Business Combination Process - The company is in the process of completing its initial Business Combination, specifically the EEW Business Combination, which is expected to enhance shareholder value [13]. - The company has extended the Combination Period from October 19, 2023, to July 19, 2024, allowing more time to finalize the Business Combination [16]. - The company plans to seek approval to further extend the Combination Period beyond April 19, 2025, in the upcoming 2025 Proxy Statement [19]. - The company must complete its initial Business Combination by April 19, 2025, which is 42 months from the closing of the Initial Public Offering [30]. - The obligations to consummate the EEW Business Combination are subject to various conditions, including the approval of shareholders and the absence of any Material Adverse Effect [62]. - The EEW Business Combination Agreement may be terminated if the Closing does not occur by January 19, 2025, with potential extensions of up to three additional months [65]. - The EEW Business Combination will result in the Company becoming a wholly-owned subsidiary of Pubco, with all outstanding securities of the Company being cancelled in exchange for Pubco securities [43]. - The transaction includes provisions for drag-along rights to facilitate the transfer of shares to certain former shareholders of an affiliate of EEW [53]. Financial Information - The company completed its Initial Public Offering on October 19, 2021, raising gross proceeds of $200 million from the sale of 20 million Units at $10.00 per Unit [25]. - A total of $200 million was placed in the Trust Account, consisting of $196 million from the Initial Public Offering and $4 million from the Private Placement [28]. - The amount in the Trust Account is approximately $11.14 per Public Share as of December 31, 2024, providing Public Shareholders with the opportunity to redeem their shares at this price upon completion of the initial Business Combination [94]. - The per-share redemption amount in the Trust Account is approximately $11.14 as of December 31, 2024, before taxes payable [120]. - The company has access to up to $27.72 million from funds outside the Trust Account to cover potential claims, with a reserve for claims and liabilities of up to $50,000 [125]. - The Trust Account may be reduced below $10.00 per Public Share due to claims from creditors, affecting the redemption price for shareholders [124]. - The company must have at least $5,000,001 in net tangible assets at Closing unless shareholders approve amendments to eliminate this requirement [60]. - The Company and Pubco must collectively have an aggregate amount of cash and cash equivalents equal to or exceeding $15 million at Closing [63]. Shareholder Actions and Rights - The 2023 EGM resulted in 4,998,734 Public Shares not being redeemed, while 16,045,860 Public Shares were redeemed at approximately $10.54 per share [17]. - The company has entered into Non-Redemption Agreements to encourage investors not to redeem their shares during the EGM [17]. - Public Shareholders are restricted from redeeming more than 15% of the Public Shares sold in the Initial Public Offering without prior consent [108]. - The company will provide Public Shareholders with redemption rights either through a general meeting or a tender offer, allowing flexibility in how the initial Business Combination is executed [97]. - The redemption offer will remain open for at least 20 business days, and the initial Business Combination cannot be completed until the expiration of this period [102]. - The company intends to return any certificates delivered by Public Shareholders who elected to redeem their shares if the proposed initial Business Combination is not approved [113]. Risks and Uncertainties - The company is subject to various risks and uncertainties that may cause actual results to differ materially from forward-looking statements [15]. - The company may incur losses from costs related to identifying and evaluating target businesses if the initial Business Combination is not completed, reducing available funds for future transactions [86]. - The company has a lack of business diversification, which may expose it to risks associated with the performance of a single business post-combination [87]. - The funds in the Trust Account could be subject to claims from creditors, which would take priority over Public Shareholders' claims [121]. - In the event of bankruptcy, the Trust Account funds could be subject to claims from third parties, potentially reducing the amount returned to shareholders [126]. - The company faces competition from other SPACs and private equity groups, which may limit its ability to acquire larger target businesses due to financial resource constraints [129]. Share Structure and Sponsor Agreements - The Legacy Sponsor transferred 3,093,036 Founder Shares and 4,645,398 Private Placement Warrants to the new Sponsor during the Sponsor Handover on August 31, 2023 [31]. - Following the Sponsor Handover and Founder Share Conversions, there are 5,681,485 Class A Ordinary Shares and 2,110,122 Class B Ordinary Shares outstanding, with Legacy Sponsor and Sponsor holding approximately 28.45% and 39.70% of the total shares, respectively [41]. - The company issued 600,000 Class A Ordinary Shares on October 19, 2023, following the approval of the Founder Share Amendment Proposal [16]. - The company issued 600,000 Class A Ordinary Shares to the Sponsors upon the conversion of an equal number of Class B Ordinary Shares on October 19, 2023 [37]. - An additional 2,600,000 Founder Shares were converted into Class A Ordinary Shares on a one-for-one basis on July 24, 2024 [38]. - The Sponsor Agreement stipulates that if unpaid transaction expenses exceed $5 million, the Sponsor will either pay the excess in cash or forfeit shares equivalent to the excess amount [74]. Regulatory and Compliance Matters - The 2024 SPAC Rules adopted by the SEC may materially affect the company's ability to negotiate and complete its initial Business Combination, potentially increasing costs and time [14]. - The EEW Registration Statement must be declared effective by the SEC prior to Closing [60]. - Financial statements of potential target businesses must comply with GAAP or IFRS, which may limit the pool of candidates for Business Combinations [132]. - The company is required to file periodic reports with the SEC, including audited financial statements [131]. - The company is classified as an "emerging growth company," allowing it to take advantage of certain reporting exemptions [136]. - The company will remain a smaller reporting company until specific revenue and market value thresholds are exceeded [139]. Future Plans and Expectations - The company anticipates that the value of the Founder Shares will be substantially higher than the nominal price paid for them post-Business Combination [13]. - The company expects to receive proprietary deal flow opportunities due to the track record and business relationships of its officers and directors, enhancing the potential for successful acquisitions [82]. - The company may seek to raise additional funds through a private offering of debt or equity securities to complete its initial Business Combination, targeting businesses with enterprise values greater than the net proceeds from the Initial Public Offering [81]. - The company may raise funds through equity-linked securities or loans to satisfy cash requirements for the initial Business Combination [106]. - The Earnout Shares will vest if the volume-weighted average price for Pubco Ordinary Shares reaches $11.00 or $12.00 per share during the Earnout Period [50]. - Sellers may receive up to an additional 4.2 million Earnout Shares if certain performance targets are met, including a consolidated EBITDA of at least $41.9 million for the fiscal year ending April 30, 2025 [46][50].
pass Digital Acquisition (CDAQ) - 2024 Q4 - Annual Report