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, with a potential request for an additional $100,000 from accrued interest if necessary [87]. - 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 of $5,404,164 [138]. - The Initial Public Offering (IPO) raised gross proceeds of $230,000,000 from the sale of 23,000,000 Units at $10.00 per Unit, including the full exercise of the over-allotment option [141]. - As of December 31, 2024, the company had marketable securities in the Trust Account totaling $235,529,521, consisting of U.S. Treasury Bills with a maturity of 185 days or less [144]. - 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]. Business Combination and Strategy - 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]. - The management team has significant experience in the life sciences industry, which is expected to aid in identifying and evaluating potential acquisition targets [28]. - The company anticipates sourcing potential initial Business Combination targets from various unaffiliated sources, including investment bankers and private investment funds [45]. - The company may engage finders for potential transactions, with fees typically tied to the completion of a transaction [47]. - The company has not yet identified a target for its initial Business Combination, leading to uncertainty regarding its financial condition and business prospects [113]. - The company may attempt to complete multiple Business Combinations simultaneously, increasing costs and risks associated with its operations [105]. - The company may face significant risks related to selecting a suitable business target and completing its initial Business Combination within the prescribed time frame [104]. Shareholder Rights and Redemption - The company will provide Public Shareholders 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]. - 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]. - If shareholder approval is not sought, redemptions will be conducted under tender offer rules, remaining open for at least 20 business days [71]. - The redemption price for Public Shares will equal the aggregate amount in the Trust Account divided by the number of outstanding Public Shares, net of taxes and up to $100,000 for dissolution expenses [84]. - If the initial Business Combination is not completed, Public Shareholders who elected to redeem their shares will not receive any pro rata share of the Trust Account [82]. - The company intends to require Public Shareholders to submit redemption requests two business days prior to the scheduled vote on the initial Business Combination [73]. - The Sponsor, officers, and directors have waived rights to liquidating distributions from the Trust Account for Founder Shares if the initial Business Combination is not completed [85]. Management and Governance - The management team will conduct a due diligence review of prospective target businesses, which may include meetings with management, document reviews, and financial assessments [31]. - The company’s management may not remain with the combined company post-Business Combination, and the future management's qualifications are uncertain [50]. - The company may face conflicts of interest as its officers and directors may pursue other business ventures during the search for a Business Combination [44]. - 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 a diverse board with expertise in investment, biotechnology, and corporate governance [168][169][170]. - 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 and is responsible for executive compensation oversight [182]. - The company has adopted a Clawback Policy to recover erroneously awarded incentive-based compensation in the event of a financial restatement [194]. - The company has adopted a Code of Business Conduct and Ethics applicable to all directors, officers, and employees [188]. Financial Condition and Risks - The company has not taken steps to secure third-party financing for the Business Combination, and there is no assurance it will be available [48]. - The company may need to obtain additional financing to complete its Business Combination or due to potential redemptions of Public Shares [147]. - The company may not be able to return $10.00 per share to Public Shareholders if bankruptcy claims deplete the Trust Account [92]. - The company is subject to competition from other SPACs, private equity groups, and public companies, which may limit its ability to acquire larger target businesses due to financial resource constraints [94]. - The company may face challenges in acquiring target businesses that can provide financial statements prepared in accordance with GAAP or IFRS, potentially limiting its pool of candidates [97]. - The company may face adverse effects from international economic and political uncertainties, including potential tariffs and regulatory changes [115]. - 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 generated any operating revenues to date and does not expect to do so until after completing its Business Combination [137]. Compliance and Reporting - The company is classified as an "emerging growth company," allowing it to take advantage of certain exemptions from reporting requirements, which may affect the attractiveness of its securities to investors [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 is focused on enhancing its segment reporting disclosures in line with new accounting standards [151]. - Management believes that no recently issued accounting standards will materially affect the financial statements [152]. - Disclosure controls and procedures were evaluated and found not effective as of the end of the fiscal year ended December 31, 2024 [157]. - The management report on internal control over financial reporting is not included due to a transition period for newly public companies [159]. - No changes in internal control over financial reporting were reported [160]. - 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.(LPAAU) - 2024 Q4 - Annual Report