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Powerup Acquisition Corp.(PWUPU) - 2023 Q4 - Annual Report
PWUPUPowerup Acquisition Corp.(PWUPU)2024-03-11 21:29

IPO and Financial Proceeds - The company completed its initial public offering on February 23, 2022, raising gross proceeds of 287.5millionfromthesaleof28,750,000unitsat287.5 million from the sale of 28,750,000 units at 10.00 per unit[15]. - A total of 294.69millionwasplacedinthetrustaccountaftertheIPOandprivateplacementwarrantsale[16].BusinessCombinationTimelineandRequirements−ThecompanymustcompleteitsinitialbusinesscombinationbyMay23,2024,oritsexistencewillterminate[17].−ShareholdersapprovedanextensionofthebusinesscombinationdeadlinefromMay23,2023,toMay23,2024,withapproximately26,946,271ClassAordinarysharesredeemed[19].−Theinitialbusinesscombinationmustinvolvetargetbusinesseswithanaggregatefairmarketvalueofatleast80294.69 million was placed in the trust account after the IPO and private placement warrant sale[16]. Business Combination Timeline and Requirements - The company must complete its initial business combination by May 23, 2024, or its existence will terminate[17]. - Shareholders approved an extension of the business combination deadline from May 23, 2023, to May 23, 2024, with approximately 26,946,271 Class A ordinary shares redeemed[19]. - The initial business combination must involve target businesses with an aggregate fair market value of at least 80% of the net assets held in the trust account[35]. - The initial business combination must involve target businesses with an aggregate fair market value of at least 80% of the balance in the trust account[53]. - The company intends to structure the initial business combination to acquire at least 50% of the outstanding voting securities of the target business[55]. - The company has until May 23, 2024, to complete an initial business combination, or it will cease operations and redeem public shares at a per-share price equal to the amount in the trust account[93]. Merger and Acquisition Plans - The company entered into a merger agreement with Visiox Pharmaceuticals, intending to exchange all outstanding capital stock of Visiox for shares of the company's common stock[23]. - The company plans to migrate from the Cayman Islands to Delaware prior to the closing of the merger, with a one-for-one conversion of shares[24]. - The management team possesses over 25 years of experience in growing companies, raising capital, and executing mergers and acquisitions[25]. - The company established acquisition criteria focusing on competitive position, management team capability, and potential for growth[26][27][28]. Financial Resources and Risks - The company has approximately 19.9 million available for a business combination as of December 31, 2023, assuming no redemptions[47]. - The company may seek to raise additional funds through private offerings of debt or equity securities in connection with the initial business combination[51]. - The company has not taken steps to secure third-party financing for the initial business combination, and there is no assurance that it will be available[47]. - The time required to select and evaluate a target business and complete the initial business combination is currently uncertain, which may incur losses if not completed[58]. - The company may not have the resources to diversify operations after the initial business combination, potentially increasing risks associated with being in a single line of business[59]. - The obligation to pay cash for redemptions may reduce available resources for the initial business combination, potentially placing the company at a competitive disadvantage[108]. Redemption and Shareholder Rights - The anticipated redemption price for public shareholders upon completion of the initial business combination is approximately 11.03perpublicshare[74].−Publicshareholdersarerestrictedfromredeemingmorethan1511.03 per public share[74]. - Public shareholders are restricted from redeeming more than 15% of the shares sold in the initial public offering without prior consent[85]. - The company will not complete the business combination if the aggregate cash consideration for redemptions exceeds the available cash[75]. - Shareholder approval is required for business combinations involving the issuance of more than 20% of the outstanding ordinary shares[76]. - The company expects to conduct redemptions either through a general meeting or a tender offer, depending on legal requirements[76]. - The company will not redeem shares if it would cause net tangible assets to fall below 5,000,001[75]. - The redemption offer will remain open for at least 20 business days following the announcement of the initial business combination[80]. - If the initial business combination is not completed, public shareholders who elected to redeem their shares will not receive any redemption for their shares[92]. - The anticipated per-share redemption amount upon liquidation is 11.03,butthisamountmaybesubjecttoclaimsfromcreditors[98].−PublicshareholdersareentitledtoredeemtheirClassAordinarysharesforcashiftheinitialbusinesscombinationisnotcompletedbyMay23,2024[105].ComplianceandReporting−Thecompanyisclassifiedasan"emerginggrowthcompany,"allowingittotakeadvantageofcertainexemptionsfromreportingrequirements[42].−Thecompanywillremainanemerginggrowthcompanyuntilithastotalannualgrossrevenueofatleast11.03, but this amount may be subject to claims from creditors[98]. - Public shareholders are entitled to redeem their Class A ordinary shares for cash if the initial business combination is not completed by May 23, 2024[105]. Compliance and Reporting - The company is classified as an "emerging growth company," allowing it to take advantage of certain exemptions from reporting requirements[42]. - The company will remain an emerging growth company until it has total annual gross revenue of at least 1.07 billion or the market value of its Class A ordinary shares held by non-affiliates exceeds 700million[44].−Thecompanyisalsoclassifiedasa"smallerreportingcompany,"allowingforreduceddisclosureobligationsuntilcertainmarketvalueorrevenuethresholdsareexceeded[118].−Thecompanyisrequiredtofileannual,quarterly,andcurrentreportswiththeSEC,includingauditedfinancialstatements[110].−FinancialstatementsofprospectivetargetbusinessesmustcomplywithGAAPorIFRS,whichmaylimitthepoolofpotentialacquisitioncandidates[111].−ThecompanyfilesvariousreportswiththeSEC,whichareavailabletothepublicthroughitswebsite[119].InsiderTradingandMarketConduct−Thecompanyhasadoptedaninsidertradingpolicytopreventpurchasesduringblackoutperiodsandwheninpossessionofmaterialnon−publicinformation[67].−AnypurchasesbyinsiderswillcomplywithRegulationMundertheExchangeActtoavoidmarketmanipulation[72].−Initialshareholdersandmanagementhavewaivedtheirrightstoliquidatingdistributionsfromthetrustaccountforfounderandplacementsharesifthebusinesscombinationisnotcompletedbythedeadline[94].−Thecompanyexpectstofundcostsassociatedwithdissolutionfromremainingfundsoutsidethetrustaccount,whichiscurrentlynoneasofDecember31,2023[97].−Thecompanyaimstohaveallvendorsandserviceprovidersexecutewaiversregardingclaimstothetrustaccount,butthereisnoguaranteethiswillbeachieved[99].−Ifthetrustaccountproceedsfallbelow700 million[44]. - The company is also classified as a "smaller reporting company," allowing for reduced disclosure obligations until certain market value or revenue thresholds are exceeded[118]. - The company is required to file annual, quarterly, and current reports with the SEC, including audited financial statements[110]. - Financial statements of prospective target businesses must comply with GAAP or IFRS, which may limit the pool of potential acquisition candidates[111]. - The company files various reports with the SEC, which are available to the public through its website[119]. Insider Trading and Market Conduct - The company has adopted an insider trading policy to prevent purchases during blackout periods and when in possession of material non-public information[67]. - Any purchases by insiders will comply with Regulation M under the Exchange Act to avoid market manipulation[72]. - Initial shareholders and management have waived their rights to liquidating distributions from the trust account for founder and placement shares if the business combination is not completed by the deadline[94]. - The company expects to fund costs associated with dissolution from remaining funds outside the trust account, which is currently none as of December 31, 2023[97]. - The company aims to have all vendors and service providers execute waivers regarding claims to the trust account, but there is no guarantee this will be achieved[99]. - If the trust account proceeds fall below 11.03 per public share, shareholders may not receive the expected redemption amount[102]. - The company has no liquid assets available to pay potential claims, with estimated liquidation costs not exceeding $100,000[103]. Competition and Market Position - The company faces intense competition from other blank check companies with greater financial and technical resources, limiting its ability to acquire larger target businesses[107]. - The company currently has two officers who will devote necessary time to affairs until the initial business combination is completed, with no full-time employees planned prior to that[109].