IPO and Financing - The company completed its Initial Public Offering on July 15, 2024, raising gross proceeds of $230 million from the sale of 23 million Units at $10.00 per Unit, which was oversubscribed [21]. - An additional $6 million was generated from the private sale of 6 million Private Placement Warrants, each exercisable at $11.50 per share [22]. - A total of $230 million from the IPO and Private Placement was placed in a Trust Account maintained by Continental [23]. - As of December 31, 2024, the company has $23.55 million available for a Business Combination, before redemptions and deferred underwriting fees [48]. - The amount in the Trust Account was approximately $10.24 per Public Share as of December 31, 2024 [64]. - The company has approximately $1,250,000 in proceeds held outside the Trust Account to fund costs associated with its dissolution plan [87]. - The company has access to approximately $850,338 from the Initial Public Offering proceeds to cover potential claims and estimated liquidation costs of around $100,000 [91]. - The company may raise funds through equity or debt to meet cash requirements for the initial Business Combination if necessary [76]. - The company may need to obtain additional financing to complete its Business Combination or due to potential redemptions of Public Shares [147]. Business Combination Requirements - The company must complete its initial Business Combination by July 15, 2026, which is 24 months from the IPO closing date [24]. - If the initial Business Combination is not completed within the specified period, the company will redeem 100% of the Public Shares at approximately $10.00 per share [37]. - Nasdaq rules require that the company must complete one or more business combinations with an aggregate fair market value of at least 80% of the assets held in the Trust Account [38]. - The company intends to focus on emerging growth healthcare companies, particularly in the biotechnology sector, for its initial Business Combination [29]. - Shareholder approval may be required for the initial Business Combination under Nasdaq's listing rules if certain conditions are met [55]. - The company may seek to extend the Combination Period by amending its Amended and Restated Charter, subject to shareholder approval [25]. - If the initial Business Combination is not completed within the designated completion window, the company will redeem Public Shares at a price equal to the aggregate amount in the Trust Account divided by the number of outstanding Public Shares [84]. - The company will provide Public Shareholders with the opportunity to redeem shares at a price equal to the amount in the Trust Account divided by the number of outstanding Public Shares [64]. Management and Governance - The management team has significant experience in the life sciences industry, which is expected to aid in identifying and negotiating with potential acquisition targets [27]. - The company has a diverse board with expertise in venture capital, biotechnology, and corporate governance, enhancing its strategic direction [168][169][170]. - The board of directors includes experienced individuals such as Ryan Gilbert, Chris Ehrlich, and Jurgen van de Vyver, with extensive backgrounds in finance and biotechnology [165][166][167]. - The company has established an Audit Committee consisting of independent directors, including Ms. Stack, Mr. Atwood, and Mr. Ferguson [179]. - The Audit Committee is responsible for overseeing the integrity of financial statements and compliance with legal requirements [181]. - The Compensation Committee, chaired by Mr. Ferguson, includes independent members Ms. Stack and Mr. Atwood [182]. - The Compensation Committee reviews and approves executive compensation and incentive plans [187]. - The company adopted a Code of Business Conduct and Ethics applicable to all directors, officers, and employees [188]. Financial Performance and Risks - The company generated a net income of $5,129,519 from February 21, 2024, to December 31, 2024, primarily from interest earned on marketable securities held in the Trust Account [138]. - The company incurred total offering costs of $15,574,281, which included a cash underwriting fee of $4,000,000 and a deferred underwriting fee of $10,950,000 [142]. - Cash used in operating activities from February 21, 2024, to December 31, 2024, amounted to $472,305, with net income impacted by interest and unrealized gains on marketable securities [143]. - The company has not paid any cash dividends on its Ordinary Shares and does not intend to do so prior to completing its initial Business Combination [126]. - The company may face conflicts of interest as its Sponsor and officers may pursue other business ventures during the search for a Business Combination [44]. - The lack of business diversification may pose risks as the company's success may depend entirely on the performance of a single business post-combination [49]. - There is uncertainty regarding the financial performance of potential target companies, which may not have an established record of revenue or cash flows [105]. - The company faces risks related to selecting a suitable business target and completing its initial Business Combination within the prescribed time frame [104]. Compliance and Internal Controls - The company will evaluate its internal control procedures for compliance with the Sarbanes-Oxley Act for the fiscal year ending December 31, 2025 [98]. - Disclosure controls and procedures were evaluated and found not effective as of the end of the fiscal year ended December 31, 2024 [157]. - The company has not provided a report on internal control over financial reporting due to a transition period for newly public companies [159]. - There were no changes in internal control over financial reporting reported [160]. - Management believes that no recently issued accounting standards will materially affect the financial statements [152]. Shareholder Matters - Public Shareholders can redeem up to 15% of shares sold in the Initial Public Offering without prior consent, which aims to prevent large shareholders from blocking Business Combinations [77]. - A quorum for shareholder meetings requires at least one-third of issued and outstanding shares to be represented, with a minimum of 7,500,001 Public Shares needed for approval of the initial Business Combination [70]. - The redemption process will require Public Shareholders to deliver share certificates or use the DWAC system prior to the scheduled vote or tender offer deadline [79]. - Shareholders can withdraw their redemption requests at any time before the specified date in the proxy or tender offer documents [81]. - The company’s Sponsor, officers, and directors have waived their rights to liquidating distributions from the Trust Account for Founder Shares if the initial Business Combination is not completed [85]. Miscellaneous - The company is classified as an "emerging growth company," allowing it to take advantage of certain reporting exemptions, which may affect the attractiveness of its securities [100]. - The company is classified as a "smaller reporting company" and will maintain this status until its market value reaches $250 million or annual revenues exceed $100 million [103]. - The company has a tax exemption for 30 years from the Cayman Islands government, exempting it from certain taxes on profits and income [99]. - The company has not encountered any cybersecurity incidents since its Initial Public Offering, but acknowledges the risks associated with cybersecurity [118]. - The company has not established any limit on the amount of consulting or management fees that may be paid to directors or members of Management after the initial Business Combination [200].
Launch One Acquisition Corp.(LPAA) - 2024 Q4 - Annual Report