditioned on the approval of the Business Combination Proposal and the Merger Proposal at the Special Meeting. If the Business Combination Proposal and the Merger Proposal are not approved, the Organizational Documents Proposals will not be presented at the Special Meeting. The Adjournment Proposal is not conditioned on the approval of any other proposal. Each of these proposals is more fully described in this proxy statement/prospectus, which each shareholder is encouraged to read carefully and in its entirety.

 

   

The Business Combination, including Bullish’s business following the Business Combination, involves numerous risks. For more information about these risks, please see the section entitled “Risk Factors.”

 

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SUMMARY

This summary highlights selected information included in this document and does not contain all of the information that may be important to you. You should read this entire document and its annexes and the other documents to which FPAC and Bullish Global refer before you decide how to vote with respect to the proposals to be considered and voted on at the Special Meeting. Each item in this summary includes a page reference directing you to a more complete description of that item.

Overview of Bullish

The Bullish mission is to empower people to create a better financial future for themselves through technology and tools that make earning, investing and transacting more rewarding. Bullish aims to be a leading cryptocurrency-focused fintech platform that combines the benefits of technological innovation and blockchain expertise with traditional financial services.

Bullish’s blockchain-based cryptocurrency trading platform (the “Bullish Exchange” or “Exchange”) is designed to increase market integrity by rewarding customers who provide the liquidity and network effects responsible for value creation. The Bullish Exchange has been designed as a regulated, externally verifiable exchange, operating a high-performance central-limit-order-book matching engine combined with DeFi-derived Liquidity Pools to enable automated market-making capabilities and yield earning opportunities. This unique Hybrid Order Book is underpinned by Liquidity Pools for each trading pair (described herein under “Business of Bullish — Key Services and Innovations) and this new breed of exchange is intended to reward asset holders while providing liquidity to the asset pairs the Exchange offers for trading.

The Exchange, domiciled in Gibraltar, will be central to Bullish’s operations and to the development of future products and services. The Exchange commenced its Full Launch on December 21, 2021. The Exchange has the following operating features:

 

   

a robust, institutional-caliber regulatory compliance framework, licensed and regulated by the Gibraltar Financial Services Commission’s Distributed Ledger Technology (“DLT”) Regulatory Framework;

 

   

a Hybrid Order Book that integrates a traditional central limit order book and automated market making liquidity, and which will be powered by proprietary Liquidity Pools that act as market makers and underpin trading pairs on the Exchange;

 

   

a layered custody solution that (i) will combine offline cold storage utilizing complex, multi-sig, white-list only transfer processes with self-managed hot wallets; (ii) will reduce risk concentration utilizing multiple segregated wallets; and (iii) is designed so that sensitive and critical custody components and asset-based operations are cryptographically verified, signed and attested;

 

   

an innovative blockchain-aided platform design that will require significant actions on the Exchange to be recorded on a blockchain, cryptographically validating that each such action will happen at the right time and has been appropriately authorized resulting in a verifiable ledger;

 

   

operational support services from across the Bullish Group, with operating subsidiaries in Gibraltar, the Cayman Islands, the United States, Hong Kong and Singapore, and initially from Block.one or its subsidiaries (the “Block.one Group”) pursuant to the Master Services Agreement; and

 

   

access to more than 360 staff with more than 200 technologists including engineering, product, exchange operations and security, as of July 31, 2022. Bullish and the Exchange continue to selectively recruit across diverse roles, with a focus on engineering, product, security, operations, compliance, sales and support functions.

 

 

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Bullish believes the Bullish Exchange’s regulatory infrastructure, technology stack, and scale of human capital will be difficult for many DeFi and centralized competitors to replicate, and that there are several unique features reinforcing this:

 

   

the Exchange will be powered by its proprietary Liquidity Pools that will underpin trading pairs on the Exchange;

 

   

the Liquidity Pools can be used to automate portfolio allocation and market-making functions; standard Liquidity Pools spread liquidity across all price points and aim to ensure a constant balance in terms of the relative value of the assets contributed, notwithstanding fluctuations in their value, while range-bound Liquidity Pools concentrate liquidity within a specified price range;

 

   

the automated market maker included in the proprietary Hybrid Order Book is designed to provide liquidity at prices calculated deterministically, based on the size of the relevant Liquidity Pool and the ratio of assets in it;

 

   

Bullish will continue to draw materially on its own balance sheet of digital assets and U.S. dollars of approximately US$3.9 billion as of July 31, 2022 (valued using third-party company reference prices) to facilitate liquidity on the Exchange. Bullish intends to continue to contribute such assets to Liquidity Pools alongside customers to provide competitive order book depth for participants, varying its participation levels as it deems appropriate over time. Bullish’s participation in the Exchange is made through Bullish Treasury, a separate treasury unit operated by Bullish Capital. Bullish Treasury is registered as a customer of the Exchange and participates in the Liquidity Pool like other eligible customers of the Exchange; and

 

   

eligible customers will be offered the opportunity to contribute assets into the Liquidity Pools alongside Bullish Treasury funds and allow them to earn a passive income in doing so.

Bullish believes that these features will help create deep and predictable liquidity on the Bullish Exchange, reduce volatility in its offered trading pairs, and do so within a regulated environment reflective of the increasing level of global cryptocurrency regulation. For a further description of the Liquidity Pools and the Hybrid Order Book, see “Business of Bullish — Key Services and Innovations.

Bullish Treasury is a separate treasury unit for managing Bullish’s financial capital. In addition to contributing certain balance sheet digital assets to Liquidity Pools to facilitate liquidity and trading on the Bullish Exchange, Bullish Treasury may raise financing and/or deploy capital into other commercial opportunities, acquisitions and investments in the blockchain and financial services industries. See “Business of Bullish — Bullish Treasury” and “Business of Bullish — Further Growth Opportunities.”

The Bullish Exchange has a digital assets offering of BTC, ETH, EOS, LINK, LTC and USDC, and is designed to appeal to (i) institutional customers such as traders, arbitrageurs, long-term holders, fund managers and corporate treasurers; and (ii) advanced retail customers who manage their own portfolios of digital assets. The Exchange intends to broaden its digital asset offerings in the future, subject to applicable regulatory requirements, based on customer demand, and to expand targeted customer segments to include mass market retail as the business achieves greater scale and adoption.

The Bullish leadership team comprises of financial services, blockchain and technology experts and, following the Business Combination, Bullish will be led by incoming Chief Executive Officer, Thomas W. Farley, FPAC’s Chairman and Chief Executive Officer and the former President of the New York Stock Exchange.

As of the date of this proxy statement/prospectus, Bullish Exchange has been operational since Full Launch for approximately nine months and has experienced stable system operations, with approximately 13 million completed trades and de minimis unscheduled downtime.

 

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Since the Launch of the Bullish Exchange, total trading volumes on the platform have reached over $100 billion, hitting a peak of over $2.5 billion in 24-hour total trading volume. The average daily trading volume for each full month of 2022 is as follows:

January - $120 million;

February - $213 million;

March - $171 million;

April - $161 million;

May - $548 million;

June - $857 million; and

July - $651 million

The average of transaction fees and trading spreads to trading volume earned for each full month of 2022 is as follows:

January - 10 basis points (0.10%);

February - 12 basis points (0.12%);

March - 15 basis points (0.15%);

April - 11 basis points (0.11%);

May - 13 basis points (0.13%);

June - 14 basis points (0.14%); and

July - 13 basis points (0.13%).

As of July 31, 2022, Bullish had cash and cash equivalents of $1 billion (excluding restricted cash and customer segregated cash), which it believes is sufficient to fund ongoing liquidity needs for at least the next twelve months.

During the months of May through July 2022, market volatility in the prices of digital assets has been elevated due to a variety of factors, including, but not limited to, the macroeconomic environment (high inflation and rising interest rates) as well as the ‘crypto credit crisis’ brought on by the collapse and bankruptcy of a small number of key players in the sector (cryptocurrency Luna collapse, hedge fund Three Arrows Capital default on loans and filing for bankruptcy, crypto-lending platform Celsius freezing all withdraws, cryptocurrency lender Voyager Digital filing for bankruptcy, among others). Bullish does not have counterparty exposure to any of the foregoing firms affected by the recent crypto credit crisis nor have its plans for business operations been materially adversely impacted. Moreover, we believe that as a result of Bullish’s regulated status, well-capitalized balance sheet and institutional focus, the Exchange experienced increased volumes and growing market share during these recent months. Furthermore, Bullish’s institutional focus has insulated Bullish from the impacts of recently reduced retail participation in the crypto space.

The recent increase in market volatility in the prices of digital assets transacted on Bullish Exchange has contributed to an increase in average daily trading volume on the platform. This behavior is in line with our general expectation that trading volume is positively correlated with volatility in digital asset prices. This increased volume also has had a positive impact on the trading fees/spreads generated by the Exchange from Trading Services and on the portion received by Liquidity Pool participants. Volatility in market prices also impacts the value of digital assets on Bullish’s balance sheet, including its contribution to the Liquidity Pools. Digital asset prices have declined since April 2022, including certain digital assets held by Bullish such as

 

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BTC, ETH and EOS. As of July 31, 2022, Bullish Capital has contributed (net of allocations between trading pairs) approximately $3 billion in fiat and digital assets to the Liquidity Pools, with Bullish Capital having been the primary Liquidity Pool contributor with only de minimis contributions from third-party customers. Bullish Exchange continues to develop and enhance its operations, product offerings and strategic focus in response to changing customer demand and market conditions.

In April 2022 Bullish Exchange added LTC/USD, LINK/USD, LTC/BTC and LINK/BTC to its digital asset offering, and plans to continue offering additional trading pairs on its platform throughout 2022. In May and June 2022 Bullish Exchange suspended its margin lending product for the BTC/USD, ETH/USD and ETH/BTC trading pairs as a result of lower-than-expected demand; it has since launched a pilot program that offers eligible institutional clients margin credit lines and may continue to expand this program further should demand warrant. Bullish continues to expect that interest income from margin lending activity will represent an important revenue stream for its business, but Bullish Exchange may not be successful with its new pilot program or other attempts to generate margin lending revenue.

On September 15, 2022, Ethereum transitioned from a proof-of-work to proof-of-stake consensus mechanism in what is called the Ethereum Merge (the “Ethereum Merge”). Bullish supports the proof-of-stake version of Ethereum and for ETH tokens that remained on Bullish’s Exchange platform during the Ethereum Merge, they continued to be tradeable in their new proof-of-stake form. For customers that wished to access any potential ETH fork token(s) post the Ethereum Merge (e.g. EthereumPoW), customers were notified to withdraw their ETH from the Bullish Exchange platform prior to the Ethereum Merge and specifically, before the time that Bullish disabled deposits and withdrawals in anticipation of the Ethereum Merge. Bullish resumed deposits and withdrawals for ETH on September 16, 2022.

The Bullish Exchange commenced the Full Launch on December 21, 2021. The Bullish Exchange obtained the DLT license (license number FSC1038FSA) in November 2021. The Exchange is available to selected markets in Europe, Asia-Pacific, Africa and Latin America. Measures (such as know-your-customer (“KYC”) processes and IP address geo-blocking) are taken to exclude customers from jurisdictions where Bullish has identified laws or regulations that restrict Bullish from serving them and to ensure we are compliant with the Office of Foreign Assets Control of the U.S. Treasury Department and United Nations sanctions requirements. For example, the United States, mainland China, Canada and Japan are currently among the initially excluded jurisdictions because of licensing and other restrictions in respect of dealings with persons in those countries. See “Business of Bullish — Geographic Scope” and “Business of Bullish — Assessment of the Legality and Appropriateness of Digital Assets and Products.” Bullish does not plan for the Exchange services to be available to U.S. persons at Launch and until such time as a decision is made regarding offering services in the U.S. Prior to such time, Bullish plans to implement onboarding checks and controls including e-KYC and ongoing monitoring to restrict participation by U.S. persons unless services are made available to them.

As of the date of this proxy statement/prospectus, Bullish only recently commenced the Full Launch on December 21, 2021 and, commensurate with this, the Bullish Exchange has limited operating history, Bullish is not currently profitable from its operations and it has not been since its inception. Bullish intends to develop and launch its products and services to compete in the highly competitive digital assets industry. Bullish’s business will be subject to legal, regulatory, operational, reputational, tax and other risks in every jurisdiction, including those applicable due to its use of cryptocurrency and blockchain technology. Even if Bullish accomplishes its operational objectives, it may not generate positive cash flows or profits. As a new business, Bullish may be more vulnerable to these and other risks and their occurrence may have a disproportionate impact on its business, operations and reputation relative to a more mature or established business. See “Risk Factors.” There is no assurance that Bullish will achieve an acceptable return on shareholders’ investments and the likelihood of success must be considered in light of the early stage of its operations.

 

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Bullish, the Cayman Islands exempted company, was incorporated solely for the purpose of effectuating the Business Combination in which, as described above, it will succeed to the business of Bullish Global. Bullish Global is, and upon consummation of the Business Combination, Bullish will be, a holding company that, through its subsidiaries, operates the Exchange. Bullish Global maintains subsidiaries in the Cayman Islands, Gibraltar, Hong Kong, Singapore and the United States and deploys various ways to transfer cash within the group. The subsidiaries that function (or will function) as group service companies in the Cayman Islands, Hong Kong, Singapore and the United States receive cash transfers from Bullish Global (through a combination of equity injections or in relation to the provision of services) and from Bullish Gibraltar with respect to provision of services. Since January 1, 2022 to July 31, 2022, in relation to group service fee arrangements, (i) the U.S. subsidiary has received US$13 million and US$20 million from Bullish Global and Bullish Gibraltar, respectively, (ii) the Hong Kong subsidiary has received US$0.4 million and US$2 million from Bullish Global and Bullish Gibraltar, respectively, and (iii) the Singapore subsidiary has received US$2 million from Bullish Global. Bullish Global has also made loans to Bullish Capital, comprising US$300 million of cash (of which US$275 million has been repaid) and 50,000 units of BTC (of which 5,200 units have been repaid), and to Bullish Gibraltar of 4,650 units of BTC. During the same period, Bullish Capital has deployed approximately US$0.8 billion of cash (net of withdrawal) and US$1.3 billion of digital assets to the Liquidity Pools on the Bullish Exchange operated by Bullish Gibraltar. None of the subsidiaries have made any dividends or distributions to Bullish.

Engaging in cross-border business can make it difficult for Bullish to ensure that it adequately protects its legal rights and interests, including under contracts with counterparties and terms of business with its customers. There are numerous national, local and international laws and regulations relevant to Bullish’s business and operations, the scope of which is rapidly changing, subject to differing interpretations and may be inconsistent among countries, or conflict with other rules. As Bullish has limited operating history and due to the complexity of the relevant laws and regulations for Bullish’s business and operations, the legal treatment of Bullish’s terms of service with the Bullish Exchange and Liquidity Pool customers as well as contracts with Bullish’s third party service providers is untested and therefore uncertain. As a result, Bullish may incur liability from breaching its legal obligations or may not be able to enforce legal rights and obligations to protect its interests (including under relevant terms and conditions with its customers and counterparties) or to enforce them consistently and predictably across these jurisdictions. This may lead to legal proceedings and result in additional liability, damages, compensation, fines and other penalties against Bullish, which may adversely impact its reputation, business, financial condition and share price. See “Risk Factors — Risks Related to the Legal and Regulatory Environment — Engaging in cross-border business can make it difficult for Bullish to ensure that it adequately protects its legal rights and interests. Bullish may incur liability from breaching its legal obligations or may not be able to enforce legal rights and obligations or to enforce them consistently and predictably across these jurisdictions.

Under current law, none of the jurisdictions where Bullish has subsidiaries impose foreign currency controls and the local currency is freely convertible. Generally distributions of earnings by each subsidiary is restricted to the extent that local companies law requires solvency or distributions can only be out of post-tax earnings, and in addition for the Gibraltar subsidiary that operates the Bullish Exchange, minimum regulatory capital Bullish’s ability to declare dividends or distributions. Currently under the Business Combination Agreement, Bullish and its subsidiaries are restricted from paying any dividend or distribution to its shareholders and such restriction will fall away on Closing.

Bullish Global and its subsidiaries in the Cayman Islands, Gibraltar, and the United States maintain bank accounts and balances with banks in the United States. The Singapore subsidiary has local currency bank accounts in Singapore for its operational needs as a group service company. The Hong Kong subsidiary currently maintains Hong Kong dollar denominated current and savings accounts in amounts determined to be necessary to support its operational needs in Hong Kong as a group service company. The aggregate balance as of July 31, 2022 was HK$1.8 million (equivalent to US$0.2 million), and such balance has not changed materially as of the date of this proxy statement/prospectus.

 

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Hong Kong is a Special Administrative Region of the People’s Republic of China (PRC) and enjoys its own limited autonomy as defined by the Basic Law of Hong Kong. Hong Kong’s legal system, which is different from that of mainland China, is based on common law and has its own laws and regulations but some of the national laws of the PRC are made applicable in Hong Kong under the Basic Law.

It has been speculated that there may be increased alignment between PRC laws and regulations and the Basic Law or that PRC laws and regulations will be applied directly in Hong Kong. If certain PRC laws and regulations relevant to Bullish’s business operations were to become applicable in Hong Kong in the future, Bullish may face legal and operational risks and uncertainties relating to its operations in Hong Kong. Bullish’s Hong Kong subsidiary, Bullish HK Limited, is a services company established to perform services for other entities in the Bullish Group, including in respect of the Bullish Exchange. Currently, such services — engineering and development, cybersecurity, sales and relationship management, custody operations (which include coordinating with the Exchange’s third-party custody service provider for the administration of digital assets in custodial wallets), and technology operations services as well as shared group support services such as marketing, finance, human resources, legal and compliance, and risk management — are predominantly being provided by Bullish HK Limited and supported by B1 Services HK Limited, a subsidiary of Block.one, pursuant to the Master Services Agreement. Bullish HK Limited is expected to take over providing such services once the relevant resources are transferred to it pursuant to the Contribution Agreement. Both B1 Services HK Limited and Bullish HK Limited are based in Hong Kong and provide services out of Hong Kong. Hong Kong based services are integral to Bullish’s business operations although Bullish continues to work on geographical diversification to reduce country concentration risk. The Hong Kong ServiceCos provide operational and support services across various functions. The Hong Kong ServiceCos employ fewer than 50% of Bullish’s personnel and hold fewer than 10% of the vendor contracts identified in the Contribution Agreement as being material to Bullish’s business operations. Although Hong Kong based services are integral to Bullish’s business operations, over 50% of Bullish’s personnel are already located outside of Hong Kong, including the Cayman Islands, U.S., Singapore and Gibraltar, and provide services including every major function of Bullish such as engineering and development, other technology functions, cybersecurity, marketing, legal, compliance and risk management. None of Bullish’s customers’ digital assets or Bullish Gibraltar’s own digital assets are held with the Hong Kong ServiceCos and to Bullish’s knowledge, none of Bullish’s third-party custody providers are based in, or custody any of Bullish’s customers’ digital assets or the Bullish Gibraltar’s own digital assets, in Hong Kong. It is Bullish’s policy that (i) only Bullish Gibraltar is permitted to hold customers’ digital assets; and (ii) a Bullish Group entity may only hold its own digital assets, meaning no Bullish Group entity may hold digital assets on behalf of another Bullish Group entity (apart from Bullish Gibraltar holding Bullish Capital assets that have been deployed to the Exchange which form part of Bullish Gibraltar’s customers’ assets). If a Bullish Group entity wishes to hold its own digital assets, it is required to go through an internal approval process, including board approvals and establishment of account control procedures. As of the date of this proxy statement/prospectus, the Hong Kong ServiceCos have not set up any wallets or accounts to hold digital assets. In addition, as part of its license application with the GFSC, Bullish is required to demonstrate that it has a fixed place of business in Gibraltar with real substance, including adequate number of employees with necessary qualifications and adequate operating expenditure in Gibraltar, which Bullish has been able to do. Bullish continues to work on geographically diversifying its business operations and re-balancing its operational presence to reduce country concentration risk and disruption from future changes in law; however, the process of geographically diversifying its business operations and re-balancing its operational presence may be disruptive to Bullish’s business which could adversely affect results of operations due to potentially higher expenses and lower revenues. In addition, depending on the extent of the risks and uncertainties, Bullish may determine it must relocate operations in Hong Kong to another jurisdiction, which could result in disruption of the business, additional costs and expenses, and loss of key personnel, any of which could adversely affect its financial condition and results of operations.

 

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The PRC government imposes controls on the convertibility of Renminbi, the national currency of the PRC, into foreign currencies and, in certain cases, the remittance of currency out of mainland China. Although Bullish has no business operations in mainland China, if such control were to extend to Hong Kong, or if by any case Bullish were to become subject to such oversight or discretion in the future, it may restrict the ability of its Hong Kong subsidiary to remit currency maintained in Hong Kong to its offshore entities in order for its offshore entities to pay dividends or make other payments or otherwise satisfy its foreign-currency-denominated obligations. In such case, the State Administration of Foreign Exchange of China (“SAFE”) and other relevant PRC governmental authorities may limit the ability of Bullish’s Hong Kong subsidiary to purchase foreign currencies in the future to settle transactions. As the PRC government may continue to strengthen its capital controls, additional restrictions and substantial vetting processes may be instituted by SAFE for cross-border transactions. Any future restrictions on currency exchange that become applicable to Bullish’s Hong Kong subsidiary or currency that is maintained in Hong Kong may limit its ability to utilize currency maintained in Hong Kong to fund its business activities outside of China, or to pay dividends in foreign currencies. See “Risk Factors—Financial Risks—Bullish will conduct its business operations through subsidiaries and may in the future rely on dividends from subsidiaries for a substantial amount of its cash flows”.

The position on cryptocurrency businesses in mainland China is significantly less permissive than Hong Kong. The central bank in mainland China has recently announced a ban on cryptocurrency trading activities. In addition, the Chinese government recently announced that it would increase supervision of mainland Chinese companies listed offshore. Under the new measures, the Chinese government will improve regulation of cross-border data flows and security, police illegal activity in the securities market and punish fraudulent securities issuances, market manipulation and insider trading. It will also monitor sources of funding for securities investment and control leverage ratios. The CAC has also opened a cybersecurity probe into several large U.S.-listed technology companies focusing on anti-monopoly and financial technology regulation and, more recently with the passage of the PRC Data Security Law, how companies collect, store, process and transfer data. For example, if the recent PRC regulatory actions on data security or other data-related laws and regulations were to apply to Bullish, it could become subject to certain cybersecurity and data privacy obligations, including the potential requirement to conduct a cybersecurity review for its listing on a foreign stock exchange, and the failure to meet such obligations could result in penalties and other regulatory actions against it and may materially and adversely affect its business and results of operations.

Bullish does not maintain operations in mainland China, does not generate revenues from mainland China, and does not intend to provide services in mainland China. Bullish does not intend to provide customer services to potential customers located in mainland China, and does not intend to conduct sales and marketing activities or other communication with residents in mainland China. Accordingly, Bullish believes that the laws and regulations of the PRC that do not apply in Hong Kong, including the recent developments on cryptocurrency and cybersecurity laws and regulations of the PRC, do not currently have any material impact on Bullish’s business, financial condition and results of operations or the listing of Bullish’s securities, notwithstanding the fact that Bullish maintains a subsidiary in Hong Kong. However, changes in the policies, regulations, rules, and the enforcement of laws of the PRC government may be made quickly with little or no advance notice. If certain PRC laws and regulations were to become applicable in Hong Kong in the future, the application of such laws and regulations may have a material adverse impact on Bullish’s business, financial condition and results of operations and Bullish’s ability to offer or continue to offer securities to investors, any of which may cause the value of Bullish’s securities to significantly decline or become worthless.

In addition, as Bullish’s auditor is located in the United States, the auditor is subject to laws in the United States pursuant to which the PCAOB may conduct inspections to assess the auditor’s compliance with the PCAOB’s standards and rules, and it is not subject to the determinations by the PCAOB on December 16, 2021 that the PCAOB is unable to inspect or investigate completely PCAOB-registered public accounting firms headquartered in mainland China and in Hong Kong because of positions taken by PRC authorities in

 

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such jurisdictions. Bullish does not believe that PRC laws or regulations relating to the PCAOB’s access to auditor files currently apply to Bullish. If because of a position taken by an authority in a foreign jurisdiction any PRC laws or regulations relating to the PCAOB’s access to auditor files were to apply to Bullish or its auditor or other reasons result in the PCAOB being unable to fully inspect or investigate Bullish’s auditor, Bullish’s securities may be delisted or prohibited from being traded “over-the-counter” pursuant to the Holding Foreign Companies Accountable Act, which will materially and adversely affect the value and/or liquidity of your investment. On June 22, 2021, the U.S. Senate passed a bill which would reduce the number of consecutive non-inspection years required for triggering the prohibitions under the HFCA Act from three years to two. On February 4, 2022, the U.S. House of Representatives passed a bill which contained, among other things, an identical provision. On August 26, 2022, the PCAOB, the CSRC and the MOF signed a Statement of Protocol, which aims to empower the PCAOB to inspect and investigate registered public accounting firm headquartered in mainland China and Hong Kong. It remains uncertain how the agreement will be implemented in practice.

The PRC government has issued several regulations to impose prior approval requirement on mainland China based companies raising capital offshore, and has recently sought to exert more control and impose more restrictions in this regard. On December 24, 2021, the CSRC released the Administrative Provisions of the State Council on the Overseas Securities Offering and Listing by Domestic Companies (Consultation Draft) and the Administrative Measures on the Filing of Overseas Securities Offering and Listing by Domestic Companies (Consultation Draft) for public comments through January 23, 2022 (collectively, the “CSRC Draft Rules”). Under the CSRC Draft Rules, PRC issuers that intend to list or offer securities on a foreign stock exchange through direct offshore listing (i.e., the listing of a PRC-incorporated company (in form of a company limited by shares)) or indirect offshore listing (i.e., the listing of an overseas company that meets the following conditions: (a) more than 50% of the revenue, profit, gross assets or net assets of the issuer’s audited consolidated financial statement in the last fiscal year originated from a PRC-incorporated company or companies, and (b) a majority of the issuer’s senior executives in charge of its business operations and management are PRC citizens or habitually reside in mainland China and the issuer’s business operations are mainly conducted in mainland China or the principal place for business operation is located in mainland China) shall complete a filing with the CSRC within three business days upon the submission of the issuer’s initial public filing of its listing application documents with the foreign stock exchange.

In addition, on December 28, 2021, the PRC government promulgated the amended Cybersecurity Review Measures (the “Cybersecurity Review Measures”), which came into effect on February 15, 2022, to impose cybersecurity review requirement on the purchase of network products and services by critical information infrastructure operators, or the data processing activities conducted by network platform operators, which affect or may affect the national security of the PRC. According to the Cybersecurity Review Measures, a cybersecurity review through the Cybersecurity Review Office under CAC is required in any of the following situations: (i) internet platform operators holding personal information of more than one million users and seeking to have their securities listed on a stock exchange in a foreign country; (ii) the purchase of network products and services by critical information infrastructure operators affect or may affect China’s national security; and (iii) network product/service or a data processing activity that is identified as affecting or may affect national security of the PRC by a member authority of the working mechanism for cybersecurity reviews.

Based on its understanding of the current PRC laws and regulations, Bullish believes that it is not required to obtain any prior approval or conduct filing under the PRC financial regulations that are effective as of the date hereof, or the CSRC Draft Rules from any PRC governmental authorities for consummating this offering, given that: (a) the CSRC currently has not issued any definitive rule or interpretation concerning whether offerings like Bullish’s are subject to the rules, and the CSRC Draft Rules are still in draft forms as of now and have no legal effect; (b) Bullish is not a PRC-incorporated company and has no business activities or subsidiaries, joint ventures or partnerships in mainland China; and (c) Bullish is not controlled by PRC companies or individuals

 

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nor formed for the purpose of seeking a public listing on an overseas stock exchange through acquisition of PRC domestic companies. Furthermore, because Bullish is not (a) a PRC-incorporated internet platform operator holding personal information of more than one million users, (b) a critical information infrastructure operator that purchases network products and services that affect or may affect China’s national security, or (c) providing network product/service or conducting any data processing activity that affect or may affect China’s national security based on the facts that Bullish (i) does not have any business activities in mainland China and (ii) does not and will not provide services to any customers located in mainland China or conduct sales and marketing activities or other communications with residents in mainland China, and (iii) takes technical measures to refrain from providing services to any customers located in mainland China or conducting sales and marketing activities or other communications with residents in mainland China, Bullish does not believe that the Cybersecurity Review Measures are applicable to the Business Combination nor does it believe that it will be required to undergo such cybersecurity review in connection with the Business Combination or that the Cybersecurity Review Measures will have any material adverse impact on the operations of Bullish.

In the event that Bullish inadvertently concluded that relevant permissions or approvals were not required or that applicable laws, regulations, or interpretations change and it is required to obtain such permissions or approvals in the future, any failure by Bullish to maintain or obtain such permissions or approvals could result in enforcement and other action by the PRC government, including investigations, penalties, fines and orders, which action may significantly limit or completely hinder its ability to operate and offer or continue to offer securities to investors and may cause the value of such securities to significantly decline or become worthless.

Persons that effect transactions in securities with or for persons in the United States are, absent an exemption, subject to registration with the SEC as a “broker” or “dealer.” Platforms that bring together purchasers and sellers residing in the United States to trade securities are subject to registration as national securities exchanges or must qualify for an exemption, such as by registering as a broker-dealer/alternative trading system. Persons facilitating the clearance and settlement of securities transactions may in certain circumstances be required to register with the SEC as a clearing agency.

Bullish does not currently offer Exchange services in the United States and Bullish Exchange is not registered with the SEC as a broker-dealer, national securities exchange, alternative trading system or clearing agency. Bullish does not plan to make a decision regarding offering Exchange services and digital assets in the United States until toward the end of 2022 or the first half of 2023. If Bullish decides to support trading in the U.S. market only in digital assets that it determines are unlikely to be “securities” under applicable U.S. securities law, and assuming applicable U.S. securities laws and SEC rules currently in effect are not amended or modified in the interim, then Bullish would not expect to initially pursue such registration as a broker-dealer, national securities exchange, alternative trading system or clearing agency with the SEC. Alternatively, if Bullish decides either at the outset or subsequently to support trading in the U.S. market in digital assets that it determines are likely to be “securities” under applicable U.S. securities law, and again assuming applicable U.S. securities laws and SEC rules currently in effect are not amended or modified in the interim, Bullish would expect to register with the SEC as a broker-dealer, national securities exchange, alternative trading system and/or clearing agency. See “Business of Bullish – Assessment of the Legality and Appropriateness of Digital Assets and Products”.

The U.S. market entry decision would involve an evaluation of the digital assets that Bullish may potentially offer in the U.S. market and also of the attractiveness of the business that could be developed under the different approaches. There is considerable uncertainty surrounding the legal characterization of digital assets in the U.S., and any determination by Bullish as to whether specific digital assets are unlikely to be “securities” would not be binding on the SEC or any other regulator. If Bullish commences providing Exchange services in the United States without registering as a broker-dealer, national securities exchange, alternative trading system or clearing agency and the SEC determines that one or more of the digital assets included in Bullish’s business lines is a “security” under applicable U.S. securities law, based on its interpretation of existing, or implementation of new,

 

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laws, rules and regulations, Bullish may be deemed to be operating as an unregistered “broker” or “dealer,” national securities exchange, clearing agency or other applicable SEC-regulated institution and may be subject to investigations, enforcement actions and litigation by the SEC, which could lead to substantial costs, fines and penalties and impede Bullish’s potential business plan to enter the U.S. market and could adversely affect Bullish’s business, operating results, financial condition and share price. For a discussion of certain risks associated with doing business in the U.S., see “Risk Factors — Risks Related to the Legal and Regulatory Environment — Bullish may not be able to comply fully with all applicable legal and regulatory requirements in the jurisdictions relevant to its business, and may be subject to fines, penalties, censures and/or other adverse actions from regulators and/or law enforcement authorities as well as customers and other stakeholders.

Information About the Parties to the Business Combination (page 167)

Far Peak Acquisition Corporation

511 6th Ave #7342

New York, New York 10011

(917) 737-1541

Far Peak Acquisition Corporation is a blank check company whose business purpose is to effect a merger, capital stock exchange, asset acquisition, stock purchase or similar business combination with one or more businesses.

Bullish Global

c/o Maples Corporate Services Limited, P.O. Box 309, Ugland House, Grand Cayman KY1-1104, Cayman Islands, Attn: CLO

Bullish Global, a Cayman Islands exempted company, is a majority-owned subsidiary of Block.one and is a holding company for the Bullish Group companies.

Bullish

c/o Maples Corporate Services Limited, P.O. Box 309, Ugland House, Grand Cayman KY1-1104, Cayman Islands, Attn: CLO

Bullish, a Cayman Islands exempted company and a direct wholly owned subsidiary of Bullish Global, will be the parent company of Bullish Global and Merger Sub 1 (the surviving entity of the Initial Merger with FPAC) upon the Closing of the Business Combination.

BMC 1

c/o Maples Corporate Services Limited, P.O. Box 309, Ugland House, Grand Cayman KY1-1104, Cayman Islands, Attn: CLO

BMC 2

c/o Maples Corporate Services Limited, P.O. Box 309, Ugland House, Grand Cayman KY1-1104, Cayman Islands, Attn: CLO

The Business Combination Agreement (page 174)

The terms and conditions of the Business Combination are contained in the Business Combination Agreement, which is attached to this proxy statement/prospectus as Annex A and is incorporated by reference

 

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herein in its entirety. FPAC encourages you to read the Business Combination Agreement carefully, as it is the legal document that governs the Business Combination. For more information on the Business Combination Agreement, see the section entitled “The Business Combination Agreement.”

Ancillary Agreements Related to the Business Combination (page 188)

In connection with the Business Combination Agreement, the parties and other certain investors had entered into or agreed to enter into a number of ancillary agreements, including the Block.one Lock-Up Agreement, the Letter Agreement Amendment, the Side Letters, the Target Voting Agreement, the Sponsor Voting Agreement, the Registration Rights Agreement, the Non-Competition Agreement, the Standstill Agreement, the Indemnification Agreement, the Sponsor Release, and the PIPE Subscription Agreements. Under their terms, the PIPE Subscription Agreements expired and terminated on July 8, 2022. As a result, the Business Combination will proceed without the PIPE Investment. No efforts were made by FPAC or Bullish Global management to extend the PIPE Investment expiration date. The PIPE Investment was never a closing condition of the Business Combination. As a result, the combined company will not receive the $300 million cash proceeds of the PIPE Investment (net of transaction costs), and its pro forma cash assets following the completion of the business combination will be lower than anticipated. However, considering that the combined company will continue to hold cash and digital assets sufficient to meet its financial obligations and liquidity requirements, and will continue to explore additional financing options as circumstances require, Bullish does not believe that the PIPE Investment not being consummated will have any material adverse impact to the combined company. In addition, if the PIPE Investment is not consummated, the combined company will issue fewer new shares and the FPAC shareholders will experience less dilution following completion of the business combination. For more information on the ancillary agreements to the Business Combination Agreement, see the section entitled “Ancillary Agreements Related to the Business Combination.”

Structure of the Business Combination

On the Closing Date, in connection with the Initial Merger, FPAC will merge with and into Merger Sub 1, with Merger Sub 1 as the surviving entity and, after giving effect to such Initial Merger, continuing as a wholly owned subsidiary of Bullish. Following the Initial Merger, in connection with the Acquisition Merger, Merger Sub 2 will merge with and into Bullish Global, with Bullish Global as the surviving entity in the merger, and, after giving effect to such Acquisition Merger, continuing as a wholly owned subsidiary of Bullish.

The following diagram illustrates in simplified terms the current structure of FPAC and Bullish Global.

 

LOGO

 

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The following diagram illustrates in simplified terms the expected structure of Bullish and its operating subsidiaries upon the Closing.

 

LOGO

The following diagram and the text that follows illustrate the ownership of Bullish, giving effect to the completion of the Business Combination. This presentation assumes no redemptions and a Digital Asset Market Value of US$2.84 billion, based on the average value over the 20-day period ended July 31, 2022.

LOGO

 

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Shareholder Group

  Class A - One
Vote per Share
    Class B - Ten
Votes per Share
    Total Shares     Ownership %     Total Voting
Shares
    Voting Power %  

FPAC Initial Shareholders(1)

    9,750,000         9,750,000       1.38     9,750,000       0.19

FPAC Public Shareholders

    60,000,000         60,000,000       8.47     60,000,000       1.19

Block.one

    112,615,616       482,123,225       594,738,841       83.94     4,933,847,864       97.75

Other Existing Bullish Global Shareholders

    44,027,223         44,027,223       6.21     44,027,223       0.87

Total

    226,392,839       482,123,225       708,516,063       100.00     5,047,625,087       100.00

Total Bullish Global Shareholders (Block.one and Other Existing Bullish Global Shareholders)

    156,642,839       482,123,225       638,766,063       90.16     4,977,875,087       98.62
    Warrants Held                          
    Public     Private                          

FPAC Initial Shareholders

      3,199,999          

FPAC Public Shareholders

    20,000,000            

BR Investors

      3,499,999          

 

(1)

Shares held by FPAC Initial Shareholders include 1,950,000 shares to be transferred to the BR Investors.

The PIPE (page 192)

FPAC and Bullish had entered into subscription agreements with the PIPE Investors, pursuant to which, among other things, Bullish agreed to issue and sell in private placements an aggregate of 30,000,000 shares of Class A Ordinary Shares of Bullish to the PIPE Investors for $10.00 per share. Under their terms, the PIPE Subscription Agreements expired and terminated on July 8, 2022. As a result, the Business Combination will proceed without the PIPE Investment. No efforts were made by FPAC or Bullish Global management to extend the PIPE Investment expiration date. The PIPE Investment was never a closing condition of the Business Combination. One PIPE Investor, an affiliate of Softbank Corp. and referred to as the Anchor Subscriber, who had subscribed for 7,500,000 Class A Ordinary Shares of Bullish for an aggregate purchase price of $75,000,000, had also entered into a Securities Purchase Agreement with Bullish and the FPAC Sponsor pursuant to which the Anchor Subscriber would have purchased, for $1.00 per warrant, from the Sponsor or the BR Investors, 3,000,000 outstanding Private Placement Warrants. Due to the expiration of the Securities Purchase Agreement under its terms on July 8, 2022, the Anchor Subscriber will no longer be purchasing warrants from the Sponsor or the BR Investors. Neither the Sponsor nor Initial Shareholders of FPAC participated in the PIPE investment.

Consideration (page 174)

Bullish Global Shareholders

At the effective time of the Acquisition Merger , (i) (a) each outstanding Bullish Global Class B preference share will automatically convert into one Bullish Global Class C common share and (b) thereafter each issued and outstanding Bullish Global Class C common share will convert automatically into such number of Class A Ordinary Shares of Bullish that is equal to the Exchange Ratio (as described below and more fully defined in the Business Combination Agreement), (ii) each issued and outstanding Bullish Global Class A common share will convert

 

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automatically into such number of Class B Ordinary Shares of Bullish that is equal to the Exchange Ratio, (iii) each Bullish Global restricted stock unit award will cease to represent the right to acquire Bullish Global Class C common shares and will be cancelled in exchange for a right to acquire a number of Class A Ordinary Shares of Bullish under the 2022 Omnibus Incentive Plan equal to the product of (a) the number of Bullish Global Class C common shares subject to such Bullish Global restricted stock unit award as of immediately prior to the effective time of the Acquisition Merger and (b) the Exchange Ratio, and (iv) each Bullish Global option award will cease to represent the right to purchase Bullish Global Class C common shares and will be cancelled in exchange for an option to purchase a number of Class A Ordinary Shares of Bullish under the 2022 Omnibus Incentive Plan equal to the product of (a) the number of Bullish Global Class C common shares subject to such Bullish Global option award as of immediately prior to the effective time of the Acquisition Merger, and (b) the Exchange Ratio, at an exercise price per share equal to (x) the exercise price per share of such Bullish Global option award, divided by (y) the Exchange Ratio. The Class A Ordinary Shares of Bullish will have voting rights of one vote per share and the Class B Ordinary Shares of Bullish will have voting rights of ten votes per share.

The “Exchange Ratio” is a number determined by dividing the Acquisition Merger Consideration (as described below and more fully defined in the Business Combination Agreement) by $10 and dividing by the number of Bullish Global shares issued and outstanding as of immediately prior to the effective time of the Acquisition Merger. “Acquisition Merger Consideration” is defined in the Business Combination Agreement as the amount equal to the aggregate market value equivalent of the digital assets (as defined in the Business Combination Agreement) held by Bullish Global (the “Digital Asset Market Value”), plus the amount of cash and cash equivalents Bullish Global has on the business day prior to the Closing Date, plus $2,500,000,000, plus, if applicable, any FPAC transaction expenses that exceed thresholds set forth in the Business Combination Agreement. The Digital Asset Market Value is calculated based on the average daily price of the relevant Digital Asset, as determined by using a specified data source, in the twenty-calendar day period ending on the date of the delivery of the closing statement by Bullish Global, which is to be delivered three business days prior to the closing of the Initial Merger. To the extent a price is unavailable on a particular day, the first immediately prior day with a price will be used for that day. Bullish Global has entered into the Loan Financing Arrangements using digital assets as loan collateral. Such loans are not included for purposes of calculating the cash and cash equivalents Bullish Global has on the business day prior to the Closing Date, and the digital assets used as loan collateral will be included for purposes of calculating the Digital Assets Market Value since such digital assets are still owned by Bullish Global. See “Bullish Global’s Management’s Discussion and Analysis of Financial Condition and Results of Operations — Loan Financing Arrangements.

FPAC Shareholders

At the effective time of the Initial Merger, FPAC Class A ordinary shares and Class B ordinary shares held by FPAC Shareholders immediately prior to the effective time of the Initial Merger will be exchanged, on a one-for-one basis, for Class A Ordinary Shares of Bullish, and each issued and outstanding FPAC Warrant will convert automatically into one Bullish Warrant.

At the effective time of the Initial Merger, holders of FPAC Class A ordinary shares, Class B ordinary shares and FPAC Warrants will receive Class A Ordinary Shares of Bullish and Bullish Warrants without needing to take any action, and accordingly such holders should not submit the certificates relating to their FPAC Class A ordinary shares or FPAC Warrants.

Special Meeting of FPAC Shareholders and the Proposals (page 168)

The Special Meeting will be convened on                 , 2022, at 9:00 a.m., New York City time, in a virtual format. Shareholders may attend, vote and examine the list of FPAC Shareholders entitled to vote at the Special

 

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Meeting by visiting https://www.cstproxy.com/farpeak/2022 and entering the control number found on your proxy card, voting instruction form or the notice you previously received. The purpose of the Special Meeting is to consider and vote on the Business Combination Proposal, the Merger Proposal, the Organizational Documents Proposals and the Adjournment Proposal.

Approval of the Business Combination Proposal, the Merger Proposal and the Organizational Documents Proposal are a condition to the obligation of FPAC to complete the Business Combination.

Only holders of record of issued and outstanding FPAC Shares as of the close of business on                  , 2022, the record date for the Special Meeting, are entitled to notice of, and to vote at, the Special Meeting or any adjournment or postponement of the Special Meeting. You may cast one vote for each FPAC share that you owned as of the close of business on that record date.

A quorum of FPAC Shareholders is necessary to hold a valid meeting. A quorum will exist at the Special Meeting with respect to each matter to be considered at the Special Meeting if the holders of a majority of the outstanding FPAC Shares as of the record date are present virtually or represented by proxy at the Special Meeting. All shares represented by proxy are counted as present for purposes of establishing a quorum.

Approval of the Business Combination Proposal requires the affirmative vote of a majority of the votes cast by FPAC Shareholders present virtually or represented by proxy at the Special Meeting and entitled to vote thereon. Abstentions and broker non-votes will have no effect on the outcome of the proposal.

Approval of the Merger Proposal requires the affirmative vote of two-thirds majority of the votes cast by FPAC Shareholders present virtually or represented by proxy at the Special Meeting and entitled to vote thereon. Abstentions and broker non-votes will have no effect on the outcome of the proposal.

Approval of the Organizational Documents Proposals require the affirmative vote of two-thirds majority of the votes cast by FPAC Shareholders present virtually or represented by proxy at the Special Meeting and entitled to vote thereon. Abstentions and broker non-votes will have no effect on the outcome of the six separate proposals.

Approval of the Adjournment Proposal requires the affirmative vote of a majority of the votes cast by FPAC Shareholders present virtually or represented by proxy at the Special Meeting and entitled to vote thereon. Abstentions and broker non-votes will have no effect on the outcome of the proposal.

Recommendation of the FPAC Board (page 238)

The FPAC Board has unanimously determined that the Business Combination is in the best interests of, and advisable to, the FPAC Shareholders and recommends that the FPAC Shareholders adopt the Business Combination Agreement and thereby approve the Business Combination. The FPAC Board made its determination after consultation with its legal and financial advisors and consideration of a number of factors.

The FPAC Board recommends that you vote “FOR” the approval of the Business Combination Proposal, “FOR” the approval of the Merger Proposal, “FOR” the approval of the Organizational Documents Proposals and “FOR” the approval of the Adjournment Proposal.

For more information about the FPAC Board’s recommendation and the proposals, see the sections entitled “Extraordinary General Meeting of FPAC Shareholders — Vote Required and FPAC Board Recommendation” beginning on page 168 and “The Business Combination Proposal — FPAC’s Board of Directors’ Reasons for the Approval of the Business Combination” beginning on page 211.

 

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Opinion of Duff & Phelps, the FPAC Board’s Financial Advisor (see page 222)

The FPAC Board obtained a fairness opinion from Duff & Phelps which stated that the consideration being paid in the Business Combination was fair to FPAC from a financial point of view. For more information about the Opinion of FPAC’s Financial Advisor, see the section entitled “The Business Combination Proposal — Opinion of Duff & Phelps, the FPAC Board’s Financial Advisor” beginning on page 222.

FPAC’s Board of Directors’ Reasons for the Approval of the Business Combination (page 211)

The FPAC Board considered several factors in its determination to approve the Business Combination with Bullish Global.

In considering the commercial rationale, the FPAC Board considered that the market and demand for cryptocurrency has significantly grown and Bullish Global has invested in creating innovative products and services which the Board believes makes Bullish well positioned to participate in this market. The FPAC Board considered Bullish Global’s range of planned products and services as well as its differentiated approach to providing liquidity on its exchange in periods of high volatility through the Liquidity Pools. In addition, Bullish Global has extensive capital resources which the Board anticipates will provide it with a meaningful competitive advantage in attracting customers and trading volumes once operations commence. Additionally, Bullish Global’s commitment to operate in a regulated and compliant manner was an important factor to the FPAC Board in considering its commercial rationale for the Business Combination.

The FPAC Board assessed Bullish Global’s balance sheet, concluding that it is in good financial health and has no debt or material contingent liabilities, as of July 2, 2021. The Board also believed that Bullish Global has a strong existing management team that has extensive experience in blockchain, cryptocurrency, and financial service technology, which will be strengthened through the addition of Thomas W. Farley who will join the Bullish executive team as its Chief Executive Officer. The Business Combination in general has strong sponsorship from its shareholders and had received significant private capital commitments from the PIPE Investors, including participation from existing investors in Bullish Global (all PIPE commitments expired under their terms on July 8, 2022).

The FPAC Board also considered, in its deliberations, the risks associated with the Business Combination, risks associated with Bullish Global’s business operations and technology, risks associated with the cryptocurrency industry as a whole, and the risks associated with the post-closing corporate governance.

The FPAC Board believes that the Business Combination Agreement is fair, advisable and in the best interests of FPAC and the FPAC Shareholders and is a product of arm’s-length negotiations among the parties. In addition, the FPAC Board obtained a fairness opinion from Duff & Phelps which stated the consideration being paid in the Business Combination was fair to FPAC from a financial point of view. The overall assumptions in the Duff & Phelps fairness opinion assumed the completion of the Business Combination as originally contemplated, including the concurrent PIPE Investment. The opinion’s conclusion and the Financial Projections (as defined therein) did not however assume any PIPE Investment. These factors are discussed in greater detail in the section entitled “The Business Combination Proposal — FPAC’s Board of Directors’ Reasons for the Approval of the Business Combination.”

Conditions to the Consummation of the Transaction (page 131)

Consummation of the Transactions is subject to customary closing conditions, including approval by the FPAC Shareholders and Bullish Global and certain regulatory approvals from governmental authority. The Business Combination Agreement also contains other conditions, including, among others: (i) the Contribution Agreement and Master Services Agreement being in full force and effect and no material breach of such agreements being continuing and uncured, (ii) Bullish’s initial listing application with the NYSE having been

 

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conditionally approved and the Class A Ordinary Shares of Bullish to be issued pursuant to the Business Combination Agreement having been approved for listing on the NYSE, and (iii) Bullish having been approved by the GFSC as a Controller (as defined in Section 131(3) of the Gibraltar Financial Services Act 2019) with respect to the DLT license held by Bullish Gibraltar. As of the date of this proxy statement/prospectus, Bullish has obtained the approval for Bullish as a Controller with respect to the DLT License. The PIPE Investment was never a closing condition of the Business Combination.

Termination (page 184)

The Business Combination Agreement may be terminated at any time prior to the consummation of the Business Combination by written consent of FPAC and Bullish Global or in certain other circumstances, including, but not limited to: (i) if the conditions to the closing of the Initial Merger have not been satisfied by the Outside Date and such delay is not due to the breach of the Business Combination Agreement by the party seeking to terminate, (ii) a government entity of competent jurisdiction has issued an order or any other action permanently restraining, enjoining or otherwise prohibiting the consummation of the Business Combination, (iii) the Business Combination and other related proposals have not been approved by FPAC Shareholders at the duly convened meeting of FPAC Shareholders, or (v) the FPAC Board has made a Change in Recommendation. On June 29, 2022, FPAC, Bullish, the Merger Subs and Bullish Global entered into a third amendment to the Business Combination Agreement extending the Outside Date to December 31, 2022. Additionally, as consideration for the FPAC’s agreement to enter into the Amendment No. 3, Bullish Global paid a $2.5 million extension fee at the time of signing.

Redemption Rights (page 171)

Pursuant to FPAC’s Memorandum and Articles of Association, a Public Shareholder may request that FPAC redeem all or a portion of their Public Shares (which would become Class A Ordinary Shares of Bullish in the Business Combination) for cash if the Business Combination is consummated. You will be entitled to receive cash for any Public Shares to be redeemed only if you:

 

   

(a) hold Public Shares or (b) hold Public Shares through Units and you elect to separate your Units into the underlying Public Shares and Public Warrants prior to exercising your redemption rights with respect to the Public Shares; and

 

   

prior to 5:00 p.m., New York City time, on      , 2022, the second business day before the Special Meeting, (a) submit a written request to the transfer agent that FPAC redeem your Public Shares for cash and (b) deliver your Public Shares to the transfer agent, physically or electronically through DTC.

As noted above, holders of Units must elect to separate the underlying Public Shares and Public Warrants prior to exercising redemption rights with respect to the Public Shares. Holders may instruct their broker to do so, or if a holder holds Units registered in its own name, the holder must contact the transfer agent directly and instruct them to do so. Public Shareholders may elect to redeem all or a portion of their Public Shares even if they vote for the Business Combination Proposal. If the Business Combination is not consummated, the Public Shares will not be redeemed for cash. If a Public Shareholder properly exercises its right to redeem its Public Shares and timely delivers its Public Shares to Continental, FPAC’s transfer agent, FPAC will redeem such Public Shares upon the Closing for a per-share price, payable in cash, equal to the aggregate amount then on deposit in the Trust Account, calculated as of two business days prior to the consummation of the Business Combination, including interest earned on the funds held in the Trust Account and not previously released to FPAC to pay FPAC taxes, divided by the number of then-issued and outstanding Public Shares. If a Public Shareholder exercises its redemption rights, then it will be exchanging its redeemed Public Shares for cash and will no longer own such shares. See the section entitled “Extraordinary General Meeting of FPAC Shareholders — Redemption Rights” for a detailed description of the procedures to be followed if you wish to redeem your Public Shares for cash.

 

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Notwithstanding the foregoing, a holder of Public Shares, together with any affiliate of such Public Shareholder or any other person with whom such Public Shareholder is acting in concert or as a “group” (as defined in Section 13(d)(3) of the Exchange Act), will be restricted from redeeming their Public Shares with respect to more than an aggregate of 15% of the Public Shares. Accordingly, if a Public Shareholder, alone or acting in concert or as a group, seeks to redeem more than 15% of the Public Shares, then any such shares in excess of that 15% limit would not be redeemed for cash.

Holders of FPAC Warrants will not have redemption rights with respect to the FPAC Warrants.

Proxy Solicitation (page 170)

Proxies may be solicited by mail, telephone or in person. FPAC has engaged Morrow to assist in the solicitation of proxies. If a shareholder grants a proxy, it may still vote its shares at the Special Meeting if it revokes its proxy before the Special Meeting. A shareholder also may change its vote by submitting a later-dated proxy as described in the section entitled “Extraordinary General Meeting of FPAC Shareholders — Revoking Your Proxy.”

Interests of FPAC’s Directors and Officers in the Business Combination (page 232)

When you consider the recommendation of the FPAC Board in favor of approval of the Business Combination Proposal, you should keep in mind that FPAC’s Initial Shareholders, including its directors and officers, have interests in such proposal that are different from, or in addition to those of FPAC Shareholders and FPAC Warrant holders generally. These interests include, among other things, the interests listed below. The FPAC Board, including FPAC’s independent directors, with their outside counsel, reviewed and considered these interests during the negotiation of the Business Combination Agreement and in evaluating and approving, as members of the FPAC Board, the Business Combination Agreement and the Transactions, including the Business Combination. In particular, the FPAC Board considered that Thomas W. Farley, FPAC’s Chief Executive Officer, President and Chairman will become Chief Executive Officer of Bullish and would be entering into an employment agreement effective upon the Closing of the Business Combination, and that Mr. Farley negotiated certain key aspects of his compensation to be set forth in that employment agreement prior to the signing of the Business Combination Agreement. Mr. Farley’s employment agreement is not a condition to the Closing of the Business Combination. Additionally, at the direction of the FPAC Board, Mr. Farley refrained from negotiating any such personal compensation matters until agreement on the valuation terms of the Business Combination Agreement had been reached among the parties, and then only under the supervision of the FPAC Board’s and the independent directors’ outside counsel.

 

   

As noted above, at or immediately following the Closing, Mr. Farley, FPAC’s President, Chief Executive Officer and Chairman, will become the Chief Executive Officer of Bullish and has entered into an employment agreement dated December 13, 2021, effective at the Closing, with a subsidiary of Bullish that will provide for cash and incentive compensation. See “Director and Officer Compensation – Bullish Executive Officer and Director Compensation Following the Business Combination – Thomas W. Farley Employment Agreement” for a description of Mr. Farley’s employment agreement.

 

   

At or immediately following the Closing, David W. Bonanno, FPAC’s Chief Financial Officer and Secretary and a member of the Board, will become the Chief Financial Officer of Bullish and has entered into an employment agreement dated February 8, 2022, with a subsidiary of Bullish that will provide for cash and incentive compensation. See “Director and Officer Compensation - Bullish Executive Officer and Director Compensation Following the Business Combination - David W. Bonanno Employment Agreement” for a description of Mr. Bonanno’s employment agreement. Discussion respecting Bullish’s employment of Mr. Bonanno did not commence until September 2021 after the negotiation and execution of the Business Combination Agreement, and the FPAC Board’s approval and its recommendation in favor thereof and the Transactions, including the Business Combination.

 

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If FPAC is unable to complete its initial business combination by March 7, 2023, FPAC will: (i) cease all operations except for the purpose of winding up, (ii) as promptly as reasonably possible but not more than 10 business days thereafter, redeem the Public Shares and (iii) as promptly as reasonably possible following such redemption, subject to the approval of FPAC’s remaining shareholders and the FPAC Board, liquidate and dissolve, subject in each case to FPAC’s obligations under Cayman Islands law to provide for claims of creditors and the requirements of other applicable law. There will be no redemption rights nor liquidating distributions with respect to the Founder Shares if FPAC fails to complete its initial business combination by March 7, 2023. FPAC’s Sponsor purchased the Founder Shares prior to the Initial Public Offering for an aggregate purchase price of $25,000, and transferred 70,000 Founder Shares to each of FPAC’s three independent directors. In addition, as described below, upon completion of the Business Combination, certain of such Founder Shares will be transferred for nominal value, and may be forfeited or subjected to extended lock-up restrictions.

 

   

In addition, simultaneously with the closing of the Initial Public Offering, FPAC consummated the sale of 7,000,000 Private Placement Warrants at a price of $1.50 per warrant, 3,500,000 to the Sponsor and 3,500,000 to the BR Investors. In January 2022, March 2022 and May 2022, pursuant to commitments made by FPAC’s Sponsor and the BR Investors at the time of the Initial Public Offering, FPAC sold, in each of three similar transactions, an additional 33,333 Private Placement Warrants to each of the Sponsor and the BR Investors at a price of $1.50 per warrant. FPAC’s Sponsor’s aggregate investment in Private Placement Warrants was $5,400,000. The Private Placement Warrants will be exercisable commencing 30 days following the Closing for one share of Class A Ordinary Shares of Bullish at $11.50 per share. If FPAC does not consummate a business combination transaction by March 7, 2023, then the FPAC Warrants held by FPAC’s Sponsor will be worthless.

 

   

However, the Founder Shares and Private Placement Warrants are subject to certain contractual obligations that will be completed upon the consummation of the Business Combination. These are described in greater detail below under “The Business Combination Proposal – Ancillary Agreements Related to the Business Combination.” Pursuant to the BR Subscription Agreements, FPAC’s Sponsor agreed to transfer 1,950,000 Founder Shares (which will convert into 1,950,000 Class A Ordinary Shares of Bullish) to the BR Investors at the price the Sponsor originally paid for such shares (which as noted above was nominal).

 

   

In addition, in accordance with the Letter Agreement Amendment, the FPAC Sponsor agreed that (a)(i) at the Closing of the Business Combination, it would forfeit for cancellation 1,950,000 Class A Ordinary Shares of Bullish (including 390,000 to which the BR Investors would otherwise be entitled) at the Closing of the Business Combination if more than 15,000,000 Class A ordinary shares of FPAC are validly tendered for redemption and not withdrawn, or (ii) if no such forfeiture occurs, be subject to additional lock-up restrictions with respect to such 1,950,000 Class A Ordinary Shares of Bullish (including 390,000 that will be transferred to the BR Investors as described below in “Business Combination Proposal – BlackRock Side Letter”), and (b) at the closing of the Business Combination, it would forfeit, or cause BR Investors to forfeit, for cancellation 500,000 Private Placement Warrants (400,000 will be forfeited by the Sponsor and 100,000 by the BR Investors). Additionally, subject to the terms of the prior sentence, FPAC’s Sponsor will be subject to a lock-up of the Ordinary Shares to be received in exchange for the Founder Shares until one year following the Business Combination or if Bullish completes a liquidation, merger, share exchange or other similar transaction that results in all of Bullish’s shareholders having the right to exchange their Ordinary Shares for cash, securities or other property; provided that if the Ordinary Shares have traded at a price equal to or greater than $12.00 per share within any 20 trading days within a 30-trading day period commencing at least 150 days after the initial Business Combination, the Ordinary Shares to be received in exchange for the Founder Shares shall be released from the Sponsor Lock-up.

 

   

Giving effect to the foregoing transfers and forfeitures, upon completion of the Business Combination, assuming no redemptions and a Digital Asset Market Value (as defined in the Business Combination

 

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  Agreement) of $2.84 billion, based on the average value over a 20-day period as of July 31, 2022, it is expected that FPAC’s Sponsor will hold approximately 1.07% of the outstanding Class A Ordinary Shares of Bullish, which based on an assumed $10.00 per share value would have an aggregate value of approximately $75,900,000. In addition, following the Closing, and giving effect to the transfers and forfeitures described above, FPAC’s Sponsor will hold 3,199,999 Bullish Warrants (for which the Sponsor would have paid an aggregate of $3,000,000). Based on the $0.33 per warrant value of FPAC’s Public Warrants as of July 31, 2022, such 3,199,999 Bullish Warrants would have a value of $1,055,999.67.

 

   

As a result of the difference in the purchase price of approximately $0.003 per share that FPAC’s Sponsor paid for the Founder Shares, as compared to the purchase price of $10.00 per unit sold in FPAC’s Initial Public Offering, FPAC’s Sponsor may earn a positive rate of return on its investment even if the share price of Bullish’s Class A Ordinary Shares falls significantly below the per share value implied in the Business Combination of $10.00 per share and the public stockholders of FPAC experience a negative rate of return.

 

   

Pursuant to the Securities Purchase Agreement, FPAC’s Sponsor agreed to sell, or cause the BR Investors to sell, 3,000,000 Private Placement Warrants to the Anchor Subscriber for $1.00 per warrant (2,400,000 would have been transferred by the Sponsor and 600,000 by the BR Investors). Due to the expiration of the Securities Purchase Agreement under its terms on July 8, 2022, the Anchor Subscriber will no longer be purchasing warrants from the Sponsor or the BR Investors.

 

   

FPAC’s Sponsor, officers and directors will lose their entire investment in FPAC if FPAC does not complete a business combination by March 7, 2023. The independent directors each received 70,000 Founder Shares concurrently with FPAC’s Initial Public Offering. The 70,000 Founder Shares currently held by each director, if unrestricted and freely tradeable, would be valued at $700,000, based on an assumed $10.00 per share value. Founder Shares do not have the redemption rights of Public Shares if FPAC is unable to complete its initial business combination by March 7, 2023, nor will they receive any liquidating distributions if FPAC liquidates.

 

   

FPAC’s Initial Shareholders and its officers and directors have agreed to waive their rights to liquidating distributions from the Trust Account with respect to their Founder Shares if FPAC fails to complete a business combination by March 7, 2023.

 

   

In order to protect the amounts held in the Trust Account, FPAC’s Sponsor has agreed that it will be liable to FPAC if and to the extent any claims by a vendor for services rendered or products sold to FPAC, or a prospective target business with which it has entered into a transaction agreement, reduce the amount of funds in the Trust Account. This liability will not apply with respect to any claims by a third party who executed a waiver of any right, title, interest or claim of any kind in or to any monies held in the Trust Account or to any claims under FPAC’s indemnity of the underwriters of this offering against certain liabilities, including liabilities under the Securities Act.

 

   

Following the Closing, FPAC’s Sponsor would be entitled to the repayment of any working capital loan and advances that have been made to FPAC and remain outstanding. As of the date of this proxy statement/prospectus, FPAC’s Sponsor has not made any advances to FPAC for working capital expenses. If FPAC does not complete an initial business combination within the required period, FPAC may use a portion of its working capital held outside the Trust Account to repay the working capital loans, but no proceeds held in the Trust Account would be used to repay the working capital loans.

 

   

Following the consummation of the Business Combination, FPAC’s officers and directors will be indemnified as discussed under “The Business Combination Proposal — Indemnification”.

 

   

Upon the Closing, subject to the terms and conditions of the Business Combination Agreement, the Sponsor, FPAC’s officers and directors and their respective affiliates may be entitled to reimbursement

 

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for any reasonable out-of-pocket expenses related to identifying, investigating and consummating an initial business combination, and repayment of any other loans, if any, and on such terms as to be determined by FPAC from time to time, made by the Sponsor or certain of FPAC’s officers and directors to finance transaction costs in connection with an intended initial business combination. As of the date of this proxy statement/prospectus, neither the Sponsor nor any director or officer of FPAC has extended any loan to FPAC, incurred any out-of-pocket expense reimbursable by FPAC, or has any entitlement to any fee upon completion of the Business Combination.

Each of FPAC’s officers and directors presently has fiduciary or contractual obligations to other entities pursuant to which such officer or director is required to present a business combination opportunity to such entity. FPAC’s Amended and Restated Articles of Incorporation provides that FPAC renounces its interest in any corporate opportunity offered to any director or officer unless such opportunity is expressly offered to such person solely in his or her capacity as a director or officer of FPAC and such opportunity is one FPAC is legally and contractually permitted to undertake and would otherwise be reasonable for FPAC to pursue, and to the extent the director or officer is permitted to refer that opportunity to FPAC without violating another legal obligation. FPAC does believe, however, that neither the fiduciary duties or contractual obligations of its officers or directors, nor the waiver of the corporate opportunities doctrine in its Restated Articles of Incorporation, materially impacted its search for an acquisition target nor will materially impact its ability to complete the proposed Business Combination. In fact, as described below under “The Business Combination Proposal – Background of the Business Combination,” FPAC was able to identify approximately 50 potential business combination candidates, and engage in discussions with 34 potential targets other than Bullish Global in a relatively short period following its Initial Public Offering.

The existence of financial and personal interests of FPAC’s directors and officers may result in a conflict of interest on the part of one or more of them between what they may believe is best for FPAC and what they may believe is best for them in determining whether or not to grant a waiver in a specific situation. See the sections entitled “Risk Factors” and “The Business Combination Proposal — Interests of FPAC’s Directors and Officers in the Business Combination” for a further discussion of this and other risks.

At any time prior to the Special Meeting, during a period when they are not then aware of any material nonpublic information regarding FPAC or its securities and subject to any applicable securities laws and regulations, the Initial Shareholders, Bullish Global and/or their respective affiliates may purchase shares and/or warrants from investors, or they may enter into transactions with such investors and others to provide them with incentives to acquire FPAC Shares or vote their FPAC Shares in favor of the Business Combination Proposal. The purpose of such share purchases and other transactions would be to increase the likelihood that (i) the proposals presented for approval at the Special Meeting are approved and/or (ii) FPAC having at least $5,000,001 of net tangible assets following the exercise of redemption rights by the holders of FPAC’s Class A ordinary shares issued in FPAC’s Initial Public Offering. Any such purchases of Public Shares and other transactions may thereby increase the likelihood of obtaining shareholder approval of the Business Combination. This may result in the completion of FPAC’s Business Combination that may not otherwise have been possible. While the exact nature of any such incentives has not been determined as of the date of this proxy statement/prospectus, they might include, without limitation, arrangements to protect such investors or holders against potential loss in value of their shares, including the granting of put options and the transfer to such investors or holders of shares or rights owned by the Initial Shareholders for nominal value.

Entering into any such arrangements may have a depressive effect on FPAC Shares. 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 and may therefore be more likely to sell the shares it owns, either prior to or immediately after the Special Meeting.

 

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If such transactions are effected, the consequence could be to cause the Business Combination to be approved in circumstances where such approval could not otherwise be obtained. Purchases of shares by the persons described above would allow them to exert more influence over the approval of the proposals to be presented at the Special Meeting and would likely increase the chances that such proposals would be approved. As of the date of this proxy statement/prospectus, there have been no such discussions and no agreements to such effect have been entered into with any such investor or holder.

Stock Exchange Listing (page 288)

Bullish expects the Class A Ordinary Shares of Bullish to trade on the NYSE under the symbol “BULL” and the Bullish Warrants to trade under the symbol “BULLW” following the Closing.

Sources and Uses of Funds

The following table summarizes the sources and uses for funding the Transactions. Where actual amounts are not known or knowable, the figures below represent FPAC’s good-faith estimate of such amounts and reflect various assumptions as noted.

 

Sources

  

Acquisition Merger Consideration (1)

   $ 6,387,660,634  

Marketable securities held in Trust Account (2)

     600,000,000  
  

 

 

 

Total Sources

   $ 6,987,660,634  
  

 

 

 

Uses

  

Acquisition Merger Consideration

   $ 6,387,660,634  

Estimated Transaction Expenses

     39,351,097  

Cash on Balance Sheet

     560,648,903  
  

 

 

 

Total Uses

   $ 6,987,660,634  
  

 

 

 

 

1.

Acquisition Merger Consideration as defined and reflects Bullish’s holdings of cash and digital assets (valued using 20-day average price) as of July 31, 2022. Amount of cash and digital assets values subject to change at Closing.

2.

Assumes no redemptions.

Material U.S. Tax Consequences of the Business Combination and Exercise of Redemption Rights (page 365)

For a discussion summarizing the U.S. federal income tax considerations of the Business Combination and an exercise of redemption rights, please see “Material U.S. Federal Income Tax Consideration.” The tax consequences of the foregoing to any particular shareholder will depend on that shareholder’s particular facts and circumstances. Accordingly, please consult your tax advisor to determine the tax consequences to you of the Business Combination or an exercise of redemption rights.

For United States federal tax purposes, the Business Combination is intended to qualify as a reorganization under the provisions of Section 368(a) of the Code. Morgan, Lewis & Bockius LLP has delivered an opinion regarding certain aspects of the U.S. federal income tax treatment of the transactions, as described in this discussion. Such opinion is filed by amendment as Exhibit 8.1 to the registration statement of which this proxy statement/prospectus forms part and is based on customary assumptions, representations and covenants.

 

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Accounting Treatment of the Business Combination (page 236)

The Business Combination will be accounted for as a capital reorganization. Under this method of accounting, FPAC will be treated as the “acquired” company for financial reporting purposes. Accordingly, the Business Combination will be treated as the equivalent of Bullish Global issuing shares at the Closing of the Business Combination for the net assets of FPAC as of the Closing Date, accompanied by a recapitalization. The net assets of FPAC will be stated at historical cost, with no goodwill or other intangible assets recorded.

Comparison of Shareholders’ Rights (page 261)

Following the consummation of the Business Combination, the rights of FPAC Shareholders who become Bullish shareholders in the Business Combination will no longer be governed by FPAC’s Memorandum of Association and Articles of Association and instead will be governed by Bullish’s Amended and Restated Memorandum of Association and Articles of Association. See “Comparison of Shareholders’ Rights” beginning on page 261.

Summary Risk Factors

The risks and uncertainties described in the Risk Factors, including the following summary of select risks and uncertainties below, could materially adversely affect the Business Combination, Bullish Global and its business, financial condition and results of operations. You should read this summary together with the full and complete discussion of risk factors described under “Risk Factors” beginning on page 71 of this proxy statement/prospectus.

Risks Relating to Bullish’s Business and Industry

 

   

An early-stage company entering a highly competitive market with limited operating history, the operations of Bullish are nascent, largely unproven and subject to material legal, regulatory, operational, reputational, financial, tax, market, credit and other risks.

 

   

Bullish has only recently commenced the Full Launch of the Bullish Exchange.

 

   

Bullish does not have experience operating as a U.S. public company and may not be able to adequately develop and implement the governance, compliance, risk management and control infrastructure and culture required for a public company, including compliance with the Sarbanes Oxley Act.

 

   

Bullish’s strategy and focus on delivering high-quality, regulated, easy-to-use, and secure cryptocurrency-related financial services may not maximize short-term or medium-term financial results.

 

   

Bullish expects its operating expenses to increase in the foreseeable future and may not be able to achieve profitability or achieve positive cash flow from operations on a consistent basis, if at all.

 

   

Any significant disruption in Bullish’s planned products and services, in its information technology systems, or in any of the blockchain networks it supports, could result in a loss of customers or own funds and/or assets and adversely impact Bullish.

 

   

Bullish’s sales and marketing strategy is not fully tested or proven and may not be effective.

 

   

Bullish currently relies on Block.one to provide essential functions and resources to support its business and operations.

 

   

Bullish plans to rely on external vendors and third-party service providers to provide critical outsourcing functions.

 

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Bullish’s internal governance, risk management and compliance program, policies, systems and controls are continuing to be developed and have not been fully embedded and tested. The existing processes and controls may not be adequate or effective to mitigate risk or ensure compliance.

 

   

Any strategic investments that Bullish makes or enters into could require significant management attention, disrupting the business and harming its financial condition.

 

   

The underlying blockchain technology used by Bullish is unproven and untested in a real operational environment of the scale and complexity currently contemplated.

 

   

The future development and growth of digital assets is subject to a variety of factors that are difficult to predict and evaluate. If digital assets do not grow as Bullish expects, Bullish’s business, operating results and financial condition could be adversely affected.

 

   

Cyberattacks and security breaches of Bullish’s Exchange platform, or those impacting Bullish’s customers or third parties, could adversely impact Bullish’s brand and reputation and its business, operating results and financial condition.

 

   

The legal and regulatory treatment of the digital assets included in Bullish’s business lines is unclear, may be subject to inconsistent recognition or treatment in different jurisdictions and fast, unpredictable and retrospective changes, which may adversely impact Bullish’s business and operations and financial condition.

 

   

Bullish is subject to a multi-jurisdictional legal and regulatory environment, which can be complex and conflicting and its regulatory compliance framework may not be sufficient to mitigate all relevant legal and regulatory compliance risks across the relevant jurisdictions.

 

   

Bullish may become a party to material litigation and other legal proceedings, including actions by regulators, government and law enforcement authorities, private actions on both individual and class basis, actions against or by employees, as well as other counter-parties.

 

   

Engaging in cross-border business can make it difficult for Bullish to ensure that it adequately protects its legal rights and interests. Bullish may incur liability from breaching its legal obligations or may not be able to enforce legal rights and obligations or to enforce them consistently and predictably across these jurisdictions.

 

   

Bullish will obtain and process a large amount of sensitive customer data. Any real or perceived improper use of, disclosure of, or access to such data could harm Bullish’s reputation, as well as have an adverse effect on Bullish’s business.

 

   

Third parties may make claims or bring legal proceedings against Bullish for alleged infringement of their intellectual property rights and consequences could include having to cease offering Bullish’s products or services.

 

   

The U.S. federal income tax and non-U.S. tax treatment of digital assets is unclear, and future developments regarding the treatment of digital assets for U.S. federal income and non-U.S. tax purposes could adversely impact Bullish’s business.

 

   

Bullish depends on talented, experienced and committed personnel to operate and grow Bullish’s business and may incur increased operational costs to recruit, train, motivate and/or retain them. If Bullish is unable to do so, Bullish’s business, financial condition, results of operations and prospects may be adversely affected.

 

   

Bullish is exposed to potential fraud risk and physical security threats, both internally and externally, which could result in loss of assets for Bullish and its customers, as well as risk to the safety of Bullish’s personnel.

 

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Military conflicts such as conflict that began between Russia and Ukraine in late February 2022 has already affected global economic markets, and the uncertain resolution of this conflict could result in protracted and/or severe damage to the global economy. Even though the Bullish Exchange does not currently offer services in Russia or Ukraine and the Bullish group does not currently maintain operations or assets in those countries, the extent and duration of the military action, sanctions, and resulting market disruptions are impossible to predict, but could be substantial. Continuation and escalation of the military action or its expansion to involve other geographies and belligerents in the future may adversely affect Bullish’s business by resulting in deteriorating global or relevant local economic conditions, changes in the laws applicable to Bullish’s business, increases in illicit finance risk and other geopolitical, legal or economic consequences of war.

Risks Relating to the Business Combination

 

   

FPAC Shareholders will experience immediate dilution due to the issuance of Class A Ordinary Shares and Class B Ordinary Shares to the Bullish Global shareholders as consideration in the Business Combination. Having a minority share position likely reduces the influence that FPAC’s current shareholders have on the management of the combined company.

 

   

Since holders of FPAC’s Founder Shares and Private Placement Warrants will lose their entire investment in FPAC if the Business Combination is not completed, a conflict of interest exists in determining whether Bullish Global is an appropriate target for a business combination.

 

   

FPAC is attempting to complete the Business Combination with a private company about which little information is available, which may result in a business combination that is not as profitable as FPAC suspected, if at all.

 

   

FPAC expects to incur significant, non-recurring costs in connection with consummating the Business Combination and related transactions.

Risks Relating to Doing Business in Hong Kong

 

   

The business, financial condition and results of operations of Bullish, and/or the value of Bullish’s securities or Bullish’s ability to offer or continue to offer securities to investors may be materially and adversely affected to the extent the laws and regulations of the PRC become applicable to Bullish. See “Risk Factors—Risks Relating to Doing Business in Hong Kong — The business, financial condition and results of operations of Bullish, and/or the value of Bullish’s securities or Bullish’s ability to offer or continue to offer securities to investors may be materially and adversely affected to the extent the laws and regulations of the PRC become applicable to Bullish.

 

   

The PRC legal system is evolving rapidly and PRC laws, regulations, and rules may change quickly with little or no advance notice. The PRC government has significant authority to intervene or influence the mainland China operations of an offshore holding company at any time and has recently indicated an intent to exert more oversight and control over offerings that are conducted overseas and/or foreign investment in mainland China-based issuers.

The PRC government has issued several regulations to impose prior approval requirement on mainland China based companies raising capital offshore, and has recently sought to exert more control and impose more restrictions in this regard, and such efforts may continue or intensify in the future. On December 24, 2021, the CSRC released the CSRC Draft Rules, under which, PRC issuers that intend to list or offer securities on a foreign stock exchange through direct offshore listing or indirect offshore listing shall complete a filing with the CSRC within three business days upon the issuer’s initial public

 

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filing of its listing application documents with the foreign stock exchange. In addition, on December 28, 2021, the PRC government promulgated the Cybersecurity Review Measures, which came into effect on February 15, 2022, to impose cybersecurity review requirement on the purchase of network products and services by critical information infrastructure operators, or the data processing activities conducted by network platform operators, which affect or may affect the national security of the PRC. According to the Cybersecurity Review Measures, a cybersecurity review through the Cybersecurity Review Office under CAC is required in any of the following situations: (i) internet platform operators holding personal information of more than one million users and seeking to have their securities listed on a stock exchange in a foreign country; (ii) the purchase of network products and services by critical information infrastructure operators affect or may affect China’s national security; and (iii) network product/service or a data processing activity that is identified as affecting or may affect national security of the PRC by a member authority of the working mechanism for cybersecurity reviews.

Based on its understanding of the current PRC laws and regulations, Bullish believes that it is not required to obtain any prior approval or conduct filing under the PRC financial regulations that are effective as of the date hereof, or the CSRC Draft Rules from any PRC governmental authorities for consummating this offering, given that: (a) the CSRC currently has not issued any definitive rule or interpretation concerning whether offerings like Bullish’s are subject to the rules, and the CSRC Draft Rules are still in draft forms as of now and have no legal effect; (b) Bullish is not a PRC-incorporated company and has no business activities or subsidiaries, joint ventures or partnerships in mainland China; and (c) Bullish is not controlled by PRC companies or individuals nor formed for the purpose of seeking a public listing on an overseas stock exchange through acquisition of PRC domestic companies. Furthermore, because Bullish is not (a) a PRC-incorporated internet platform operator holding personal information of more than one million users, (b) a critical information infrastructure operator that purchases network products and services that affect or may affect China’s national security, or (c) providing network product/service or conducting any data processing activity that affect or may affect China’s national security based on the facts that Bullish (i) does not have any business activities in mainland China; (ii) does not and will not provide services to any customers located in mainland China or conduct sales and marketing activities or other communications with residents in mainland China, and (iii) takes technical measures to refrain from providing services to any customers located in mainland China or conducting sales and marketing activities or other communications with residents in mainland China, Bullish does not believe that the Cybersecurity Review Measures are applicable to the Business Combination nor does it believe that it will be required to undergo such cybersecurity review in connection with the Business Combination or that the Cybersecurity Review Measures will have any material adverse impact on the operations of Bullish.

Although Bullish has no business operations in mainland China and none of its subsidiaries are incorporated in mainland China, if it were to become subject to such oversight or discretion, there may be a material change in its operations and any action by the PRC government may significantly limit or completely hinder its ability to operate and offer or continue to offer securities to investors and may cause the value of such securities to significantly decline or become worthless. See “Risk Factors — Risks Relating to Doing Business in Hong Kong — The PRC government has significant oversight and discretion over the manner in which companies incorporated under the laws of PRC must conduct their business activities. Although Bullish has no business operations in mainland China and none of its subsidiaries are incorporated in mainland China, if it were to become subject to such oversight or discretion, there may be a material change in its operations and/or the value of Bullish’s securities, which would materially affect the interests of the investors.” and “Risk Factors — Risks Relating to Doing Business in Hong Kong — The business, financial condition and results of operations of Bullish,

 

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and/or the value of Bullish’s securities or Bullish’s ability to offer or continue to offer securities to investors may be materially and adversely affected to the extent the laws and regulations of the PRC become applicable to Bullish.”.

 

   

Bullish Global and its subsidiaries in the Cayman Islands, Gibraltar, and the United States maintain bank accounts and balances with banks in the United States. The Singapore subsidiary has local currency bank accounts in Singapore for its operational needs as a group service company. The Hong Kong subsidiary currently maintains Hong Kong dollar-denominated current and savings accounts in amounts determined to be necessary to support its operational needs in Hong Kong as a group service company. The aggregate balance as of July 31, 2022 was HK$1.8 million (equivalent to US$0.2 million). The PRC government imposes controls on the convertibility of Renminbi, the national currency of the PRC, into foreign currencies and, in certain cases, the remittance of currency out of mainland China. Although Bullish has no business operations in mainland China, if such control were to extend to Hong Kong, or if by any case Bullish were to become subject to such oversight or discretion in the future, it may restrict the ability of its Hong Kong subsidiary to remit currency maintained in Hong Kong to its offshore entities in order for its offshore entities to pay dividends or make other payments or otherwise satisfy its foreign-currency-denominated obligations. In such case, the State Administration of Foreign Exchange of China (“SAFE”) and other relevant PRC governmental authorities may limit the ability of Bullish’s Hong Kong subsidiary to purchase foreign currencies in the future to settle transactions. As the PRC government may continue to strengthen its capital controls, additional restrictions and substantial vetting processes may be instituted by SAFE for cross-border transactions. Any future restrictions on currency exchange that become applicable to Bullish’s Hong Kong subsidiary or currency that is maintained in Hong Kong may limit its ability to utilize currency maintained in Hong Kong to fund its business activities outside of China, or to pay dividends in foreign currencies. See “Risk Factors — Financial Risks — Bullish will conduct its business operations through subsidiaries and may in the future rely on dividends from subsidiaries for a substantial amount of its cash flows” for a detailed discussion of the PRC legal restrictions on the payment of dividends and Bullish’s ability to transfer cash within its organization.

 

   

Implementation of the National Security Law in Hong Kong involves uncertainty, and the recent policy pronouncements by the PRC government regarding business activities of U.S.-listed Chinese businesses may negatively impact Bullish’s existing and future operations in Hong Kong. See “Risk Factors — Risks Relating to Doing Business in Hong Kong — Implementation of the National Security Law in Hong Kong involves uncertainty, and the recent policy pronouncements by the PRC government regarding business activities of U.S.-listed Chinese businesses may negatively impact Bullish’s existing and future operations in Hong Kong.

 

   

Bullish’s securities may be delisted or prohibited from being traded “over-the-counter” under the Holding Foreign Companies Accountable Act if any PRC laws or regulations relating to the PCAOB’s access to auditor files were to apply to Bullish or its auditor or other reasons result in the PCAOB being unable to fully inspect or investigate Bullish’s auditor. The delisting or the cessation of trading “over-the-counter” of Bullish securities, or the threat of them being delisted or prohibited, may materially and adversely affect the value and/or liquidity of your investment. Additionally, if the PCAOB were unable to conduct full inspections or investigations of Bullish’s auditor, it would deprive Bullish’s investors of the benefits of such inspections or investigations. See “Risk Factors — Risks Relating to Doing Business in Hong Kong — Bullish’s securities may be delisted or prohibited from being traded “over-the-counter” under the Holding Foreign Companies Accountable Act if any PRC laws or regulations relating to the PCAOB’s access to auditor files were to apply to Bullish or its auditor or other reasons result in the PCAOB being unable to fully inspect or investigate Bullish’s auditor. The delisting or the cessation of trading “over-the-counter” of Bullish securities, or the threat of them being delisted or prohibited, may materially and adversely affect the value and/or liquidity of your investment.

 

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Additionally, if the PCAOB were unable to conduct full inspections or investigations of Bullish’s auditor, it would deprive Bullish’s investors of the benefits of such inspections or investigations.

 

   

Bullish may be required to obtain regulatory licenses or approvals in order to provide some or all of the Exchange services to Hong Kong customers which it currently does not have, or it may be required to obtain such licenses or approvals in the near future. See “Risk Factors — Risks Relating to Doing Business in Hong Kong — Bullish may be required to obtain regulatory licenses or approvals in order to provide some or all of the Exchange services to Hong Kong customers which it currently does not have, or it may be required to obtain such licenses or approvals in the near future.

 

   

Increases in labor costs may adversely affect Bullish’s business and results of operations. See “Risk Factors — Risks Relating to Doing Business in Hong Kong — Increases in labor costs may adversely affect Bullish’s business and results of operations.

Risks Related to Effecting Service of Legal Process, Enforcing Judgments or Bringing Actions against Bullish and Certain of Its Officers or Directors

 

   

Bullish is a Cayman Islands company with operations and assets in various non-U.S. jurisdictions, including Hong Kong. In addition, certain officers and directors of Bullish are expected to be based in Hong Kong. Therefore, you may experience difficulties and incur additional costs in effecting service of legal process, enforcing foreign judgments or bringing actions against Bullish and these officers and directors based on foreign laws. See “Risk Factors — Risks Related to Effecting Service of Legal Process, Enforcing Judgments or Bringing Actions against Bullish and Certain of Its Directors — You may experience difficulties and incur additional costs in effecting service of legal process, enforcing foreign judgments or bringing actions against Bullish and certain of its directors based on foreign laws.

Legal Proceedings & Settlements

Neither Bullish nor any member of the management in their capacity as such is a party to, and Bullish is not aware of any threat of, any legal proceeding that, in the opinion of Bullish’s management, is likely to have a material adverse effect on Bullish’s business, financial condition or operations.

In May 2021, Block.one reached a settlement agreement, subject to the court’s final approval, with the plaintiffs in the U.S. class action lawsuit related to Block.one’s 2018 sale of ERC-20 tokens, in which the intended Chairman of the Bullish Board is also a defendant. On August 15, 2022, the court issued a written opinion declining to approve the proposed settlement.

In 2019, Block.one reached a “neither admit nor deny” settlement with the SEC related to such sale. The SEC ordered that: (a) pursuant to Section 8A of the Securities Act, Block.one cease and desist from committing or causing any violations and any future violations of Sections 5(a) and 5(c) of the Securities Act; and (b) Block.one pay a civil money penalty in the amount of $24,000,000 to the SEC. A copy of the settlement documentation is publicly available on the SEC website. For further information about the settlement conditions see the “Risk Factors” section on page 75.

Recent Developments – Additional Private Placement Warrants

In January 2022, March 2022 and May 2022, pursuant to commitments made by FPAC’s Sponsor and the BR Investors at the time of the Initial Public Offering, FPAC sold, in each of three similar transactions, an additional 33,333 Private Placement Warrants to each of the Sponsor and the BR Investors at a price of $1.50 per warrant. The aggregate gross proceeds of $100,000 from each transaction are intended to fund certain of FPAC’s working capital needs prior to the Closing.

 

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Recent Developments - Military Action involving Russia and Ukraine

In February 2022, Russia commenced military action in Ukraine. Bullish Exchange does not currently offer services in Russia or Ukraine and the Bullish group does not currently maintain operations or assets in those countries. Nevertheless, the specific impact of the military action on Bullish’s business, while anticipated to not be material, is not determinable as of the date of this proxy statement/prospectus.

Recently adopted additional U.S., European Union and other sanctions against Russia and Belarus in connection with the military action are relevant to the Exchange’s KYC and onboarding processes and are being addressed through the Exchange’s compliance program. As explained in “Business of Bullish - Operations - Compliance”, the Exchange leverages the services of proven service providers to facilitate initial and ongoing screening for sanctioned and politically exposed persons and identifying transfers from high-risk cryptocurrency addresses. Bullish Exchange does not offer services to residents of or companies incorporated in Russia or Belarus. With respect to nationals of Russia and Belarus who are resident abroad, Bullish considers each on a case-by-case basis.

Continuation or escalation of the military action or its expansion to involve other geographies or belligerents in the future may adversely affect Bullish’s business by resulting in deteriorating global or relevant local economic conditions, changes in laws applicable to Bullish’s business, increases in illicit finance risk and other geopolitical, legal or economic consequences of war. See “Risk Factors - Adverse economic conditions may adversely affect Bullish’s business”, “Risk Factors - Because Bullish’s potential customers are located in diverse markets around the world, Bullish’s revenue is vulnerable to local market conditions around the world and geopolitical developments, such as trade wars and foreign exchange limitations”, “Risk Factors - The pace of change in the legal and regulatory environments relevant to Bullish can be fast and unpredictable and may require Bullish to adapt and change its business operations, including the operations of the Bullish Exchange, Bullish Treasury and other business lines”, “Risk Factors - Bullish’s Exchange platform may be exploited by customers to facilitate illegal activities or other serious misconduct, which may not be detected or prevented by Bullish’s due diligence systems and controls. If any of Bullish’s customers exploit its platform for illegal activities, Bullish’s business can be adversely affected”, and “Risk Factors - Natural disasters, COVID-19 and other pandemics, wars, terrorist attacks and other crises involving any of the countries in which Bullish has operations could adversely affect its business continuity, operations and financial results”.

Recent Developments - Wells Fargo Waiver of Deferred IPO Underwriting Discount

On May 20, 2022, FPAC received a letter from Wells Fargo Securities, LLC (the “IPO Underwriter”), which was the sole underwriter of FPAC’s December 2020 IPO, in which the IPO Underwriter gratuitously waived its entitlement to all or any part of the approximately $15.4 million deferred underwriting discount from the IPO. This fee was agreed between FPAC and the IPO Underwriter in the IPO underwriting agreement signed by the parties on December 2, 2020, and was earned in full upon completion of the IPO but payment was conditioned upon the closing of FPAC’s business combination. Following the IPO, there has been no engagement of the IPO Underwriter by FPAC, including for any financial or merger-related advisory services. Without limiting the generality of the foregoing, the IPO Underwriter has not acted for FPAC (or Bullish) in any role with respect the Business Combination, including the related PIPE Investment, and has not been involved in the preparation of any disclosure included herein, including any analysis underlying disclosure. Notwithstanding that lack of any role (which the IPO Underwriter acknowledges in its letter), the IPO Underwriter advised FPAC “for the avoidance of doubt” that it resigns, or ceases or refuses to act in, every office, capacity and relationship with respect to the Transaction. In addition, in its letter, the IPO Underwriter disclaimed any responsibility for any portion of the registration statement of which this proxy statement/prospectus is a part.

 

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In its letter, while it provided no express reason for its action, the IPO Underwriter stated that such waiver of entitlement to the deferred underwriter discount and such resignation, ceasure and refusal to act was “not the result of any dispute or disagreement with FPAC, Bullish of any matter relating to FPAC’s or Bullish’s respective operations policies, procedures or practices.”

Recent Developments – Placement Agents Waiver of Placement Fees

On June 1, 2022 and June 10, 2022, J.P. Morgan Securities LLC (“JPM”) and Nomura Securities International, Inc. (“Nomura” and together with JPM, the “Resigned Placement Agents”), respectively, delivered to FPAC and Bullish notices of resignation of their roles as placement agents in connection with the PIPE Investment to FPAC. Each of the Resigned Placement Agents waived any right to receive placement fees, due at the time, pursuant to an engagement letter, dated May 17, 2021, among JPM, FPAC, Jefferies LLC, Nomura, Berenberg Capital Markets LLC and Galaxy Digital Partners LLC (the “Engagement Letter”), which agreement is related to the PIPE Investment. The aggregate amount of fees waived by the Resigned Placement Agents is approximately $6 million. Please see “Unaudited Pro Forma Combined Financial Information” for further information and the estimated transaction fees and expenses required to be paid in connection with the Business Combination. FPAC and Bullish continue to have customary obligations with respect to use of information and indemnification under the Engagement Letter with the Resigned Placement Agents. However, FPAC and Bullish are not party to any agreements that would require the payment of any fees to, or require the reimbursement of any expenses (other than de minimis expenses of legal counsel to the Resigned Placement Agents), the Resigned Placement Agents with respect to the Business Combination or any other transactions described herein. In addition, each of the Resigned Placement Agents have delivered notices of resignation to the SEC pursuant to Section 11(b)(1) under the Securities Act. Each Resigned Placement Agents’ resignation was not a result of any dispute or disagreement between FPAC, Bullish or the Resigned Placement Agents.

At no time prior to or after their resignation did any of the Resigned Placement Agents indicate that they had any specific concerns with the Business Combination and the Resigned Placement Agents did not advise FPAC or Bullish that they were in disagreement with the contents of this prospectus/proxy statement or the registration statement of which it forms a part. The Resigned Placement Agents did not prepare or provide any of the disclosure in this prospectus/proxy statement or any analysis underlying such disclosure or any other materials or work product that have been provided to FPAC’s shareholders or the PIPE Investors. However, the Resigned Placement Agents did receive a draft of this prospectus/proxy statement prepared by FPAC and Bullish and had the opportunity to provide comments. There can be no assurances that Resigned Placement Agents agree with this disclosure and no inference can be drawn to this effect. Shareholders should not put any reliance on the fact that one or more of the Resigned Placement Agents were previously involved with any aspect of the transactions described in this prospectus/proxy statement.

Each of the Resigned Placement Agents conducted usual and customary placement agent services in connection with the PIPE Investment, including logistical coordination on investor outreach, data room management and participation in the assembly of marketing materials; however, the PIPE Investment was not contingent upon any continued involvement of the Resigned Placement Agents in the transactions and each of the PIPE Investors had specifically disclaimed reliance on any statement, representation or warranty made by, among others, each of the Resigned Placement Agents in determining to participate in the PIPE investment.

Please see “The Business Combination Agreement — The Background of the Business Combination Agreement” for further details as to the involvement of the Resigned Placement Agents in the Business Combination and the PIPE Investment.

 

 

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The services provided by the Resigned Placement Agents under the Engagement Letter were substantially complete at the time of their resignations. FPAC and Bullish did not consider engaging and do not intend to engage additional placement agents. Under their terms, the PIPE Subscription Agreements expired and terminated on July 8, 2022. As a result, the Business Combination will proceed without the PIPE Investment. No efforts were made by FPAC or Bullish Global management to extend the PIPE Investment expiration date. The PIPE Investment was never a closing condition of the Business Combination.

The resignation of the Resigned Placement Agents and the waiver of fees for services that have already been rendered is unusual. FPAC shareholders may be more likely to elect to redeem their shares as a result of such resignations and as a result, FPAC may not have sufficient funds to meet the condition of FPAC having at least $5,000,001 in net tangible assets after giving effect to the payment of amounts that FPAC will be required to pay to redeeming shareholders upon consummation of the Business Combination.

FPAC shareholders may believe that when financial institutions, such as the Resigned Placement Agents, are named in a proxy statement/prospectus, the involvement of such institutions typically presumes a level of due diligence and independent analysis on the part of such financial institution and that the naming of such financial institutions generally means that a financial institution has done a level of due diligence ordinarily associated with a professional engagement. The resignation letters of each of the Resigned Placement Agents with respect to their engagements with FPAC and Bullish and the notices of resignation sent to the SEC pursuant to Section 11(b)(1) under the Securities Act, each stated that the Resigned Placement Agents expressly disclaimed responsibility for any part of this proxy statement/prospectus. Neither FPAC nor Bullish will speculate about the reasons why the Resigned Placement Agents withdrew from their roles as placement agents in connection with the Business Combination and forfeited their fees after doing substantially all the work to earn their fees. Accordingly, shareholders should not place any undue reliance on the fact that the Resigned Placement Agents have been previously involved with this transaction.

 

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SELECTED HISTORICAL CONSOLIDATED FINANCIAL INFORMATION OF FPAC

This section contains the following selected historical financial information to assist you in your analysis of the financial aspects of the Business Combination: FPAC’s balance sheet information as of June 30, 2022 and September 30, 2021, as well as FPAC’s statements of operations information for the nine months ended June 30, 2022, the period from October 19, 2020 (inception) through June 30, 2021, and the period from October 19, 2020, (inception) through September 30, 2021. The selected historical financial information has been derived from FPAC’s (i) unaudited financial statements as of June 30, 2022 and for the nine months ended June 30, 2022, and the period from October 19, 2020 (inception) through June 30, 2021 and (ii) audited financial statements as of September 30, 2021, for the period from October 19, 2020 (inception) to September 30, 2021, included elsewhere in this proxy statement/prospectus.

FPAC’s financial statements have been prepared in accordance with generally accepted accounting principles in the United States (“U.S. GAAP”).

The information is only a summary and should be read in conjunction with FPAC’s financial statements and related notes contained elsewhere herein. The historical results included below and elsewhere in this proxy statement/prospectus are not indicative of the future performance of FPAC. Certain amounts that appear in this section may not sum due to rounding.

 

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SELECTED CONDENSED BALANCE SHEET INFORMATION

 

     As of
June 30,
2022
    As of
September 30,
2021
 
     (unaudited)     (in US$,
except share
and per
share data)
 

Assets

    

Current assets:

    

Cash

   $ 2,415,903     $ 172,454  

Prepaid expenses

     237,917       642,917  
  

 

 

   

 

 

 

Total current assets

     2,653,820       815,371  

Investments held in Trust Account

     600,676,688       600,209,262  
  

 

 

   

 

 

 

Total Assets

   $ 603,330,508     $ 601,024,633  
  

 

 

   

 

 

 

Liabilities, Class A Ordinary Shares Subject to Possible Redemption and Shareholders’ Deficit

    

Current liabilities:

    

Accrued expenses

   $ 9,400,375     $ 5,155,500  

Accounts payable

     75,118       29,474  
  

 

 

   

 

 

 

Total current liabilities

     9,475,493       5,184,974  

Deferred legal fees

     400,000       400,000  

Deferred underwriting commissions

           15,437,500  

Derivative warrant liabilities

     7,615,997       46,710,000  
  

 

 

   

 

 

 

Total liabilities

     17,491,490       67,732,474  

Commitments and Contingencies

    

Class A ordinary shares subject to possible redemption; 60,000,000 shares at $10.00 per share

     600,576,688       600,000,000  

Shareholders’ Deficit

    

Preference shares, $0.0001 par value; 5,000,000 shares authorized; none issued and outstanding

     —         —    

Class A Ordinary Shares, $0.0001 par value; 500,000,000 shares authorized; no non-redeemable shares issued and outstanding

     —         —    

Class B Ordinary Shares, $0.0001 par value; 50,000,000 shares authorized; 9,750,000 shares issued and outstanding

     975       975  

Additional paid-in capital

     —         —    

Retained earnings

    

Accumulated deficit

     (14,738,645     (66,708,816
  

 

 

   

 

 

 

Total shareholders’ deficit

     (14,737,670     (66,707,841
  

 

 

   

 

 

 

Total Liabilities, Class A Ordinary Shares Subject to Possible Redemption and Shareholders’ Deficit

   $ 603,330,508     $ 601,024,633  
  

 

 

   

 

 

 

 

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SELECTED CONDENSED STATEMENTS OF OPERATIONS INFORMATION

 

     For the
Nine Months Ended

June 30, 2022
    For the
Period From
October 19, 2020,
(Inception) Through
June 30, 2021
    For the
Period From
October 19, 2020,
(Inception) Through
September 30, 2021
 
     (unaudited)     (unaudited)        

General and administrative expenses

   $ 5,252,067     $ 4,617,788     $ 7,010,698  

Loss on operations

     (5,252,067     (4,617,788     (7,010,698

Other income (expense)

      

Change in fair value of derivative warrant liabilities

     39,322,000       15,660,000       7,290,000  

Loss on sale of Private Placement Warrants

     —         (3,500,000     (3,500,000

Offering costs — derivative warrant liabilities

     —         (1,684,760     (1,684,760

Extension fee income

     2,500,000      

Income (loss) from investments held in Trust Account

     467,425       201,707       209,262  

Gain on settlement of deferred underwriting commissions

     15,437,500      
  

 

 

   

 

 

   

 

 

 

Net income (loss)

   $ (52,474,858   $ 6,059,159     $ (4,696,196
  

 

 

   

 

 

   

 

 

 

Weighted average shares outstanding of Class A ordinary shares — Basic

     60,000,000       48,577,075       51,623,188  

Weighted average shares outstanding of Class A ordinary shares — Diluted

     (60,000,000     48,577,075       51,623,188  

Basic net income (loss) per ordinary share, Class A

   $ (0.75   $ 0.10     $ (0.08

Diluted net income (loss) per ordinary share, Class A

   $ (0.75   $ 0.10     $ (0.08

Weighted average shares outstanding of Class B Ordinary Shares — Basic and diluted

     9,750,000       9,750,000       9,750,000  

Basic net income (loss) per ordinary share, Class B

   $ (0.75   $ 0.10     $ (0.08

Diluted net income (loss) per ordinary share, Class B

   $ (0.75   $ 0.10     $ (0.08

 

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SELECTED HISTORICAL CONSOLIDATED FINANCIAL INFORMATION OF BULLISH GLOBAL

The following table sets forth selected historical financial information derived from Bullish Global’s audited consolidated financial statements for the period from October 23, 2020, (incorporation) to December 31, 2020, and for the year ended December 31, 2021, as well as the unaudited consolidated financial statements for the six months ended June 30, 2021 and 2022, which are included elsewhere in this proxy statement/prospectus. The historical results presented below are not necessarily indicative of the results to be expected for any future period. You should carefully read the following selected financial information in conjunction with the section entitled “Bullish Global’s Management’s Discussion and Analysis of Financial Condition and Results of Operations” and Bullish Global’s financial statements and the related notes contained elsewhere in this proxy statement/prospectus.

SELECTED CONSOLIDATED INCOME STATEMENT DATA

 

    For the six
months ended
June 30, 2022
    For the six
months ended
June 30, 2021
    For the year
ended
December 31,
2021
    For the period from
October 23, 2020,
(Date of Incorporation)
to December 31, 2020
 
   

(in US$ thousands, except per share data)

 

Revenue

    31,115,697       —         1,321,565       —    

Cost of revenue

    (31,073,040     —         (1,321,272     —    

Change in fair value of digital assets held, net

    (3,803,805     —         (1,043,758     —    

Gross margin

    (3,761,148     —         (1,043,465     —    

Legal and professional fees

    (11,946     (13,710     (33,704     (10

Compensation and benefits

    (34,858     (19,951     (59,307     —    

Intercompany service fees

    (34,942     (62,271     (112,676     (19,816

Other operating expenses

    (35,353     (5,119     (26,459     (14

Other expense

    —         —         (49     —    

Net operating loss

    (3,878,247     (101,051     (1,275,660     (19,840

Finance income

    283       512       1,511       3  

Finance expense

    (5,558     —         (35     —    

Amortization of convertible redeemable preference shares

    (56,448     (72,087     (126,800     —    

Loss before income tax

    (3,939,970     (172,626     (1,400,984     (19,837

Income tax expense

    (252     —         (263     —    

Net loss

    (3,940,222     (172,626     (1,401,247     (19,837

Shares outstanding

    225,001       225,001       225,001       3,215  

Basic attributable loss per share

    (17.51     (0.77     (6.23     (6.17

Diluted attributable loss per share

    (17.51     (0.77     (6.23     (6.17

 

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SELECTED CONSOLIDATED STATEMENT OF FINANCIAL POSITION DATA

 

     As of June 30, 2022      As of December 31, 2021  
     (in US$ thousands)  

ASSETS

     

Non-current assets

     18,821        11,692  

Current assets

     3,752,258        7,443,539  
  

 

 

    

 

 

 

Total assets

     3,771,079        7,455,231  

EQUITY AND LIABILITIES

     

Total equity

     2,182,807        6,110,931  

Liabilities

     

Non-current liabilities

     1,231,504        1,171,881  

Current liabilities

     356,768        172,419  
  

 

 

    

 

 

 

Total liabilities

     1,588,272        1,344,300  
  

 

 

    

 

 

 

Total equity and liabilities

     3,771,079        7,455,231  

SELECTED CONSOLIDATED CASH FLOW STATEMENT DATA

 

     For the six
months ended
June 30, 2022
    For the six
months ended
June 30, 2021
    For the year ended
December 31, 2021
    For the period
from October 23, 2020,
(Date of Incorporation) to
December 31, 2020
 
    

(in US$ thousands)

 

Net cash used in operating activities

     (460,580     (69,863     (120,946     (25

Net cash (used in)/generated from investing activities

     (1,025     951,056       1,502,939       21,402  

Net cash (used in)/generated from financing activities

     (6,236     (339,870     (340,355     218,000  
  

 

 

   

 

 

   

 

 

   

 

 

 

Net (decrease)/increase in cash and cash equivalents, customer segregated cash and restricted cash

     (467,841     541,323       1,041,638       239,377  

Cash and cash equivalents, customer segregated cash and restricted cash at the beginning of the year/period

     1,281,015       239,377       239,377       —    

Cash and cash equivalents, customer segregated cash and restricted cash at the end of the year/period

     813,174       780,700       1,281,015       239,377  
  

 

 

   

 

 

   

 

 

   

 

 

 

Net change in cash and cash equivalents, customer segregated cash and restricted cash

     (467,841     541,323       1,041,638       239,377  

 

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SELECTED UNAUDITED PRO FORMA CONDENSED FINANCIAL STATEMENTS

The following summary unaudited pro forma condensed combined financial data (the “Selected Pro Forma Data”) gives effect to the Business Combination and is described in the section entitled “Unaudited Pro Forma Condensed Combined Financial Information.” The Business Combination is anticipated to be accounted for as a capital reorganization. Under this method of accounting, FPAC will be treated as the “acquired” company for financial reporting purposes and the Business Combination will be treated as the equivalent of Bullish Global issuing shares at the Closing of the Business Combination for the net assets of FPAC as of the Closing date, accompanied by a recapitalization.

The summary unaudited pro forma condensed combined statement of financial position data as of June 30, 2022, gives effect to the Business Combination as if it had occurred on June 30, 2022. The summary unaudited pro forma condensed combined income statement data for the six months ended June 30, 2022 and for the year ended December 31, 2021, give effect to the Business Combination as if it had occurred on January 1, 2021.

The Selected Pro Forma Data has been derived from, and should be read in conjunction with, the more detailed unaudited pro forma condensed combined financial information appearing in the section entitled “Unaudited Pro Forma Condensed Combined Financial Information.” The unaudited pro forma condensed combined financial information is based upon, and should be read in conjunction with, the consolidated financial statements and related notes of Bullish Global and the financial statements and related notes including any restatements of FPAC available elsewhere.

The Selected Pro Forma Data has been presented for informational purposes only and is not necessarily indicative of actual financial position and results of operations that would have been achieved had the Business Combination and related transactions occurred on the dates indicated. In addition, the Selected Pro Forma Data does not purport to project the future financial position or operating results of the post-combination company. The unaudited pro forma adjustments are based on information currently available and reflect various assumptions and estimates underlying the unaudited pro forma adjustments that are described in the notes to the accompanying unaudited pro forma consolidated condensed combined financial information. Actual results may differ materially from the assumptions used to present the accompanying unaudited pro forma condensed combined financial information. As the unaudited pro forma condensed combined financial information has been prepared based on these preliminary estimates, including assumptions about digital asset prices, the final amounts recorded may differ materially from the information presented. As a result, this should be read in conjunction with the historical financial information included elsewhere in this proxy statement/prospectus.

The Selected Pro Forma Data has been prepared assuming two alternative levels of redemption of FPAC Class A ordinary shares by the Public Shareholders for cash equal to their pro rata share of the aggregate amount on deposit in the Trust Account, and reflect, in the case of maximum redemptions, terms under the Letter Agreement Amendment:

 

   

Assuming No Redemptions: This presentation assumes that no Public Shareholders exercise redemption rights with respect to their Public Shares for cash in the Trust Account and assuming the Sponsor forfeits 400,000 Private Placement Warrants of FPAC, the BR investors forfeit 100,000 Private Placement Warrants of FPAC, and the Exchange Ratio (as defined in the Business Combination Agreement) of Bullish Global Shares to Bullish Shares was calculated using the July 31, 2022 price of the digital assets (using the 20-day average price).

 

   

Assuming Maximum Redemptions: This presentation assumes that 59,510,000 of FPAC Public Shares are redeemed for their pro rata share of the cash in the Trust Account. This scenario gives effect to FPAC share redemptions of 59,510,000 shares for aggregate redemption payments of

 

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US$595,100,000 at a redemption price of US$10.00 per share based on the investments held in the Trust Account as of June 30, 2022, and assuming the Exchange Ratio (as defined in the Business Combination Agreement) of Bullish Global Shares to Bullish Shares was calculated using the July 31, 2022 price of the digital assets (using the 20-day average price). In addition, it assumes the Sponsor forfeits 1,950,000 Class A Ordinary Shares of Bullish otherwise issuable in the Business Combination in respect of the Sponsor’s Founder Shares and forfeits 400,000 Private Placement Warrants of FPAC. It also assumes the BR Investors forfeit for cancellation an aggregate 100,000 Private Placement Warrants of FPAC.

 

     Assuming no
redemption of
shares
    Assuming
maximum
redemption of
shares
 
    

(in US$ thousands, except per

share data)

 

Summary Unaudited Pro Forma Condensed Combined Income Statement Data for the six months ended June 30, 2022

    

Revenue

     31,115,697       31,115,697  

Gross margin

     (3,761,148     (3,761,148

Total operating expenses

     (129,201     (128,135

Net operating loss

     (3,890,349     (3,889,283

Loss for the period

     (3,905,982     (3,904,916

Pro forma weighted average number of shares outstanding, basic

     708,516       647,056  

Basic attributable loss per share

     (5.51     (6.03

Pro forma weighted average number of shares outstanding, diluted

     708,516       647,056  

Diluted attributable loss per share

     (5.51     (6.03

Summary Unaudited Pro Forma Condensed Combined Income Statement Data for the year ended December 31, 2021

    

Revenue

     1,321,565       1,321,565  

Gross margin

     (1,043,465     (1,043,465

Total operating expenses

     (387,506     (375,670

Net operating loss

     (1,430,971     (1,419,135

Loss for the year

     (1,555,293     (1,543,457

Pro forma weighted average number of shares outstanding, basic

     708,516       647,056  

Basic attributable loss per share

     (2.20     (2.39

Pro forma weighted average number of shares outstanding, diluted

     708,516       647,056  

Diluted attributable loss per share

     (2.20     (2.39

Summary Unaudited Pro Forma Condensed Combined Statement of Financial Position Data as of June 30, 2022

    

Total current assets

     4,331,764       3,736,088  

Total assets

     4,350,585       3,754,909  

Total current liabilities

     356,768     356,768  

Total liabilities

     372,177     372,177

Total shareholders’ equity

     3,978,408       3,382,732  

 

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Comparative Historical and Unaudited Pro Forma Per Share Information

The following table sets forth the historical comparative share information for Bullish Global and FPAC on a standalone basis and the unaudited pro forma combined share information for the period ended June 30, 2022, after giving effect to the Business Combination, assuming two redemption scenarios:

 

   

Assuming No Redemptions: This presentation assumes that no Public Shareholders exercise redemption rights with respect to their Public Shares for cash in the Trust Account and assuming the Sponsor forfeits 400,000 Private Placement Warrants of FPAC, the BR investors forfeit 100,000 Private Placement Warrants of FPAC, and the Exchange Ratio (as defined in the Business Combination Agreement) of Bullish Global Shares to Bullish Shares was calculated using the July 31, 2022 price of the digital assets (using the 20-day average price).

 

   

Assuming Maximum Redemptions: This presentation assumes that 59,510,000 of FPAC Public shares are redeemed for their pro rata share of the cash in the Trust Account. This scenario gives effect to FPAC share redemptions of 59,510,000 shares for aggregate redemption payments of US$595,100,000 at a redemption price of US$10.00 per share based on the investments held in the Trust Account as of June 30, 2022, and assuming the Exchange Ratio (as defined in the Business Combination Agreement) of Bullish Global Shares to Bullish Shares was calculated using the July 31, 2022 price of the digital assets (using the 20-day average price). In addition, it assumes the Sponsor forfeits 1,950,000 Class A Ordinary Shares of Bullish otherwise issuable in the Business Combination in respect of the Sponsor’s Founder Shares and forfeits 400,000 Private Placement Warrants of FPAC. It also assumes the BR investors forfeit for cancellation an aggregate 100,000 Private Placement Warrants of FPAC.

The following comparative per share data is only a summary and should be read together with the historical financial information of FPAC and Bullish Global as well as the financial statements of FPAC and Bullish Global and related notes that are included elsewhere in this proxy statement/prospectus. The following comparative per share data is derived from, and should also be read in conjunction with, the unaudited pro forma condensed combined financial information and related notes included elsewhere in this proxy statement/prospectus.

The comparative per share data does not purport to represent the earnings per share which would have occurred had the companies been combined during the periods presented, nor earnings per share for any future date or period. The unaudited pro forma combined book value per share information below does not purport to represent what the value of FPAC or Bullish Global would have been had the companies been combined during the period presented.

 

    Historical     Pro Forma Combined  
    Bullish
Global
    FPAC     Assuming No
Redemption
    Assuming Maximum
Redemption
 
    (in US$ thousands, except per share data)  

Weighted average shares outstanding
— basic and diluted (in thousands)

       

Class A

    225,001       60,000       708,516       647,056  

Class B

    N/A       9,750       N/A       N/A  

For the period ended June 30, 2022

       

Profit/(loss) for the six months ended
June 30, 2022 attributable to the
owners of the parent

  $ (3,940,222   $ 61,846     $ (3,905,982   $ (3,904,916

Class A attributable loss per share
-basic and diluted

    (17.51     0.89       (5.51     (6.03

Class B attributable loss per share
-basic and diluted

    N/A       0.89       N/A       N/A  

Equity attributable to owners of the parent

  $ 2,182,807     $ (14,737   $ 3,978,408     $ 3,382,732  

Class A attributable profit/loss per share
-basic and diluted

    9.70       (0.21     5.62       5.23  

Class B attributable profit/loss per share
-basic and diluted

    N/A       (0.21     N/A       N/A  

 

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RISK FACTORS

You should carefully review and consider the following risk factors and the other information contained in this proxy statement/prospectus, including the Annexes, in evaluating the Business Combination and the proposals to be voted on at the Special Meeting. You should carefully consider the following risk factors in addition to the other information included in this proxy statement/prospectus, including matters addressed in the section entitled “Cautionary Note Regarding Forward-Looking Statements.” Bullish, FPAC or Bullish Global may face additional risks and uncertainties that are not presently known to Bullish, FPAC or Bullish Global, or that Bullish, FPAC or Bullish Global currently deems immaterial, which may also impair Bullish’s, FPAC’s or Bullish Global’s business or financial condition. In this section, unless the context indicates otherwise, Bullish refers to Bullish Global and its subsidiaries prior to the consummation of the Business Combination, and to Bullish and its subsidiaries, including Bullish Global, following consummation of the Business Combination.

Risks Related to Bullish’s Business Strategy and Operations

As an early-stage company entering a highly competitive market with limited operating history, the operations of Bullish are nascent, unproven and subject to material legal, regulatory, operational, reputational, financial, tax, market, credit and other risks.

Bullish has limited operating history in the highly competitive digital assets industry. The Bullish Exchange commenced the Soft Launch in November 2021 and commenced the Full Launch on December 21, 2021. In addition, Bullish is not currently profitable from its operations and it has not been since its inception. There is no assurance that Bullish will achieve an acceptable return on shareholders’ investments and the likelihood of success must be considered in light of the early stage of its operations. Even if Bullish accomplishes its operational objectives, it may not generate positive cash flows or profits.

As a young business, Bullish may be more vulnerable to such risks and corresponding risk events may have greater and disproportionate impact on its business, operations and reputation relative to a more mature or established business.

The Bullish Treasury, a separate treasury unit operated by Bullish Capital, is primarily intended for providing liquidity on the Bullish Exchange through contribution to the Liquidity Pools. If Bullish is unable to successfully build its business while controlling expenses, its ability to continue its business could depend on the ability to raise sufficient additional capital, obtain sufficient financing and monetize assets. Even though Bullish has raised debt financing, there can be no guarantee that in the future Bullish will be able to raise funding in sufficient quantity or at acceptable terms to fund the continued development of its business. The occurrence of any of the foregoing risks would have an adverse effect on Bullish’s business, financial condition and results from operations.

Furthermore, as Bullish’s business will be subject to legal, regulatory, operational, reputational, tax and other risks in every jurisdiction, including those applicable due to its use of cryptocurrency and blockchain technology, there is no assurance its business will ever be profitable. Bullish may fail to develop its products and services or produce a return for its investors. Without limiting the generality of the foregoing, Bullish does not offer the Exchange services in the United States at Launch due to federal and state legal and regulatory restrictions. See “Regulatory Compliance — Bullish’s failure to obtain and maintain required regulatory licenses or approvals, or otherwise comply with any laws and regulations, could adversely affect its ability to launch its product or to offer its product to certain segments of customers around the world. In particular, Bullish does not offer the Exchange services in the United States or mainland China at Launch.

From time to time, Bullish may also offer new products and services or undertake other strategic projects. There are substantial risks and uncertainties associated with these efforts and Bullish could invest significant capital and resources into such efforts. Regulatory requirements can affect whether initiatives are able to be

 

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brought to market in a manner that is timely and attractive to Bullish’s customers. Initial timetables for the development and introduction of new products or services and price and profitability targets may not be met. New products or services may need to be initially launched on a limited basis. In addition, Bullish’s revenues and costs may fluctuate because new products and services generally require startup costs while revenues take time to develop, which could adversely impact Bullish’s results of operations.

You should consider Bullish’s business and prospects in light of the risks and significant challenges it faces as a new entrant into its industry, including, among other things, with respect to its ability to:

 

   

develop, launch and operate a reliable and quality cryptocurrency trading platform;

 

   

obtain necessary regulatory approvals in a timely manner;

 

   

build a well-recognized and -respected brand;

 

   

establish and expand its customer base;

 

   

implement, maintain and improve its operational efficiency;

 

   

execute its business model and maintain reliable, secure, high-performance and scalable technology infrastructure;

 

   

navigate in a new and rapidly evolving and changing space;

 

   

predict its future revenues and appropriately budget for its expenses;

 

   

attract, retain and motivate talented employees;

 

   

anticipate trends that may emerge and affect its business;

 

   

anticipate and adapt to changing market conditions, including technological developments and changes in the competitive landscape; and

 

   

navigate an evolving and complex global regulatory environment.

If Bullish fails to adequately address any or all of these risks and challenges, such failure could have an adverse effect on Bullish’s reputation, business, financial condition, results from operations and share price.

Bullish may not be able to adapt quickly or effectively to changes in the fast-evolving digital assets industry and regulatory environment.

The fast-evolving digital assets industry has been characterized by many rapid, significant, and disruptive products, services and technologies in recent years. Bullish expects new products, services and technologies to continue to emerge and evolve, which may be superior to, or render obsolete, the products and services that Bullish intends to provide. Competitors may be able to respond more quickly and effectively than Bullish can to new or changing opportunities, technologies, standards or customer requirements. Bullish cannot predict the effects of new products, services and technologies on Bullish’s proposed business. Unlike many of its competitors, Bullish has limited operating history and has not fully established its customer base and has limited personnel and other resources. Because of its current stage of business development, Bullish may not be able to adapt quickly or effectively to changes in the industry. Bullish believes that its ability to grow its customer base and net revenue will depend heavily on its ability to innovate and create successful new products and services and to keep pace with rapidly changing technology. In particular, developing and incorporating new products and services into its business may require substantial expenditures, take considerable time, and ultimately may not be successful. Any new products or services could fail to attract customers, generate revenue, or perform or integrate well with third-party applications and platforms. In addition, Bullish must continue to enhance its technical infrastructure and other technology offerings to remain competitive and maintain a platform that has the required functionality, performance, capacity, security, and speed to attract and retain customers. Moreover, Bullish’s ability to adapt and compete with new products and services may be inhibited by regulatory

 

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requirements and general uncertainty in the law, constraints by Bullish’s banking partners and payment processors, third-party intellectual property rights, or other factors. The success of Bullish’s business also depends on its ability to address and adapt quickly or effectively to changes in the regulatory environment of the digital assets industry.

As a result, Bullish expects to expend significant costs and expenses to develop Bullish’s Exchange platform to meet the evolving needs of the industry. Bullish’s success will depend on its ability to develop and incorporate new offerings and adapt to technological changes, evolving industry practices and the regulatory environment. If Bullish is unable to do so in a timely or cost-effective manner, its business and ability to successfully compete and attract new customers may be adversely affected. If Bullish’s technology solutions do not work as planned, or do not meet or continue to meet the level of quality required, its customers or its regulators, it may make transacting business less efficient, more expensive and potentially prone to errors, thereby reducing the positive effects Bullish seeks to make available to its customers through the adoption of blockchain technology.

Risks Related to Being a Public Company

Bullish does not have experience operating as a U.S. public company and may not be able to adequately develop and implement the governance, compliance, risk management and control infrastructure and culture required for a public company, including compliance with the Sarbanes-Oxley Act.

Bullish does not have experience operating as a U.S. public company. Some of Bullish’s proposed executive officers have only limited experience in managing a U.S. public company, which makes their ability to comply with applicable laws, rules and regulations uncertain. Bullish’s failure to comply with all laws, rules and regulations applicable to U.S. public companies could subject Bullish or its management to regulatory scrutiny or sanction, which could harm its reputation and share price.

Prior to becoming a U.S. reporting company, Bullish has not previously been required to prepare or file periodic and other reports with the SEC or to comply with the other requirements of U.S. federal securities laws applicable to public companies. Bullish has not previously been required to establish and maintain the disclosure controls and procedures, and internal controls over financial reporting applicable to a public company in the United States, including the Sarbanes-Oxley Act. Although Bullish is in the process of developing and implementing its governance, compliance, risk management and control framework and culture required for a public company, Bullish may not be able to meet the requisite standards expected by U.S. regulators and/or its investors. Bullish may also encounter errors, mistakes and lapses in processes and controls, resulting in failure to meet the requisite standards expected of a public company.

As a U.S. reporting company, Bullish will incur significant legal, accounting and other expenses. Compliance with reporting, internal control over financial reporting and corporate governance obligations from which foreign private issuers are not exempt may require members of its management and its finance and accounting staff to divert time and resources from other responsibilities to ensure these additional regulatory requirements are fulfilled and may increase Bullish’s legal, accounting, insurance and compliance costs. Bullish cannot predict or estimate the amount of additional costs it may incur or the timing of such costs.

If it fails to adequately implement the required governance and control framework and culture, Bullish can be more at risk of failing to comply with significant rules or requirements associated with being a public company. Such failure could result in the loss of investor confidence and could harm Bullish’s reputation and cause the market price of Bullish’s securities to decline. Other challenges in complying with these regulatory requirements may arise because Bullish may not be able to complete its evaluation, testing and any required remediation in a timely fashion. In addition, any current or future controls may be considered as inadequate due to changes or increased complexity in regulations, operating environment or other reasons.

Due to inadequate governance and internal control policies, misstatements or omissions due to error or fraud may occur and may not be detected, which could result in failures to make required filings in a timely manner

 

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and make filings containing incorrect or misleading information. Any of these outcomes could result in SEC enforcement actions, monetary fines or other penalties, litigations, damage to Bullish’s reputation, business, financial condition, operating results and share price.

As a foreign private issuer, Bullish is exempt from a number of rules under U.S. securities laws and is permitted to file less information with the SEC than U.S. public companies; as a result, investors may receive less information regarding Bullish that may adversely impact their investment decision-making.

Bullish is a foreign private issuer, as defined in the SEC rules and regulations, and, consequently, it is not subject to all the disclosure requirements applicable to companies organized within the United States, including certain rules under the Exchange Act that regulate disclosure obligations and procedural requirements related to the solicitation of proxies, consents or authorizations applicable to a security registered under the Exchange Act. In addition, Bullish’s officers and directors are exempt from the reporting and “short-swing” profit recovery provisions of Section 16 of the Exchange Act and related rules with respect to their purchases and sales of the Bullish’s securities. Moreover, Bullish is not required to file periodic reports and financial statements with the SEC as frequently or promptly as U.S. public companies. Accordingly, there may be less publicly available information concerning Bullish than there is for U.S. public companies, which may adversely impact investors’ decision-making with respect to Bullish’s securities.

As a foreign private issuer and “controlled company,” Bullish can rely on exemptions from certain corporate governance requirements that provide greater protection to shareholders of other companies.

As a foreign private issuer, Bullish may generally follow home-country practice with respect to certain matters of corporate governance in lieu of the comparable governance provisions of the NYSE listing rules except for certain matters, including the composition and responsibilities of the audit committee and the independence of its members within the meaning of the rules and regulations of the SEC. The Cayman Islands home-country practices that Bullish follows may afford less protection to holders of Bullish securities than that provided under the NYSE listing rules.

Upon the consummation of the Business Combination, Block.one will beneficially own Class B Ordinary Shares (each of which is entitled to ten votes) with a substantial majority of Bullish’s voting power. As a result, Bullish will be a “controlled company” within the meaning of the NYSE listing rules. Under these rules, a listed company of which more than 50% of the voting power is held by an individual, group, or another company is a “controlled company” and will be permitted to elect to not comply with certain corporate governance requirements, including the requirement that a majority of the board of directors consist of independent directors, the requirement that the nominating and corporate governance committee is composed entirely of independent directors, and the requirement that the compensation committee is composed entirely of independent directors.

As a result of Bullish’s foreign private issuer and “controlled company” status, Bullish’s securityholders may be afforded less protection under the NYSE listing rules and SEC regulations than other public companies.

Bullish may not be able to consistently comply with all of NYSE’s Listing Rules.

As a public company, Bullish will be subject to NYSE listing rules. If it fails to meet the requirements of the applicable listing rules, such failure may result in Bullish not being listed by the NYSE, suspension of trading of its shares or delisting in the future. This may further result in legal or regulatory proceedings, fines and other penalties, legal liability for Bullish, inability for Bullish’s shareholders to trade their shares and negatively impact Bullish’s share price, reputation and public perception, operations and financial position, as well as its ability to conduct future fundraising activities, whether in or outside of the U.S.

 

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If Bullish is unable to remediate material weaknesses in its internal control over financial reporting or otherwise fails to maintain an effective system of internal controls, it may not be able to accurately or timely report its financial condition or results of operations.

Though no material weakness has been identified in connection with the audit of Bullish Global’s consolidated financial statements as of December 31, 2021, Bullish may subsequently identify material weaknesses with, or in the effectiveness of, its internal controls. Bullish’s failure to correct the material weaknesses or failure to discover and address any other material weaknesses or control deficiencies could result in inaccuracies in its financial statements and could also impair its ability to comply with applicable financial reporting requirements and related regulatory filings on a timely basis, which could cause investors to lose confidence in its reported financial information, which may result in volatility in and a decline in the market price of Bullish securities.

Upon completion of this Business Combination, Bullish Global will become a wholly owned subsidiary of Bullish. Prior to the filing of the registration statement of which the proxy statement/prospectus is a part, Bullish was not subject to the Sarbanes-Oxley Act. Section 302 thereof will require executive attestation that financial information is accurate and reliable and that internal controls are implemented and maintained. Section 404 thereof will require that Bullish include a report from management on the effectiveness of its internal control over financial reporting in its annual report on Form 20-F. It may take Bullish time to develop the requisite internal control framework. Bullish’s management may conclude that its internal control over financial reporting is not effective, or the level at which Bullish’s controls are documented, designed, operated or reviewed is not adequate, and may result in Bullish’s independent registered public accounting firm issuing an internal controls report that is qualified. In addition, the reporting obligations may place a significant strain on Bullish’s management, operational and financial resources and systems for the foreseeable future. Bullish may be unable to complete its evaluation testing and any required remediation in a timely manner.

During the course of documenting and testing Bullish’s internal control procedures, in order to satisfy the requirements of Sections 302 and 404 of the Sarbanes-Oxley Act, Bullish may subsequently identify weaknesses and deficiencies in its internal control over financial reporting. In addition, if Bullish fails to maintain the adequacy of its internal control over financial reporting, as these standards are modified, supplemented or amended from time to time, it may not be able to conclude on an ongoing basis that it has effective internal control over financial reporting in accordance with Sections 302 and 404 of the Sarbanes-Oxley Act. If Bullish fails to achieve and maintain an effective internal controls environment, it could result in material misstatements in its financial statements and a failure to meet its reporting obligations, which may cause investors to lose confidence in its reported financial information. This could in turn limit its access to capital markets and harm its results of operations. Bullish may also be required to restate its financial statements from prior periods if such weaknesses and deficiencies are identified. Additionally, ineffective internal control over financial reporting could expose it to increased risk of fraud or misuse of corporate assets and subject it to potential delisting from the stock exchange on which it lists, as well as regulatory investigations and civil or criminal sanctions. All of the preceding could adversely impact Bullish’s reputation, business, results of operations, financial condition and share price.

Industry data, projections and estimates relied upon by Bullish are inherently uncertain, subject to interpretation and may not have been independently verified.

Information concerning Bullish’s industry and the markets in which Bullish intends to operate is obtained from independent industry and research organizations and other third-party sources. Industry projections and estimates are derived from publicly available information released by independent industry analysts and third-party sources. Bullish has not independently verified any such third-party information. In addition, projections, assumptions and estimates of the future performance of the industry in which Bullish operates are subject to uncertainty and risk due to a variety of factors. As a result, inaccuracies in third-party information, or in the projects, may lead to adverse impact on assumptions that are relied upon for internal business planning and analysis purposes.

 

 

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Block.one is a majority shareholder of Bullish. The concentration of ownership may affect the market demand for Bullish shares.

Upon closing of the Business Combination, Block.one will hold Class B Ordinary Shares, with ten votes per share, and will hold a majority of Bullish’s voting equity even if its equity ownership declines below a majority. While Block.one maintains such holding, and as a consequence of such holding, Block.one will have substantial influence over Bullish’s business, including decisions regarding mergers, consolidations, the sale of all or substantially all of its assets, election of directors, declaration of dividends and other significant corporate actions. As the controlling shareholder, Block.one may take actions that are not in the best interests of Bullish’s other shareholders. These actions may be taken in many cases even if they are opposed by Bullish’s other shareholders. In addition, this concentration of ownership may discourage, delay or prevent a change in control which could deprive shareholders of an opportunity to receive a premium to the trading price for the shares as part of a sale of Bullish.

Material adverse incidents associated with Block.one may adversely impact Bullish’s reputation, business and financial position and share price.

Significant negative news, adverse legal or regulatory findings, material litigation, reputational damage and other material adverse developments associated with Block.one may also adversely impact Bullish’s reputation, business and financial position and share price.

For example, Block.one and the intended Chairman of the Bullish Board are defendants in a class action lawsuit in the U.S. in relation to Block.one’s sale of ERC-20 tokens, in which a settlement agreement had been reached in May 2021 subject to the court’s final approval. On August 15, 2022, the court issued a written opinion declining to approve the proposed settlement. In light of the court’s ruling, the prior stipulation of settlement is of no force and effect and the parties are restored to their respective positions in the litigation before the proposed settlement was reached. This may conceivably lead to adverse findings with respect to Block.one, EOSIO and EOS. In addition, there have been allegations of potential market manipulation by unknown parties, misrepresentation, and other malfeasance during the token sale that have caused, and may continue to cause, negative media coverage about Block.one and Bullish. Such negative media coverage as well as any future legal or regulatory proceedings that may be instigated concerning such allegations or others may adversely impact Bullish’s reputation, business, financial condition, cryptocurrency holdings, share price and ability to raise additional capital in the U.S.

The price of Bullish’s share price may be volatile.

The price of Bullish’s shares may fluctuate due to a variety of factors. Particularly, Bullish’s shares may be volatile due to (i) fluctuation in the price of digital assets carried on its balance sheet and (ii) fluctuation in revenue, which could be both positively and negatively affected by increased or decreased trading levels on the Bullish Exchange in response to variations in price.

In addition, Bullish’s shares may fluctuate due to other factors, including:

 

   

the number of Bullish’s shares publicly owned and available for trading;

 

   

overall performance of the equity markets or publicly-listed cryptocurrency trading platform companies;

 

   

Bullish’s actual or anticipated operating performance and the operating performance of its competitors;

 

   

changes in the projected operational and financial results Bullish provides to the public or its failure to meet those projections;

 

   

failure of securities analysts to initiate or maintain coverage of Bullish, changes in financial estimates by any securities analysts who follow its company, or its failure to meet the estimates or the expectations of investors;

 

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any major change in the board of directors, management, or key personnel;

 

   

rumors and market speculation involving Bullish, Block.one or other companies in the industry;

 

   

announcements by Bullish or its competitors of significant innovations, new products, services, features, integrations or capabilities, acquisitions, strategic investments, partnerships, joint ventures, or capital commitments;

 

   

changes in or losses of counterparty relationships considered important to support the business operations of Bullish;

 

   

market perception as to whether Bullish’s listing is successful;

 

   

the impact of a securities or industry analysts issuing an adverse or unfavorable opinion regarding Bullish’s business or not publishing research or publishing unfavorable research about its business; and

 

   

other events or factors, including those discussed elsewhere in these risk factors, or those resulting from COVID-19, war, incidents of terrorism, or responses to these events.

If Bullish’s share price falls, it may not be able to successfully leverage its listed status to grow its business and operations, or attract additional capital investments in the future. This may adversely affect Bullish’s reputation, financial condition and business and its ability to attract and retain customers.

The prominence of being a publicly listed company operating a regulated exchange and consequent disclosure obligations may increase any adverse impact on Bullish’s reputation, its operations and ability to attract and retain customers.

Unlike a private company that is subject to less public attention and regulatory obligations, the prominence of being a publicly listed company operating a regulated exchange and consequent disclosure obligations may increase the impact of any financial and non-financial risks on Bullish. Bullish intends to market its product and services to its investors and therefore there may be an overlap between Bullish’s customer base and its investor base. If a material adverse event associated with Bullish occurs, Bullish’s reputation, its ability to attract and retain customers, its business operations and financial condition and share price may be more adversely impacted than that of a private company.

Bullish will indemnify the liabilities of its directors and officers and may incur additional operating costs and liability.

Bullish, as a Cayman Islands exempted company, may indemnify its directors or officers and that of members of the Bullish Group, except with regard to dishonesty, willful default or fraud. Bullish has or will enter into indemnification agreements with its and Bullish Group members’ directors and executive officers, pursuant to which Bullish may agree to indemnify its directors and executive officers against certain liabilities and expenses incurred by such persons in connection with claims made by reason of their being such a director or executive officer. Bullish may also maintain directors’ and officers’ liability insurance policies. Bullish may therefore incur liability from the acts and omissions of its and Bullish Group members’ directors and officers.

Following the consummation of the Business Combination, Bullish will assume FPAC’s liabilities arising from facts or events on or before the Business Combination and Bullish expects to indemnify individuals who are FPAC’s directors and officers as of the date of the Business Combination in respect of such liabilities and maintain a directors’ and officers’ liability insurance policy. Bullish must use its commercially reasonable efforts to purchase (or allow FPAC to purchase) a tail insurance policy extending FPAC’s directors’ and officers’ indemnity insurance for six years (from the Closing of the Business Combination).

As a result, Bullish may incur additional liability due to the Business Combination and its indemnification obligation towards itself, Bullish Group members and FPAC’s directors and officers as described above, which

 

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may negatively affect its results of operations. Any maintenance of directors’ and officers’ liability insurance policies will also result in additional costs for Bullish. Bullish expects that being a public company and having requirements to comply with applicable rules and regulations will make it more expensive for it to obtain director and officer liability insurance, and Bullish may be required to incur substantially higher costs to obtain and maintain the same or similar coverage. These factors could also make it more difficult for Bullish to attract and retain qualified members of its board of directors and qualified executive officers.

Financial Risks

Bullish’s strategy and focus on delivering high-quality, regulated, easy-to-use, and secure cryptocurrency-related financial services may not maximize short-term or medium-term financial results.

Bullish has taken, and expects to continue to take, actions that it believes to be in the best interests of its potential customers and the long-term interests of its business, even if those actions do not necessarily maximize short-term or medium-term results. These may include expending significant managerial, technical, and legal efforts on complying with laws and regulations that are applicable to products and services and ensuring that products are secure. Bullish’s public and regulated status may also limit its ability to expand its product and services offerings or extend such offerings to certain markets and locations, which may result in Bullish missing material opportunities to generate revenue. Bullish also intends to focus on driving long-term engagement with customers through innovation and developing new products and technologies. These decisions may not be consistent with the short-term and medium-term expectations of Bullish’s shareholders and may not produce the long-term benefits that are expected, which could have an adverse effect on Bullish’s business, operating results, and financial condition.

Bullish expects its operating expenses to increase in the foreseeable future and may not be able to achieve profitability or positive cash flow from operations on a consistent basis, if at all.

Bullish anticipates that its operating expenses will increase substantially in the foreseeable future as Bullish incurs more network and processing fees, and continues to hire additional employees, expand its sales and marketing efforts, develop additional products and services, and expand its international business. Moreover, Bullish expects to incur significant legal, accounting, advisory and other expenses, including substantially higher costs to obtain and maintain director and officer liability insurance, as a result of becoming a public company. This may prove more expensive than Bullish currently anticipates, and Bullish may not succeed in increasing its revenue sufficiently to offset these higher expenses. Bullish’s revenue growth may slow, or its revenue may decline for a number of other reasons, including reduced demand for its offerings, increased competition, increased cost of regulatory compliance, a decrease in the growth or size of the industry in which Bullish operates, or any failure to capitalize on growth opportunities. Any failure to increase its revenue could prevent Bullish from achieving profitability. Bullish cannot be certain that its business will be able to achieve profitability or achieve positive operating cash flow on any quarterly or annual basis. As the Bullish Treasury, a separate treasury unit operated by Bullish Capital, is primarily intended for providing liquidity on the Bullish Exchange, Bullish does not expect the Treasury to continuously provide additional working capital to cover Bullish’s operating expenses. If Bullish is unable to effectively manage these risks and difficulties as Bullish encounters them, its business, operating results, and financial condition may suffer.

Bullish’s operating results may significantly fluctuate due to the highly volatile nature of the cryptocurrency industry and factors outside of Bullish’s control.

The majority of Bullish’s proposed sources of revenue are dependent on digital assets and the broader digital asset industry. Due to the highly volatile nature of the digital asset industry and the prices of digital assets, Bullish’s operating results may fluctuate significantly from quarter to quarter in accordance with market sentiments and movements in the broader cryptocurrency industry. Bullish’s operating results may continue to

 

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fluctuate significantly as a result of a variety of factors, many of which are unpredictable and in certain instances are outside of its control, including:

 

   

Bullish’s dependence on digital asset trading activity, including trading volume and the prevailing trading prices for digital assets, whose trading prices and volume can be highly volatile;

 

   

the fluctuation of the value of digital assets and Bullish’s revenue due to market volatility;

 

   

Bullish’s ability to attract, maintain, and grow a customer base and engage its future customers;

 

   

Bullish’s ability to diversify and grow product and service offerings, generate revenue and remain competitive in a rapidly innovating and expanding industry;

 

   

addition and removal of digital assets on the Bullish Exchange platform;

 

   

the dominance of certain type of cryptocurrency such as bitcoin over other types of cryptocurrencies;

 

   

pricing for Bullish’s products and services;

 

   

the continued growth of the cryptocurrency investor community due to factors outside of Bullish’s control;

 

   

investments Bullish makes in the development of products and services as well as technology offered to its partners, international expansion, and sales and marketing;

 

   

Bullish’s ability to develop and maintain important counterparty and supplier service relationships;

 

   

macroeconomic conditions;

 

   

changes in the legislative or regulatory environment, or actions by governments or regulators, including fines, orders, or consent decrees;

 

   

regulatory changes that impact Bullish’s ability to offer certain products or services;

 

   

adverse legal proceedings or regulatory enforcement actions, judgments, settlements, or other legal proceeding and enforcement-related costs;

 

   

the development and introduction of existing and new products and services by Bullish or its competitors;

 

   

increases in operating expenses that Bullish expects to incur in order to grow and expand its operations and to remain competitive;

 

   

system failure or outages, including with respect to the Bullish Exchange platform and third-party networks;

 

   

failure of Bullish Exchange infrastructure to respond to network events such as forks or airdrops with respect to supported digital assets;

 

   

breaches of security or privacy;

 

   

inaccessibility of the Bullish Exchange platform due to its or third-party actions; and

 

   

Bullish’s ability to attract and retain talent.

As a result of these factors, it is difficult for Bullish to forecast growth trends accurately and its business and future prospects are difficult to evaluate, particularly in the short term. For example, the bitcoin price (in U.S. dollars) declined by over 50% during the second quarter of 2022. U.S. media news outlets reported at the time that this sharp decline, together with other factors, may have had an effect on public confidence in cryptocurrencies and cryptocurrency exchanges, with at least one publicly traded company that operates a cryptocurrency exchange announcing workforce reductions due to market conditions during the same period. In view of the rapidly evolving nature of Bullish’s business and the digital asset industry, period-to-period comparisons of Bullish’s operating results may not be meaningful, and shareholders should not rely upon them as an indication of future performance. Quarterly and annual expenses reflected in Bullish’s financial statements may be significantly different from historical or projected rates. Bullish’s operating results in one or more future quarters may fall below the expectations of securities analysts and investors. As a result, the trading price of Bullish’s share price may increase or decrease significantly.

 

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If the prices of digital assets and volume of transactions conducted on the Bullish Exchange platform decline, Bullish’s business, operating results and financial condition would be adversely affected.

Bullish expects to generate a substantial portion of its revenues from transaction fees and margin fees paid to it by customers in connection with the trading of digital assets. Declines in the price, Trading Volume or market liquidity of digital assets may result in lower revenue from liquidity fees, transaction fees and margin fees in the future.

The price, Trading Volume and market liquidity of digital assets across the market is subject to significant uncertainty and volatility, depending on a number of factors, including:

 

   

market conditions for the digital assets;

 

   

changes in liquidity, market-making volume and trading activities;

 

   

trading activities on other digital asset platforms worldwide, many of which may be unregulated;

 

   

investment and trading activities of highly active retail and institutional customers, speculators, arbitrageurs, miners and investors;

 

   

the speed and rate at which digital assets are able to gain adoption as a medium of exchange, utility, store of value, consumptive asset, security instrument, or other financial assets worldwide, if at all;

 

   

decreased customer and investor confidence in digital assets and digital asset platforms;

 

   

negative publicity and events relating to digital assets;

 

   

unpredictable social media coverage or “trending” of digital assets;

 

   

the ability for digital assets to meet customer and investor demands;

 

   

the functionality and utility of digital assets and their associated ecosystems and networks, including digital assets designed for use in various applications;

 

   

impact of digital asset network events such as forks;

 

   

consumer preferences and perceived value of digital assets and digital asset markets;

 

   

increased competition from other payment services or other digital assets that exhibit better speed, security, scalability, or other characteristics;

 

   

regulatory or legislative changes and updates affecting the digital assets;

 

   

the characterization of digital assets and Bullish’s automated market maker system under the laws of various jurisdictions around the world;

 

   

the maintenance, troubleshooting and development of the blockchain networks underlying digital assets, including by miners, validators and developers worldwide;

 

   

the ability for digital asset networks to attract and retain miners or validators to secure and confirm transactions accurately and efficiently;

 

   

ongoing technological viability and security of digital assets and their associated smart contracts, applications and networks, including actual or perceived threats and vulnerabilities against cyberattacks and scalability;

 

   

fees and speed associated with processing digital asset transactions, including on the underlying blockchain networks and on digital asset platforms;

 

   

financial strength of market participants;

 

   

the availability and cost of funding and capital;

 

   

the liquidity of digital asset platforms;

 

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interruptions in service from or failures of major digital asset platforms;

 

   

availability of an active derivatives market for various digital assets;

 

   

availability of banking, payment and custody services to support projects in connection with digital assets;

 

   

level of interest rates and inflation;

 

   

monetary policies of governments, trade restrictions and fiat currency devaluations; and

 

   

national and international economic and political conditions.

There is no assurance that any supported digital asset will maintain its value or that there will be meaningful levels of trading activities. In the event that the price of digital assets or the demand for trading digital assets decline, Bullish’s business, operating results and financial condition would be adversely affected.

A significant amount of the Trading Volume on the Bullish Exchange platform currently comes from, and may continue to come from, a relatively small number of customers, and the loss of these customers, or a reduction in their Trading Volume, could have an adverse effect on Bullish’s business, operating results, and financial condition.

A relatively small number of institutional market makers, arbitrageurs and high-transaction volume customers account for a significant amount of the Trading Volume on the Bullish Exchange and its net revenue. As a result, a loss of these customers, or a reduction in their Trading Volume, and the inability of Bullish to replace these customers with other customers, could have an adverse effect on Bullish’s business, operating results, and financial condition.

The value of digital assets on Bullish’s balance sheet may fluctuate significantly due to the highly volatile nature of digital asset markets. Similarly, fluctuations in fiat currency exchange rates could also have an adverse effect on the results of operations of Bullish.

Bullish Capital will deploy digital assets from its own significant balance sheet through the Liquidity Pools to provide liquidity on the Bullish Exchange. Due to the highly volatile nature of digital assets and the prices of digital assets, Bullish’s financial condition will fluctuate significantly in accordance with movements in the digital asset market. Bullish Capital holds bitcoin, Ether, EOS, LINK, LTC, other digital assets, specific stablecoins and U.S. dollars. Since bitcoin will account for a significant portion of the digital assets held by Bullish Capital, the volatility of bitcoin will significantly impact on the value of digital assets on Bullish’s balance sheet.

The table below provides, based on thirty (30) day average price movements from August 1, 2021 to July 31, 2022, the impact to the value of digital assets as of July 31, 2022:

 

Type of Digital

Assets

  Quantity
(’000)
    Price
(US$’000)
    Value of
Digital
Assets
(US$ million)
    30d average
price
movements
    Price as
adjusted
upwards
by 30d
average
price
movement
(US$’000)
    Impact to
Digital
Asset values

due to
upward
price
movement
(US$
million)
    Price as
adjusted
downwards

by 30d
average
price
movement
(US$’000)
    Impact to
Digital
Asset values

due to
downward
price
movement

(US$
million)
 
BTC     119       24       2,820       17.38     28       490       20       (490
ETH     102       1.708       175       22.68     2.095       40       1.320       (40
EOS     32,878       0.001       45       20.59     0.002       9       0.001       (9
LINK     1,473       0.008       12       23.09     0.010       3       0.006       (3
LTC     133       0.061       8       19.32     0.073       2       0.050       (2
USDC     21,667       0.001       22         0.001       —         0.001       —    
     

 

 

       

 

 

     

 

 

 

Total

        3,082           544         (544

 

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In addition, fluctuations in fiat currency exchange rates could also have an adverse effect on the results of operations of Bullish. Revenue generated and expenses incurred from Bullish’s international operations may be denominated in the currencies of the local countries. Accordingly, changes in the value of foreign currencies relative to the U.S. dollar can affect Bullish’s revenue and operating results reflected in Bullish’s U.S. dollar-denominated financial statements

Bullish may not be able to effectively manage its growth, particularly in relation to the scaling of operations while maintaining effective control of operations, processes and technology.

As Bullish grows its business, its employee headcount and the scope and complexity of its business may increase dramatically. Consequently, if Bullish’s business grows at a rapid pace, it may experience difficulties maintaining this growth and building the appropriate processes and controls. Growth may increase the strain on resources, causing operating difficulties, including difficulties in daily operation, research and development, maintaining internal controls, marketing, designing products and services and meeting customer needs. If Bullish does not adapt to meet these challenges, it could have an adverse effect on its business, financial condition and results of operations.

The nature of Bullish’s business requires the application of complex financial accounting rules that are uncertain and may change from that presented.

The accounting rules and regulations that Bullish must comply with are complex and subject to interpretation by the International Accounting Standards Board (the “IASB”) the SEC and various bodies formed to promulgate and interpret appropriate accounting principles. There is limited precedent and guidance for financial accounting of digital assets and related valuation and revenue recognition, and limited official guidance has been provided by the IASB or the SEC. In addition, new accounting pronouncements, or changed interpretations of accounting pronouncements or policies have occurred and may occur in the future that may be applied retroactively. Bullish makes certain estimates and assumptions related to the adoption and interpretation of accounting principles, including valuation, revenue recognition, treatment of the Liquidity Pools, margin activities and custodial activities, among other issues in preparing financial statements. As such, these uncertainties in or changes to regulatory or financial accounting standards could result in the need to change Bullish’s accounting methods, restate historical financial statements, impair Bullish’s ability to provide timely and accurate financial information and require enhancements or changes to processes or systems with increased costs. This could adversely affect Bullish’s financial statements, result in a loss of investor confidence, and more generally impact the business, operating results, and financial condition.

Recent actions and public comments from the IASB and the SEC have also focused on the integrity of financial reporting and internal controls. As a result, the accounting policies for companies with exposure to digital assets are being subject to heightened scrutiny by regulators and the public. There remains significant uncertainty on how companies can account for digital asset transactions, digital assets and related revenue. The complexity may mean financial results are difficult to interpret.

Bullish’s liquidity pricing methodologies, are impacted by a number of factors which may not be fully developed, and ultimately may not be successful in attracting and retaining customers and business partners.

Due to the competition in the industry, Bullish’s competitors may create pricing pressure and it may be expected that the fees charged by them will decline over time. Bullish’s liquidity pricing methodologies (i.e. automated market makers) are impacted by a number of factors which may not be fully developed. If Bullish is unable to effectively manage its liquidity pricing methodologies and respond to pricing pressure, it may not be successful in attracting and retaining customers and business partners, which could have an adverse effect on Bullish’s business, financial condition and results of operations.

 

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Bullish is exposed to risks relating to the availability of capital to fund working capital, including regulatory capital requirements, margin requirements and required advances to payment providers.

Bullish is required to possess sufficient financial soundness and strength to adequately support its operations. Bullish is exposed to risks relating to the availability of capital to fund working capital, including regulatory capital requirements, margin requirements and required advances to payment providers. Bullish has incurred and may from time to time incur indebtedness and other obligations which could make it more difficult to meet these capitalization requirements or any other requirements. Insufficient working capital may make Bullish unable to meet financial obligations or liquidity requirements as needed. In addition, Bullish could become subject to new capital requirements introduced or imposed by regulators. Any change or increase in these regulatory requirements could have an adverse effect on Bullish’s business, operating results and financial condition.

Bullish believes that its initial contribution of capital to the Bullish Exchange complies with the regulatory requirements set by the Gibraltar Financial Services Commission (the “GFSC”). However, it is possible Bullish may experience errors in fiat currency and digital asset handling, accounting and regulatory reporting that lead Bullish to be out of compliance with these requirements. In addition, regulators may increase the amount of regulatory capital that Bullish is required to maintain for Bullish’s operations. If Bullish is unable to maintain the required reserves, Bullish may have to change its business operations, and may be subject to regulatory sanctions, penalties, the revocation of licenses or other adverse regulatory actions as well as negative impact on its business, reputational, and financial condition.

Bullish will conduct its business operations through subsidiaries and may in the future rely on dividends from subsidiaries for a substantial amount of its cash flows.

Bullish may in the future depend on dividends, distributions and other payments from its subsidiaries to fund payments on obligations, including any future debt obligations that may be incurred. Regulatory and other legal restrictions may limit the ability to transfer funds to or from certain subsidiaries. Certain subsidiaries may be subject to laws and regulations that authorize regulatory bodies to block or reduce the flow of funds to Bullish, or that prohibit such transfers altogether in certain circumstances. These laws and regulations may hinder Bullish’s ability to access funds that may be needed to make payments on its obligations, including any future debt obligations that may be incurred and otherwise conduct its business by, among other things, reducing liquidity in the form of corporate cash. In addition to negatively affecting its business, a significant decrease in Bullish’s liquidity could also reduce investor confidence in the company.

Bullish Global and its subsidiaries in the Cayman Islands, Gibraltar, and the United States maintain bank accounts and balances with banks in the United States. The Singapore subsidiary has local currency bank accounts in Singapore for its operational needs as a group service company. The Hong Kong subsidiary currently maintains Hong Kong dollar-denominated current and savings accounts in amounts determined to be necessary to support its operational needs in Hong Kong as a group service company. The aggregate balance as of July 31, 2022 was HK$1.8 million (equivalent to US$0.2 million). The PRC government imposes controls on the convertibility of Renminbi into foreign currencies and the remittance of currencies out of mainland China to foreign entities or investors. Under the existing PRC foreign exchange regulations, payments of current account items, including profit distributions, interest payments and expenditures from trade-related transactions, can be made in foreign currencies without prior approval from the State Administration of Foreign Exchange as long as certain procedural requirements related to foreign exchange control are met, although the PRC government may, at its discretion, impose restrictions on access to foreign currencies for current account transactions, while approval from appropriate government authorities is also required if Renminbi is converted into foreign currency and remitted out of mainland China to pay capital expenses such as the repayment of loans denominated in foreign currencies. Furthermore, foreign currency loans or capital contributions are subject to statutory limits and must be registered with competent authorities. The Hong Kong government has not issued similar laws or regulations for companies that are incorporated in or conduct businesses in Hong Kong. Other than the above, there is no regulatory oversight by authorities in the PRC or Hong Kong over the flow of funds among Bullish, Bullish Global, or their respective subsidiaries, or any distributions or dividends to their investors as of the date

 

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of this proxy statement/prospectus, and we do not expect there will be such regulatory oversight before or after the completion of the Business Combination.

Although Bullish has no business operations in mainland China, if such control were to extend to Hong Kong, or if by any case Bullish were to become subject to such oversight or discretion in the future, it may restrict the ability of its Hong Kong subsidiary to remit currency maintained in Hong Kong to its offshore entities for its offshore entities to pay dividends or make other payments or otherwise to satisfy its foreign-currency-denominated obligations. In such case, SAFE and other relevant PRC governmental authorities may limit the ability of Bullish’s Hong Kong subsidiary to purchase foreign currencies in the future to settle transactions. As the PRC government may continue to strengthen its capital controls, additional restrictions and substantial vetting processes may be instituted by SAFE for cross-border transactions. Any future restrictions on currency exchange that become applicable to Bullish’s Hong Kong subsidiary or such currencies that are maintained in Hong Kong may limit its ability to utilize these currencies maintained in Hong Kong to fund Bullish’s business activities outside of China, or to pay dividends in foreign currencies.

Bullish may suffer losses due to abrupt and erratic market movements, which can also cause stress to all aspects of Bullish’s business and operations, including the operations of the Bullish Exchange and the Bullish Treasury.

The digital asset market has been characterized by significant volatility and unexpected price movements. Certain digital assets may become more volatile and less liquid in a very short period of time, resulting in market prices being subject to erratic and abrupt market movement, which could harm Bullish’s business. During times of market volatility, an asset price may move up or down suddenly in a single large movement or over a short period of time. Bullish’s products and services may be exposed to unforeseen and unforeseeable operational risks. Bullish’s ability to respond to market risk and extreme market conditions is untested. At times of extreme market conditions, certain product features, particularly the automated marketing making services, may not function as expected or at all and may need to be suspended or recalibrated. Because of this sudden movement, Bullish may be unable to execute or adjust risk management practices in a timely manner, which could result in potential losses. Bullish may also be unable to recover the losses suffered. Bullish’s market risk framework while still being developed is based on, among other things, periodic scenario-based stress tests and value at risk analysis and may not be able to fully anticipate extreme market conditions or “black swan” events. Since bitcoin will account for a significant portion of the digital assets held by Bullish Capital, the reliance on bitcoin may exacerbate the foregoing impacts. Failure to effectively manage such events can adversely impact Bullish’s reputation, business operations and financial condition.

Bullish’s exposure to credit risk from customers’ margin trading activities could result in financial losses and reputational harm.

Bullish extends margin credit and leverage to customers via its margin lending facility, which will be collateralized by customers’ assets stored and segregated within their margin account (or spot account in the case of margin credit lines). By permitting customers to invest in digital assets on margin, Bullish will rely upon its margin lending systems and processes to monitor customers’ real-time credit exposure and, in situations where there are abrupt changes in market values of the digital assets, to liquidate their margin positions before the size of their margin loan exceeds the value of assets segregated within their relevant account. Failure of Bullish’s margin lending systems and processes to monitor customers’ real-time credit exposure and to liquidate the margin position in a timely and orderly manner, or if there is insufficient liquidity in the market to liquidate the margin positions in full, may result in losses to Bullish and adversely impact its business, operating results, financial condition and lead to reputational harm. Bullish has developed processes and controls designed to manage credit risk related to its margin-lending business. However, such processes and controls are not mature and may not be fully effective in mitigating the risk. Further, the credit decision process and underwriting, pricing, loss forecasting, and any scoring models used to evaluate loan applications may contain errors or may not adequately assess creditworthiness of customers, or may be otherwise ineffective, resulting in incorrect approvals or denials. It is also possible that customers could provide false or incorrect information.

 

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Through Bullish Capital’s contribution of assets into the Liquidity Pools, Bullish may experience losses, for which cost effective risk mitigation and hedging solutions may not be available.

The value of a liquidity provider’s staked assets contributed to the Liquidity Pools for automated market making can lose value compared to simply holding the tokens on their own. This risk is often described as “divergent loss” (or “impermanent loss”). This occurs when the prices of assets in the market making service diverge in either direction. The greater the divergence the greater the impermanent loss. The loss is described as impermanent because if the exact price at the time of entry and exit is the same, then the loss can be avoided entirely. Bullish uses two types of Liquidity Pools: standard Liquidity Pools and range-bound Liquidity Pools (see “Business of Bullish Key Services and Innovations”). Relative to standard Liquidity Pools, the risk exposure to divergent losses is increased for range-bound Liquidity Pools due to the increased likelihood of staked assets being removed from the relevant range-bound Liquidity Pool when the market price of such assets goes outside the specified price range.

Bullish Capital will contribute assets into Bullish’s standard and range-bound Liquidity Pools. In doing so, the Treasury will attempt to optimize the allocation for revenue generation while operating within the limits of prudent asset exposure risk. By acting as a liquidity provider through the Treasury, Bullish will likely experience impermanent losses due to the volatility in a trading pair which could potentially be material. Although the Treasury may attempt to mitigate such risk, cost effective risk mitigation and hedging solutions may not be available to the Treasury, which could adversely impact Bullish’s business, operating results, and financial condition.

Bullish relies on external financial and tax advisors to provide it with accurate advice, which may be wrong or inaccurate. Bullish may not be able to onboard external financial, tax advisors or auditors with the right skill sets and experience in the blockchain technology and digital assets industry and may not be able to maintain the services of external auditors.

Due to the complexity and novelty of the law, regulations and accounting standards relevant to blockchain technology and digital assets industry, Bullish has to from time to time rely on external financial and tax advisors to provide it with accurate advice. However, as the industry is relatively new, the interpretation of the applicable laws, regulations and accounting standards by its external advisors may be different from that of government authorities. The advice from external advisors may be wrong or inaccurate.

As there is a limited pool of suitably qualified financial and tax advisors with sufficient expertise in digital assets and blockchain technology, Bullish may not be able to onboard external advisors with the right skill sets and experience. Bullish may incur increased costs in obtaining external financial and tax advice from advisors with the appropriate level of quality and expertise.

Bullish has retained Deloitte as its external auditor. If Bullish is unable to maintain the relationship for any reason, Bullish may experience difficulties in obtaining the services of another audit service provider as they may be unwilling to onboard Bullish due to the perceived risks associated with the digital asset industry, its lack of operating history and its inability to maintain an existing relationship with its auditors. In this case, Bullish may not be able to obtain the required audit reports to maintain its listing status.

If Bullish is unable to secure quality services from suitably qualified external financial and tax advisors, as well as auditors or to obtain the required audit reports, Bullish may be exposed to increased legal, regulatory and financial risks. Further, it may not be able to maintain its listing status and its ability to conduct capital raising in the future can also be adversely impacted.

 

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Risks related to Bullish’s Business Operations

Any significant disruption in Bullish’s planned products and services, in its information technology systems, or in any of the blockchain networks it supports, could result in a loss of customers or own funds and/or assets and adversely impact Bullish.

Bullish’s reputation and ability to attract and retain customers and grow its business depends on its ability to operate its services at high levels of reliability, scalability and performance, including the ability to process and monitor, on a daily basis, a large number of transactions that occur at high volume and frequencies across multiple systems. Significant disruptions to its planned product and services and the underlying information technology systems and blockchain networks can lead to losses for both Bullish and its customers and adversely impact Bullish’s reputation, business, operating results, financial condition and share price.

The success of the Bullish Exchange, the ability of its customers to trade, and its ability to operate at a high level, are dependent on Bullish’s ability to access the blockchain networks underlying the supported digital assets, for which access is dependent on Bullish’s systems’ ability to access the internet. Further, the successful and continued operations of such blockchain networks will depend on a network of computers, miners, block producers or validators, and their continued operations, all of which may be impacted by service interruptions, which may be caused by a variety of technical, operational, legal, regulatory or geopolitical factors. Significant disruptions to the operation of the network computers, including miners, block producers and validators, can adversely impact the operations of the blockchain network and its ability to process transactions, which may in turn adversely impact on customers’ willingness to invest in the digital assets supported by the impacted network, and consequently their value.

Bullish’s systems, the systems of its third-party service providers and partners, and certain digital asset and blockchain networks may experience service interruptions or degradation because of hardware and software defects or malfunctions, distributed denial-of-service and other cyberattacks, insider threats, break-ins, sabotage, human error, vandalism, earthquakes, hurricanes, floods, fires, and other natural disasters, power losses, disruptions in telecommunications services, fraud, military or political conflicts, terrorist attacks, computer viruses or other malware, or other events. Blockchain network transactions may sometimes experience clogging, which may impact Bullish’s ability to process transactions and settlements. In addition, extraordinary Trading Volumes or site usage could cause Bullish’s computer systems to operate at an unacceptably slow speed or even fail.

Some of Bullish’s systems, or the systems of its third-party service providers and partners are not fully redundant. Bullish’s business continuity and disaster recovery planning framework is being developed and has not been tested in a real operational environment, and may not be sufficient to address all possible risks or events. Similarly, the business continuity and disaster recovery planning of Bullish’s third party service providers may also be insufficient.

If any of Bullish’s systems, or those of its third-party service providers, are disrupted for any reason, Bullish’s planned products and services may fail, resulting in unanticipated disruptions, slower response times and delays in Bullish’s potential customers’ trade execution and processing, failed settlement of trades, incomplete or inaccurate accounting, recording or processing of trades, unauthorized trades, loss of customer information, increased demand on limited customer support resources, customer claims, complaints with regulatory organizations, lawsuits or enforcement actions. A prolonged interruption in the availability or reduction in the availability, speed or functionality of Bullish’s products and services could harm its business.

Frequent or persistent interruptions in Bullish’s services could cause potential customers to believe that its systems are unreliable, leading them to switch to competitors or to avoid or reduce the use of Bullish’s planned products and services. Such interruptions can also result in trading losses for Bullish or its customers, leading to increased legal liability, fines, sanctions and other penalties, and could significantly harm Bullish’s reputation, business and financial condition.

 

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Problems with the reliability or security of Bullish’s systems would harm its reputation and may lead to claims brought by customers or other third parties and damage to Bullish’s reputation, and the cost of remedying these problems could negatively affect Bullish’s business, operating results and financial condition. The business continuity management capability of Bullish is not fully developed and, as a result, customers may face periods of service disruption which could lead to adverse reputational harm.

Furthermore, Bullish aims to continually improve and upgrade its information systems and technologies. Implementation of new systems and technologies is complex, expensive and time-consuming and may not be successful. Upgrades and patches could also result in platform downtime, which may impact the experience of Bullish’s customers and the continuous availability of Bullish’s services. If Bullish fails to timely and successfully implement new information systems and technologies, or improvements or upgrades to existing information systems and technologies, or if such systems and technologies do not operate as intended, it could have an adverse impact on Bullish’s business, internal controls (including internal controls over financial reporting), operating results and financial condition.

Bullish will rely heavily on the use of new, innovative technology to service its business. Bullish may not be successful in developing and deploying the necessary technology to keep pace with rapidly changing technology to service its business or the new technologies may take longer to develop and implement than anticipated.

Bullish will rely heavily on the use of technology that it has created or plans to create by itself or with other third parties as much of the existing technology for the financial services business was not built to service digital assets, which require a unique set of considerations. The blockchain-based architecture of the Bullish Exchange, which Bullish believes is relatively unique, may not operate as intended or may inhibit scalability of its development. Bullish’s product deploys complex technology, which may need to be improved or enhanced and may be difficult to scale.

The digital assets industry has been characterized by many rapid, significant, and disruptive products and services in recent years. Bullish expects new services and technologies to continue to emerge and evolve, which may be superior to, or render obsolete, the products and services that Bullish currently provides. Competitors may be able to respond more quickly and effectively than Bullish can to new or changing opportunities, technologies, standards or customer requirements. Bullish cannot predict the effects of new services and technologies on Bullish’s business. However, Bullish expects that its ability to grow its customer base and net revenue will depend heavily on its ability to innovate and create successful new products and services and keep pace with rapidly changing technology, both independently and in conjunction with third-party developers. In particular, developing and incorporating new products and services into its business may require substantial expenditures, take considerable time, and ultimately may not be successful. Any new products or services could fail to attract customers, generate revenue, perform or integrate well with third-party applications and platforms. In addition, Bullish’s ability to adapt and compete with new products and services may be inhibited by regulatory requirements and general uncertainty in the law, constraints by Bullish’s banking partners and payment processors, third-party intellectual property rights, or other factors. Moreover, Bullish must continue to enhance its technical infrastructure and other technology offerings to remain competitive and maintain a platform that has the required functionality, performance, capacity, security, and speed to attract and retain customers.

As a result, Bullish expects to incur significant costs to develop and upgrade Bullish’s technical infrastructure to meet the evolving needs of the industry. Bullish’s success will depend on its ability to develop and incorporate new offerings and adapt to technological changes and evolving industry practices. If Bullish is unable to do so in a timely or cost-effective manner, its business and ability to successfully compete and attract new customers may be adversely affected. If Bullish’s technology solutions do not work as planned or as required by customers or regulators, then transacting business may be less efficient, more expensive, and potentially prone to errors, thereby reducing the positive effects Bullish seeks to make available to its customers through the adoption of blockchain technology.

 

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If Bullish fails to develop, maintain and enhance its brand and reputation, its business, operating results and financial condition may be adversely affected.

Bullish is in the early stage of building its brand and attracting customers while acquiring a high public profile. Developing, maintaining, protecting and enhancing Bullish’s brand depends largely on the success of its marketing efforts, ability to provide consistent, high-quality and secure products, services, features and support, and its ability to successfully secure, maintain and defend its rights to use the “Bullish” mark and other trademarks important to its brand. Bullish’s success depends on its ability to establish and maintain its brand image. Bullish seeks to establish, maintain, extend, and expand its brand image through marketing investments. Bullish expects that its brand will be an important corporate asset in its competition with other market players. Its brand and reputation could be harmed if Bullish fails to achieve these objectives or if its public image were to be tarnished by negative publicity, unexpected events, or actions by third parties. Bullish may be more susceptible than a mature business to the impact of adverse media coverage and negative news, including adverse social media coverage and campaigns, and other incidents that harm its reputation. Unfavorable publicity about Bullish, including its products, services, technology, customer service, personnel, and digital assets or digital asset platforms generally could diminish confidence in, and the use of, Bullish’s products and services. Such negative publicity could also have an adverse effect on the size and engagement of Bullish’s customers leading to decreased revenue, which could have an adverse effect on its business, operating results and financial condition.

Bullish’s failure to attract and retain customers could lead to the business, operating results and financial condition being significantly harmed.

The future success of the Bullish Exchange will heavily depend on Bullish’s ability to attract customers. To do so, Bullish must offer leading technologies and ensure that its products and services are secure, reliable and engaging. On an ongoing basis, Bullish must also expand its products and services and offer competitive prices in an increasingly crowded and price-sensitive market. There is no assurance that Bullish will successfully attract and retain a significant number of customers. A material component of the viability of Bullish’s services will be the willingness of customers to engage in trading activity with Bullish. This could be impacted by a general inability to attract a sufficient number of customers seeking to engage in trading of digital assets. If Bullish is unable to attract customers and retain them, its revenue and financial results may be adversely affected. Bullish may fail to establish significant demand or supply for the products and services in order to make its business viable. If Bullish’s customer growth rate slows or declines, it will become increasingly dependent on its ability to maintain or increase levels of customer engagement and monetization in order to drive growth of revenue.

Bullish expects that there are possibilities that a significant amount of the Trading Volume on Bullish’s Exchange platform will be derived from a relatively small number of customers in the initial stage of its operation, and the loss of these customers or inability to attract those initial customers, or a reduction in their Trading Volume, could have an adverse effect on its business, operating results, and financial condition if Bullish fails to attract more new customers.

Any number of factors can negatively affect customer growth, including if:

 

   

customers engage with competing products and services, including products and services that Bullish is unable to offer due to regulatory or other reasons;

 

   

Bullish fails to introduce new and improved products and services, or if Bullish introduces new products or services that are not favorably received;

 

   

Bullish fails to support new and in-demand digital assets or if Bullish elects to support digital assets with negative reputations;

 

   

there are changes in sentiment about the quality or usefulness of Bullish’s products and services or concerns related to privacy, security, or other factors;

 

   

there are adverse changes in Bullish’s products and services that are mandated by legislation, regulatory authorities, or litigation;

 

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customers perceive the digital assets on Bullish’s Exchange platform to be bad investments, or they experience significant losses in investments made on its platform;

 

   

technical or other problems prevent Bullish from delivering Bullish’s products and services with the speed, functionality, security and reliability that Bullish’s customers expect;

 

   

cybersecurity incidents, employee or service provider misconduct, or other unforeseen activities that cause losses to Bullish or its customers, including losses to assets held by Bullish on behalf of its customers;

 

   

modifications to Bullish’s pricing model, or modifications by competitors to their pricing, leads to Bullish’s offering being perceived as relatively less attractive by customers;

 

   

Bullish fails to provide adequate customer service to customers;

 

   

Bullish fails to obtain appropriate licensing or other regulatory approvals in jurisdictions that require such approvals in a timely manner;

 

   

Bullish or other companies in its industry are the subject of adverse media reports or other negative publicity; or

 

   

Bullish is not able to onboard all potential customers due to geographical, risk, or regulatory constraints.

Certain operational metrics that Bullish intends to track are subject to inherent challenges in measurement, and any real or perceived inaccuracies in such metrics may adversely affect Bullish’s business and reputation.

Bullish will review operational metrics to evaluate growth trends, measure its performance, and make strategic decisions. These metrics are calculated using internal company data and will not be validated by an independent third party. There are inherent challenges in such measurements. If Bullish fails to maintain an effective analytics platform, its metrics calculations may be inaccurate and Bullish may not be able to identify those inaccuracies.

The metrics may also be impacted by compliance or fraud-related bans, technical incidents, or fraudulent or spam accounts in existence on Bullish’s Exchange platform. Bullish intends to regularly deactivate fraudulent and spam accounts that violate the terms of service, and exclude these customers from the calculation of the key business metrics; however, Bullish may not succeed in identifying and removing all such accounts from Bullish’s Exchange platform. If Bullish’s metrics provide incorrect or incomplete information about customers and their behavior, Bullish may make inaccurate conclusions about its business. Any real or perceived inaccuracies in such metrics may also adversely affect Bullish’s reputation, business and operations.

Examples of operational metrics Bullish currently plans to measure for internal purposes include number of active users, Liquidity Pool activity, distribution of customer orders and uptime and availability of the app and APIs. Depending on the particular analysis being performed or decision being considered, the metrics that are most relevant for evaluation will vary, as will the potential impact of any inaccuracies in them.

Bullish expects to conduct capital or other fundraising activities in the future which may adversely affect the interests of Bullish’s existing shareholders.

Bullish has raised debt and expects to conduct significant fundraising activities in the future to raise additional capital and other funds to meet its business, strategic, operational and other needs. Such future fundraising activities may include, but are not limited to, issuance and/or sale of debt instruments (such as bonds) or equity (including but not limited to issuance of different classes of securities), private placements or public offerings, sale of assets (including sale of cryptocurrency and other digital assets or non-digital assets); borrowings and other debts (fiat and/or digital assets, either on a secured and/or unsecured basis); donations and/or other methods. Such existing debt financing and future capital raising activities may adversely affect the interests of Bullish’s existing shareholders, as well as Bullish’s balance sheet and/or overall financial position

 

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and share price. As the Bullish Treasury, a separate treasury unit operated by Bullish Capital, is intended for providing liquidity on the Bullish Exchange, Bullish does not expect the Treasury to provide working capital to cover Bullish’s operating expenses. If Bullish raises additional funds through the issuance of equity or debt securities, the percentage ownership of its shareholders could be significantly diluted, and newly issued securities may have rights, preferences or privileges senior to those of existing shareholders. If Bullish accumulates additional funds through debt financing, a substantial portion of its operating cash flow may be dedicated to the payment of principal and interest on such indebtedness, thus limiting funds available for Bullish’s business activities. Bullish cannot assure shareholders that additional financing will be available on terms favorable to Bullish, or at all. If adequate funds are not available or are not available on acceptable terms, when Bullish desires them, Bullish’s ability to fund its operations, develop or enhance its products and services, or otherwise respond to competitive pressures would be adversely impacted and any of these factors could harm Bullish’s results of operations.

Bullish provides its lenders with digital assets as collateral under the Loan Financing Arrangements. A decrease in the value of the digital assets could lead to margin calls that require additional collateral from Bullish or repayment of the loan by Bullish, and a failure to do so would lead to an event of default, which could adversely affect Bullish’s business, financial condition and results of operations, and could restrict its access to financing to meet its working capital needs.

Bullish has entered into the Loan Financing Arrangements with lenders. Such loans are secured by pledges of a sufficient amount of digital assets stored in collateral accounts. See “Bullish Global’s Management’s Discussion and Analysis of Financial Condition and Results of Operations — Loan Financing Arrangements.” If the value of the digital assets decreases below the specified level under the relevant loan agreements, Bullish is required to provide additional collateral or repay a portion of the loan so that the collateral becomes sufficient to cover the outstanding loan amount. A failure by Bullish to provide additional collateral or repay the loan pursuant to the terms of the loan agreements would lead to an event of default, in which case the lender will be entitled to exercise rights and remedies under the relevant loan agreements or applicable law, including foreclosure of the collateral and acceleration of repayment. If the outstanding loans were to be accelerated, Bullish may not have sufficient cash or be able to borrow sufficient funds to refinance the loans or sell sufficient assets to repay the loans, which could materially and adversely affect its cash flows, business, financial condition and results of operations. Furthermore, the terms of any new or additional financing may be on terms that are more restrictive or less desirable to Bullish, which would restrict Bullish’s access to financing to meet its working capital needs.

Bullish’s sales and marketing strategy is not fully tested or proven and may not be effective.

Establishing, maintaining, protecting, and enhancing Bullish’s brand and reputation depend largely on the success of its sales and marketing efforts, ability to provide consistent, high-quality, differentiated and secure products, services, features, and support, and Bullish’s ability to successfully secure, maintain, and defend Bullish’s rights to use trademarks important to Bullish’s brand. However, as Bullish has only recently commenced the Full Launch of the Bullish Exchange, its sales and marketing strategy is not fully tested or proven and may not be effective and Bullish may not be able to attract or retain sufficient numbers of customers.

Further, Bullish’s ability to market and sell its product and services is restricted by complex laws and regulations across the relevant jurisdictions to its business as well as the internal policies of media platforms. Bullish intends to conduct its sales and marketing efforts in a compliant manner, and this may adversely impact Bullish’s ability to successfully attract customers. Without limiting the generality of the foregoing, Bullish currently does not offer Exchange services in the United States due to federal and state legal and regulatory restrictions.

If Bullish fails to successfully execute its sales and marketing strategy, its reputation, business, operating results, financial condition and share price may be adversely affected.

 

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Bullish may not have sufficient resources to manage its relationships with institutional customers and may lack the bargaining power to negotiate favorable terms of business with them.

Bullish’s initial target market includes institutional customers. Such customers may be reluctant to use a new, unproven exchange like Bullish, and may be cautious when onboarding with Bullish. They may subject Bullish to lengthy and complex due diligence processes, and Bullish may not be successfully on-boarded by institutional customers for a number of reasons, including the risk that it may exceed the risk appetites of these institutional customers. Bullish also may not have sufficient resources to manage its relationships with institutional customers and/or respond appropriately to their needs and requests, such as providing bespoke technical solutions or integrating with their technical operating systems.

Bullish may also lack the bargaining power to negotiate favorable terms of business with institutional customers and may need to adapt its own policies or procedures to align with their requests. Failure to attract and retain institutional customers could have an adverse effect on Bullish’s business, operating results, and financial condition.

The Bullish Exchange products and services may not be attractive to mass-market retail customers and may not be competitive compared to existing offerings by competitors.

Initially at Launch, Bullish believes that the products and services of the Bullish Exchange may not be attractive to mass market retail customers. Although the product and services of the Bullish Exchange are available at Full Launch to retail customers, the products and services of the Bullish Exchange may not be suitable to the needs of retail customers and may not be competitive compared to existing offerings by competitors. This may limit Bullish’s ability to expand its customer base and support mass-market retail customers in the future. Bullish may require substantial resources to lower the cost of service and enhance its product features to become more competitive in the retail customer market.

If Bullish is unable to effectively respond to industry competition Bullish’s business, financial condition and results of operations could be negatively impacted.

The digital asset industry is highly competitive, and Bullish faces competition from various types of products and services and market participants, including (but not limited to) unregulated or less-regulated companies, companies with greater financial and other resources, companies with an existing and greater customer base, decentralized products on public blockchains, large regulated financial services institutions, and technology companies. Bullish’s potential competitors are expected to have various competitive advantages over Bullish, such as:

 

   

the ability to trade digital assets and offer products and services that Bullish does not support or offer on Bullish’s Exchange platform;

 

   

greater name recognition, longer operating histories, larger customer bases and larger market shares;

 

   

more established marketing, banking and compliance relationships;

 

   

greater understanding of the industry regulatory landscape and participation in advocacy groups;

 

   

greater customer support resources;

 

   

greater resources to make acquisitions;

 

   

lower labor, compliance, risk mitigation and research and development costs;

 

   

larger and more mature intellectual property portfolios;

 

   

greater number of applicable licenses or similar authorizations;

 

   

established core business models outside of the trading of digital assets, allowing them to operate on lower margins or at a loss;

 

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operations in certain jurisdictions with lower compliance costs and greater flexibility to explore new product offerings; and

 

   

substantially greater financial, technical and other resources.

If Bullish is unable to compete successfully, or if competing successfully requires Bullish to take costly actions in response to the actions of its competitors, Bullish’s business, operating results and financial condition could be adversely affected. Bullish may, in particular initially, lack the investment or resources to constantly evolve and develop new products and services to keep up with its competitors, and its competitiveness is untested and unproven. Bullish’s competitors may also engage in anti-competitive behavior to harm Bullish’s public perception and reputation, including creating negative news, generating regulatory actions against Bullish, or attempts to preventing Bullish from accessing key service providers. Bullish could experience discriminatory or anti-competitive practices that could impede its business growth, cause Bullish to incur additional expense, or otherwise harm its business.

While Bullish believes its focus on providing products and services that take advantage of blockchain technology differentiates it from many such competitors, its business has relatively low barriers to entry and Bullish anticipates that such barriers to entry will become lower in the future. Bullish currently expects that, as digital assets become more mainstream, additional competitors, potentially in large numbers, may begin to provide equivalent products and services. A number of investment banks have already supported digital assets and are continuing to grow their expertise. In addition, the introduction of new technologies, as well as regulatory changes, may significantly alter the competitive landscape for Bullish’s business. This could lead to fee compression or require Bullish to spend more to modify or adapt its offerings to attract and retain customers and remain competitive with the products and services offered by new competitors in the industry. Increased competition on the basis of any of these factors, including competition leading to fee reductions, could negatively impact Bullish’s business, financial condition and results of operations.

Bullish currently relies on Block.one to provide essential functions and resources to support its business and operations.

Bullish currently relies on its parent, Block.one, to provide essential functions and resources to support its business and operations. Although Bullish expects that a majority of Block.one’s current employees will become Bullish’s employees upon completion of the Business Combination, any major disruptions to Block.one’s business, operations, or financial condition or to the transition process from Block.one to Bullish can significantly disrupt Bullish’s business continuity and operations, as well as adversely impact Bullish’s performance and financial condition.

Bullish plans to rely on external vendors and third-party service providers to provide critical outsourcing functions.

Bullish’s operations could be interrupted or disrupted if Bullish’s vendors and third-party service providers, or even the vendors of such vendors and third-party service providers, experience operational or other systems difficulties, terminate their service, fail to comply with regulations, raise their prices or dispute key intellectual property rights sold or licensed to, or developed for, Bullish. Bullish may also suffer the consequences of such vendors and third-party providers’ mistakes. Bullish plans to outsource some of its operational activities and accordingly will depend on relationships with many vendors and third-party service providers. For example, Bullish will rely on vendors and third parties for certain services including the underlying exchange technology for exchange operations, banking for fiat currencies, know-your-customer (“KYC”) administration, transaction monitoring and custody of customer assets.

Because Bullish has only recently commenced the Full Launch of the Bullish Exchange, the integration of critical third-party services into Bullish’s operations may not be fully tested and they may not function the way that Bullish expects them to. Bullish’s critical third-party service providers may also be new businesses themselves and subject to risks associated with a new business. Bullish’s service providers also may not be scalable to meet Bullish’s needs or the needs of Bullish’s customers, including institutional customers.

 

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The failure or capacity constraints of vendors and third-party services providers, a cybersecurity breach involving any third-party service providers or the termination or change in terms or price of a third-party service agreement on which Bullish relies could interrupt or otherwise negatively impact Bullish’s operations.

If Bullish’s vendors and third-party service providers experience difficulties, are subject to cybersecurity breaches, terminate their services, dispute the terms of their service agreements, or raise their prices, and Bullish is unable to solve the issues or replace them with other vendors and service providers, particularly on a timely basis, Bullish’s operations could be interrupted. If an interruption were to continue for a significant period, Bullish’s business, financial condition and results of operations could be adversely affected.

Further, significant negative news, legal or regulatory sanctions, major security breaches and other incidents that harm the brand and reputation of Bullish’s third-party service providers may also adversely impact Bullish’s brand and reputation as well as its business and financial condition.

Critical third parties may be unwilling to provide services to Bullish, particularly those that are regulated entities such as banks and insurers. Bullish is also vulnerable to changes in their rules or practices that could adversely impact its business.

Due to the novelty of the digital asset and blockchain industry, certain types of critical third-party service providers may be unwilling to provide services to Bullish, particularly those that are regulated entities such as banks and insurers, which would make it difficult for Bullish to obtain such critical services from alternative service providers if Bullish fails to maintain its relationship with existing service providers. Failure to maintain a bank account could result in the inability to pay staff and vendors, and impact operations in terms of providing fiat on/off gateway. Bullish’s business also depends on insurance coverage provided by third parties, such as Directors & Officers insurance, Professional Indemnity insurance and Crime insurance, and Bullish is subject to the risk that this may be insufficient or that insurance providers may be unable to meet their obligations. Bullish may also experience difficulties in obtaining adequate insurance coverage due to the nature of the digital asset industry.

Bullish is vulnerable to changes in such third-party service providers’ internal rules or practices. Such changes can result in higher costs for Bullish to use the critical services provided or force Bullish to change its own practices, which can adversely impact Bullish’s reputation, business and operations.

Bullish’s business will be subject to a relatively greater degree of single point of failure and/or concentration risk of its third-party service providers, particularly at the earlier stage of business development.

As the digital asset industry is still relatively young, and Bullish has only recently commenced the Full Launch of the Bullish Exchange, Bullish’s business will be subject to a relatively greater degree of single point of failure and/or concentration risk of its third-party service providers, particularly at the earlier stage of its business development. Currently, Bullish has a single third-party service provider for each key function/service. Alternative service providers are limited, and for some services, nonexistent. Replacing or securing redundant service providers for certain functions or services may be difficult or impossible.

Therefore, if Bullish loses a key service provider for a critical function or service for any reason, Bullish may not be able to obtain a new service provider or do so in a timely manner. As Bullish is still at the early stage of business development, Bullish may also not be able to adapt and respond as quickly or effectively compared to a more mature business.

The loss of a key provider may impact Bullish more severely than it would a more mature business. Failure to obtain a replacement key service provider can result in prolonged disruptions to Bullish’s services and operations, which can lead to financial losses for both Bullish and its customers, as well as adversely impact Bullish’s brand, reputation, and its overall business and financial condition.

 

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Replacing service providers may be technically complex and take a long time and may disrupt Bullish’s business continuity and increase the cost of operations.

Replacing vendors and third-party service providers or addressing other issues with Bullish’s vendors and third-party service providers could entail significant delay, expense and disruption of service, which could also adversely affect Bullish’s business, financial condition and results of operations. Even if Bullish is able to replace vendors and third-party providers, new contracts with such service providers may take significant time to procure and implement. The replacement services/functions will require technical integration into Bullish’s systems, which can be complex and cause significant disruptions to Bullish’s operations and delay in restoring key services or functions. Bullish may also have to incur additional expenses in replacing vendors or service providers and therefore increase its cost of operations.

As a young business and due to its dependency on critical service providers, Bullish may lack the bargaining power to negotiate favorable terms and conditions with such service providers and may also need to adapt its own policies in order to retain such service providers.

As a new business, Bullish is more dependent on third-party service providers to provide critical functions than a more mature business that has more resources and expertise to establish internal resources for such functions. Such dependency places Bullish at a weaker negotiating position when engaging critical third-party service providers. Bullish may not be able to obtain favorable terms and conditions from such providers and may also need to adapt its own policies or practices in order to retain such providers. This can increase Bullish’s legal risks and cost of operations, and may adversely impact Bullish’s financial results and profitability.

Bullish’s counterparties may become unable to meet their financial and non-financial obligations to Bullish, and Bullish may not be able to recover its losses.

Bullish’s business, including the operations of the Bullish Exchange and the Bullish Treasury, is subject to counterparty risks, including credit risk with respect to such counterparties. These counterparties can be subject to numerous financial and non-financial risks and some of them are unregulated by any government authorities. Bullish’s counterparties may be forced to discontinue business and operations due to a variety of reasons, such as changes in applicable laws and regulations, technical system failures, challenges to business continuity and inability to appropriately recover from disaster situations or insolvency. Bullish’s counterparties may discontinue provision of critical services or functions or fail to perform other non-financial obligations to Bullish. They may also fail to meet financial obligations owed to Bullish. Such failures can result in adverse impact on Bullish’s business, operations, financial condition and share price, and Bullish may not have any recourse or be able to recover any losses suffered.

Failure to conduct adequate due diligence or effective ongoing monitoring of third parties may potentially expose Bullish to latent risks, which could include fraud, security vulnerabilities, misappropriation or compliance violations.

Bullish intends to conduct due diligence and enforce strong policies and practices regarding its relationships with third-party service providers and counterparties. However, despite such efforts, Bullish may not successfully detect and prevent fraud, incompetence, misappropriation or theft by its third-party service providers or their failure to comply with their financial and non-financial obligations owed to Bullish. While Bullish performs third-party security reviews, Bullish may not be able to detect or prevent all security vulnerabilities and breaches, including those resulting from future changes or unexpected behaviors in third-party platforms. Bullish may also be exposed to the risk of violations of laws and regulations of multiple jurisdictions, including sanctions violations, if it fails to detect material violation of laws and regulations by its third-party service providers and counterparties. Such failures can result in loss of data and assets of Bullish and its customers and increased legal and regulatory liabilities for Bullish, and could adversely affect Bullish’s brand, reputation, business, operations, financial condition and share price.

 

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Adverse economic conditions may adversely affect Bullish’s business.

Bullish’s performance is subject to general economic conditions and their impact on the digital asset markets and Bullish’s customers. The United States and other key international economies have experienced cyclical downturns from time to time in which economic activity declined resulting in lower consumption rates, restricted credit, reduced profitability, weaknesses in financial markets, bankruptcies, and overall uncertainty with respect to the economy. The impact of general economic conditions on the economy of digital assets is highly uncertain and dependent on a variety of factors, including market adoption of digital assets, global trends in the economy of digital assets, central bank monetary policies and other events beyond Bullish’s control. Geopolitical developments, such as trade wars and foreign exchange limitations, can also increase the severity and levels of unpredictability globally and increase the volatility of global financial and digital asset markets. To the extent that conditions in the general economic and digital assets markets materially deteriorate, Bullish’s ability to attract and retain customers may suffer.

Natural disasters, COVID-19 and other pandemics, wars, terrorist attacks and other crises involving any of the countries in which Bullish has operations could adversely affect its business continuity, operations and financial results.

Natural disasters or other catastrophic events may also cause damage or disruption to international commerce, and the global economy and could have an adverse effect on Bullish’s business, operating results, and financial condition. Bullish’s business operations are subject to interruption by natural disasters, fire, power shortages, and other events beyond its control. In addition, Bullish’s global operations expose it to risks associated with public health crises, such as pandemics and epidemics, which could harm its business and cause its operating results to suffer. For example, the ongoing effects of the COVID-19 pandemic and/or the precautionary measures that Bullish has adopted have resulted, and could continue to result, in difficulties or changes to its customer support, or create operational or other challenges, any of which could adversely impact its business and operating results. Further, acts of terrorism, labor activism or unrest, and other geopolitical unrest could cause disruptions in its business or the businesses of its partners or the economy as a whole. Moreover, military conflicts such as conflict that began between Russia and Ukraine in late February 2022, and the recent recognition by Russia of the independence of the self-proclaimed republics of Donetsk and Luhansk, in the Donbas region of Ukraine, has already affected global economic markets, and the uncertain resolution of this conflict could result in protracted and/or severe damage to the global economy. Even though the Bullish Exchange does not currently offer services in Russia or Ukraine and the Bullish group does not currently maintain operations or assets in those countries, the extent and duration of the military action, sanctions, and resulting market disruptions are impossible to predict but could be substantial. Continuation or escalation of the military action or its expansion to involve other geographies or belligerents in the future may adversely affect Bullish’s business by resulting in deteriorating global or relevant local economic conditions, changes in laws applicable to Bullish’s business, increases in illicit finance risk and other geopolitical, legal or economic consequences of war. In the event of a natural disaster, including a major earthquake, blizzard, or hurricane, or a catastrophic event such as a fire, power loss, or telecommunications failure, Bullish may be unable to continue its operations and may endure system interruptions, reputational harm, delays in development of its platform, lengthy interruptions in service, breaches of data security, and loss of critical data, all of which could have an adverse effect on its future operating results. Additionally, all the aforementioned risks may be further increased if Bullish does not implement an effective disaster recovery plan or if its partners’ disaster recovery plans prove to be inadequate. To the extent natural disasters or other catastrophic events concurrently impact data centers Bullish relies on in connection with private key restoration, customers will experience significant delays in withdrawing funds, or, in the extreme, Bullish may suffer loss of customer funds. Such losses can expose Bullish to additional legal liability, fines, sanctions and other penalties, and adversely impact Bullish’s reputation, business, financial condition, operating results and share price.

 

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Because Bullish’s potential customers are located in diverse markets around the world, Bullish’s revenue is vulnerable to local market conditions around the world and geopolitical developments such as trade wars and foreign exchange limitations.

Because Bullish’s potential customers are located in diverse markets around the world, Bullish’s revenue is vulnerable to local market conditions around the world and to geopolitical developments. Bullish will be exposed to the risks associated with the changes in policies, political unrest, trade wars or other unstable economic conditions of the countries where Bullish’s customers will be located. Bullish may also be exposed to risks of foreign exchange fluctuations and foreign exchange controls due to the diverse locations of its customers. Any adverse changes in local market conditions around the world and adverse geopolitical developments would impact Bullish’s business, financial condition, results of operations and share price.

Bullish’s internal governance, risk management and compliance program, policies, systems and controls are continuing to be developed and have not been fully embedded and tested. The existing processes and controls may not be adequate or effective to mitigate risk or ensure compliance.

As Bullish has only recently commenced the Full Launch of the Bullish Exchange, Bullish’s internal governance, risk management and compliance program, policies, systems and controls are continuing to be developed and have not been fully embedded and tested. There may be inherent limitations to Bullish’s risk management and compliance strategies because there may be existing or future risks that have not been fully identified, including risks that it has not appropriately anticipated or identified, and certain policies that will have been adopted may be insufficient when used in connection with digital assets. Bullish’s management may not be able to receive accurate and timely risk information due to internal control failures, and its decision-making, particularly in times of crisis, may be impaired.

If Bullish’s risk management and compliance framework proves ineffective or if Bullish’s management information is incomplete or inaccurate, it could suffer unexpected losses or fail to generate the expected revenue, which could adversely affect its reputation, business, financial condition, results of operations and share price.

Operational risks may adversely affect Bullish’s performance and results. The risk of human failure related to manual processes and controls may also be greater at the earlier stage of business development.

Operational risk is the risk of an adverse outcome resulting from inadequate or failed internal processes, people, systems or external events. Bullish’s exposure to operational risk arises from routine design and processing errors (both human and technical), as well as serious incidents, such as major systems failures, internal or external fraud, cybersecurity attacks, legal and regulatory matters. Because Bullish’s operations will be reliant on both technology and human expertise and execution, it may be exposed to material operational risk arising from a number of factors, including, but not limited to, human error, processing and communication errors, errors of third-party service providers, counterparties or other third parties, failed or inadequate processes, design flaws and technology or system failures and malfunctions. Such operational risks can lead to inaccurate recording or execution of transactions and customer and Bullish’s assets, resulting in losses for Bullish and its customers.

Operational errors or significant operational delays could have a negative impact on Bullish’s ability to conduct its business or service its customers, which could adversely affect results of operations due to potentially higher expenses and lower revenues, increase liability for Bullish, lead to losses for its customers and negatively impact its reputation. Recurring operational issues may also raise concerns among regulators regarding Bullish’s governance and control environment.

 

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Bullish may be unable to establish or enforce appropriate processes and controls to manage the risks of unauthorized trading or ensure adequate segregation of duties between the operations of Bullish Exchange and Bullish Treasury.

Unauthorized trading describes the potential for staff misconduct (both intentional and unintentional trading errors) through the execution of fraudulent or otherwise unauthorized trading activity in breach of internal policies and procedures or relevant laws and regulations. For the Bullish Exchange, the principal risk would involve staff conducting unauthorized trading activity through the accounts and assets of customers (which may include Bullish Capital assets). For the Bullish Treasury, the principal risk would involve trading staff conducting trading activity through the accounts and assets of Bullish that exceeds the limits specified through mandates and/or delegated authority.

In addition, Bullish Capital will deploy digital assets through the Liquidity Pools to provide liquidity and facilitate customer activity on the Bullish Exchange. Limited scope trading will also be undertaken by Bullish Capital on the Bullish Exchange in order to support portfolio rebalancing. There is a risk that Bullish Capital’s activities on the Bullish Exchange may result in inherent or incidental commercial advantage for itself (e.g., front-running other customers) and/or actual or perceived advantage for the Bullish Exchange (e.g., “wash trading” to boost volume).

Bullish is in the process of implementing appropriate processes and controls to manage the risks of unauthorized trading and ensure adequate segregation between the operations of Bullish Exchange and Bullish Treasury to manage the risks of actual or perceived commercial advantage for Bullish Treasury or Bullish Exchange, as described above. Such processes and controls are however largely untested in a real operating environment and, despite Bullish’s best efforts to do so, may not adequately address the risk or meet the expectations of relevant regulators. They may not be adequately enforced by Bullish, and therefore may fail to detect or prevent such misconduct. If Bullish fails to appropriately detect, prevent and/or address such misconduct, Bullish could be exposed to claims, legal actions and liability, financial losses and/or regulatory investigations, sanctions, fines, or other penalties and could face serious harm to its reputation, business, financial condition, operating results and share price.

Bullish may not be effective in achieving adequate risk mitigation, where levels of exposure exceed risk appetite.

Bullish is establishing risk management and oversight policies and procedures to provide a sound operational environment for the types of risk to which it is subject, including operational risk, credit risk, market risk and liquidity risk. However, as with any risk management framework, there are inherent limitations to Bullish’s current and future risk management strategies, including risks that it has not appropriately anticipated or identified and the risk that certain policies may be insufficient when used in connection with digital assets. Accurate and timely risk information is necessary to enhance management’s decision-making in times of crisis. If Bullish’s risk management framework proves ineffective or if Bullish’s management information is incomplete or inaccurate, it could suffer unexpected losses or fail to generate the expected revenue, which could materially adversely affect its business, financial condition, results of operations and share price.

Bullish has not yet developed its environmental, social and governance (“ESG”) program. Bullish may be required by law, regulations or listing rules to implement an ESG program and its failure to do so may adversely impact its operations and reputation.

The growing integration of ESG factors in making investment decisions is relatively new, and frameworks and methods used by investors for assessing ESG policies are not fully developed and vary considerably among the investment community. Bullish has not yet developed its ESG program, including its diversity and inclusion program. Bullish may be required by law and regulations to implement an ESG program. In particular, the SEC has proposed rule changes that would require registrants to include certain climate-related disclosures in their registration statements and periodic reports, including information about climate-related risks that are reasonably

 

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likely to have a material impact on their business, results of operations, or financial condition, and certain climate-related financial statement metrics in a note to their audited financial statements. Nasdaq is implementing diversity and inclusion reporting rules as well as requirements for its listed companies to meet certain diversity targets, and it is possible that other exchanges, including the NYSE, may impose similar requirements. Any failure to implement an ESG program and comply with ESG disclosure requirements may adversely impact Bullish’s business and reputation as well as financial condition. There may be a perception held by the general public, Bullish’s customers, investors, service providers or counterparties that Bullish’s policies and procedures are insufficient.

Bullish’s reputation could also be harmed if it fails to act responsibly in the ESG areas in which it chooses or is required to report apart from legal or regulatory requirements. Any harm to Bullish’s reputation resulting from setting these standards or its failure or perceived failure to set or meet such standards could impact employee retention; the willingness of Bullish’s customers to use its product and services, its service providers or counterparties to do business with it; investors’ willingness or ability to purchase or hold its securities; or Bullish’s ability to access capital, any of which could adversely affect Bullish’s reputation, business, financial performance, future prospects and share price.

Risks Related to the Growth of Bullish’s Products and Services

Bullish has only recently commenced the Full Launch of the Bullish Exchange.

Particularly during the early launch period, the various system components of the Bullish Exchange platform and the supporting function systems may not integrate properly or function as expected, resulting in technical errors and/or service-level disruptions. Certain technical features may also not be available. Such technical limitations during the early launch period may limit Bullish’s ability to effectively respond to industry and regulatory changes, market demands or customer needs. The product development process may fail to perform as expected. Key milestones to ensure on-time delivery of product may not be met, and opportunities may be missed from trying to deliver the perfect product.

Bullish’s Hybrid Order Book, a key product differentiator for Bullish, continues to be tested and may not be completed or function as expected. If Bullish is unable to deliver the Hybrid Order Book, there is a risk that customers may view the Bullish Exchange as comparable to a spot trading platform, where Bullish may not be as competitive.

If the Bullish Exchange is unable or slow to support more types of digital assets, Bullish’s business, operating results and financial condition may be more severely impacted relative to a more mature exchange with diverse types of supported digital assets.

Unlike a mature exchange with diverse types of supported digital assets, Bullish supports only a limited range of digital assets on the Bullish Exchange platform, i.e., bitcoin, ETH, EOS, LINK, LTC and USDC, and possibly USDT in the future. The limitation of supported digital assets may constrain Bullish’s ability to attract more customers. In order to support any additional types of digital assets, a variety of front- and back-end technical and development work is required to integrate such supported digital assets with Bullish’s existing technical infrastructure. For certain digital assets, a significant amount of development work is required and there is no guarantee that Bullish will be able to integrate successfully with any existing or future digital asset. Bullish may also be slow or unable to support additional digital assets due to limitations imposed by laws and regulations relevant to its business and/or its third-party service providers, including custody services.

If Bullish is required to suspend or remove one or more supported digital assets from its platform for any reason, given that Bullish has a limited range of supported assets at Launch, such suspending or removing one or more digital assets would have a significantly larger impact on Bullish’s overall business operations and financial condition compared to a platform with a broader range of supported digital assets. If for any reason Bullish is

 

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unable or slow to support more assets, Bullish’s business and operations may be more severely impacted relative to a more mature exchange with a more diverse digital asset offering. Bullish may be required to suspend or remove, either entirely or in respect of a specific jurisdiction, a digital asset supported on Bullish Exchange for a variety of reasons, including compliance with new legal and regulatory requirements in respect of offering the digital asset in the relevant jurisdiction(s), compliance with Bullish’s policies and procedures and/or reputational risks associated with the asset (e.g., as a consequence of forks, changes in governance or features of a digital asset). A digital asset may also be suspended or removed where for business or technical reasons support for the relevant blockchain or token concerned is no longer going to be offered by Bullish, or due to the restrictions or limitations imposed by Bullish’s third-party service providers.

Compared to a more mature business with a diverse asset offering, Bullish’s business may be more adversely affected if the markets for bitcoin, ETH, EOS, LINK, LTC, other supported digital assets and stablecoins deteriorate or if their prices decline, including as a result of the following factors:

 

   

the reduction in mining rewards of bitcoin, including block reward halving events, which are events that occur after a specific period of time which reduces the block reward earned by miners;

 

   

the completion of the Ethereum Merge which migrated the blockchain from proof-of-work to proof-of-stake and could result in one or many chain forks;

 

   

disruptions, hacks, splits in the underlying network also known as “forks”, attacks by malicious actors who control a significant portion of the networks’ hash rate such as double spend or 51% attacks, or other similar incidents affecting the corresponding blockchain networks for the supported digital assets;

 

   

hard “forks” resulting in the creation of and divergence into multiple separate networks;

 

   

informal or formal governance led by core developers of the corresponding blockchain networks for the supported digital assets that lead to revisions to the underlying source code or inactions that prevent network scaling and which evolve over time largely based on self-determined participation, which may result in new changes or updates that affect their speed, security, usability, or value;

 

   

the ability of the corresponding blockchain networks for the supported digital assets to resolve significant scaling challenges and increase the volume and speed of transactions;

 

   

the ability to attract and retain developers and customers to use the supported digital assets for payment, store of value, unit of accounting, and other intended uses;

 

   

transaction congestion and fees associated with processing transactions on the corresponding blockchain networks for the supported digital assets;

 

   

the identification of Satoshi Nakamoto, the pseudonymous person or persons who developed bitcoin, or the transfer of Satoshi’s bitcoins. This may adversely affect the market for bitcoin or its price because it could be perceived as significantly increasing the circulating supply of bitcoin. Bitcoin is one of the only few digital assets supported on the Bullish Exchange at Launch and Bullish expects the trading volume of bitcoin on the exchange to be significant. Bullish also holds a significant amount of bitcoin on its balance sheet. Any adverse impact on the market or price of bitcoin may therefore adversely impact on Bullish’s financial position;

 

   

negative news and perception of the supported digital assets, including their perceived environmental impact;

 

   

developments in mathematics, technology, including in digital computing, algebraic geometry, and quantum computing, that could result in the cryptography being used by the corresponding blockchain networks for the supported digital assets becoming insecure or ineffective;

 

   

material legal proceedings, laws and regulations affecting the supported digital assets and/or their corresponding blockchain networks or access to these networks and/or material governmental investigations in relation to serious wrongdoing;

 

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undiscovered or unknown security flaws in blockchain, cryptography or underlying hardware and software supporting the supported digital assets;

 

   

any internal governance dispute within the Centre Consortium, which governs the USDC network; or

 

   

any other factors that adversely impact the demand of the digital assets supported on the Bullish Exchange.

The Bullish Exchange products and services may be subject to bugs, technical defects and errors as well as service-level disruptions, which can increase as Bullish scales its services to a larger customer base.

Bullish’s product and services offered on the Bullish Exchange may be subject to bugs, technical defects and errors, including errors in system algorithms, underlying smart-contracts, technical systems or system to blockchain data interfaces, which can potentially arise from unauthorized change or inadequate change control. Through the efforts to remediate such issues, Bullish may be required to implement technical solutions that give rise to additional operational risks. This could include the need to develop automated trading features that may lead to accusations of market abuse and other legal and regulatory violations, which may result in enforcement actions and increased legal liability for Bullish. Such errors or defects may delay or threaten the anticipated launch, and/or lead to service-level disruptions, which can increase as Bullish scales its services to a larger user base. Service-level disruptions can lead to poor user experience and may result in trading losses for both Bullish and its customers, which can further result in loss of consumer confidence in Bullish’s products and services, loss of customers and/or allegations and claims against Bullish and regulatory investigations and/or enforcement actions, which can adversely impact Bullish’s brand and reputation as well as its business, operating results, financial condition and share price.

As new product features or additional supported assets become available on the Bullish Exchange, the Liquidity Pools may not be sufficient to meet the needs of its customers.

The Liquidity Pools of the Bullish Exchange act as the primary market maker in Bullish’s Hybrid Order Book. As new product features or additional supported assets become available, the liquidity provided on Bullish’s Exchange platform may not be sufficient to meet the needs of its customers. There is also no guarantee that Bullish Capital will be able to contribute to all, or any, Liquidity Pools at all times. The Liquidity Pools may be unable to provide liquidity in the amount and/or at the price that is satisfactory to meet the needs of its customers. The failure or inefficiency of Bullish’s Liquidity Pools to provide satisfactory liquidity may result in Trading Volume decrease and loss of customers, which may negatively impact the business operation of Bullish.

Bullish may not be able to adapt or respond to new products or services, support new digital assets or include them into the Liquidity Pools of the Bullish Exchange due to technical, legal, regulatory and/or resource constraints.

From time to time, Bullish intends to offer new products and services on the Bullish Exchange as well as expand the range of digital assets supported. There are substantial risks and uncertainties associated with these efforts, and Bullish could invest significant capital and resources into such efforts. Regulatory requirements can affect whether initiatives are able to be brought to market in a manner that is timely and attractive to Bullish’s customers. Initial timetables for the development and introduction of new products or services and price and profitability targets may not be met. New products or services may need to be initially launched on a limited basis prior to their full launch. In addition, Bullish’s revenues and costs may fluctuate because new products and services generally require startup costs while revenues take time to develop, which may adversely impact Bullish’s results of operations. Bullish may not be able to adapt or respond to new products or services or support new digital assets due to technical, legal, regulatory, resource constraints or other unforeseen factors and events.

 

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Bullish’s failure to safeguard and adequately custody its customers’ assets could adversely impact its business, operating results and financial condition.

The Bullish Exchange is designed to provide its customers with a seamless, end-to-end cryptographically secure custody service to keep their digital assets safe. Customer digital assets, in spot, margin and/or liquidity accounts on the Exchange, are kept in a mixture of wallet solutions with the majority of digital assets held in offline cold storage and each transaction is recorded on a private blockchain. The custody solution consists of a minimum of three types of wallet implementation each with clearly segregated functions and restrictions, including appropriate limits and monitoring controls. Bullish manages and controls the wallets consistent with customers’ instructions and as the custodian of customers’ assets. Business continuity and disaster recovery protocols are also being developed to enable Bullish to respond appropriately to potential custody related incidents that could lead to a loss of customer assets. While Bullish’s custody services will take steps to ensure that the custody services are secure and protected against custody related incidents, no assurance can be given that the custody services are or will be fully secure and protected.

Supported digital assets are not insured or guaranteed by any government or government agency. Bullish has entered into partnerships with third parties, where Bullish or its partners receive and hold assets for the benefit of its customers. Bullish and its partners’ abilities to manage and accurately safeguard these customer assets requires a high level of internal controls. As Bullish’s business continues to grow and expand its product and service offerings, Bullish must continue to strengthen its associated internal controls and ensure that its partners do the same. Bullish’s success and the success of its offerings requires significant public confidence in its and its partners’ ability to properly manage customers’ balances and handle large and growing transaction volumes and amounts of customer assets. In addition, Bullish is dependent on its partners’ operations, liquidity, and financial condition for the proper maintenance, use, and safekeeping of these customer assets. Any failure by Bullish or its partners to maintain the necessary controls or to manage customer digital assets and funds appropriately and in compliance with applicable regulatory requirements could result in reputational harm, significant financial losses, lead customers to discontinue or reduce their use of its and its partners’ products, and result in significant penalties and fines and additional restrictions, which could adversely impact Bullish’s business, operating results, and financial condition.

The operation of the Bullish Exchange will involve the need to deposit, transfer, and custody customer cash and digital assets. In each instance, Bullish is required to safeguard customers’ assets using institutional level security standards applicable to its hot and cold wallet and storage systems. Bullish’s security technology is designed to prevent, detect, and mitigate inappropriate access to its systems, by internal or external threats. Bullish intends to maintain administrative, technical, and physical safeguards designed to comply with applicable legal requirements and industry standards. However, it is nevertheless possible that hackers, employees or service providers acting contrary to its policies or agreements, or others, could circumvent these safeguards to improperly access its systems or documents, or the systems or documents of its business partners, agents, or service providers, and improperly access, obtain, and/or misuse customer digital assets and funds. The methods used to obtain unauthorized access, disable, or degrade service or sabotage systems are also constantly changing and evolving and may be difficult to anticipate or detect for long periods of time. Bullish’s insurance coverage for such risks is limited and may not cover the full extent or nature of its liability, which may exceed the value of its assets. Bullish’s ability to maintain insurance is also subject to the insurance carriers’ ongoing underwriting criteria. Bullish Exchange uses third-party custodians for cold storage services and hot and warm wallets that are jointly managed by the operations of the Exchange and Bullish’s third party custodian. Currently, BitGo Trust Company, Inc. (“BitGo”) is the third-party digital asset custody provider for the Exchange. BitGo holds an insurance policy which covers digital assets where the keys are held by BitGo. BitGo customers, including Bullish, will be expected to secure no more than the policy limit, US$250 million, in each cold wallet. As this insurance coverage is shared among Bullish and other customers of BitGo and on a first loss basis, if a loss event impacts multiple BitGo customers, the full value of any loss may not be indemnified by the policy. For the hot and warm wallet solutions provided by BitGo, BitGo agrees to maintain technology, network security, and privacy liability insurance, covering technology errors, losses and omissions, to a minimum level of US$5 million. For the composition of digital assets held with BitGo in cold storage and in hot/warm wallets as of December 31, 2021, see table “Total digital assets held with BitGo for

 

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the Bullish Group and Bullish Gibraltar’s customers” on page 295. Any loss of customer cash or digital assets could result in a subsequent lapse in insurance coverage, which could cause a substantial business disruption, adverse reputational impact, inability to compete with its competitors, and regulatory investigations, inquiries, or actions. Additionally, transactions undertaken through its websites or other electronic channels may create risks of fraud, hacking, unauthorized access or acquisition, and other deceptive practices.

There is a risk of loss of customers’ assets arising from the use of omnibus accounts or back-end infrastructure and related services provided or maintained by sub-custodians and third-party service providers. Bullish attempts to protect customers by carefully selecting its sub-custodians and third-party service providers and by requiring them to adhere to a contractual standard of care and to implement extensive policies and procedures, including (without limitation) information security obligations, that are intended to reduce the risk of loss of assets, but there can ultimately be no assurance that such measures will be entirely successful to avoid loss. For example, in the event of the insolvency, failure, default, breach, hacking, loss, business disruption, fraud, theft, error, negligence, or accident of or by a sub-custodian or third-party service provider contracted by Bullish to maintain and operate an omnibus account for digital assets, or to provide the back-end infrastructure that it uses to hold customers’ digital assets in an omnibus account, as applicable, Bullish as custodian and bare trustee on customers’ behalf may only have an unsecured claim against the sub custodian or third-party service provider in connection with the digital assets. A bare trustee under Gibraltar law is one that, under the terms of the relevant trust, has no discretion over the trust assets and no active duties such as to insure or to invest the trust assets. A bare trustee may be considered similar to a nominee, custodian or equivalent. In the context of customers’ assets, the Exchange’s terms of service provide that Bullish Gibraltar holds the assets as bare trustee and is not legally the beneficial owner of the assets; however, this conclusion remains subject to risks and uncertainties - see “- Bullish Exchange customers’ assets may be at risk of loss in the event of the insolvency or bankruptcy of Bullish Gibraltar or any other entity that may operate the Bullish Exchange in the future.” While Bullish intends to use commercially reasonable efforts, as determined by Bullish, to attempt on customers’ behalf to recover the amounts due, there is no assurance such efforts by Bullish will be successful, or that any recovery will be obtained promptly or in full, and customers are exposed to the resulting risk of loss of assets. Pursuant to the Exchange terms of service (but subject to any limitations under applicable law), Bullish is not liable or responsible for any losses customers may suffer that are caused directly or indirectly by Bullish holding customers’ digital assets with a sub custodian or third party service provider or the use of infrastructure and related services provided by a sub custodian or third party service provider. Bullish Gibraltar holds all customers’ assets (including Bullish Capital assets deployed to the Exchange) in omnibus accounts and wallets that are segregated from Bullish Gibraltar’s own assets. Based on Bullish’s understanding of relevant Gibraltar laws and regulations, Bullish believes that in the event of an insolvency of Bullish Gibraltar, Gibraltar law would recognize assets in spot, margin and/or liquidity accounts as the property of the applicable customers and not of Bullish Gibraltar and accordingly such assets would not be available to satisfy Bullish Gibraltar’s general creditor claims; however, this conclusion remains subject to risks and uncertainties – see “- Bullish Exchange customers’ assets may be at risk of loss in the event of the insolvency or bankruptcy of Bullish Gibraltar or any other entity that may operate the Bullish Exchange in the future.

Certain supported digital assets enable holders to earn rewards by participating in decentralized governance, bookkeeping and transaction confirmation activities on their underlying blockchain networks, such as through staking, delegating, and voting the digital assets. The Bullish Exchange does not currently offer customers staking services of the type referred to here or any other types, and development of such services and related operations and arrangements is not a current priority. The Bullish group does not currently engage in staking for their own account and in 2021 only engaged in staking EOS for governance purposes, which did not generate rewards. Bullish may in the future decide to offer or engage in such services for certain supported digital assets in order to earn additional yield based on digital assets that are held on behalf of customers. Some networks require customer assets to be transferred into smart contracts on the underlying blockchain networks not under Bullish or anyone’s control. If the validator, any third-party service providers, or smart contracts fail to behave as expected, suffer cybersecurity attacks, experience security issues, or encounter other problems, Bullish’s customers’ assets may be irretrievably lost.

 

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Any security incident resulting in a compromise of customer assets could result in substantial costs to Bullish and/or require Bullish to notify impacted individuals, and in some cases regulators, of a possible or actual incident, expose Bullish to regulatory enforcement actions, including substantial fines, limit its ability to provide services, cause user discontinuation or reduction of use of servicesloss of customers or reduction in the use of its products and services, and further subject Bullish to litigation, significant financial losses, damage its reputation, and adversely affect its business, operating results, financial condition, cash flows and share price.

Bullish Exchange customers’ assets may be at risk of loss in the event of the insolvency or bankruptcy of Bullish Gibraltar or any other entity that may operate the Bullish Exchange in the future.

As the operator of the Bullish Exchange, Bullish Gibraltar, currently holds customers’ assets on behalf of its customers. In the event of an insolvency or bankruptcy of Bullish Gibraltar or any other entity that may operate the Bullish Exchange in the future, there is a risk that customers’ assets may be considered the property of the bankruptcy estate of Bullish Gibraltar or such other entity and customers may be at risk of losing their assets depending on the application of the relevant jurisdiction’s laws. Gibraltar laws and regulations oblige Bullish Gibraltar as a DLT licensee to have effective arrangements in place for the protection of customers’ assets and require custodial assets to be segregated from the DLT licensee’s own assets. Bullish Gibraltar holds all customers’ assets in omnibus accounts and wallets that are segregated from Bullish Gibraltar’s own assets. The Exchange’s terms of service provide that customers’ assets are held by Bullish Gibraltar as custodian and bare trustee for and on behalf of customers. The Exchange’s terms of service also provide that customers remain the beneficial owners of their assets held in custody by Bullish Gibraltar. Bullish Capital assets that are deployed to the Exchange are also held in the omnibus accounts and wallets and are for these purposes treated the same as other customers’ assets, and the omnibus accounts and wallets temporarily contain any amount of fees, spreads or interest separately identified and collected by the Exchange that has yet to be swept to Bullish Gibraltar’s own account or wallet (which revenues sweep occurs periodically), in each case consistent with the requirements of the DLT License. Bullish’s understanding of Gibraltar law is that an insolvent Gibraltar company’s estate can only consist of assets to which it is legally and beneficially entitled. The Gibraltar Insolvency Act 2011 provides that assets held by a Gibraltar company in liquidation on trust for another person are not assets of such company. As such, a person beneficially entitled to assets that the Gibraltar company holds in custody or trust is entitled to have the assets returned to them. The courts of England & Wales have recognized digital assets as property, and in the absence of Gibraltar case law or guidance on this point (apart from the GFSC’s position that customers’ assets do not represent property of the DLT licensee), Bullish considers it very likely that Gibraltar courts would adopt a similar position to that of the English & Welsh courts as English & Welsh judgments are highly persuasive before the Gibraltar courts. Based on Bullish’s understanding of relevant Gibraltar laws and regulations, Bullish believes that in the event of an insolvency of Bullish Gibraltar, Gibraltar law would recognize assets in spot, margin and/or liquidity customer accounts as the property of the applicable customers and not of Bullish Gibraltar and accordingly such assets would not be available to satisfy Bullish Gibraltar’s general creditor claims.

Except for Bullish Gibraltar, no other entities within Bullish Group currently hold any customers’ assets. In the event of the insolvency or bankruptcy of any other Bullish entities, customers’ assets held by Bullish Gibraltar should not be subject to general creditor claims against those other entities. In particular, in the event of insolvency or bankruptcy of Bullish or Bullish Global which are Bullish Gibraltar’s parent companies and incorporated in the Cayman Islands, Bullish understands that the Cayman Islands has a legal system that is based on the English common law system, including equity, and Bullish considers it likely that absent specific regulation to the contrary, the local courts would recognize customers’ beneficial interests in their assets with such assets being treated as the property of the applicable beneficial owners and not being available to satisfy general creditor claims. Notwithstanding the above, in the event of insolvency or bankruptcy of Bullish, Bullish Global, or any service companies within Bullish Group, third-party creditors may claim rights to some or all of the assets of the relevant insolvent or bankrupt company, that could result in, among other things, partial or complete unavailability of services or resources employed by the Exchange, which may adversely affect the Exchange’s operation. Any errors, defects, disruptions, or other performance problems with the Exchange arising from such insolvency or bankruptcy could adversely affect customers’ ability to timely access or sell their digital

 

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assets, and may result in losses for its customers. In addition, Bullish understands that the relevant Gibraltar and Cayman Islands laws and regulations have not yet been applied by the courts to the insolvency of a company holding digital assets, and the Exchange’s terms of service have not been tested in any courts meaning this conclusion remains subject to uncertainty. See “ — Engaging in cross-border business can make it difficult for Bullish to ensure that it adequately protects its legal rights and interests. Bullish may incur liability from breaching its legal obligations or may not be able to enforce legal rights and obligations or to enforce them consistently and predictably across these jurisdictions.” Bullish further expects that if the laws of another jurisdiction were found to be applicable to an insolvency or bankruptcy of the operator of the Bullish Exchange (which could arise in the future, for example, if Bullish Gibraltar were to do business in that other jurisdiction or if the Bullish Exchange were to be operated by an entity established in that other jurisdiction), then the application of that jurisdiction’s laws may result in different or conflicting treatment of customers’ assets. For example, based on its current understanding of U.S. laws and regulations, Bullish believes that if it were to commence insolvency or bankruptcy proceedings in the United States, customers’ assets may be treated as property of the bankruptcy estate and customers may be treated as general creditors with unsecured claims. Additionally, even if customers’ assets were recognized as their property in the insolvency or bankruptcy of Bullish Gibraltar or other relevant entity, the entitlements of individual customers would need to be ascertained and the corresponding assets identified and transferred, which process could be subject to delays, create increased risk of losses or reveal shortfalls caused by default, and in any such cases customers may receive less than their full entitlements. Additionally, in the event of insolvency or bankruptcy of a sub-custodian or third-party service provider engaged by Bullish Gibraltar to hold or administer customers’ assets, relevant customers’ assets may be considered property of the bankruptcy or insolvent estate such that Bullish Gibraltar (on customers’ behalf) is treated as a general unsecured creditor. Bullish believes that the commingling of Bullish Gibraltar revenues derived from the operation of the Bullish Exchange temporarily and of Bullish Capital’s assets with other customers’ assets does not impact the risk to customers’ assets in the event of a bankruptcy or insolvency of Bullish Gibraltar or other relevant Bullish group entity. However in such an event Bullish Capital would be exposed to the same risks and uncertainties as other customers of Bullish Exchange, including risks of delays and losses in recovery of its assets. Further, the above conclusions remain subject to uncertainties as Bullish has not obtained counsels’ opinions regarding the insolvency or bankruptcy laws of Gibraltar or other jurisdictions that may be applicable in an insolvency or bankruptcy of Bullish Gibraltar or other relevant entity. Any loss of customers’ assets by such means could harm Bullish’s brand and reputation, result in significant losses, and adversely impact its business, financial condition, operating results, cash flows and share price. In addition, the uncertainty in the treatment of customers assets could have an adverse impact on Bullish’s ability to attract and retain customers.

The Exchange uses third-party custodians for cold storage services and hot and warm wallets that are jointly managed by the operations of the Exchange and Bullish’s third party custodian. Currently, BitGo Trust Company, Inc. (“BitGo”), a third-party provider of institutional digital asset custody, trading, and finance services, is the third-party digital asset custody provider for the Exchange. For the composition of digital assets held with BitGo in cold storage and in hot/warm wallets as of December 31, 2021, see table “Total digital assets held with BitGo for the Bullish Group and Bullish Gibraltar’s customers” on page 295. BitGo holds an insurance policy which covers digital assets where the keys are held by BitGo under the custodial services agreement and an insurance policy for its hot and warm wallet solution under the advanced wallet services agreement. For the hot and warm wallet solutions provided by BitGo, BitGo maintains technology, network security, and privacy liability insurance, covering technology errors, losses and omissions, to a minimum level of US$5 million. For BitGo’s cold storage services, BitGo customers, including Bullish, will be expected to secure no more than the policy limit, US$250 million, in each cold wallet. As this insurance coverage is shared among Bullish and other customers of BitGo and on a first loss basis, if a loss event impacts multiple BitGo customers, the full value of any loss may not be indemnified by the policy which could cause a substantial business disruption, adverse reputational impact, inability to compete with its competitors, and regulatory investigations, inquiries, or actions.

 

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The loss, destruction or mismanagement of private keys required to access any digital assets held in custody for Bullish’s own account or for its customers may be irreversible. If Bullish is unable to access its private keys or if Bullish experiences a hack or other data loss relating to its ability to access any digital assetsdigital assets, it could cause regulatory scrutiny, reputational harm, and other losses.

Digital assets are generally controllable only by the possessor of the unique private key(s) relating to the digital wallet in which the digital assets are held. While blockchain protocols typically require public addresses to be published when used in a transaction, private keys must be safeguarded and kept private in order to prevent a third party from accessing the digital assets held in such a wallet. To the extent that any of the private keys relating to its hot or cold wallets containing digital assets held for its own account or for its customers is lost, destroyed, or otherwise compromised or unavailable, and no backup of the private key is accessible, Bullish will be unable to access the digital assets held in the related wallet. Further, Bullish cannot provide assurance that its wallet will not be hacked or compromised. Digital assets and blockchain technologies have been, and may in the future be, subject to security breaches, hacking, or other malicious activities. Any loss of private keys relating to, or hack or other compromise of, digital wallets used to store its customers’ digital assets could adversely affect its customers’ ability to access or sell their digital assets, and may result in losses for its customers, and subject Bullish to significant financial losses, damage to its reputation, and/or loss of customer trust in Bullish and its products and subsequent customer discontinuation or reduction of use of services, potential litigations, as well as legal and regulatory liabilities. As such, any loss of private keys due to a hack, employee or service provider misconduct or error, or other compromise by third parties could hurt Bullish’s brand and reputation, result in significant losses, and adversely impact its business, financial condition, operating results, cash flows and share price. The total value of digital assets in Bullish’s possession and control is significantly greater than the total value of insurance coverage that would compensate Bullish in the event of theft or other loss of funds.

The way in which custody services are integrated into the Bullish Exchange may not be attractive to all customers.

The current product design seeks to provide Bullish customers with a seamless, end-to-end cryptographically secure custody service. A consequence of this is that customer cryptocurrency deposits and withdrawals are made strictly through hot wallets. It is possible that customers, particularly those with substantial assets or a more restrictive risk appetite, may be detracted from Bullish due to the absence of alternative options, such as cold-to-cold custody transfer. Also, while it is common in the digital asset industry to integrate exchange and custody services, this is not typically the case in traditional markets where such services may be segregated. Such considerations may impact the ability of Bullish to attract demand from larger and more sophisticated customers, and require the investment of additional resources to develop the required architecture to support this demand. Inability to attract such customers may adversely impact Bullish’s reputation, business, financial condition, and results of operations and share price.

The custody services, and any blockchain technology on which they rely, may be the target of cyber attacks or may contain exploitable flaws in their underlying code, which may result in security breaches and the loss or theft of digital assets that are held or deposited.

The custody services, their structural foundation, and the software applications and other interfaces or applications upon which they rely (including blockchain technology) are unproven, and there can be no assurances that the custody services are or will be fully secure, which may result in a complete loss of investors’ digital assets and an unwillingness of market participants to access, adopt and utilize digital assets or the custody services. Examples of the above include but are not limited to:

 

   

a cyberattack causing a customer withdrawal instruction, or a withdrawal address being altered;

 

   

a customer receiving an incorrect deposit address;

 

   

hardware failures delaying or preventing deposits and withdrawals;

 

   

the tampering or spoofing of customer instructions and materials;

 

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deposit addresses being incorrectly stored;

 

   

the hacking or unavailability of customer portals rendering customers unable to access their account;

 

   

vulnerabilities within the applicable blockchain code arising or the blockchain being manipulated by a malicious actor;

 

   

attacks on third party technology supplier infrastructure, such as cloud providers;

 

   

a cyber-attack causing the individual to lose otherwise valid credentials;

 

   

the tampering with laptop codes to cause withdrawals to incorrect withdrawal addresses; and

 

   

bad acts by employees, third-party service providers and others.

While Bullish’s custody services will take steps to ensure that the custody services are secure and protected against such incidents, no assurance can be given that the custody services are or will be fully secure and protected from attack, and any failure in this regard could result in enforcement actions, litigation, significant costs being incurred, fines, and other penalties, as well as adversely affect Bullish’s reputation, business, financial condition, and results of operations and share price. The impact of such attacks could also seriously curtail the utilization of digital assets and cause a decline in the broader market price of the affected digital assets.

Bullish may modify the arrangements in which it manages digital asset custody in the future, including the development of its own digital asset custody solution. This may expose the business to greater risks associated with new product development.

Bullish implements arrangements with third parties to support the management of digital asset custody. As Bullish grows its business, it may modify its existing third-party digital asset custody arrangements, including developing its own digital asset custody solution. This may expose Bullish to greater risks associated with new product development. For example, the new custody solution may be subject to material technical and non-technical problems and may not function as reliably as the existing arrangement, which may result in loss of assets for Bullish and its customers. Such losses can lead to enforcement actions, litigation, significant costs being incurred, damages, fines, and other penalties, as well as adversely affect Bullish’s reputation, business, financial condition, and results of operations and share price.

Bullish has not yet developed, tested or launched any other products or services.

Bullish is currently exploring opportunities to bring regulated financial services products using blockchain technologies as the cornerstone to market in 2022. This planning remains at a nascent stage of the product development life cycle. It is not yet proven that the technical product requirements can be delivered and the extent of future demand for such products and services remains uncertain. Bullish may invest significant resources into developing this business, and there is no assurance that it will be launched. Further, the laws and regulations applicable to such products and services are complex and highly uncertain. Bullish may incur significant resources and costs in applying for the required licenses or approvals it needs to launch a business involving such products and services, and there is no assurance that it is able to do so. Bullish may also be at risk of breaching applicable laws and regulations related to such products and services and incur additional legal liability, resulting in legal proceedings, investigations, fines, penalties and other sanctions.

Any strategic investments that Bullish makes or enters into could require significant management attention, disrupting the business and harming its financial condition.

Bullish may merge, acquire or form partnerships or joint ventures with other companies to add specialized employees, products, services, licenses, or technologies. Bullish may not be able to find other suitable acquisition and investment candidates, and Bullish may not be able to complete acquisitions or make investments on favorable terms, if at all. In some cases, the costs of such acquisitions may be substantial, and there is no

 

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assurance that Bullish will receive a favorable return on investment for Bullish’s acquisitions. Bullish may in the future be required to write off acquisitions or investments. Moreover, Bullish’s future acquisitions may not achieve Bullish’s goals, and any future acquisitions Bullish completes could be viewed negatively by customers, developers, advertisers, or investors. In addition, if Bullish fails to successfully close or integrate any acquisitions, or integrate the products or technologies associated with such acquisitions into Bullish, Bullish’s net revenue and operating results could be adversely affected. Bullish’s ability to acquire and integrate companies, products, services, licenses, or technologies in a successful manner is unproven. Any integration process may require significant time and resources, and Bullish may not be able to manage the process successfully, including successfully securing regulatory approvals which may be required to close the transaction and/or to continue to operate the target’s business or products in a manner that is useful to Bullish. Bullish may not successfully evaluate or utilize the acquired products, services, technology, or personnel or accurately forecast the financial impact of an acquisition transaction, including accounting charges. Bullish may have to pay cash, incur debt, or issue equity securities to pay for any such acquisition, any of which could adversely affect Bullish’s financial results. The sale of equity or issuance of debt to finance any such acquisitions could result in dilution to Bullish’s shareholders. The incurrence of indebtedness would result in increased fixed obligations and could also include covenants or other restrictions that would impede Bullish’s ability to manage its operations.

The underlying blockchain technology used by Bullish is unproven and untested in a real operational environment of the scale and complexity currently contemplated.

The Bullish Exchange incorporates a private blockchain based on EOSIO software. This technical implementation is unproven and untested in a real operational environment of the scale and complexity currently contemplated. Significant technical changes may be required, including the addition, substitution, reduction, removal, amendments, enhancements and/or adaptations of certain features, functions and/or performance. The future success of Bullish’s product is dependent on its ability to scale and the feasibility of the current design is unproven and may lead to significant re-architecture. If Bullish fails to achieve this, Bullish’s business operations, reputation, financial condition and share price may be adversely impacted.

For example, the EOSIO software has been enhanced to have greater throughput in order to meet the operational needs of a mass market exchange. Bullish may experience technical challenges and not be able to continually enhance the software sufficiently to support the volume of transactions required to be processed or may be required to reduce the use of the software. This may lead to service-level disruptions on the Bullish Exchange platform, resulting in losses for customers.

In addition, although Bullish intends to hash states to the EOS public blockchain, Bullish may not be able to do so for technical reasons. Such failure may adversely impact Bullish’s reputation and public perception regarding Bullish’s product and services.

Bullish may not be able to generate adequate value from investments made in developing EOSIO software.

Bullish is a developer of EOSIO based software. Bullish may make substantial investments to support the development of EOSIO based software, and there is no assurance that the expected value and benefits will be realized, or that such a strategy will be profitable. If Bullish fails to generate adequate value from investments made in developing EOSIO based software, its business operations, reputation, financial condition and share price may be adversely impacted.

Bullish’s reputation, business and financial condition may be adversely impacted due to its association with EOSIO.

Despite Bullish’s investment in EOSIO, EOSIO may not be able to attract a wider developer and user base to its ecosystem as expected. Bullish may also be unable to invest in the EOSIO software or ecosystem to the level expected by the EOSIO ecosystem community. The EOSIO software and blockchain networks based on it

 

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may not function as expected and may encounter serious performance issues or cybersecurity incidents. Blockchain networks built on EOSIO or the block producers may be subject to material legal proceedings or investigations for serious wrongdoing, or adversely affected by laws and regulations, including any determination by a regulator or legal proceeding that any digital asset based on such networks is a security or instrument that otherwise requires a license or approval to trade. These factors and other material negative news, reputational harm or adverse events associated with EOSIO, the block producers or the broader ecosystem can adversely impact Bullish’s reputation, business, financial condition, results of operations and share price.

Risks Inherent in the Digital Asset Industry

The future development and growth of digital assets is subject to a variety of factors that are difficult to predict and evaluate. If digital assets do not grow as Bullish expects, Bullish’s business, operating results and financial condition could be adversely affected.

Digital assets built on blockchain technology remain in the early stages of development. Digital assets are a new asset class that, as of yet, have not been widely adopted, particularly by institutional investors and corporate securities issuers. The majority of Bullish’s business will rely on the acceptance and use by such investors and issuers of digital assets at a scale to create demand for Bullish’s products and services sufficient to make Bullish’s business commercially viable. Though Bullish believes that the anticipated benefits of digital assets will create such demand, there can be no assurance that this will occur, or if it does occur that it will be in the near term.

The further growth and development of any digital assets and their underlying networks and other cryptographic and algorithmic protocols governing the creation, transfer and usage of digital assets represent a new and evolving paradigm that is subject to a variety of factors and associated risks that are difficult to evaluate, including:

 

   

Many digital asset networks have limited operating histories, have not been validated in production, and are still in the process of developing and making significant decisions that will affect the design, supply, issuance, functionality and governance of their respective digital assets and underlying blockchain networks, any of which could adversely affect their respective digital assets.

 

   

Many digital asset networks are in the process of implementing software upgrades and other changes to their protocols, which could introduce bugs, security risks, or adversely affect the respective cryptocurrency networks.

 

   

Several large networks, including Bitcoin and Ethereum, are developing new features to address fundamental speed, scalability and energy usage issues. If these issues are not successfully addressed, or are unable to receive widespread adoption, it could adversely affect the underlying digital assets.

 

   

Security issues, bugs and software errors have been identified with many digital assets and their underlying blockchain networks, some of which have been exploited by malicious actors. There are also inherent security weaknesses in some digital assets, such as when creators of certain cryptocurrency networks use procedures that could allow hackers to counterfeit tokens. Any discovered or previously unknown weaknesses identified with digital assets could adversely affect price, security, liquidity and adoption. If a malicious actor, group, or botnet (a volunteer or hacked collection of computers controlled by networked software coordinating the actions of the computers) obtains a majority of the compute or staking power on a cryptocurrency network, as has happened in the past, it may be able to manipulate transactions, which could cause financial losses to holders, damage the network’s reputation and security, and adversely affect its value.

 

   

The emergence of quantum computing and its potential for shortening the time required by governments, criminals, and unauthorized third parties to factor and derive the very large seed numbers (e.g., private keys) associated with current public key cryptography poses a future risk to current approaches to blockchain cryptography that protect many digital assets from theft or loss.

 

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The development of new technologies for mining, such as improved application-specific integrated circuits (commonly referred to as ASICs), or changes in industry patterns, such as the consolidation of mining power in a small number of large mining farms, could reduce the security of blockchain networks and reduce the price and attractiveness of digital assets.

 

   

If rewards and transaction fees for miners or validators on any particular digital asset network are not sufficiently high to attract and retain miners, a digital asset network’s security and speed may be adversely affected, increasing the likelihood of a malicious attack.

 

   

Many digital assets have concentrated ownership or an “admin key,” allowing a small group of holders to have significant unilateral control and potentially collusive influence over key decisions relating to their digital asset networks, such as governance decisions and protocol changes, as well as the market price of such digital assets.

 

   

The governance of many decentralized blockchain networks is by voluntary consensus and open competition, and many developers are not directly compensated for their contributions. As a result, there may be a lack of consensus or clarity on the governance of any particular cryptocurrency network, a lack of incentives for developers to maintain or develop the network, and other unforeseen issues, any of which could result in unexpected or undesirable errors, bugs, or changes, or stymie such network’s utility and ability to respond to challenges and grow.

 

   

Many digital asset networks are in the early stages of developing partnerships and collaborations, all of which may not succeed and adversely affect the usability and adoption of the respective digital assets.

 

   

Governments, quasi-government and financial institutions may impose additional regulation on digital assets and blockchain technology, and the regulatory environment for digital assets is changing and unpredictable.

 

   

Consumer demographics, public tastes and preferences, and general economic conditions may change and affect the acceptance and popularity of digital assets.

 

   

Forks of digital assets may occur at any time. A fork can lead to a disruption of networks and Bullish’s information technology systems, cybersecurity attacks, replay attacks, or security weaknesses, any of which can further lead to assets being unavailable for a period of time or temporary or even permanent loss of assets.

Various other technical issues have also been uncovered from time to time that resulted in disabled functionalities, theft of customers’ assets, and other negative consequences, and which required resolution with the attention and efforts of their global miner, customer and development communities. If any such risks or other risks materialize, and in particular if they are not resolved, the development and growth of digital assets may be significantly affected and, as a result, Bullish’s business, operating results and financial condition could be adversely affected.

Many participants in the financial industry (including regulators) and other industries may oppose the development of products and services that utilize blockchain technology. The market participants who may oppose such products and services may include entities with significantly greater resources, including financial resources and political influence, than Bullish has. The ability of Bullish to operate and achieve its commercial goals could be adversely affected by any actions of any such market participants that result in additional regulatory requirements or other activities that make it more difficult for Bullish to operate.

The blockchain industry as a whole has been characterized by rapid changes and innovations and is constantly evolving. Although it has experienced significant growth in recent years, the slowing or stopping of the development, general acceptance and adoption and usage of blockchain technology and digital assets may adversely impact Bullish’s reputation, business, financial condition, results of operations and share price.

 

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