IPO and Financial Proceeds - The company completed its IPO on July 27, 2023, raising gross proceeds of $149.5 million by selling 14,950,000 units at $10.00 per unit[28]. - A private placement with KVC Sponsor LLC generated an additional $6.79 million from the sale of 678,575 private units at $1.00 per unit[29]. - The total net proceeds of $151.37 million from the IPO and private placement were deposited into a trust account for public shareholders[30]. - A total of $151,368,750 from the IPO and private placement was deposited in a Trust Account for the benefit of public shareholders[127]. - The company incurred $6,597,980 in IPO-related costs, including $2,990,000 in underwriting fees[136]. - The company has no off-balance sheet financing arrangements as of December 31, 2024[145]. - The company has no long-term debt or capital lease obligations, only a monthly fee of $10,000 to its Sponsor for administrative services starting from August 1, 2023[146]. - The company is committed to paying a Deferred Discount of 2% of the gross offering proceeds from the Initial Public Offering, amounting to $2,990,000, to the underwriter upon consummation of the Business Combination[148]. - As of December 31, 2024, the company was not subject to any market or interest rate risk, with net proceeds from the initial public offering invested in U.S. government treasury obligations with a maturity of 180 days or less[155]. Merger and Acquisition Strategy - The company has entered into a merger agreement with Medera Inc., with an aggregate consideration of $622.56 million, payable in newly issued shares valued at $10.00 each[35]. - The merger will result in the issuance of approximately 62,578,505 ordinary shares to Medera shareholders as part of the transaction[35]. - The company aims to focus on sectors such as biotechnology, consumer goods, and agriculture, emphasizing sustainability and ESG imperatives in its acquisition strategy[26][31]. - The company intends to target businesses with a total enterprise value not exceeding $1 billion, focusing on those with strong growth potential and industry leadership[38]. - The selection process for target companies will leverage a broad network of contacts, including investment bankers and private business owners, to ensure a strong pipeline of acquisition leads[36]. - The company seeks to acquire targets with resilient business models and experienced management teams aligned with investor interests, aiming to create shareholder value through operational improvements[40]. - The company intends to utilize cash from the IPO and private placement for business combinations, with no specific allocation for other purposes[41]. - Target businesses must have a fair market value of at least 80% of the trust account balance at the time of the business combination agreement[49]. - The company anticipates acquiring 100% of the equity interests or assets of the target business, but may also consider less than 100% acquisitions[49]. - The net tangible asset threshold for consummating a business combination is set at $5,000,001 to avoid being subject to Rule 419[57]. - The company may need to seek third-party financing if the target business imposes working capital conditions, which could limit acquisition opportunities[57]. - The company has not selected any specific business combination target and has not initiated substantive discussions with any potential targets[133]. - The company intends to use substantially all net proceeds from the IPO to acquire a target business and cover related expenses[137]. - If the company cannot complete its Initial Business Combination by March 27, 2025, it will redeem 100% of outstanding public shares[139]. Shareholder Rights and Redemption - Shareholders may convert their public shares into their pro rata share of the trust account amount, regardless of their vote on the business combination[56]. - Public shareholders may have to wait up to 21 months after signing a letter of intent to receive a pro rata share of the trust account[57]. - If the business combination is not completed, the company will redeem 100% of outstanding public shares for a pro rata portion of the funds in the trust account, with a potential redemption price of $10.125 per share[76]. - The trust account funds may be subject to claims from creditors, which could reduce the amounts available for public shareholders[77]. Regulatory and Compliance Risks - The company is considering acquiring a China-based company, which may involve risks related to PRC laws and regulations[80]. - Approval from Chinese authorities may be required for the company to continue listing on U.S. exchanges post-business combination[81]. - The company has not received any denial to list on a U.S. exchange but may face future regulatory challenges[83]. - If permission for continued listing is denied or rescinded post-business combination, the company may incur increased compliance costs[85]. - The company faces uncertainties regarding future actions by the PRC government that could adversely affect its ability to offer securities and potentially decrease their value significantly[86]. - The company is subject to various risks related to business combinations with China-based companies, including potential delays, increased operating costs, and negative publicity[87]. - The company is incorporated under BVI law, which may limit shareholders' rights compared to U.S. companies, particularly regarding derivative actions and fiduciary responsibilities[89]. Management and Governance - The management team has over 55 years of combined experience in private equity investments, corporate operations, and mergers and acquisitions, enhancing the likelihood of successful business combinations[19]. - The company has a management team with extensive experience in finance, operations, and M&A, including the CEO Kenneth Wong and CFO Alex Davidkhanian[167][170]. - The audit committee consists of independent directors and is chaired by Mr. Peter Ding, focusing on financial statement reviews and risk management policies[191]. - The compensation committee, chaired by Prof. Albert Yu, is responsible for reviewing executive compensation plans and recommending amendments[196]. - The company will only enter into business combinations approved by a majority of Independent Directors[188]. - Mr. Peter Ding is qualified as an "audit committee financial expert" under SEC rules[192]. - The nominating committee, chaired by Mr. William Chu, oversees the selection of board nominees based on various qualifications[194]. - The company has established procedures for handling complaints regarding accounting and internal controls[193]. - Directors are not required to commit full time to the company's affairs, which may lead to potential conflicts of interest[198]. - The company has not entered into any employment agreements with its executive officers and has not made any agreements to provide benefits upon termination of employment[212]. - The company will pay an administrative fee of $10,000 per month to the sponsor for up to 9 months, extendable to 21 months if the Combination Period is extended[214]. - No compensation, including finders or consulting fees, has been paid or will be paid to existing shareholders or directors prior to the consummation of a business combination[214]. - Directors or management team members who remain post-combination may receive consulting or management fees, which will be disclosed to shareholders[215]. - The company does not intend to take action to ensure management team members maintain their positions after the initial business combination[216]. - All ongoing and future transactions with officers and directors will require prior approval by the audit committee and a majority of uninterested independent directors[207]. - The company has agreed not to consummate an initial business combination with an entity affiliated with any officers or directors unless certain conditions are met[208]. - All existing shareholders, including officers and directors, have agreed to vote their shares in favor of any proposed initial business combination[206]. - The company believes all filing requirements applicable to executive officers and directors were filed in a timely manner[211]. - A code of conduct and ethics has been adopted for directors, officers, and employees in accordance with federal securities laws[209]. Financial Performance - For the year ended December 31, 2024, the company reported a net income of $7,409,180, primarily from dividend and interest earned on marketable securities held in the Trust Account[143]. - The company had a net income of $1,454,758 for the year ended December 31, 2023, with dividend income of $1,933,397 and operating costs of $478,676[144]. - As of December 31, 2024, the company had cash of $54,548 and investments held in the Trust Account of $70,373,065[134]. - The company has not considered the effect of warrants sold in the Initial Public Offering and private placements in the calculation of diluted net income (loss) per share, as their exercise is contingent upon future events[154]. - The company’s ordinary shares feature certain redemption rights that are considered to be outside of its control, classified as temporary equity[153]. - The company’s disclosure controls and procedures were evaluated as effective as of December 31, 2024, by its Certifying Officers[158]. - There were no changes in the internal control over financial reporting during the most recent fiscal quarter that materially affected the company's internal control[161]. - The company has identified critical accounting policies that require management to make estimates and assumptions affecting reported amounts of assets and liabilities[149]. - The company accounts for warrants as either equity-classified or liability-classified instruments based on specific terms and applicable guidance[150].
Keen Vision Acquisition (KVAC) - 2024 Q4 - Annual Report