IPO and Financial Overview - The company completed its Initial Public Offering (IPO) on June 13, 2024, raising net proceeds of $86.25 million from the sale of 8,625,000 Class A ordinary shares at $10.00 per share[21]. - The company has no operating history or revenues to date and does not expect to generate operating revenues until it completes its initial business combination[19]. - The company has $88,654,397 held in the trust account available for the initial business combination, assuming no redemptions[52]. - The company has access to $1,129,684 from the proceeds of its Initial Public Offering to cover potential claims and estimated liquidation costs of approximately $100,000[106]. - As of December 31, 2024, there were 470,088,750 authorized but unissued Class A ordinary shares available for issuance[199]. - Approximately $85,204,397 is available in the Trust Account for the initial business combination after deducting $3,450,000 of deferred underwriting fees[207]. Business Strategy and Focus - The focus is on acquiring companies in the healthcare sector, particularly in life sciences and medical technology, targeting North American and European markets[20]. - The company aims to complete business combinations with an aggregate fair market value of at least 80% of the net assets held in the Trust Account[35]. - The management team has prior experience with public acquisition vehicles, including successful business combinations with Immatics and Cerevel[23][24]. - The company believes that life sciences and medical technology companies will benefit from being publicly traded, gaining access to capital and increased customer awareness[31]. - The company anticipates that target business candidates may be sourced from various unaffiliated sources, leveraging relationships with venture capitalists and investment banking firms[33]. Management and Governance - The sponsor, Perceptive Advisors, manages over $8.4 billion in regulatory assets and has invested in 210 companies in the healthcare sector as of December 31, 2024[22]. - Affiliates of Perceptive Advisors and members of the board own 2,156,250 Class B ordinary shares, which may create conflicts of interest in selecting a target business[40]. - The company’s independent directors may choose not to take legal action against the sponsor to enforce indemnification obligations, which could impact the recovery of funds in the Trust Account[105]. - The company is classified as an "emerging growth company" and a "smaller reporting company," allowing for reduced disclosure obligations[50][51]. Acquisition Process and Challenges - The company has 24 months from the closing of the Initial Public Offering to consummate the initial business combination, with the option to seek shareholder approval for an extension[46]. - The company may face competition from other investment vehicles managed by Perceptive Advisors for acquisition opportunities[41]. - The company may not be able to complete its initial business combination if potential target businesses cannot provide required financial statements[122]. - The company may face competition from well-established entities in acquiring target businesses, which could limit its ability to complete initial business combinations[171]. - The company may need to incur substantial debt to complete a business combination, adversely affecting leverage and financial condition[206]. Redemption and Shareholder Rights - Public shareholders will have the opportunity to redeem their Class A ordinary shares at a per-share price of approximately $10.00, based on the amount in the Trust Account prior to the business combination[81]. - The company anticipates needing 3,091,251 public shares, or 35.8% of the 8,625,000 public shares sold in the Initial Public Offering, to be voted in favor of the initial business combination for approval[85]. - If the initial business combination is not completed, public shareholders who elected to redeem their shares will not be entitled to redeem for their pro rata share of the Trust Account[96]. - Initial Shareholders and affiliates will not possess redemption rights with respect to their securities in connection with the business combination[79]. - The redemption process will require public shareholders to tender their shares electronically or physically prior to the scheduled vote on the business combination[92]. Financial Risks and Liabilities - The redemption amount per share could be less than $10.00 if claims by creditors reduce the Trust Account balance, and shareholders may be liable for claims made by creditors up to the amount received from the Trust Account[105]. - If a bankruptcy petition is filed, the proceeds in the Trust Account may be subject to claims from third parties, potentially affecting the ability to return $10.00 per public share to shareholders[107]. - The company may face claims of punitive damages if it pays public shareholders from the Trust Account before addressing creditor claims[187]. - The board of directors may be viewed as breaching fiduciary duties if it distributes proceeds to shareholders before addressing creditor claims in bankruptcy[188]. - The Trust Account may be reduced below $10.00 per public share due to claims from creditors, impacting the redemption amount for public shareholders[183]. Market Conditions and Competition - The healthcare industry represented approximately $3.8 trillion in total U.S. national health expenditures in 2019, accounting for about 18% of the U.S. GDP[29]. - The number of special purpose acquisition companies (SPACs) has increased significantly, leading to potential scarcity of attractive targets and increased competition, which may raise costs or hinder the ability to find suitable targets[166]. - The market for directors and officers liability insurance has become less favorable, potentially increasing costs and complicating negotiations for an initial business combination[167]. - The company may face challenges in identifying suitable target businesses due to geopolitical tensions and market volatility, which could impact the completion of its initial business combination[166]. Operational Considerations - The company will conduct thorough due diligence on prospective target businesses, including meetings with management and reviews of financial information[64]. - The company may incur costs related to identifying and evaluating target businesses, which could reduce available funds for future combinations[65]. - The company may depend entirely on the performance of a single business post-combination, limiting diversification and increasing risk[66]. - The company may need to borrow funds from its sponsor or management team if the net proceeds from the Initial Public Offering and Private Placement shares are insufficient for operations over the next 24 months[173]. - The company may need additional financing to complete its initial business combination due to potential cash shortfalls or significant public share redemptions[57].
Perceptive Capital Solutions Corp(PCSC) - 2024 Q4 - Annual Report