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ESH Acquisition (ESHA) - 2024 Q4 - Annual Report
ESHAESH Acquisition (ESHA)2025-04-04 01:27

IPO and Financing - The Company completed its IPO on June 16, 2023, raising gross proceeds of 115,000,000fromthesaleof11,500,000unitsat115,000,000 from the sale of 11,500,000 units at 10.00 per unit[15]. - The Company also sold 7,470,000 Private Placement Warrants at 1.00each,generatinganadditional1.00 each, generating an additional 7,470,000 in gross proceeds[15]. - After the IPO and Private Placement, the Trust Account held 116,725,000,equatingto116,725,000, equating to 10.15 per unit sold[15]. - The Company incurred total offering costs of 5,368,092,whichincludedacashunderwritingdiscountof5,368,092, which included a cash underwriting discount of 2,300,000 and the fair value of Representative Shares at 2,239,466[19].−ThecompanybelievesthatnetproceedsfromtheIPOandPrivatePlacementWarrantsaresufficientfortheInitialBusinessCombination,butcannotascertaincapitalrequirementswithoutatargetbusinessidentified[105].−ThetotalfundsavailablefortheInitialBusinessCombination,afterdeductingthemarketingfee,amountto2,239,466[19]. - The company believes that net proceeds from the IPO and Private Placement Warrants are sufficient for the Initial Business Combination, but cannot ascertain capital requirements without a target business identified[105]. - The total funds available for the Initial Business Combination, after deducting the marketing fee, amount to 4,039,792[151]. - The company may need to obtain additional financing to complete the Initial Business Combination or due to significant redemptions of Public Shares[212]. Initial Business Combination - The Company plans to effectuate its Initial Business Combination using cash from the IPO proceeds and may seek additional financing if necessary[29]. - The Initial Business Combination must involve target businesses with an aggregate fair market value of at least 80% of the Trust Account assets[34]. - The Company anticipates structuring the Initial Business Combination to acquire 100% of the equity interests or assets of the target business[35]. - The company is not prohibited from pursuing an Initial Business Combination with an affiliated company, provided an independent valuation opinion is obtained[33]. - If the Initial Business Combination is not completed within the Combination Period, the company will redeem Public Shares at a per-share price based on the amount in the Trust Account, which could be approximately 10.15[44].−ThecompanyhasaplantoensurethattheTrustAccountmaintainsaminimumvalueof10.15[44]. - The company has a plan to ensure that the Trust Account maintains a minimum value of 10.15 per public share, but this is subject to claims from creditors[49]. - The company’s public stockholders will only receive funds from the Trust Account upon the completion of the Initial Business Combination or if the company fails to complete it within the Combination Period[51]. - The company must complete its Initial Business Combination within a specified time frame, which may limit due diligence and give target businesses leverage in negotiations[77]. - If the Initial Business Combination is not completed, public stockholders may only receive 10.15pershare,orpotentiallyless,uponliquidation[79].−ThecompanymaynotbeabletocompleteanInitialBusinessCombinationifregulatoryapprovalsarenotobtained,whichcouldlimitthepoolofpotentialtargets[60].RisksandChallenges−Thecompanymayfacerisksduetoalackofbusinessdiversification,asitcouldonlycompleteitsInitialBusinessCombinationwithasingletargetbusiness,limitingitsabilitytospreadrisks[36].−Thecompanymayencountercompetitionfromotherentitieswithsimilarbusinessobjectives,whichmayhavegreaterfinancialandtechnicalresources[52].−Thecompany’sabilitytoacquirelargertargetbusinessesislimitedbyitsavailablefinancialresources,whichmayhinderitsInitialBusinessCombinationefforts[52].−Thecompanymayfaceintensecompetitionforbusinesscombinationopportunities,whichmayhinderitsabilitytocompleteatransaction[86].−ThecompanymayfaceconflictsofinterestwithunderwritersprovidingadditionalservicesrelatedtotheInitialBusinessCombination[58].−ThecompanymaynotcompleteitsInitialBusinessCombinationifasignificantnumberofstockholdersexercisetheirredemptionrights,potentiallyleadingtoliquidationatapproximately10.15 per share, or potentially less, upon liquidation[79]. - The company may not be able to complete an Initial Business Combination if regulatory approvals are not obtained, which could limit the pool of potential targets[60]. Risks and Challenges - The company may face risks due to a lack of business diversification, as it could only complete its Initial Business Combination with a single target business, limiting its ability to spread risks[36]. - The company may encounter competition from other entities with similar business objectives, which may have greater financial and technical resources[52]. - The company’s ability to acquire larger target businesses is limited by its available financial resources, which may hinder its Initial Business Combination efforts[52]. - The company may face intense competition for business combination opportunities, which may hinder its ability to complete a transaction[86]. - The company may face conflicts of interest with underwriters providing additional services related to the Initial Business Combination[58]. - The company may not complete its Initial Business Combination if a significant number of stockholders exercise their redemption rights, potentially leading to liquidation at approximately 10.15 per share[78]. - The company may face challenges in assessing the management of a prospective target business, which could impact the post-combination operations[95]. - The unexpected loss of key personnel could negatively impact the operations and profitability of the post-combination business[120]. - The company may incur substantial debt to complete a business combination, which could adversely affect financial condition and stockholder value[111]. - Additional risks may arise if the Initial Business Combination involves a company with international operations, including regulatory and economic challenges[113]. Shareholder and Governance Issues - Stockholder approval is required for certain types of transactions, such as a merger of the company with a target, while other transactions like asset purchases do not require approval[37]. - Public stockholders may not have the opportunity to vote on the Initial Business Combination, as the decision to seek approval is at the company's discretion[70]. - The company’s Sponsor will own 20% of the outstanding shares, which may influence the approval of the Initial Business Combination[71]. - Initial Stockholders and affiliates may purchase shares from public stockholders, potentially influencing the vote on the business combination[80]. - The company is exempt from certain SEC rules protecting investors in blank check companies due to having net tangible assets exceeding 5million[83].−ThecompanymayamenditsChartertofacilitatetheInitialBusinessCombination,whichmaynotalignwithstockholderinterests[142].−CertainagreementsrelatedtotheIPOcanbeamendedwithoutstockholderapproval,potentiallyaffectingthevalueofinvestments[143].FinancialPerformanceandProjections−FortheyearendedDecember31,2024,thecompanyreportedanetincomeof5 million[83]. - The company may amend its Charter to facilitate the Initial Business Combination, which may not align with stockholder interests[142]. - Certain agreements related to the IPO can be amended without stockholder approval, potentially affecting the value of investments[143]. Financial Performance and Projections - For the year ended December 31, 2024, the company reported a net income of 3,878,173, primarily from interest income of 5,942,677,afteraccountingforoperatingcostsandtaxes[200].−FortheyearendedDecember31,2023,thecompanyreportedanetincomeof5,942,677, after accounting for operating costs and taxes[200]. - For the year ended December 31, 2023, the company reported a net income of 1,946,899, with interest income of 3,275,366[201].−Thecompanyhaswithdrawn3,275,366[201]. - The company has withdrawn 1,796,252 in interest earned from the Trust Account, all of which was used to pay taxes[207]. - The company expects to continue incurring significant costs in pursuit of its acquisition plans and cannot assure the success of completing an Initial Business Combination[198]. - The company has not paid any cash dividends on its common stock and does not intend to do so prior to the completion of its Initial Business Combination[187]. Operational and Compliance Considerations - The company is subject to potential adverse effects from economic downturns, including rising interest rates and inflation, which could impact its ability to consummate a business combination[168]. - Compliance with the Sarbanes-Oxley Act may increase costs and time needed to complete an acquisition, particularly due to internal control requirements[176]. - The company plans to take advantage of exemptions available to emerging growth companies, which may affect the attractiveness of its securities to investors[174]. - The company has agreed to pay 5,000permonthforofficespaceandadministrativesupport,indicatingongoingoperationalexpenses[181].−Thecompanyisnotcurrentlyengagedinoperationsthatcouldfacematerialcybersecuritythreats,butreliesonthird−partytechnologiesforitsoperations[179].TrustAccountandRedemptionIssues−TheTrustAccountmaybereducedbelow5,000 per month for office space and administrative support, indicating ongoing operational expenses[181]. - The company is not currently engaged in operations that could face material cybersecurity threats, but relies on third-party technologies for its operations[179]. Trust Account and Redemption Issues - The Trust Account may be reduced below 10.15 per share if indemnification obligations are not enforced, impacting funds available for public stockholders[132]. - The per-share redemption amount received by stockholders may be less than 10.15pershareduetopotentialclaimsagainsttheTrustAccount[129].−IfbankruptcyoccursbeforeTrustAccountdistributions,creditorclaimsmaytakepriority,reducingtheper−shareamountforstockholders[135].−Stockholdersmaybeliableforclaimsagainstthecompanytotheextentofdistributionsreceiveduponredemptionofshares[136].−ThecompanywillnotredeemPublicSharesifitcausesnettangibleassetstofallbelow10.15 per share due to potential claims against the Trust Account[129]. - If bankruptcy occurs before Trust Account distributions, creditor claims may take priority, reducing the per-share amount for stockholders[135]. - Stockholders may be liable for claims against the company to the extent of distributions received upon redemption of shares[136]. - The company will not redeem Public Shares if it causes net tangible assets to fall below 5,000,001 before and after the Initial Business Combination[104]. Miscellaneous - The company may issue shares in private placement transactions at a price of $10.15 per share, which may be less than the market price at that time[69]. - The company may attempt to complete multiple business combinations simultaneously, which could hinder the ability to finalize any of them and increase costs and risks[100]. - The company is not limited to specific industries for its Initial Business Combination, which may affect the ability to evaluate risks of target businesses[108]. - The company may face difficulties in managing cross-border operations and complying with different legal requirements in overseas markets[114].