Business Combination and SPAC Regulations - The company reported a redemption of 12,626,668 Class A Ordinary Shares at approximately $10.50 per share during the 2023 EGM[12]. - The 2024 SPAC Rules adopted by the SEC will become effective on July 1, 2024, impacting SPAC Business Combination transactions[10]. - The company has an initial Business Combination deadline extended to May 8, 2024, as approved by shareholders[14]. - The company is in the process of negotiating the Scage Business Combination Agreement, which was entered into on August 21, 2023[16]. - The company must complete its initial Business Combination by May 8, 2024, or it will terminate and distribute amounts in the Trust Account[24]. - The Aggregate Merger Consideration Amount under the Scage Business Combination Agreement is set at $1,000,000,000, subject to adjustments for net debt[34]. - The Scage Business Combination Agreement was entered into on August 21, 2023, and involves a two-step merger process with Pubco[32]. - The obligations to consummate the Business Combination are subject to the approval of both companies' shareholders[47]. - The Scage Business Combination Agreement may be terminated if the Closing does not occur by February 29, 2024[51]. - The company may seek further extensions of the Combination Period, which would require shareholder approval and could adversely affect the Trust Account balance[29]. Financial Instruments and Funding - The company issued a January 2024 Promissory Note with a principal amount of up to $1,500,000 to Scage on January 26, 2024[15]. - The company issued a June 2023 Promissory Note with a principal amount of up to $1,200,000 to its Sponsor on June 2, 2023[15]. - The company has not secured third-party financing for the Business Combination, which may affect future capital availability[83]. - The company intends to utilize cash from its Initial Public Offering and Private Placement Warrants for the Business Combination[86]. - The cash proceeds from the PIPE investment must be not less than an aggregate of $15,000,000[49]. Trust Account and Shareholder Rights - The company placed a total of $175,950,000 in the Trust Account, which includes $153,000,000 from the Initial Public Offering and $22,950,000 from the Private Placement[23]. - The company has approximately $51,200,344 in its Trust Account, equating to $11.07 per share, as of December 31, 2023, assuming no redemptions[83]. - Public Shareholders may convert their shares into their pro rata share of the Trust Account amount at any general meeting called to approve an initial Business Combination[107]. - The company may engage in a tender offer for Public Shareholders to sell their shares, avoiding the need for a shareholder vote[107]. - Shareholders must properly elect to redeem their shares to receive funds from the Trust Account, which will only occur upon the completion of the Initial Business Combination or other specified circumstances[123]. Internal Controls and Compliance - The company has identified material weaknesses in its internal control over financial reporting, particularly in the recognition of professional fees and related party transactions[246][247]. - Management is enhancing internal controls and procedures to address identified weaknesses and ensure compliance with GAAP[248]. - The company acknowledges that internal control over financial reporting may not prevent or detect errors or misstatements in financial statements[252]. - Management's internal control includes policies that ensure transactions are recorded to permit preparation of financial statements in accordance with GAAP[251]. - The report does not include an attestation report of internal controls from an independent registered public accounting firm due to the company's status as an emerging growth company under the JOBS Act[254]. Acquisition Strategy and Market Position - The acquisition strategy focuses on Israel-related companies in sectors such as fintech, insuretech, and digital banking, targeting businesses with proven revenue growth[69]. - The management team has significant experience in executing transactions under varying economic conditions, enhancing the ability to identify and evaluate potential targets[75]. - The company emphasizes the importance of disruptive technology and strong competitive positions in its investment criteria for prospective targets[71]. - The company has identified a pipeline of potential targets through its management team's extensive network and relationships in the industry[76]. - The company believes its public status offers a more certain and cost-effective method for target businesses to go public compared to traditional Initial Public Offerings[79]. Risks and Uncertainties - The company anticipates potential risks and uncertainties that may cause actual results to differ materially from forward-looking statements[11]. - The company has encountered intense competition from well-established entities with greater resources, which may limit its ability to acquire sizable target businesses[129]. - Certain executive officers and directors may have fiduciary duties to other companies, potentially precluding the company from pursuing certain acquisition opportunities[130]. Miscellaneous - The company is currently maintaining its executive offices at 265 Franklin Street, Suite 1702, Boston, MA, and is paying $3,000 per month for administrative services[133]. - As of the report date, the company has two officers, and their time commitment varies based on the Business Combination process[134]. - The company has received a tax exemption undertaking from the Cayman Islands government for a period of 20 years, exempting it from certain taxes[143].
Finnovate Acquisition Corp.(FNVTU) - 2023 Q4 - Annual Report