Financial Proceeds and Trust Account - The net proceeds from the IPO and the sale of private placement warrants amount to $2.9 million available outside the trust account for working capital requirements [178]. - The trust account is expected to contain approximately $10.20 per Class A ordinary share at the time of the initial business combination, which may incentivize public shareholders to redeem their shares [180]. - If additional capital is required, the company may need to borrow funds from its sponsor or management team, as there is no obligation for them to provide such loans [179]. - The proceeds held in the trust account are invested in U.S. government treasury obligations, which could yield negative interest rates, reducing the value of assets held in trust [187]. - If the company files for bankruptcy after distributing trust account proceeds, shareholders may face recovery claims, potentially reducing their received amounts [191]. - Proceeds held in the trust account may only be invested in U.S. government securities with a maturity of 185 days or less or in certain money market funds [196]. - If the company does not complete its initial business combination within the Combination Period, public shareholders may only receive their pro rata portion of the funds in the trust account [201]. - The company may need to seek additional financing for remaining contributions, as only a portion of the Loan will be used for working capital purposes [178]. - The company may need to seek additional financing if the cash portion of the purchase price exceeds the available amount from the trust account [284]. - A minimum cash requirement may be imposed for the initial business combination, affecting the ability to complete the transaction if cash conditions are not met [276]. - The company may abandon a business combination if the aggregate cash consideration required exceeds the available cash [277]. Business Combination Risks - The company may incur significant costs in pursuing acquisition plans, and if it fails to complete the initial business combination, it may be forced to liquidate [179]. - There is a risk that the funds in the trust account could be reduced due to third-party claims, potentially lowering the per-share redemption amount for shareholders [183]. - The company has not verified whether its sponsor has sufficient funds to satisfy indemnification obligations, which could impact the funds available for the initial business combination [186]. - Changes in laws or regulations may adversely affect the company's ability to negotiate and complete its initial business combination [199]. - Proposed SEC rules could impose additional disclosure requirements for SPACs and may materially affect the company's business operations [200]. - The company may face burdensome compliance requirements if deemed an investment company under the Investment Company Act, which could hinder the completion of the initial business combination [193]. - The company may face challenges in obtaining shareholder approval for business combinations if the target does not meet established criteria [224]. - The company is not required to obtain an independent valuation for the target business, relying instead on the judgment of its board of directors [226]. - The company may pursue business combinations in industries outside of its management's expertise, which could lead to inadequate risk assessment [222]. - The completion of a business combination is contingent upon the simultaneous closing of multiple acquisitions, which may complicate negotiations and due diligence [273]. - The company may pursue a business combination with a private company, which typically has limited public information available, increasing the risk of an unprofitable acquisition [274]. - The company may not maintain control of a target business after the initial business combination, which could affect operational profitability [275]. - There is no specified maximum redemption threshold, allowing the company to complete a business combination even if a substantial majority of shareholders disagree [276]. Shareholder and Management Dynamics - Initial shareholders own 20% of the issued and outstanding ordinary shares and control the appointment of the board of directors until the initial business combination is consummated [204]. - The company may not hold an annual general meeting of shareholders until after the consummation of the initial business combination, delaying the opportunity for shareholders to appoint directors [206]. - Shareholders may be held liable for claims against the company to the extent of distributions received upon redemption of their shares [203]. - The company has granted registration rights to initial shareholders and private placement warrant holders, which may complicate the initial business combination and negatively impact the market price of Class A ordinary shares [216]. - Initial shareholders collectively own 20% of the ordinary shares, potentially exerting significant influence over shareholder votes [285]. - The company may issue additional Class A ordinary shares or preference shares to complete its initial business combination, potentially diluting existing shareholders' interests [229]. - The nominal purchase price for founder shares was $25,000, or approximately $0.003 per share, which may significantly dilute the implied value of public shares upon consummation of a business combination [263]. - The company may face conflicts of interest due to the financial interests of its directors and officers in identifying and selecting target businesses for combination [257]. - Conflicts of interest may arise as officers and directors allocate their time between the company and other business activities [252]. - Officers and directors may have fiduciary obligations to other entities, leading to conflicts in presenting business opportunities [254]. Regulatory and Compliance Considerations - The company must ensure that investment securities do not constitute more than 40% of its assets to avoid being regulated as an investment company under the Investment Company Act [195]. - Compliance with the Sarbanes-Oxley Act may require substantial financial and management resources, increasing the time and costs of completing an initial business combination [305]. - The company is classified as an "emerging growth company," which allows it to take advantage of certain exemptions from disclosure requirements, potentially making its securities less attractive to investors [300]. - The company may remain a smaller reporting company if the market value of its ordinary shares held by non-affiliates is less than $250 million or if annual revenues are less than $100 million [304]. - The company is governed by the amended and restated memorandum and articles of association, the Companies Act, and the common law of the Cayman Islands, which may differ significantly from U.S. corporate governance standards [307]. - Public shareholders may face challenges in protecting their interests against actions taken by management or controlling shareholders compared to U.S. companies [310]. - Provisions in the company's articles may inhibit takeovers, potentially limiting future share prices and entrenching management [311]. Market and Economic Risks - Economic and political conditions in the country of operations could significantly impact the company's business and financial results [321]. - Exchange rate fluctuations may adversely affect the financial condition and results of operations if revenues are received in foreign currencies [322]. - The company may face increased costs and risks of non-compliance due to changing laws and regulations, impacting management's focus on revenue-generating activities [325]. - The market for directors and officers liability insurance has become less favorable, potentially complicating the negotiation of initial business combinations [331]. - The need for additional insurance to protect directors and officers could add expenses and affect the ability to complete favorable business combinations [333]. Cybersecurity and Operational Risks - Cyber incidents could lead to information theft, operational disruption, and financial loss, with the company lacking significant investments in data security protection [312]. - The company has not engaged in any hedging activities since its inception [368]. - There are no expectations for the company to engage in any hedging activities regarding market risk [368]. - As of December 31, 2022, the company was not subject to any material market or interest rate risk [368]. - The net proceeds from the Initial Public Offering and Private Placement were invested in U.S. government treasury obligations with a maturity of 185 days or less [368]. - The company believes there was no associated material exposure to interest rate risk due to the short-term nature of these investments [368].
Investcorp Europe Acquisition Corp I(IVCBU) - 2022 Q4 - Annual Report