Financial Proceeds and Trust Account - The company raised gross proceeds of $189.75 million from its initial public offering of 18,975,000 units, including 2,475,000 units from the underwriters' over-allotment option[22]. - A private placement of 7,942,500 warrants generated additional gross proceeds of $7.94 million at a price of $1.00 per warrant[22]. - The net proceeds of $191.65 million from the IPO and private placement were placed in a trust account, invested only in U.S. government securities[23]. - The company has available funds for a business combination amounting to $184,206,250, assuming no redemptions, after accounting for $6,641,250 in deferred underwriting fees and estimated offering expenses of $800,000[59]. - The anticipated amount in the trust account is initially expected to be $10.10 per public share[86]. - Public shareholders will have the opportunity to redeem shares at a price equal to the aggregate amount in the trust account divided by the number of outstanding public shares[86]. - The company may not issue additional ordinary shares that would entitle holders to receive funds from the trust account prior to the initial business combination[125]. - The company has access to up to $1,450,000 from the proceeds of its initial public offering and the sale of private placement warrants to cover potential claims[116]. - Estimated costs and expenses related to liquidation are currently projected to be no more than approximately $100,000[117]. - If the trust account proceeds fall below $10.10 per public share, the actual redemption price may be significantly less than this amount due to creditor claims[115]. Business Combination Requirements - The company must complete a business combination with an aggregate fair market value of at least 80% of the net assets held in the trust account[25]. - The company intends to structure its initial business combination to acquire 100% of the issued and outstanding equity interests or assets of the target business, but may acquire less than 100% under certain conditions[48]. - The company is required to complete its initial business combination with a target business or assets with a fair market value equal to at least 80% of the assets held in the trust account[46]. - The initial business combination must involve a target with a fair market value equal to at least 80% of the assets held in the trust account[66]. - The post-transaction company must own or acquire 50% or more of the voting securities of the target business[67]. - The company has not yet selected a specific business combination target and has not engaged in substantive discussions with any potential targets[63]. - The company may seek to raise additional funds through private offerings of debt or equity securities in connection with the completion of its initial business combination[64]. - The company may effectuate its initial business combination using cash, debt, or equity securities, providing flexibility in structuring the transaction[59]. Management and Strategy - The management team has over 85 years of combined experience in investing in Frontier Growth Markets, enhancing credibility and due diligence processes[21]. - The company aims to focus on businesses in the "new economy sectors" such as technology, financial services, and digital media across Frontier Growth Markets[20]. - The company plans to leverage its management team's extensive network and CIM's global platform to identify and evaluate potential acquisition targets[30]. - The company seeks to partner with businesses that have established business models, strong unit economics, and scalability potential[34]. - The company emphasizes ESG principles in its investment strategy, aiming to create long-term value for shareholders[32]. Shareholder Rights and Redemption - Public shareholders may redeem their shares without voting, and initial shareholders have agreed to waive their redemption rights for founder shares[93]. - The company will only complete its initial business combination if it receives the approval of a majority of ordinary shares at a general meeting[93]. - The company may conduct redemptions without a shareholder vote under certain conditions[76]. - If the initial business combination is not completed within 18 months, the company will cease operations and redeem public shares at a price based on the trust account balance[108]. - The per-share redemption amount upon dissolution is expected to be approximately $10.10, but actual amounts may be lower due to creditor claims[112]. - Redemption rights will be limited to prevent shareholders from accumulating large blocks of shares to exert pressure on the company[97]. - If too many public shareholders exercise their redemption rights, the company may not meet closing conditions for a business combination, potentially leading to an inability to proceed with the transaction[133]. - If the initial business combination is not completed within the required time period, public shareholders may receive approximately $10.10 per share upon liquidation of the trust account[205]. Risks and Challenges - The company has not generated any operating revenues to date and will only do so after completing a business combination[26]. - There is a risk of lack of business diversification as the company may complete its initial business combination with only a single entity[72]. - The time and costs associated with selecting and evaluating a target business are currently uncertain[71]. - The COVID-19 pandemic may adversely affect the company's ability to complete a business combination due to market volatility and restrictions on travel and meetings[142]. - The company may face challenges in completing its initial business combination due to limited resources and significant competition, with public shareholders potentially receiving approximately $10.10 per share if the combination is not completed within the required time period[151]. - The number of special purpose acquisition companies (SPACs) has increased significantly, leading to heightened competition for attractive targets, which may increase costs and complicate the acquisition process[153]. - The company anticipates that the increased competition for available targets may result in target companies demanding improved financial terms, potentially delaying or complicating the acquisition process[154]. - The company may face claims from creditors that could reduce the per-share amount received by shareholders in the event of liquidation[168]. Governance and Compliance - The company is classified as an "emerging growth company" and a "smaller reporting company," allowing it to take advantage of reduced disclosure obligations[57][58]. - The company will adopt an insider trading policy to regulate purchases by insiders during certain periods[84]. - The company may need to seek additional financing if the net proceeds from the initial public offering and private placement warrants are insufficient for the initial business combination[204]. - Compliance with the Sarbanes-Oxley Act may increase the time and costs associated with completing an acquisition, particularly if the target business is not compliant[215]. - The company must furnish shareholders with financial statements of the target business, which may limit the pool of potential acquisition candidates[214]. - Initial shareholders collectively own 20% of the ordinary shares and will control the appointment of the board of directors until the initial business combination is completed[206]. Shareholder Influence and Dilution - The initial shareholders hold 4,743,750 founder shares, with 4,593,750 shares held by the sponsor, which will be worthless if the initial business combination is not completed[190]. - The sponsor purchased 7,942,500 private placement warrants for a total price of $7,942,500, or $1.00 per warrant, which will also be worthless if the business combination is not completed[191]. - The company has authorized the issuance of up to 550 million Class A ordinary shares, which could dilute existing shareholders' interests[183]. - The issuance of additional shares may significantly dilute the equity interest of investors from the initial public offering[186]. - Initial shareholders may exert significant influence over corporate actions, including amendments to the memorandum and articles of association[207]. - The absence of a specified maximum redemption threshold may allow the company to complete a business combination even if a substantial majority of shareholders disagree[199]. - The founder shares will automatically convert into Class A ordinary shares at the time of the initial business combination, subject to certain anti-dilution rights[192].
CSLM Acquisition Corp.(CSLMU) - 2021 Q4 - Annual Report