Financial Condition and Capital Requirements - The company has incurred significant costs in pursuit of acquisition plans and expects to continue doing so [172]. - The company requires additional capital to operate, which may necessitate borrowing from sponsors or liquidating assets [174]. - The company may incur substantial debt to complete a business combination, which could negatively impact the value of shareholders' investments [204]. - The company may face challenges in obtaining additional financing for its initial business combination, which could lead to restructuring or abandonment of the transaction [227][228]. - The company may not be able to access a portion of its existing cash and investments due to market conditions, which could materially adversely affect its financial condition [247]. - The company must complete its initial business combination by May 8, 2023, or face potential liquidation of public shares [300]. - The company may issue additional Class A ordinary shares or preferred shares to complete the initial business combination, which could significantly dilute the interest of current shareholders [340]. Shareholder Implications - The company may only be able to provide approximately $10.20 per share to public shareholders upon liquidation of the trust account, with potential for lower amounts in certain circumstances [173]. - If unable to complete the initial business combination, public shareholders may receive less than $10.20 per share upon redemption [178]. - Shareholders may be held liable for claims against the company to the extent of distributions received upon redemption [193]. - Public shareholders incurred an immediate and substantial dilution of approximately 96.8% (or $9.68 per share) upon the closing of the initial public offering [309]. - The potential issuance of a substantial number of additional Class A ordinary shares upon exercise of warrants could make the company a less attractive acquisition vehicle [315]. - The potential issuance of shares underlying various warrants may adversely affect the market price of the Class A ordinary shares [339]. Business Combination Risks and Challenges - The company believes it will meet the requirements for exemption from the Investment Company Act, but non-compliance could hinder business combination efforts [188]. - The company may face challenges in completing simultaneous business combinations due to complex accounting issues and the need for pro forma financial statements [208]. - If the company completes a business combination with a financially unstable business, it may face numerous risks inherent in that business's operations [213]. - The management team of the target business may not possess the necessary skills to manage a public company, potentially affecting operations and profitability [265]. - Key personnel from the target business may resign after the initial business combination, which could negatively impact operations [266]. - The ability to successfully effect the initial business combination is dependent on the efforts of key personnel, whose roles may not be clearly defined [270]. - The company may seek acquisition opportunities outside of its management's areas of expertise, which could lead to challenges in evaluating or operating the acquired business [274]. Regulatory and Market Conditions - The SEC has proposed rules that may increase costs and time needed to complete the initial business combination [191]. - Economic uncertainty and volatility, particularly due to geopolitical tensions such as the military conflict in Ukraine, may adversely affect the company's ability to identify and consummate business combinations [240][241]. - The current economic downturn has led to increased difficulty in completing the initial business combination, with observed economic uncertainty in the U.S. and abroad [246]. - Recent volatility in capital markets may affect the ability to obtain financing for the initial business combination, potentially leading to significant dilution for existing stockholders [249]. - The company is subject to evolving regulatory measures that have increased general and administrative expenses and may divert management's attention from revenue-generating activities [356]. Corporate Governance and Structure - The company may seek to amend its governing instruments to facilitate the completion of an initial business combination, which some shareholders may not support [219]. - The company has approximately 19.5% of its ordinary shares owned by initial shareholders, which may facilitate amendments to its memorandum and articles of association with a two-thirds majority approval [222]. - The company may qualify as a "controlled company" under Nasdaq rules, potentially exempting it from certain corporate governance requirements [329]. - The company has not adopted a policy to prohibit conflicts of interest among its officers and directors, which may affect business combination decisions [285]. - Provisions in the company's amended and restated memorandum and articles of association may inhibit unsolicited takeover proposals [322]. Share Structure and Securities - The company issued warrants to purchase 12,937,500 Class A ordinary shares at an exercise price of $11.50 per warrant [314]. - The company has established its unit structure to reduce the dilutive effect of warrants, making it a more attractive merger partner [305]. - The company has 482,600,000 authorized but unissued Class A ordinary shares available for issuance, which includes shares reserved for outstanding warrants [341]. - The founders shares will convert into Class A ordinary shares on a one-for-one basis upon completion of the initial business combination, subject to adjustments [346]. - The company may redeem outstanding warrants at a price of $0.01 per warrant if the Class A ordinary shares' sales price equals or exceeds $18.00 for any 20 trading days within a 30 trading-day period [312]. Miscellaneous - The company is classified as an "emerging growth company," allowing it to take advantage of certain exemptions from disclosure requirements, which may affect investor attractiveness [233]. - The company has not opted out of the extended transition period for new financial accounting standards, potentially complicating comparisons with other public companies [234]. - The company is a "smaller reporting company," allowing it to provide only two years of audited financial statements, which may hinder performance comparisons with other public companies [235]. - The company may be classified as a passive foreign investment company (PFIC), which could result in adverse U.S. federal income tax consequences for U.S. investors [347]. - The company has not engaged in any hedging activities since its inception [406].
Finnovate Acquisition Corp.(FNVTU) - 2022 Q4 - Annual Report