IPO and Fundraising - The company completed its Initial Public Offering (IPO) on December 6, 2023, selling 6,900,000 units at $10.00 per unit, generating gross proceeds of $69,000,000[15]. - The company also executed a private placement of 332,000 units, raising an additional $3,320,000[16]. - A total of $69,690,000 from the IPO and private placement proceeds has been placed in a trust account for the benefit of public shareholders[17]. - The trust account has an initial amount of $69,690,000, which includes approximately $690,000 for deferred underwriting commissions[78]. - The company intends to effectuate its initial business combination using cash from the IPO proceeds, private placement, shares, or new debt[79]. - The company may seek to raise additional funds through private offerings of debt or equity securities in connection with the initial business combination[82]. Business Strategy and Target Sectors - The company intends to pursue small cap businesses in the biopharmaceutical and medical technology sectors, focusing on high growth prospects and experienced management teams[51]. - The management team aims to create shareholder value by guiding emerging healthcare companies towards commercialization, leveraging their industry experience[54]. - The investment strategy focuses on acquiring companies with a track record of success and attractive risk-adjusted equity returns for shareholders[56]. - The company is not currently targeting businesses in China but may consider opportunities with significant ties to the region, which could present regulatory challenges[26]. - The company will not engage in business combinations with entities that operate through variable interest entities (VIEs), limiting potential acquisition candidates in China[26]. Regulatory and Compliance Issues - The company has a 20-year tax exemption from the Cayman Islands government, which applies to profits, income, gains, or appreciations[13]. - Recent regulatory changes in China may impact the ability to conduct business combinations with PRC-based companies, introducing legal and operational risks[27]. - The combined company's ability to pay dividends will depend on dividends from its PRC subsidiaries, which are subject to restrictions under PRC laws[41]. - PRC companies are required to set aside at least 10% of their after-tax profits each year to fund a statutory reserve until it reaches 50% of registered capital[42]. - The PRC government imposes controls on the conversion of Renminbi (RMB) into foreign currencies, which may restrict the ability of PRC subsidiaries to remit sufficient foreign currency for dividends[43]. - The company believes it is not required to obtain approvals from PRC government authorities to issue securities to foreign investors or to list on a U.S. exchange[71]. - The company may face approval delays or sanctions if future regulations require permission for its business combination or securities issuance[71]. - The company is subject to PRC laws that may require approvals for issuing securities to foreign investors, but it currently believes no such approvals are necessary[67]. Financial Performance and Projections - The company reported a net income of $171,389 for the period from April 27, 2023, to December 31, 2023, primarily from interest income on investments held in the trust account[140]. - The company incurred formation and operational costs totaling $28,459 during the same period[140]. - The company has working capital of approximately $555,876 as of December 31, 2023[141]. - The company has not generated any operating revenues to date and will only do so after completing its initial business combination[139]. - As of December 31, 2023, the company had $69,889,848 in its trust account and $580,717 in its operating bank account[141]. Shareholder Rights and Redemption - Public shareholders will have the opportunity to redeem their shares at a per-share price of approximately $10.10, based on the amount in the trust account, regardless of their voting decision on the proposed business combination[101]. - If the initial business combination is not completed, public shareholders who elected to redeem their shares will receive their pro rata share from the trust account, estimated at $10.10 per share[115]. - Public shareholders are restricted from redeeming more than 20% of the shares sold in the IPO to prevent manipulation of the redemption process[104]. - Initial shareholders and officers have agreed to vote in favor of any proposed business combination and not to redeem their shares[99]. - The company may require public shareholders to tender their shares to the transfer agent to exercise redemption rights, which may incur nominal costs[106]. Management and Governance - The management team has significant experience in identifying potential target businesses, particularly in the intelligent transportation sector[19]. - The Chief Financial Officer has a strong background in accounting and financing, having worked with major international firms[21]. - The audit committee consists of three independent directors, ensuring compliance with Nasdaq listing standards[170]. - The compensation committee is responsible for reviewing and approving the compensation of the Chief Executive Officer and other officers annually[172]. - Independent directors will review all payments made to initial shareholders, officers, and directors on a quarterly basis[166]. - The company has established guidelines for selecting director nominees, emphasizing notable achievements and ethical standards[176]. - Potential conflicts of interest may arise due to multiple business affiliations of the company's officers and directors[180]. Risks and Challenges - The lack of business diversification may expose the company to significant risks associated with relying on a single business[93]. - The company may face challenges in evaluating the management team of the target business, which could impact future performance[94]. - The company has determined that if it fails to complete an initial business combination within the prescribed period following the IPO, it raises substantial doubt about its ability to continue as a going concern[144]. - The company may engage in private purchases of shares to meet closing conditions for a business combination, which could affect the public float of its shares[110]. Miscellaneous - The company has not identified any specific business combination target and has not engaged in substantive discussions regarding potential acquisitions[59]. - The company has not entered into any off-balance sheet financing arrangements or established any special purpose entities[145]. - The company has no critical accounting policies or estimates as of December 31, 2023[147]. - The company does not expect its disclosure controls and procedures to prevent all errors and instances of fraud[152]. - There are no disagreements with accountants on accounting and financial disclosure[149].
Aimei Health Technology Co., Ltd(AFJKU) - 2023 Q4 - Annual Report