Financial Viability and Risks - The funds available outside of the Trust Account may not be sufficient for the company to operate for at least 15 months following the IPO, with potential extensions up to 21 months [179]. - If the initial business combination is not completed, public shareholders may receive approximately $10.30 per share or less upon liquidation of the Trust Account [180]. - The company may incur significant costs in pursuit of acquisition plans, which could impact its financial condition and results of operations [179]. - There is a risk of write-downs or impairments after the initial business combination, which could negatively affect the company's share price [181]. - The company may face claims from third parties that could reduce the proceeds in the Trust Account, potentially lowering the per-share redemption amount [184]. - The sponsor has agreed to indemnify the company for claims that reduce the Trust Account below $10.30 per public share, but there is no guarantee of sufficient funds to satisfy these obligations [187]. - The company may not hold an annual general meeting until after the initial business combination, limiting public shareholders' ability to discuss company affairs [198]. - Shareholders may be held liable for claims against the company to the extent of distributions received upon redemption of their shares [195]. - The company may seek acquisition opportunities with financially unstable businesses or entities lacking an established record of revenue or earnings [205]. - The absence of a specified maximum redemption threshold may allow the company to complete a business combination even if a substantial majority of shareholders do not agree [214]. - The company is required to ensure that net tangible assets are at least $5,000,001 before redeeming public shares upon consummation of the initial business combination [215]. - The company anticipates that the investigation and negotiation of target businesses will require substantial management time and costs, which may not be recoverable if a business combination is not completed [226]. - If the company is unable to complete its initial business combination, public shareholders may receive approximately $10.30 per share on liquidation of the Trust Account, with potential for less in certain circumstances [225]. - Compliance with the Sarbanes-Oxley Act may increase the time and costs associated with completing an acquisition [211]. - The company may be unable to obtain additional financing necessary to complete its initial business combination or fund the operations of a target business [222]. - The company may incur substantial debt to complete a business combination, which could adversely affect its financial condition and shareholder value [234]. - The company may face significant adverse consequences if Nasdaq delists its securities, including reduced liquidity and potential classification as a "penny stock" [297]. - The company may not have sufficient funds to satisfy indemnification claims of officers and directors, which could discourage lawsuits against them for breach of fiduciary duty [291]. - Negative developments involving management or affiliated persons could materially impact the ability to consummate an initial business combination [292]. - The company may face challenges in finding suitable business targets due to investor concerns regarding the financial system, which could impact commercial terms and available funding [263]. Acquisition Strategy and Focus - The company plans to focus on acquiring businesses in life sciences or sustainable technology, but may pursue opportunities in various industries [201]. - The company intends to focus its acquisition strategy on the healthcare industry and sustainability sector, which are subject to significant regulatory risks and challenges [248]. - The probability of success for drug development in the biopharmaceutical sector is only 9.6%, highlighting the high risks associated with potential acquisitions in this field [249]. - The company may seek to acquire early-stage or financially unstable businesses, which could expose it to volatile revenues and intense competition [253]. - The company may face numerous risks when pursuing business combinations with financially unstable or early-stage businesses, including volatile revenues and intense competition [254]. - The complexity of potential business combinations may delay or prevent the company from achieving desired operational improvements [256]. - The company may encounter various risks when pursuing international business combinations, including currency fluctuations, regulatory challenges, and cultural differences [233]. - The expiration of patents for healthcare-related products may lead to reduced profitability as generic alternatives enter the market [251]. - The company may face increased competition for attractive acquisition targets due to the growing number of special purpose acquisition companies, which could raise costs and complicate the acquisition process [245]. Governance and Shareholder Rights - The company may amend its governing instruments to facilitate the completion of an initial business combination, potentially without shareholder support [216]. - Initial shareholders own 20% of the issued and outstanding ordinary shares, controlling the appointment of all directors prior to the initial business combination [289]. - Initial shareholders and their permitted transferees are expected to own at least 20% of the issued and outstanding ordinary shares at the time of any shareholder vote, requiring only 37.5% of public shares to approve the initial business combination [314]. - The registration rights granted to initial shareholders and holders of private placement warrants may complicate the completion of the initial business combination and adversely affect the market price of Class A ordinary shares [308]. - Provisions in the company's amended and restated memorandum and articles of association may inhibit takeovers, potentially limiting the price investors are willing to pay for Class A ordinary shares [310]. - The company may encounter conflicts of interest due to the involvement of its officers and directors with other entities engaged in similar business activities [276]. - There is no cap on the reimbursement of out-of-pocket expenses incurred by the sponsor and directors if the initial business combination is not completed, which may influence their motivation in selecting target businesses [284]. Market and Regulatory Considerations - The market for directors and officers liability insurance has become less favorable, potentially increasing costs and complicating the negotiation of business combinations [259]. - The company may face significant penalties if local regulations on foreign investment are not complied with during the acquisition of target businesses [378]. - The company has been advised that Cayman Islands courts may not enforce U.S. judgments based on federal securities laws, complicating legal recourse for shareholders [368]. - Corporate governance standards in non-US countries may be weaker, leading to potential management issues and unfavorable transactions [377]. - The SEC proposed rules could classify the company as an investment company if it does not complete a business combination within 24 months, potentially leading to liquidation [362]. - The company may face challenges in completing its initial business combination if deemed an investment company under the Investment Company Act, leading to compliance burdens [357]. Trust Account and Financial Instruments - The Trust Account proceeds will be invested only in U.S. government treasury obligations with a maturity of 185 days or less, which may yield negative interest rates, potentially reducing the per-share redemption amount below $10.30 [296]. - The company has $226,702,620 available from the IPO and private placement warrants to complete its business combination and cover related fees and expenses, including approximately $8,105,480 for deferred underwriting commissions [238]. - The company may only complete one business combination with the proceeds from the IPO, leading to a lack of diversification and potential negative impacts on operations and profitability [237]. - The company may issue additional Class A ordinary shares or preference shares to complete the initial business combination, which could significantly dilute existing shareholders' equity [305]. - There are currently 143,333,333 authorized but unissued Class A ordinary shares available for issuance, taking into account shares reserved for outstanding warrants [303]. - If the company does not conduct redemptions pursuant to tender offer rules, shareholders holding over 15% of Class A ordinary shares will lose the ability to redeem shares exceeding that threshold [300]. - The company has the right to extend the time to consummate the initial business combination up to 21 months following the IPO effectiveness without providing shareholders a vote or redemption right [315]. - The company must deposit an additional $0.10 per ordinary share into the Trust Account to extend the time for consummating the initial business combination, totaling $2,000,000 for each extension [317]. - The company may liquidate the trust account securities and hold funds in cash prior to the 24-month anniversary of the IPO effective date, which could reduce shareholder returns [365]. - The company may distribute the amount in the Trust Account, less up to $100,000 for dissolution expenses, to public shareholders if the initial business combination is not consummated [343]. - The exercise price for the public warrants is set at $11.50 per share, which is higher than typical offerings in similar blank check companies, making them more likely to expire worthless [319]. - The company may amend the terms of the public warrants with the approval of at least 50% of the outstanding public warrants, potentially in a manner adverse to holders [327]. - The public warrants may become exercisable for a security other than Class A ordinary shares if the company is not the surviving entity in the initial business combination [331]. - The company will bear the costs of registering securities for initial shareholders and holders of private placement warrants, which may negatively impact the market price of Class A ordinary shares [309]. - The company has issued public warrants to purchase 10,000,000 Class A ordinary shares at a price of $11.50 per share, along with 6,666,667 private placement warrants under the same terms [337]. - The potential for the issuance of additional Class A ordinary shares upon exercise of warrants could make the company a less attractive acquisition vehicle [337]. - The determination of the offering price of the units and the size of the IPO is considered more arbitrary than that of an operating company due to the lack of historical operations [339]. - 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 [352]. - Certain agreements related to the IPO may be amended without shareholder approval, which could adversely affect the value of investments in the company's securities [350]. - The company may reincorporate in another jurisdiction in connection with its initial business combination, potentially resulting in tax implications for shareholders [349].
Valuence Merger Corp. I(VMCAU) - 2022 Q4 - Annual Report