IPO and Fundraising - The company completed its IPO on July 30, 2021, raising gross proceeds of $250 million from the sale of 25 million units at $10.00 per unit, with offering costs of approximately $13.75 million[19]. - An additional 3.25 million units were sold through an over-allotment option, generating approximately $32.5 million in gross proceeds[19]. - The private placement generated gross proceeds of $8 million from the sale of 800,000 units at $10.00 per unit[20]. - As of December 31, 2023, approximately $282.5 million was placed in a trust account, which will be invested in U.S. government securities until a business combination is completed[21]. Trust Account and Redemptions - Following a shareholder redemption on July 27, 2023, approximately $153.17 million remained in the trust account after $140.84 million was redeemed at approximately $10.41 per share[26]. - A subsequent redemption on January 26, 2024, resulted in $24.63 million remaining in the trust account after $134.06 million was redeemed at approximately $10.78 per share[29]. - The company anticipates a redemption price of approximately $10.00 per public share upon completion of the initial business combination[52]. - Redemptions will not proceed if the business combination does not close, and all shares submitted for redemption will be returned[53]. - Public shareholders are restricted from redeeming more than 15% of the shares sold in the public offering without prior consent, which aims to discourage large block accumulations[61]. - The company has 24 months from the closing of the public offering to consummate an initial business combination, or it will cease operations and redeem public shares at a per-share price equal to the aggregate amount in the Trust Account[68]. - If the initial business combination is not completed, public shareholders who elected to exercise their redemption rights will not be entitled to redeem their shares for the applicable pro rata share of the Trust Account[67]. - The per-share redemption amount upon dissolution is expected to be $10.00, but may be subject to claims from creditors[72]. - The company will not redeem public shares in an amount that would cause net tangible assets to be less than $5,000,001 to avoid SEC's "penny stock" rules[70]. - The company anticipates that funds for dissolution expenses will be funded with up to $100,000 from the Trust Account[71]. Business Combination and Partner Selection - The company has not yet selected a prospective partner for its initial business combination and has not initiated substantive discussions with any potential candidates as of December 31, 2023[32]. - The company may need additional financing to complete its initial business combination if the transaction requires more cash than available in the trust account[33]. - The evaluation of prospective partner businesses will include extensive due diligence, including meetings with management, document reviews, and financial assessments[37]. - The company is not prohibited from pursuing a business combination with an affiliated company, but will seek an independent valuation opinion to ensure fairness[35]. - The company may complete a business combination without seeking shareholder approval if not required by law or stock exchange rules[87]. - The company may depend entirely on the future performance of a single business post-combination, increasing risk due to lack of diversification[39]. - The initial business combination may subject the company to negative economic, competitive, and regulatory developments impacting the specific industry[40]. - There is uncertainty regarding the management team's ability to effectively manage the combined company post-business combination[41]. - The company may face significant competition for business combination opportunities, which could limit its ability to complete an initial business combination[103]. - The company may pursue business combinations with private companies, which often have limited public information available, increasing the risk of unprofitable acquisitions[141]. Shareholder Approval and Voting - Shareholder approval may be required for the initial business combination if certain conditions are met, such as issuing over 20% of outstanding shares[45]. - A majority vote from shareholders is required for the initial business combination to be approved, with 35.9% of public shares needed for approval[56]. - If too many public shareholders exercise their redemption rights, the company may not meet closing conditions for a business combination, limiting potential partners[92]. - The company has not specified a maximum redemption threshold, which may allow it to complete a business combination even if a majority of shareholders disagree[142]. - The company’s Sponsor and management team own 34.12% of the outstanding ordinary shares, which may influence shareholder approval for business combinations[91]. Financial Risks and Concerns - As of December 31, 2023, the company had $0 in cash held outside of the Trust Account, raising concerns about its ability to continue as a going concern[84]. - The company may need to rely on loans from its Sponsor or affiliates to fund its search for a prospective partner business[107]. - The funds in the Trust Account will be invested in U.S. government treasury bills, which could yield negative interest rates, potentially reducing the per-share redemption amount[108]. - The company may face bankruptcy risks that could deplete the Trust Account, potentially reducing the per-share amount received by shareholders to approximately $10.00 or less upon liquidation[111]. - The company may incur substantial debt to complete a business combination, which could adversely affect its financial condition and shareholder value[133]. - The company may face challenges in obtaining additional financing for the initial business combination, which could lead to restructuring or abandonment of the deal[150]. Internal Controls and Compliance - A material weakness in internal control over financial reporting was identified as of December 31, 2023, which could lead to misstatements in financial statements[159]. - Management has implemented remediation steps to improve internal controls, but effectiveness cannot be guaranteed[161]. - Compliance with the Sarbanes-Oxley Act may increase the time and costs associated with completing an acquisition[155]. - The company’s tax obligations may become more complex and burdensome post-business combination, potentially affecting shareholder returns[157]. - The company may be subject to significant tax obligations in multiple jurisdictions if the business combination involves operations outside the United States[158]. Conflicts of Interest - The company may face conflicts of interest if it engages in business combinations with entities affiliated with its sponsor, executive officers, or directors[129]. - The management team may face conflicts of interest due to their involvement in other business activities, potentially affecting the completion of the initial business combination[185]. - Key personnel may negotiate employment agreements that could create conflicts of interest in selecting a prospective partner business[183]. - The company has not adopted a policy prohibiting directors and officers from having financial interests in transactions, which may lead to conflicts of interest[189]. - The independent directors may choose not to enforce indemnification obligations against the sponsor, potentially reducing funds available for public shareholders[128]. Share Structure and Securities - The company may issue up to 200,000,000 Class A ordinary shares, with 184,417,591 authorized but unissued shares available for issuance[208]. - Holders of Class A ordinary shares will not have voting rights on director appointments until after the initial business combination[195]. - The company may issue additional shares under an employee incentive plan after the initial business combination, which could dilute existing shareholders' interests[207]. - The company’s Second Amended and Restated Memorandum and Articles of Association allow for the conversion of Class B ordinary shares into Class A ordinary shares at the time of the initial business combination[208]. - The company may issue a substantial number of additional Class A ordinary shares or preference shares to complete its initial business combination or under an employee incentive plan[209]. - Issuing additional shares may significantly dilute the equity interest of investors in the public offering, especially if Class B ordinary shares convert to Class A ordinary shares at a greater than one-to-one ratio[210]. Warrant and Liability Issues - The company may redeem outstanding public warrants at a price of $0.01 per warrant if the closing price of Class A ordinary shares equals or exceeds $18.00 for any 20 trading days within a 30 trading-day period[217]. - The warrants will be accounted for as a warrant liability and recorded at fair value upon issuance, which may adversely affect the market price of Class A ordinary shares[213]. - The company utilized a binomial/lattice model for the initial valuation of the Public Warrants and a Black-Scholes Option Pricing model for the Founder Warrants and Private Placement Warrants[213]. - The company may amend the terms of the warrants in a manner that could be adverse to holders of public warrants with the approval of at least 50% of the then-outstanding public warrants[211]. - The warrant agreement designates the courts of the State of New York as the exclusive forum for certain types of actions, which may limit the ability of warrant holders to obtain a favorable judicial forum[214].
Plum Acquisition(PLMJ) - 2023 Q4 - Annual Report