Financial Overview - The Company completed its IPO on January 23, 2024, raising gross proceeds of $57,500,000 from the sale of 5,750,000 units at $10.00 per unit[17]. - A private placement of 240,000 units was also completed simultaneously, generating total proceeds of $2,400,000[18]. - The total net proceeds of $57,500,000 from the IPO and private placement were deposited into a trust account for public shareholders[19]. - The company raised approximately $57,500,000 from the IPO and $2,400,000 from the Private Placement Units, with net cash provided by financing activities totaling $59,037,309 for the year ended December 31, 2024[121]. - As of December 31, 2024, the company had cash of $809,301 and working capital of $415,647[84]. - The company intends to use substantially all funds held in the Trust Account to complete its Business Combination and for working capital to finance operations of the target business[122]. - The company has incurred significant costs to remain publicly traded and may need to raise additional capital to meet operational expenditures prior to the initial Business Combination[127][128]. - If a Business Combination is not consummated by April 23, 2025, the company faces mandatory liquidation and dissolution, raising substantial doubt about its ability to continue as a going concern[129]. Merger and Business Combination - The Company entered into a Merger Agreement on April 8, 2024, with an aggregate consideration of $2,300,000,000 to be paid entirely in stock at a price of $10.00 per share[20]. - The First Amendment to the Merger Agreement was executed on September 3, 2024, modifying the share exchange terms and increasing the termination fee to $2,000,000[23]. - The Company plans to complete its initial business combination within 15 months from the IPO closing, extendable to 18 months if necessary[29]. - Public shareholders will have the opportunity to redeem shares at a price equal to the amount in the trust account, initially anticipated to be $10.00 per share[28]. - If the initial business combination is not completed, the Company will distribute the trust account amount to public shareholders and enter voluntary liquidation[30]. - The actual per-share redemption amount may be less than $10.00 due to potential claims from creditors[36]. - Public shareholders can redeem shares for funds from the trust account if the initial business combination is not completed within 15 months, extendable to 18 months[41]. - The company has extended the time available to consummate a Business Combination to April 23, 2025, with a deposit of $575,000 into the Trust Account[111]. Legal and Regulatory Risks - The company faces significant legal and operational risks when considering business combinations with PRC companies, including regulatory reviews and restrictions on foreign ownership[42]. - The PRC government has implemented new cybersecurity measures that may affect companies with over one million users seeking to list abroad[45]. - The legal environment in the PRC presents uncertainties that could limit the enforcement of contractual arrangements with VIEs[47]. - The company may face challenges in obtaining foreign currency for dividend payments from its PRC subsidiaries due to regulatory restrictions[49]. - The M&A Rules require offshore special purpose vehicles to obtain CSRC approval for overseas listings, creating uncertainty for compliance[56]. - The CSRC's Trial Administrative Measures, effective March 31, 2023, clarify requirements for overseas securities offerings by domestic companies[58]. - The PRC Cybersecurity Law mandates that personal information and important data must be stored in China, affecting potential target businesses[59]. - PRC companies can only pay dividends from distributable profits, which may limit the ability of the combined company to distribute profits post-acquisition[62]. - The company may face challenges in enforcing legal judgments in China due to the lack of reciprocal recognition of foreign judgments[53]. Management and Governance - The management team possesses diverse skills in business development, finance, and marketing, which are expected to aid in sourcing and executing business combinations[25]. - The company is classified as an emerging growth company and is eligible for certain exemptions from reporting requirements[79]. - The company will remain an emerging growth company until it has total annual gross revenue of at least $1.235 billion or issues more than $1.0 billion in non-convertible debt in a three-year period[81]. - The Chief Executive Officer and Chief Financial Officer concluded that the disclosure controls and procedures were effective at a reasonable assurance level as of December 31, 2024[146]. - Management assessed the effectiveness of internal control over financial reporting as of December 31, 2024, and determined that it was effective based on COSO criteria[150]. - The company has established three standing committees: an audit committee, a compensation committee, and a nominating committee, all of which are composed solely of independent directors[166]. - The audit committee is chaired by Mr. Frank Clifford Chan, who is recognized as an "audit committee financial expert" under SEC rules[167]. - The compensation committee has the authority to retain compensation consultants and is responsible for overseeing executive compensation policies and plans[169]. - The nominating committee is tasked with selecting nominees for the Board of Directors and considers various qualifications, including management experience and integrity[170]. Shareholder and Equity Structure - Winky Investments Limited holds 1,677,500 ordinary shares, representing 21.8% of the total outstanding shares[198]. - The company has 7,686,250 ordinary shares issued and outstanding as of March 6, 2025[196]. - The company has a total of 1,677,500 ordinary shares beneficially owned by its executive officers and directors as a group[198]. - The sponsor purchased 1,437,500 Class B ordinary shares for an aggregate price of $25,000, approximately $0.017 per share, representing 21.8% of the issued shares[202]. - The sponsor acquired 240,000 Private Placement Units at $10.00 each, totaling $2,400,000, with restrictions on transfer until after the initial business combination[204]. - There will be no redemption rights or liquidating distributions for founder shares or private placement units if a business combination is not completed within 15 months, extendable to 18 months[205]. - Independent directors will receive $1,000 per annum, totaling $3,000 annually for three directors, ceasing upon completion of the initial business combination[206]. Operational Performance - The company has not generated any operating revenues to date and does not expect to do so until after the completion of its initial business combination[113]. - The company generates non-operating income from interest on investments held in the Trust Account[114]. - For the year ended December 31, 2024, the company reported a net income of $2,002,561, compared to a net loss of $76,827 for the year ended December 31, 2023[115][120]. - The company had net cash used in operating activities of $728,008 for the year ended December 31, 2024, with changes in operating assets and liabilities providing $39,607 of cash[120]. - As of December 31, 2024, the company had investments held in the Trust Account totaling $60,270,176, including approximately $2,770,176 of interest income[122]. Compliance and Ethics - The company has adopted a code of conduct and ethics applicable to its directors, officers, and employees[184]. - The company has adopted insider trading policies to promote compliance with applicable laws and regulations[185]. - The company indemnifies its officers and directors against all expenses incurred in legal proceedings, provided they acted in good faith[187]. - The company has adopted a Clawback Policy to recover excess incentive compensation based on erroneous data[195]. - Related party transactions will require majority approval from the audit committee, ensuring independence and conflict of interest assessments[214]. - The company will not consummate a business combination with an entity affiliated with the sponsor or directors without an independent fairness opinion[216].
JVSPAC Acquisition Corp.(JVSA) - 2024 Q4 - Annual Report