International Media Acquisition (US:IMAQ)2024-08-08 18:45IPO and Business Combination - IMAQ completed its IPO on August 2, 2021, raising gross proceeds of $200 million from the sale of 20 million public units at $10.00 each[10]. - The company has extended the deadline for consummating a business combination multiple times, with the latest extension moving the deadline to January 2, 2025[12]. - A proposed business combination with Risee Entertainment Holdings was terminated on October 25, 2023, with an aggregate purchase price of $102 million for 100% of the Target Company's shares[13]. - The company has until September 2, 2024, to complete its initial business combination, with an option to extend to January 2, 2025[18]. - If the Company fails to complete the business combination by the deadline, it will cease operations, redeem public shares at a pro-rata amount from the trust account, and liquidate[21]. - The Company will redeem 100% of the outstanding Public Shares if a Business Combination is not completed within the Amended Combination Period[162]. - The Company must maintain net tangible assets of at least $5,000,001 to proceed with a Business Combination[160]. - The underwriters have waived their rights to deferred underwriting commissions if the Company does not complete a Business Combination within the Amended Combination Period[162]. Financial Position and Performance - As of March 31, 2024, the company had $1,044 in cash outside of the Trust Account and a working capital deficit of $6,348,420[34]. - The company incurred a net loss of $814,487 for the year ended March 31, 2024, compared to a net loss of $1,235,409 for the year ended March 31, 2023[65]. - The company reported an accumulated deficit of $13,993,133 as of March 31, 2024, compared to $11,053,210 as of March 31, 2023, indicating a significant increase in losses[146]. - The company has a working capital deficit of $6,348,420 as of March 31, 2024, up from $3,673,078 as of March 31, 2023, reflecting worsening liquidity conditions[146]. - Total current liabilities increased to $6,378,420 as of March 31, 2024, from $3,725,880 as of March 31, 2023, highlighting rising financial obligations[149]. - The total assets decreased to $11,393,873 as of March 31, 2024, from $21,031,258 as of March 31, 2023, indicating a decline in overall financial position[149]. - The redemption value as of March 31, 2024, was $10,926,852, down from $20,284,026 as of March 31, 2023, reflecting a decrease in shareholder value[150]. Management and Governance - The company’s board size was reduced from seven to two directors following the resignations of several board members in December 2023[15]. - The Board appointed Mr. Hsu-Kao Cheng as an independent Class III director effective August 6, 2024, filling a vacancy until the 2027 annual meeting[16]. - The Board appointed Mr. Ming-Hsien Hsu as an independent Class II director effective August 6, 2024, filling another vacancy until the 2026 annual meeting[16]. - The audit committee is composed solely of independent directors and is responsible for reviewing financial statements and ensuring compliance with applicable laws[111]. - Hsu-Kao Cheng is identified as an "audit committee financial expert," enhancing the committee's financial oversight capabilities[114]. - The company has not established specific minimum qualifications for director nominees, focusing instead on a range of factors including integrity and professional reputation[115]. Legal and Regulatory Matters - The company is subject to the Holding Foreign Companies Accountable Act, which may restrict its ability to complete a business combination with certain foreign entities[25]. - IMAQ's auditor is registered with the PCAOB, but the company will not pursue business combinations with China-based targets due to regulatory concerns[25]. - The company may face challenges in enforcing legal rights for investors due to the location of its directors and officers outside the United States[26]. - The company is subject to potential review by the Committee on Foreign Investment in the United States (CFIUS), which could delay or block a business combination[34]. Shareholder Matters - Public stockholders can redeem their shares for a pro-rata portion of the trust account, initially anticipated to be $10.00 per share, plus any interest earned[20]. - IMAQ's public stockholders may face liability for claims against the corporation to the extent of distributions received during a dissolution[23]. - The company has instructed the trustee to liquidate investments in the Trust Account to mitigate the risk of being deemed an unregistered investment company[37]. - The company has not paid any cash dividends to date and does not intend to do so prior to completing an initial business combination[46]. Debt and Financing - The company has outstanding promissory notes totaling $2,445,000 as of March 31, 2024, with various terms and conditions[74]. - The Company issued an unsecured promissory note in the amount of $1,300,000 on January 31, 2024, which is convertible into units at $10.00 per unit[57]. - The Company may need to obtain additional financing to complete its Business Combination or redeem public shares, potentially issuing additional securities or incurring debt[69]. - The Company has accrued $360,000 in service fees for the Chief Financial Officer as of March 31, 2024[83]. Operational Matters - The company has limited operations and is primarily focused on identifying potential acquisition targets[27]. - The company has not commenced any operations as of March 31, 2024, and all activities have been related to its formation and initial public offering[158]. - The company has incurred significant professional costs to remain publicly traded and expects to continue incurring such expenses in connection with initial business combination activities[34]. - The company has no operations and relies on third-party technologies, which may expose it to cybersecurity risks[42]. Accounting and Financial Reporting - The Chief Executive Officer concluded that the Company's disclosure controls and procedures were not effective as of March 31, 2024, due to material weaknesses in internal controls[101]. - Management assessed the effectiveness of internal control over financial reporting and determined that it failed to maintain effective controls as of March 31, 2024, due to material weaknesses[102]. - The company has not recognized any unrecognized tax benefits or accrued interest and penalties related to income taxes as of March 31, 2024[190]. - The Company adopted ASU 2020-06 effective January 1, 2024, which did not impact its financial position or results of operations[196].