Funding and Financial Position - Energi Holding Limited committed to funding the company up to $600,000, which was fully drawn on March 25, 2024[48]. - The company has raised a total of $126.5 million from its initial public offering, selling 12,650,000 units[66]. - Following the IPO, the company completed a private sale of 4,866,667 private warrants, generating an additional $7.3 million[67]. - As of April 4, 2024, the company has $21,494,229 available in its trust fund, which may decrease due to shareholder redemptions[69]. - The company must acquire target businesses with a fair market value of at least 80% of the trust account balance at the time of the business combination[70]. - The company may seek third-party financing if it does not meet the $5,000,001 net tangible asset threshold due to share redemptions[78][80]. - The redemption amount for shareholders upon dissolution could be significantly less than the estimated $11.24 due to potential creditor claims[93]. - The trust account holds funds that may be reduced below $11.24 per public share due to claims from creditors, impacting shareholder returns[96]. - The company has a liability to ensure that the trust account maintains at least $11.24 per public share, net of interest for taxes[96]. - If the initial business combination is not completed by November 2, 2024, the company will liquidate and distribute the trust account funds[99]. - Shareholders can redeem their shares for cash equal to the amount in the trust account, currently anticipated to be approximately $11.24 per share[108]. - The original sponsor is liable if claims reduce the trust account funds below $11.24 per public share, net of taxes[113]. Business Combination and Acquisition Strategy - The company entered into a non-binding heads of agreement with Tembo e-LV B.V. for a potential business combination transaction on April 2, 2024[48]. - The company aims to identify and acquire businesses in the clean and sustainable energy industry, focusing on segments like carbon, hydrogen, and renewable energy[50]. - The company has a flexible approach to structuring its initial business combination, which may include cash, debt, or equity securities[69]. - The fair market value of the target business will be assessed based on standards such as sales, earnings, cash flow, and book value, with a threshold of $5,000,001 in net tangible assets required for business combination[72][78]. - The company plans to complete its business combination with a single entity, which may lead to a lack of diversification and increased dependency on the performance of that single business[73]. - There is no assurance that the management of the target business will possess the necessary skills or experience to manage a public company effectively[74][76]. - Shareholders will have the option to either approve the business combination at a general meeting or sell their shares through a tender offer, with the decision made at the company's discretion[77][82]. - The company will only consummate the initial business combination if it has net tangible assets of at least $5,000,001[100]. - Shareholders must exercise their redemption rights to receive funds from the trust account during the initial business combination[99]. Management and Operational Considerations - The management team has extensive experience in clean energy and sustainable infrastructure, enhancing the company's ability to create value[53]. - The company is positioned to leverage its global network and regulatory insights to identify and evaluate potential acquisition targets[52]. - The company may negotiate employment agreements for key personnel post-business combination, but their continued involvement is uncertain[75]. - Certain executive officers and directors may have fiduciary duties to other entities, potentially precluding the company from pursuing certain acquisition opportunities[111]. - The company has two officers and intends to devote necessary time to affairs until the initial business combination is completed[116]. Regulatory and Compliance Aspects - The company is classified as an "emerging growth company," allowing it to take advantage of reduced reporting requirements[120]. - The company will remain an emerging growth company until it meets specific revenue or market value thresholds[123]. - The company is not required to have its internal control procedures audited due to its status as an emerging growth company[119]. - Amendments to the memorandum and articles of association require approval from at least two-thirds of Class A ordinary shares[104]. Risks and Competition - The company faces intense competition from entities with greater resources and local industry knowledge, limiting its ability to acquire sizable target businesses[110]. - The redemption of public shares due to failure to complete the initial business combination will reduce the book value per share for remaining shareholders[110]. - Financial statements of prospective target businesses will be provided to shareholders as part of proxy solicitation materials[118].
Cactus Acquisition Corp. 1 Ltd.(CCTSU) - 2023 Q4 - Annual Report