IPO and Fundraising - The Company completed its Initial Public Offering (IPO) on May 12, 2022, raising gross proceeds of $225 million from the sale of 22,500,000 units at $10.00 per unit[14]. - An additional 3,375,000 units were issued due to the underwriter's over-allotment option, generating an extra $33.75 million[14]. - The Company sold 14,400,000 private placement warrants at $1.00 each, generating gross proceeds of $14.4 million[15]. - The net proceeds from the Initial Public Offering and the private placement will provide the company with $259,606,250 to use for completing the initial business combination[130]. - The total funds in trust available for initial business combination are $266,512,500[193]. Business Strategy and Focus - The Company intends to focus its acquisition efforts on high-growth sectors in India, including healthcare, software, consumer services, IT services, and fintech[17]. - The Company aims to target companies with an enterprise value exceeding $1 billion, emphasizing appropriate valuations and strong management teams[18]. - The management team has extensive experience in sourcing, structuring, and executing mergers and acquisitions to drive growth[17]. - The company anticipates leveraging its global network and relationships to access unique investment opportunities before they become widely available[30]. - The company may pursue acquisition opportunities in various industries, including early-stage or financially unstable businesses[109]. Risks and Challenges - The Company has identified risks related to the COVID-19 pandemic and geopolitical tensions, which may impact its search for potential acquisition targets[16]. - The ongoing geopolitical tensions, particularly due to the invasion of Ukraine, may adversely affect the company's search for business combinations[60]. - The COVID-19 pandemic continues to pose risks that could impact the company's ability to complete business combinations due to market volatility and liquidity issues[62]. - The company may face challenges in engaging financial advisors for identifying potential targets, which could hinder timely business combinations[70]. - Economic conditions in India, including inflationary pressures, could adversely affect profitability following a business combination[164]. Shareholder Rights and Redemption - Public shareholders have the right to redeem their shares for cash, but this may limit the company's ability to complete desirable business combinations[54]. - The ability of public shareholders to redeem shares for cash may deter potential business combination targets, complicating the completion of a desirable transaction[50]. - If the company does not consummate its initial business combination within the required time period, public shareholders may receive only approximately $10.30 per share upon liquidation[45]. - If a significant number of public shareholders exercise their redemption rights, it may hinder the company's ability to meet closing conditions for a business combination[51]. - The company may not redeem public shares if it would cause net tangible assets to fall below the required minimum upon completion of the business combination[51]. Governance and Management - The company is classified as an "emerging growth company," allowing it to take advantage of certain exemptions from reporting requirements, which may affect the attractiveness of its securities to investors[39]. - The company is also classified as a "smaller reporting company," which allows for reduced disclosure obligations, including providing only two years of audited financial statements[42]. - The management team possesses extensive industry knowledge and a strong track record of generating substantial risk-adjusted returns for shareholders across various market cycles[29]. - The company may engage its sponsor or affiliates as advisors for business combinations, which may create potential conflicts of interest[115]. - Conflicts of interest may arise as officers and directors are involved in multiple business ventures, potentially impacting their commitment to the company[179]. Financial Condition and Projections - The company may depend on loans from its sponsor or management team to fund its search for a target business if net proceeds from the Initial Public Offering are insufficient[45]. - The company may incur substantial debt to complete a business combination, which could adversely affect its leverage and financial condition[128]. - The company may face significant write-downs or charges post-business combination, negatively impacting financial condition and securities value[153]. - The company must maintain a market value of listed securities of at least $50 million and a minimum of 1.1 million publicly held shares to remain listed on Nasdaq[189]. - If Nasdaq delists the company's securities, it could face reduced liquidity and increased trading restrictions, potentially classifying its shares as "penny stocks"[190]. Legal and Compliance Issues - There are currently no material legal proceedings pending against the company or its management team[43]. - The company must ensure it does not qualify as an investment company under the Investment Company Act to avoid burdensome compliance[97]. - The company’s ability to complete an initial business combination may be affected by compliance obligations under the Sarbanes-Oxley Act, increasing time and costs[148]. - Proposed SEC rules could materially impact the company's ability to engage advisors and complete business combinations[102]. - Changes in laws or regulations may adversely affect the company's ability to complete its initial business combination[101]. Share Structure and Dilution - The company is authorized to issue up to 479 million Class A ordinary shares and 20 million Class B ordinary shares, with 28,875,000 Class A and 6,468,750 Class B shares available for issuance as of December 31, 2022[116]. - The issuance of additional shares may significantly dilute the equity interest of investors from the Initial Public Offering[118]. - The nominal purchase price for founder shares was $25,000, approximately $0.0035 per share, which may lead to significant dilution of public shares upon the initial business combination[192]. - The initial offering price for units was $10.00, with an anticipated trust account value of $10.30 per public share, implying a potential 20% decrease to an implied value of $8.24 per share upon business combination[192]. - If the trading price of ordinary shares drops to $2.00, the value of founder shares would still exceed the sponsor's initial investment[193].
Investcorp AI Acquisition Corp(IVCAU) - 2022 Q4 - Annual Report