IPO and Financing - The company completed its Initial Public Offering on August 14, 2024, raising gross proceeds of $100 million from the sale of 10 million Class A ordinary shares at $10.00 per share[26]. - An additional $3 million was generated from the Private Placement Shares sold to the Sponsor at the same price of $10.00 per share[26]. - A total of $100 million from the IPO and Private Placement was placed in a Trust Account, which may only be invested in U.S. government securities or held as cash until the Business Combination is completed or the Trust Account is distributed[27]. - The company may need to seek additional financing if the cash portion of the purchase price exceeds the amount available from the Trust Account after satisfying redemptions by Public Shareholders[40]. - The company may seek to raise additional funds through a private offering of debt or equity securities to complete the Business Combination, which could lead to material dilution for Public Shareholders[42]. - The company has committed to a Sponsor Loan of up to $1,750,000 to finance transaction costs related to the Business Combination, with approximately $333,000 drawn as of December 31, 2024[162]. - The company has approximately $102.0 million available for the Business Combination as of December 31, 2024, subject to certain deductions[66]. - The company has access to $25,000 held outside of the Trust Account as of December 31, 2024, to cover potential claims and expenses[119]. Business Combination - The company has a 24-month period until August 14, 2026, to complete the Business Combination, with the possibility of extensions subject to shareholder approval[29]. - The Business Combination must involve a target company with an aggregate fair market value of at least 80% of the assets held in the Trust Account at the time of signing a definitive agreement[36]. - The company intends to effectuate the Business Combination using cash from the Trust Account, net proceeds from securities sales, or a combination of these methods[67]. - If the Business Combination is not completed within the specified period, the company will cease operations and redeem Public Shares at a price equal to the amount in the Trust Account[29]. - If the Business Combination is not consummated by the end of the Combination Period, the company will cease operations and redeem Public Shares at a cash price based on the Trust Account balance[111]. - The company may continue to seek a different target for the Business Combination if the proposed one is not completed[110]. - The company is focusing on acquiring businesses in financial services, healthcare, real estate services, technology, and software industries[31]. - The company is focusing its search for target businesses in the financial services, healthcare, real estate services, technology, and software industries[152]. - The company may face increased competition for attractive acquisition targets due to the rise in the number of SPACs going public in recent years[131]. - The company expects intense competition from other SPACs and private investors, which may increase the cost and complexity of finding suitable acquisition targets[44]. Shareholder Rights and Redemption - The Public Shares are traded on Nasdaq under the symbol "CEP," with trading commencing on August 13, 2024[30]. - Public Shareholders can redeem their shares regardless of whether they vote for or against the proposed Business Combination[103]. - The company will provide Public Shareholders with the opportunity to redeem their shares either through a general meeting or a tender offer[93]. - If more than 25% of Public Shares are sought for redemption by a shareholder or group, that shareholder will be restricted from exercising redemption rights on the excess shares[105]. - The tender offer for redeeming shares will remain open for at least 20 business days[98]. - The company must comply with SEC rules regarding tender offers and proxy solicitations[101][102]. - If shareholder approval is required, the company needs at least 3,600,001 (36.0%) of the 10,000,000 Public Shares to vote in favor of the Business Combination for it to be approved[100]. - The company anticipates that any purchases of Public Shares from shareholders will be at a price no higher than the redemption price[94]. - The redemption amount for Public Shareholders upon dissolution is approximately $10.35 per share as of December 31, 2024, including $0.15 per share from the Sponsor Note[115]. - The company may only redeem Public Shares if net tangible assets are at least $5,000,001 immediately prior to or upon consummation of the Business Combination[104]. - The company cannot assure shareholders that the actual per-share redemption amount will not be substantially less than $10.35 due to potential creditor claims[115]. - If the Business Combination is not completed, Public Shareholders who elected to redeem their shares will not receive any pro rata share from the Trust Account[109]. Management and Governance - The management team has extensive experience in sourcing, structuring, and executing business acquisitions across various geographies and market conditions[35]. - The management team is not obligated to devote a specific number of hours to the company's affairs, which may vary based on the Business Combination process[54]. - The company has engaged CF&Co. as an advisor for the Business Combination, which will receive a Marketing Fee upon consummation[77]. - The company has a diverse board with members having extensive experience in finance, marketing, and management[194][195][197][198]. - The Chief Financial Officer has been with the company since November 2021 and has extensive experience in accounting policy and financial reporting[195]. - The Chairman and CEO has been in position since December 2024 and has a background in driving strategy and overseeing projects[194]. - The board consists of four directors, with terms divided into two classes serving two-year terms[202]. - The company has not established specific minimum qualifications for director nominees, focusing instead on educational background, professional experience, and integrity[214]. - The Compensation Committee is responsible for reviewing and approving executive compensation and may retain external advisers while considering their independence[208]. - The company has adopted an Insider Trading Policy to promote compliance with trading laws and Nasdaq rules[216]. - The Audit Committee consists of three members, with two meeting the independent director standard; an additional independent director will be appointed by the one-year anniversary of the Initial Public Offering[206]. - The company has adopted a Clawback Policy compliant with SEC and Nasdaq rules, allowing for the recovery of erroneously awarded incentive-based compensation from executive officers within a three-year lookback period[210]. - The company has agreed to pay independent directors $50,000 per year, with additional payments to the Sponsor for office space and administrative support totaling $10,000 per month[219]. - There are no material legal proceedings involving any director or executive officer[200]. Financial Performance and Reporting - For the year ended December 31, 2024, the company reported a net income of approximately $1,538,000, primarily from $1,882,000 of interest income on investments held in the Trust Account[166]. - The fair value of investments in U.S. government treasury bills held in the Trust Account was approximately $101,976,000 as of December 31, 2024[173]. - As of December 31, 2024, the company had cash of $25,000 and a working capital deficit of approximately $190,000[161]. - The company has not generated any operating revenues to date and expects to incur increased expenses as a result of being a public company[165]. - The company has not paid any cash dividends on the Ordinary Shares to date and does not intend to do so prior to the completion of the Business Combination[142]. - The company has filed a Registration Statement on Form 8-A with the SEC to voluntarily register the Public Shares under Section 12 of the Exchange Act[126]. - The company has no off-balance sheet arrangements or contractual obligations as of December 31, 2024[179]. - The company maintained effective internal control over financial reporting as of December 31, 2024[186]. - There were no changes to the internal control over financial reporting during the fiscal year ended December 31, 2024 that materially affected the controls[188]. - The management evaluated the effectiveness of disclosure controls and procedures and concluded they were effective as of the end of the reporting period[184]. - The company does not expect that its disclosure controls and procedures will prevent all errors and instances of fraud[185]. - The company is evaluating the potential impacts of new climate-related disclosure requirements that may significantly increase the complexity of periodic reporting[160]. Regulatory and Compliance - 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 Public Shares to investors[61]. - The company will remain an emerging growth company until the earlier of the last day of the fiscal year following August 14, 2029, achieving total annual gross revenue of at least $1.235 billion, or being deemed a large accelerated filer[127]. - The company is classified as a "smaller reporting company" and will maintain this status until the market value of its Ordinary Shares held by non-affiliates exceeds $250 million or annual revenues exceed $100 million[64]. - The company is classified as a "controlled company" under Nasdaq standards, allowing it to utilize exemptions from certain corporate governance requirements[204]. - The SEC's new 2024 SPAC Rules may materially affect the company's ability to negotiate and complete the Business Combination, potentially increasing costs and time[159]. - The company has not encountered any cybersecurity incidents since its Initial Public Offering[134]. - The company has not requested the Sponsor to reserve for indemnification obligations, raising concerns about the Sponsor's ability to satisfy such obligations[118].
Cantor Equity Partners, Inc.(CEP) - 2024 Q4 - Annual Report