Business Combination Details - The proposed business combination with DevvStream involves an acquisition valued at $145 million, which includes the aggregate exercise price of all in-the-money Company Options and Company Warrants[21]. - The Common Amalgamation Consideration is calculated as $145 million plus the aggregate exercise price of all in-the-money Company Options and Company Warrants, divided by $10.20[24]. - The acquisition structure includes a continuance from Delaware to Alberta, followed by an amalgamation to form a new corporate entity named DevvStream Corp.[21]. - The Common Conversion Ratio will determine the number of New PubCo Common Shares issued for each Multiple Voting Company Share and Subordinated Voting Company Share[24]. - The aggregate consideration to be paid to DevvStream shareholders is approximately $145 million plus the aggregate exercise price of all in-the-money options and warrants, divided by $10.20 per share[27]. - The Business Combination Agreement is expected to close on or before June 12, 2024[28]. - The Proposed Transactions are conditioned on the approval of stockholders from both FIAC and DevvStream[29]. - The Business Combination Agreement includes customary representations and warranties from both parties regarding their authority and operations[28]. - The obligations of FIAC and Amalco Sub to consummate the Proposed Transactions are subject to the satisfaction of specific conditions, including the accuracy of representations and warranties[30]. - The Business Combination Agreement allows for termination under specific conditions, including failure to obtain necessary shareholder approvals[40]. - The Business Combination Agreement includes provisions for termination, with DevvStream required to pay FIAC all expenses incurred if terminated under specific conditions[46]. Financial and Market Insights - The target sectors for potential acquisitions include education technology (EdTech), technology-enabled manufacturing and services, financial technology (FinTech), and healthcare technology (Health Tech), with a combined global market size of approximately $688 billion[17]. - The healthcare technology sector generated an estimated $96.5 billion in global revenue in 2020, with North America accounting for nearly 40% of this value[65]. - Global revenues for education technology are projected to exceed $400 billion by 2025, driven by increased demand for remote learning solutions[62]. - The tech-enabled manufacturing sector is expected to reach $385 billion in global revenues by 2025, influenced by advancements in automation and data analytics[63]. - FinTech companies are positioned to expand access to financial services for underserved groups, including BIPOC and women, tapping into a significant market opportunity[64]. - The integration of telehealth could shift $250 billion of U.S. healthcare expenditures to virtual care, representing 20% of total 2020 office, outpatient, and home health spending[65]. - The share of venture capital for women-founded companies decreased from 2.8% in 2019 to 2.3% in 2020, highlighting the funding gap for BIPOC and women-led businesses[66]. Company Strategy and Focus - The company aims to focus on high-growth businesses led by, founded by, or serving BIPOC or women, which are believed to be undervalued by markets[18]. - The management team emphasizes the connection between social commitments and competitive advantages, citing studies that show purpose-driven brands attract 25% more applicants and foster higher productivity[16]. - The company plans to work with target businesses to unlock the value of their social investments in their business models and community commitments[20]. - The business combination is expected to enhance the competitiveness of the target business while advancing social impact[15]. - The company aims to leverage social impact trends to enhance public market access for Social-Forward Companies, focusing on sectors aligned with UN SDGs Three, Four, Eight, and Ten[61]. - The company intends to focus on high-growth businesses in sectors such as EdTech, FinTech, and Health Tech, particularly those led by BIPOC or women in the U.S.[102]. Management and Advisory Team - Auldbrass Partners has managed approximately $1.5 billion in global investments across growth, buyout, mezzanine, and venture capital[93]. - The investment team at Auldbrass Partners has completed over $3.8 billion in secondary transactions across 500 funds, with assets located in Europe, Asia, and North America[95]. - Auldbrass Partners utilizes a sophisticated database, Thesys, which includes detailed information on over 5,000 active underlying companies to identify and evaluate private equity opportunities[96]. - The firm has deep relationships across the private equity ecosystem, enhancing its ability to discover actionable opportunities[96]. - The advisory board is designed to support the company in identifying and driving value in initial business combinations through their sourcing channels and networks[97]. - Auldbrass Partners has significant primary and secondary investment experience, maintaining long-term relationships with 200 top-tier fund managers[95]. - The firm focuses on secondaries transactions, particularly in middle market and late-stage growth portfolios[96]. - Auldbrass Partners has a strong track record in SaaS, PaaS, tech-enabled manufacturing, healthcare, and EdTech investments[83]. - The company aims to optimize acquired businesses through strategic plans and evaluations provided by the advisory board[98]. - The company plans to leverage the expertise of its management and advisory board to identify and execute business combinations[103]. Risks and Challenges - The company has no operations or revenues until the completion of the initial business combination, highlighting the risks associated with being a blank check company[12]. - The management team has no prior experience in operating blank check companies, which may present risks in identifying and executing transactions[100]. - Potential conflicts of interest may arise due to affiliations with Auldbrass Partners, which is an indirect investor in the company[129]. - Auldbrass Partners manages several investment programs and may compete for acquisition opportunities, potentially precluding the company from pursuing certain opportunities[131]. - The company may incur losses from costs associated with identifying and evaluating target businesses that do not result in completed transactions[163]. Financial Position and Redemption Rights - As of December 31, 2023, a total of $1,300,000 has been deposited into the trust account to extend the termination date to January 1, 2024[121]. - The company has $62,736,405 available for a business combination as of December 31, 2023, after accounting for redemptions[149]. - The company intends to complete its initial business combination using cash from its IPO proceeds, private placement warrants, capital stock, or debt[150]. - The initial business combination must involve target businesses with an aggregate fair market value of at least 80% of the assets held in the trust account[158]. - The company may seek to raise additional funds through private offerings of debt or equity securities in connection with the business combination[152]. - The company may liquidate if it cannot complete a business combination by the Termination Date, with public shareholders potentially receiving approximately $10.20 per share[137]. - Public stockholders will have the opportunity to redeem their shares for cash based on the amount in the trust account, including interest earned[179]. - If stockholder approval is required, a majority of the outstanding shares must vote in favor of the business combination for it to be approved[187]. - The sponsor holds approximately 77% of the outstanding shares, which may facilitate the approval of the initial business combination[187]. - Redemption rights are limited to 15% of the shares sold in the initial public offering without prior consent, to discourage large block accumulations[189]. - If the business combination is not completed by the Termination Date, public shares will be redeemed at a price based on the trust account balance, minus up to $100,000 for dissolution expenses[196]. - The redemption process will require public stockholders to deliver their stock certificates or use electronic delivery methods[191]. - If more shares are tendered than the company can purchase, the tender offer will be withdrawn, and the business combination will not be completed[183]. - The company may continue to seek a different target for the initial business combination until the Termination Date if the first proposed combination is not completed[195]. - There will be no redemption rights for warrants, which will expire worthless if the business combination is not completed by the Termination Date[196]. - As of December 31, 2023, the company has $224,394 held outside the trust account to fund costs associated with its dissolution plan[200]. - The expected per-share redemption amount upon dissolution is approximately $10.20, but this could be reduced due to creditor claims[201]. - The company may request the trustee to release up to $100,000 of accrued interest from the trust account to cover dissolution expenses if necessary[200]. - The company has access to $224,394 from its initial public offering and related borrowings to pay potential claims, with liquidation costs estimated at no more than $100,000[206]. - Stockholders may be liable for claims by third parties against the corporation to the extent of distributions received during dissolution[208]. - If the redemption distribution is deemed unlawful, the statute of limitations for creditor claims could extend to six years[209]. - The company intends to redeem public shares as soon as reasonably possible following the Termination Date, which may expose stockholders to liability for claims[209]. - The company has agreements in place to prevent vendors and service providers from claiming rights to funds in the trust account, although there is no guarantee these will be upheld[202]. - The company’s sponsor has agreed to indemnify against claims that reduce the trust account below $10.20 per public share, but the sponsor's ability to fulfill this obligation is uncertain[204]. - The company will not propose amendments that affect the rights of Class A common stockholders without providing an opportunity for redemption at a price equal to the trust account balance[199].
Focus Impact Acquisition Corp.(FIACU) - 2023 Q4 - Annual Report