Company Formation and Structure - The company was incorporated in the Cayman Islands on September 28, 2023, for tax-neutrality and efficient international transactions[18]. - The company issued 17,250,000 shares of common stock at approximately $0.0145 per share, totaling $25,000, and later converted these shares into Class B ordinary shares[22]. - The company is classified as an "emerging growth company" and will remain so until it has total annual gross revenue of at least $1.235 billion or the market value of its ordinary shares held by non-affiliates exceeds $700 million[66]. - The company is also a "smaller reporting company," which allows it to provide only two years of audited financial statements until certain revenue and market value thresholds are met[67]. Initial Public Offering (IPO) - The initial public offering (IPO) on March 20, 2024, consisted of 6,900,000 units sold at $10.00 per unit, generating total gross proceeds of $69,000,000[23]. - A total of $69,345,000 from the IPO and private placement was placed in a U.S.-based trust account for public shareholders[26]. - The company has granted underwriters a 45-day option to purchase an additional 1,035,000 units to cover over-allotments[23]. - The company generated gross proceeds of $69,000,000 from its IPO of 6,900,000 units at $10.00 per unit on March 22, 2024[160]. - A total of $69,345,000 from the IPO and private placement was placed in a trust account, which will be invested in U.S. government treasury bills or money market funds[161]. Financial Performance and Projections - The company currently has no revenue and has incurred losses since inception, relying on the sale of securities and loans for operations[28]. - For the year ended November 30, 2024, the company reported a net income of $1,915,703, consisting of interest income of $2,491,779, offset by general and administrative expenses of $492,131 and related party administrative fees of $83,945[158]. - The company incurred a net loss of $18,853 for the year ended November 30, 2023, all attributed to formation and operating costs[159]. - The company expects to incur significant professional costs and transaction costs in pursuit of a Business Combination, raising substantial doubt about its ability to continue as a going concern[166]. - The company has $69,000,000 available for a business combination, assuming no redemptions before fees and expenses[68]. Business Combination Strategy - The management team aims to identify attractive acquisition opportunities across various industries and geographic locations[21]. - The company intends to focus on private companies with compelling economics and clear paths to positive operating cash flow for its initial business combination[41]. - The company aims to acquire businesses with significant revenue and earnings growth potential through existing and new product development, increased production capacity, and synergistic follow-on acquisitions[45]. - The company intends to structure its initial business combination so that the post-transaction entity will own or acquire at least 50% of the target business's voting securities[52]. - The company has a deadline of 15 months to complete its initial business combination, with the possibility of extending this period up to 21 months by depositing $690,000 for each extension[51]. Shareholder Rights and Redemption - Public shareholders will have the opportunity to redeem shares at a price equal to the amount in the trust account divided by the number of outstanding public shares, subject to limitations[94]. - The company will not redeem public shares if it would cause net tangible assets to fall below $5,000,001, ensuring compliance with SEC regulations[104]. - The redemption rights are irrevocable once the business combination is approved, ensuring shareholders cannot change their decision post-approval[109]. - If the initial business combination is not completed, public shareholders will receive a redemption price of approximately $10.05 per share, subject to potential adjustments[118]. Management and Governance - The company currently has two officers and intends to devote necessary time to its affairs until the initial business combination is completed[130]. - The board of directors consists of four members, three of whom are independent under SEC and Nasdaq rules[201]. - The audit committee is composed of independent directors, with Mr. Miller serving as chairman, and is responsible for reviewing financial statements and ensuring compliance with applicable laws[209]. - The compensation committee, chaired by Mr. McCabe, oversees executive compensation and approves reimbursement of expenses incurred by management in identifying potential target businesses[213]. - The company has established an audit committee financial expert, Mr. Brandon Miller, who meets the SEC's qualifications[212]. Risks and Challenges - The company may face intense competition from other entities with similar business objectives, which may limit its ability to acquire larger target businesses[53]. - The company may encounter restrictions on foreign currency remittance from its PRC subsidiaries, which could impact its ability to pay dividends or service debt[47]. - The company may face risks associated with selecting financially unstable or early-stage target businesses[77]. - There is a risk that bankruptcy claims could deplete the trust account, affecting the redemption amount for shareholders[122]. Operational Considerations - The company plans to use net proceeds from the IPO primarily for identifying and evaluating target businesses and performing due diligence[165]. - The company has not selected any specific business combination target and has not initiated substantive discussions with any potential targets[154]. - The company expects to incur increased expenses related to being a public company, including legal and compliance costs[157]. - The company has not identified any off-balance sheet arrangements or commitments as of November 30, 2024[167].
Black Hawk Acquisition Corporation(BKHAU) - 2024 Q4 - Annual Report