Financial Condition - As of December 31, 2024, the company had $212 in its operating bank account and a working capital deficit of $1,293,798, raising substantial doubt about its ability to continue as a going concern [280]. - The net proceeds from the initial public offering, over-allotment, and the sale of private placement warrants amounted to $222,436,490, including $196,000,000 from the IPO after underwriting costs [282]. - Approximately $4,704,977 remained in the Trust Account as of February 14, 2025, after share redemptions related to extending the business combination deadline [282]. - The company may need to seek additional financing if the net proceeds from the IPO are insufficient for the initial business combination or to fund operations [290]. - The company has no operating history and no revenues, making it difficult for investors to evaluate its ability to achieve business objectives [350]. Business Combination Risks - The company may incur substantial debt to complete an initial business combination, which could adversely affect its leverage and financial condition [281]. - If the initial business combination is not completed within the required time, public shareholders may receive approximately $10.20 per share upon liquidation of the trust account [289]. - The company has not yet entered into a definitive agreement with any specific target business, making it difficult to ascertain capital requirements for any transaction [290]. - Compliance with the Sarbanes-Oxley Act may increase the time and costs associated with completing a business combination [295]. - The company may face significant risks related to the adequacy of internal controls of target businesses, potentially increasing time and costs for business combinations [296]. - Loss of key personnel from target businesses post-combination could negatively impact operations and profitability [297]. - The company may encounter additional burdens and risks when pursuing business combinations outside the United States, including regulatory approvals and due diligence challenges [298][299]. - Economic, political, and social conditions in the countries of operation could significantly affect the company's results and prospects [309]. - Exchange rate fluctuations may adversely impact the financial condition and results of operations if a non-U.S. target is acquired [311]. Regulatory and Compliance Issues - The company is subject to evolving regulatory measures, which may increase administrative expenses and compliance risks [306][307]. - Management's unfamiliarity with U.S. securities laws post-combination could lead to regulatory issues and resource allocation challenges [308]. - The company is incorporated in the Cayman Islands, which may limit investors' ability to enforce their rights in U.S. courts [326]. - The rights of shareholders and fiduciary responsibilities of directors differ under Cayman Islands law compared to U.S. law, potentially complicating legal actions [328]. - The company has not adopted a policy to prevent conflicts of interest among directors and executive officers, which may affect business combination decisions [323]. Shareholder and Governance Matters - Initial shareholders beneficially own 93% of the issued and outstanding ordinary shares, potentially exerting substantial influence over shareholder votes [292]. - Amendments to the company's governing documents require a special resolution, which may facilitate the completion of a business combination that some shareholders may not support [285]. - Public shareholders can only access funds from the trust account under specific conditions, including the completion of an initial business combination or a shareholder vote [325]. - Provisions in the company's memorandum and articles of association may inhibit unsolicited takeover proposals, affecting share price and management entrenchment [331]. - Only holders of founder shares will vote on director elections prior to the initial business combination, potentially classifying the company as a "controlled company" under Nasdaq rules [332]. Warrant and Share Issues - The company may amend warrant terms with the approval of at least 50% of outstanding public warrants, which could adversely affect holders [334]. - The warrant agreement designates New York courts as the exclusive forum for certain disputes, potentially limiting favorable judicial options for warrant holders [335]. - If additional Class A ordinary shares are issued below a specified price, it may complicate the consummation of an initial business combination [339]. - The company has the ability to redeem outstanding public warrants at a price of $0.01 per warrant if the closing price of Class A ordinary shares equals or exceeds $18.00 per share for any 20-trading days within a 30 trading-day period [340]. - The company can also redeem outstanding public warrants at a price of $0.10 per warrant with a minimum of 30 days' prior written notice if the closing price of Class A ordinary shares equals or exceeds $10.00 per share [341]. - The units consist of one-half of one redeemable warrant, which may result in the units being worth less than units of other blank check companies [344]. - The company is not currently registering Class A ordinary shares issuable upon exercise of the warrants under the Securities Act, which may prevent investors from exercising their warrants [345]. - If the warrants become redeemable, the company may exercise its redemption right even if it cannot register or qualify the underlying Class A ordinary shares for sale under applicable state securities laws [345]. - The warrants may become exercisable for a security other than Class A ordinary shares if the company is not the surviving entity in its initial business combination [347]. - The grant of registration rights to the sponsor may complicate the completion of the initial business combination and adversely affect the market price of Class A ordinary shares [348]. Company Classification and Reporting - The company is classified as an emerging growth company, which allows it to take advantage of certain exemptions from disclosure requirements, potentially making its securities less attractive to investors [354]. - The company has elected not to opt out of the extended transition period for new financial accounting standards, which may complicate comparisons with other public companies [356]. - The company is classified as a "smaller reporting company," allowing it to provide only two years of audited financial statements [357]. - The market value of the company's ordinary shares held by non-affiliates must exceed $250 million or annual revenues must exceed $100 million to lose smaller reporting company status [357]. - The company is not required to provide certain disclosures under Item 7A due to its smaller reporting company status [439].
Healthcare AI Acquisition Corp.(HAIAU) - 2024 Q4 - Annual Report