IPO and Trust Account - The company completed its Initial Public Offering on February 15, 2022, selling 14,375,000 Units at a price of $10.00 per Unit, generating gross proceeds of $143,750,000[20]. - A total of $146,625,000 was placed in the Trust Account, which includes $143,750,000 from the Initial Public Offering and $2,875,000 from the Private Placement[22]. - The Trust Account is managed by Continental, which acts as the trustee[22]. - The Trust Account held approximately $11.41 per Public Share as of December 31, 2023[77]. - The company has approximately $7,131 held outside the Trust Account as of December 31, 2023, to cover costs associated with potential claims and liquidation expenses[102]. - The anticipated per-share redemption amount upon dissolution is approximately $11.41 as of December 31, 2023, but this amount may be reduced due to creditor claims[98]. - The Trust Account may be subject to claims from creditors if a bankruptcy petition is filed, which could impact the ability to return $10.20 per share to Public Stockholders[107]. Business Combination Strategy - The company has until February 15, 2025, to consummate the proposed Business Combination, with the possibility of extensions[1]. - The company seeks to acquire a target with an enterprise value of approximately $500 million to $1 billion, focusing on fast-growing markets and strong revenue drivers[38]. - The business strategy includes leveraging the Management Team's networks to identify acquisition opportunities in various industries, including cannabis, health & wellness, and technology[34][35]. - The company has actively explored Business Combination targets in various industries, including legalized cannabis, consumer packaged goods, health & wellness, technology, and pharmaceuticals[19]. - The company has conducted thorough due diligence reviews for prospective Business Combinations, including historical data analysis and management meetings[44]. - The company must complete a Business Combination with an aggregate fair market value of at least 80% of the Trust Account assets at the time of signing a definitive agreement[42]. - The company intends to complete its initial Business Combination with a target business that has an aggregate fair market value of at least 80% of the assets held in the Trust Account[61]. - The Management Team will evaluate future cash flow potential and industry valuation metrics to determine the intrinsic value of potential Business Combination targets[45]. - The company has not secured third-party financing for its initial Business Combination, which may affect its ability to complete the transaction[54]. - A.G.P. provides significant support with its extensive network and transaction experience, enhancing the company's ability to identify potential Business Combination opportunities[45]. - The company may seek follow-on strategic acquisitions to further grow stockholder value and evaluate non-core asset sales for financial flexibility[45]. Financial Performance and Risks - The company has not provided specific financial performance metrics in the available content[1]. - The company has faced risks related to the ability to complete its initial Business Combination and potential conflicts of interest among its officers and directors[1]. - The company has focused its search for an initial Business Combination in a single industry, which may expose it to risks associated with lack of diversification[67]. - The company may not have the ability to recruit additional managers with the necessary skills to enhance the incumbent Management of the target business[70]. - The company faces intense competition from other entities with similar business objectives, which may limit its ability to acquire larger target businesses[109]. Stockholder Rights and Redemption - The company will provide Public Stockholders the opportunity to redeem shares at a price equal to the aggregate amount in the Trust Account divided by the number of outstanding Public Shares[77]. - Stockholder approval is required for direct Business Combinations where the company does not survive and for transactions involving more than 20% of outstanding Common Stock[78]. - The company anticipates that stockholder approval will be required for its initial Business Combination if it issues shares equal to or exceeding 20% of the outstanding Class A Common Stock[72]. - Initial Stockholders, officers, and directors have agreed to waive their redemption rights for shares held in connection with the initial Business Combination[77]. - The company will only redeem its Public Shares if net tangible assets are at least $5,000,001 either immediately prior to or upon consummation of the initial Business Combination[85]. - Public Stockholders must tender their certificates or deliver shares electronically to exercise redemption rights, with a nominal cost of approximately $100.00 for the tendering process[86][88]. - The company will conduct redemptions either through a stockholder meeting or a tender offer, based on various factors including timing and legal requirements[78]. - The company will not complete its initial Business Combination until the expiration of the tender offer period if redemptions are conducted under the tender offer rules[81]. - The company intends to redeem Public Shares promptly after the end of the Combination Period, with a per-share price equal to the aggregate amount in the Trust Account, potentially affecting stockholder rights[104]. - If the initial Business Combination is not completed, the company will cease operations, redeem Public Shares, and liquidate within ten business days[93]. - Initial Stockholders and officers have waived rights to liquidating distributions from the Trust Account for Founder Shares if the initial Business Combination is not completed[94]. - The company will not redeem Public Shares if it cannot satisfy the net tangible asset requirement after any optional redemption[96]. - There is no guarantee that third parties will waive claims against the Trust Account, which could affect the funds available for Public Stockholders[99][100]. - The company expects to distribute funds to redeeming Public Stockholders promptly after the completion of the initial Business Combination[90]. Regulatory and Compliance - The company is required to evaluate internal control procedures for the fiscal year ending December 31, 2023, as mandated by the Sarbanes-Oxley Act[113]. - The company plans to file another Registration Statement on Form 8-A with the SEC to voluntarily register its securities under Section 12 of the Exchange Act[114]. - The company qualifies as an "emerging growth company," allowing it to take advantage of certain exemptions from reporting requirements[115]. - The company will remain an emerging growth company until it meets specific revenue or market value thresholds, including total annual gross revenue of at least $1.235 billion[117]. - The company is classified as a "smaller reporting company," which allows for reduced disclosure obligations, including providing only two years of audited financial statements[118]. - The company has no off-balance sheet arrangements as of December 31, 2023, and 2022[186]. Management and Operations - The company does not intend to have full-time employees prior to completing its initial Business Combination[110]. - The company has the option for two Funded Extension Periods, allowing for a total of up to 24 months to complete a Business Combination[32]. - The current outstanding shares include 4,310,741 shares of Class A Common Stock and one share of Class B Common Stock, with 63,241 Public Shares remaining[34]. - The typical Initial Public Offering process is significantly longer and more expensive than the Business Combination process, making the latter a more attractive option for target businesses[51]. - The company is not prohibited from pursuing an initial Business Combination with an affiliated company, provided an independent opinion on fairness is obtained[47]. - The company’s Sponsor and Initial Stockholders hold approximately 96.52% of the voting power of the outstanding Common Stock, facilitating the approval of the initial Business Combination[84].
Relativity Acquisition (RACY) - 2023 Q4 - Annual Report