IPO and Capital Structure - The company completed its initial public offering on March 4, 2021, raising a total of 10.00 per unit and 6,000,000 private placement warrants at 309.45 million held in the trust account available for a business combination, assuming no redemptions[48]. - The company has access to up to 100,000[105]. - The company has approximately 299,870,085 available to consummate an initial business combination after payment of estimated expenses and deferred underwriting fees[199]. - The company may issue up to 500,000,000 Class A ordinary shares, with 469,054,928 authorized but unissued shares available for issuance[191]. Business Strategy and Acquisition Focus - The company is focused on identifying and acquiring technology and technology-enabled businesses in sectors such as automotive, consumer, aerospace/defense, enterprise software, and E-commerce[21]. - The acquisition criteria include targeting businesses in the technology industry with strong management teams and significant growth potential, as well as those that can benefit from operational improvements[30]. - The company intends to pursue businesses that exhibit unrecognized value or characteristics that have been misvalued by the marketplace, based on thorough due diligence[30]. - The company plans to leverage its extensive network of industry relationships and third-party advisors to identify and evaluate potential acquisition targets[23]. - Target business candidates are expected to be sourced from various unaffiliated sources, including investment market participants and private equity groups[55]. Management and Governance - The management team has a track record of leading over 100 initial public offerings and M&A transactions, managing over 500 million in capital, which enhances their attractiveness as a merger partner[24]. - The board of directors consists of seasoned executives with extensive experience in governance, operations, and capital markets, enhancing the company's competitive position[25]. - The management team has a history of acting as long-term partners to clients, which may facilitate a smoother transition for target businesses to public company status[27]. Financial Considerations and Risks - The company may need additional financing to complete its initial business combination if the transaction requires more cash than available from the trust account[54]. - The company has not taken any steps to secure third-party financing, and there is no assurance that it will be available[48]. - The company may incur substantial debt to complete a business combination, which could adversely affect its leverage and financial condition[198]. - The company may face challenges in finding attractive targets due to increased competition among special purpose acquisition companies[131]. - The company may face competition from other entities with greater financial and technical resources in pursuing target businesses for acquisition[109]. Redemption and Shareholder Rights - Public shareholders can only redeem shares for cash upon completion of an initial business combination or if not completed within 24 months, with a minimum net tangible asset requirement of 5,000,001 to avoid being subject to SEC's "penny stock" rules, allowing it to complete initial business combinations even with substantial shareholder dissent[173]. Operational and Regulatory Challenges - The company currently has no operating history and no revenues, which limits the ability to evaluate its business objectives[128]. - The company is subject to reporting obligations under the Exchange Act, including the requirement to file annual, quarterly, and current reports with the SEC[112]. - The company is classified as an "emerging growth company," allowing it to take advantage of certain exemptions from reporting requirements[118]. - The company may face limitations in completing initial business combinations due to federal proxy rules requiring historical and/or pro forma financial statement disclosures[205]. - The company may not hold an annual meeting of shareholders until after the consummation of its initial business combination, limiting shareholder engagement[170]. Liquidation and Time Constraints - If the initial business combination is not completed by March 4, 2023, the company will redeem public shares at a per-share price equal to the aggregate amount in the trust account, estimated at 10.00 per public share upon liquidation[194]. - The ability of public shareholders to redeem shares for cash may make the company less attractive to potential business combination targets[126]. - The company may continue to seek a business combination with a different target until March 4, 2023, if the initial proposal is not approved[94]. Miscellaneous Risks - The COVID-19 pandemic may adversely affect the ability to complete a business combination due to travel restrictions and market volatility[144]. - The increased cost and decreased availability of directors and officers liability insurance could complicate the negotiation of an initial business combination[158]. - There is a risk that the management of a prospective target business may lack the necessary skills to manage a public company, potentially impacting operations and profitability[196]. - The company may face delisting from Nasdaq if it fails to maintain required financial and share price levels, which could limit trading and liquidity[137]. - The potential for public shareholders to exercise redemption rights could limit the company's ability to optimize its capital structure and complete desirable business combinations[141].
Brand Engagement Network Inc.(BNAI) - 2021 Q4 - Annual Report