Financial Position - As of December 31, 2023, the company had $47,046 in cash held outside of the Trust Account and working capital of $180,232,536[119]. - The company has $2,310,000 available outside the trust account for working capital, which is expected to last for at least 27 months post-IPO[184]. - The net proceeds from the IPO and private placement of warrants, after accounting for a redemption of $65,163,747, amount to $187,355,645 available for the initial business combination[218]. - The company has net tangible assets exceeding $5,000,000 as of the completion of its IPO, exempting it from certain SEC rules for blank check companies[268]. Going Concern and Financial Risks - The company has incurred significant costs in pursuit of financing and acquisition plans, raising substantial doubt about its ability to continue as a going concern[119]. - The company may face challenges in obtaining additional financing necessary for completing the initial business combination or funding the target business operations[161]. - If the initial business combination is not completed, public shareholders will receive a cash redemption based on the amount in the trust account, minus up to $100,000 for dissolution expenses[151]. - If the company fails to complete the initial business combination, public shareholders may only receive their pro rata portion of the funds in the trust account, and warrants will expire worthless[166]. - Claims against the company could reduce trust account funds, potentially lowering the per-share redemption amount below $10.30[189]. - The company may not be able to complete its initial business combination if trust account funds are insufficient due to third-party claims[191]. Business Combination Challenges - The company may face difficulties in completing its initial business combination due to competition and limited financial resources compared to other entities[135]. - The requirement to complete the initial business combination within a prescribed timeframe may limit the company's ability to conduct due diligence on potential targets[145]. - The company may not complete its initial business combination within the Combination Period, which could lead to ceasing all operations and redeeming public shares[147]. - The company may face challenges in completing simultaneous business combinations, which could increase costs and operational risks[220]. - There is a risk that attractive targets for business combinations may become scarcer due to increased competition among special purpose acquisition companies[233]. Shareholder Rights and Voting - Initial shareholders own approximately 25.4% of the issued and outstanding ordinary shares, which may influence the likelihood of obtaining shareholder approval for the initial business combination[153]. - Holders of public shares do not have voting rights on director appointments prior to the initial business combination[267]. - If shareholders hold over 15% of Class A ordinary shares, they will lose the ability to redeem shares exceeding that threshold[269]. - The company’s ability to amend its governing documents requires a special resolution, needing the affirmative vote of at least two-thirds of attending shareholders[298]. Management and Operational Risks - The management team has extensive experience in various sectors, including healthcare and financial services, and intends to pursue initial business combinations across multiple industries[207]. - The company is dependent on the efforts of key personnel for the successful completion of its initial business combination, and the loss of such personnel could negatively impact operations and profitability[239]. - The company may seek business combination opportunities outside of its management's areas of expertise, which could lead to challenges in evaluating risks[165]. - The company may pursue acquisition opportunities with early-stage or financially unstable businesses, which carry inherent risks such as volatile revenues and intense competition[171]. Regulatory and Compliance Issues - The company must maintain a minimum shareholder's equity of $2.5 million and a minimum of 400 public holders to remain listed on Nasdaq[262]. - If Nasdaq were to delist the company's securities, it could acquire a target business valued below the funds in the trust account, reducing the required fair market value for business combinations[263]. - The company may not complete an initial business combination with a U.S. target if it is subject to foreign investment regulations or CFIUS review, limiting potential acquisition opportunities[204]. Conflicts of Interest - The personal and financial interests of directors and officers may influence their motivation in identifying and selecting a target business, potentially leading to conflicts of interest[250]. - The company does not have a policy prohibiting directors and officers from having financial interests in transactions, which may lead to conflicts of interest[249]. - Key personnel may negotiate employment or consulting agreements that could create conflicts of interest regarding the most advantageous business combination[241]. - The company may engage underwriters for additional services post-IPO, which could create potential conflicts of interest due to financial incentives tied to the completion of a business combination[210]. Trust Account and Redemption Issues - The trust account is expected to contain approximately $10.30 per Class A ordinary share at the time of the initial business combination, incentivizing public shareholders to redeem their shares[143][144]. - The proceeds in the trust account are invested in U.S. government treasury obligations or money market funds, which may yield negative interest rates, potentially lowering the per-share redemption amount below $10.30[195]. - The trust account funds may be reduced below $10.30 per unit if the value of trust assets declines, impacting the redemption amount for public shareholders[193]. Share Issuance and Dilution - The company has authorized the issuance of up to 200,000,000 Class A ordinary shares, with 177,000,000 Class A shares and 14,250,000 Class B shares currently available for issuance[294]. - The company may issue additional Class A ordinary shares or preferred shares to complete its initial business combination, which could dilute existing shareholders' interests[295]. - The potential issuance of additional Class A ordinary shares upon warrant exercise could make the company a less attractive acquisition vehicle[313]. - The company may redeem outstanding warrants at $0.01 per warrant if the Reference Value equals or exceeds $18.00 per share[311]. Miscellaneous - The company has agreed to designate New York courts as the exclusive forum for certain disputes related to its warrants[272]. - The company intends to invest trust account proceeds only in U.S. government securities or money market funds to avoid being classified as an investment company[282]. - If deemed an investment company, the company may face burdensome compliance requirements that could hinder its ability to complete a business combination[276].
Patria Latin American Opportunity Acquisition Corp.(PLAOU) - 2023 Q4 - Annual Report