Business Combination Risks - The company is a blank check company with no operating history and no revenues, making it difficult to evaluate its ability to achieve business objectives [62]. - The company has no plans or arrangements for a business combination, which may hinder its ability to generate operating revenues [62]. - The COVID-19 pandemic has adversely impacted business operations and may restrict the ability to complete a business combination due to travel limitations and market conditions [64]. - The ability to raise equity and debt financing may be affected by COVID-19, leading to increased market volatility and decreased liquidity [66]. - Recent events in the financial services industry, such as the closure of Silicon Valley Bank, could adversely affect the company's access to funding sources [68]. - The company must complete its initial business combination within 9 months, which may limit due diligence and negotiation leverage with target businesses [88]. - If the company fails to complete the business combination within the prescribed time frame, it may liquidate and public shareholders could receive only $10.00 per share [89]. - The company must complete its initial business combination within 9 months from the closing of its initial public offering, extendable up to 22 months with additional funding [90]. - If the initial business combination is not completed within the specified time, public shareholders may receive approximately $10.00 per share, or less in certain circumstances, upon redemption [110]. - The company may incur significant costs in pursuit of a business combination, and if additional capital is needed, it may have to rely on loans from sponsors or management [118]. - If third parties bring claims against the company, the proceeds held in the trust account could be reduced, affecting the per-share redemption amount for shareholders [122]. - The company may be required to take write-downs or incur impairment charges after the initial business combination, negatively impacting its financial condition and share price [120]. - If the trust account proceeds are reduced below $10.00 per public share, shareholders may receive less than this amount upon liquidation [127]. - The company may complete a business combination with a private company with limited available information, risking the acquisition of a less profitable entity than anticipated [210]. - The company may face foreign investment regulations that could hinder its ability to complete a business combination with a U.S. target company [217]. - The company may be unable to secure additional financing for the business combination or to fund the target's operations and growth, potentially leading to restructuring or abandonment of the deal [227]. Financial Condition and Liquidity - As of December 31, 2022, the company had approximately $178,652 in cash, raising substantial doubt about its ability to continue as a going concern [117]. - Only $682,250 of the net proceeds from the initial public offering and private placement units was available outside the trust account for working capital requirements [119]. - The company may not have sufficient funds outside the trust account to operate for at least 9 months, which could hinder the completion of the initial business combination [113]. - The company may incur substantial debt to complete a business combination, which could adversely affect leverage and financial condition [198]. - The company may require additional financing to fund operations or growth of the target business, which could adversely affect its development [228]. Shareholder Rights and Governance - The company may not hold a shareholder vote for its initial business combination unless required by law, which could lead to a situation where a majority of public shareholders do not support the combination [75]. - The sponsor and directors have agreed to vote in favor of the initial business combination, potentially influencing the outcome [76]. - Public shareholders may lose the ability to redeem shares exceeding 15% of those sold in the initial public offering if certain conditions are met [107]. - The rights and warrants of public shareholders will expire worthless if the initial business combination is not completed [110]. - The company does not have a specified maximum redemption threshold, allowing for a business combination even if a substantial majority of shareholders disagree [214]. - The company may need to amend its governing documents to facilitate the completion of a business combination, which could be easier than in other blank check companies [223]. - The company is required to hold an annual meeting no later than one year after its first fiscal year end following its NASDAQ listing, unless it remains a foreign private issuer [142]. Market and Competitive Environment - The company expects intense competition for business combination opportunities from well-established entities with greater resources [111]. - The company may seek acquisition opportunities in industries outside of its management's areas of expertise, which could affect the evaluation of significant risk factors [153]. - The company may only complete one business combination with the proceeds from the IPO, leading to a lack of diversification in operations [202]. - The company may pursue simultaneous business combinations with multiple targets, which could increase costs and risks, potentially impacting operations and profitability [208]. Regulatory and Compliance Issues - The company does not believe its anticipated activities will subject it to the Investment Company Act, which could impose burdensome compliance requirements [134]. - Compliance with the Sarbanes-Oxley Act may require substantial financial and management resources, increasing the time and costs of completing an acquisition [247]. - The company may face difficulties in protecting investor interests due to its incorporation under the laws of the Cayman Islands, limiting the ability to enforce judgments in U.S. courts [250]. - The determination of the offering price of the units is considered more arbitrary than that of an operating company, as the company has no historical operations or financial results [239]. - The company may face challenges in enforcing legal rights and federal securities laws due to the majority of directors and officers potentially residing outside the United States [256]. Management and Personnel - The company relies on a small group of officers and directors, and their unexpected departure could adversely affect operations and profitability [171]. - Key personnel's efforts are crucial for the success of the initial business combination, and their loss could negatively impact the post-combination business [172]. - The company may have limited ability to assess the management of prospective target businesses, potentially leading to poor management choices [177]. Share Issuance and Dilution - The company may issue up to 50,000,000 ordinary shares, with 41,180,324 authorized but unissued ordinary shares available for issuance [163]. - The issuance of additional ordinary shares or preference shares may significantly dilute the equity interest of investors in the initial public offering [164]. - The exercise price of the warrants may be adjusted to 115% of the higher of the market value or newly issued price if certain conditions are met, potentially complicating the initial business combination [237]. - The company has the ability to redeem outstanding warrants at a price of $0.01 per warrant if the last reported sales price of ordinary shares equals or exceeds $18.00 for any 20 trading days within a 30 trading-day period [232]. Miscellaneous - The company is classified as an "emerging growth company," allowing it to take advantage of certain exemptions from disclosure requirements, which may affect the attractiveness of its securities to investors [244]. - The company may remain a smaller reporting company until certain market value or revenue thresholds are exceeded, which could limit the comparability of its financial statements with other public companies [246]. - Provisions in the company's amended memorandum may inhibit takeovers, potentially limiting future share prices [254]. - The company may discourage unsolicited takeover proposals through provisions such as two-year director terms and the ability to issue new preference shares [255]. - If the company completes a business combination with a foreign entity, it will be subject to various additional risks, including currency fluctuations and trade barriers [260].
Metal Sky Star Acquisition Corporation(MSSAU) - 2022 Q4 - Annual Report