Financial Condition and Liquidity - As of December 31, 2024, the company had $61,037 available outside the Trust Account to fund working capital requirements[158]. - The company has approximately $22,206,637 available to complete its Business Combination and pay related fees and expenses after redemptions[195]. - The company has raised substantial doubt about its ability to continue as a going concern for approximately one year from the date of filing due to liquidity conditions[287]. - The company is subject to significant costs in pursuing financing and acquisition plans, which may exceed initial estimates[286]. - If the initial Business Combination is not completed by March 3, 2026, the company will face mandatory liquidation and dissolution[286]. Trust Account and Shareholder Redemption - Public shareholders may receive approximately $11.89 per share upon liquidation of the Trust Account, subject to certain conditions[159]. - If third-party claims reduce the Trust Account, the per-share redemption amount could be less than $11.89[161]. - The Sponsor is liable if claims reduce the Trust Account below $10.00 per Public Share, but may not have sufficient funds to cover such obligations[163]. - Public Shareholders may receive approximately $11.89 per share in the event of liquidation of the Trust Account, based on estimates as of December 31, 2024[173]. - Upon failure to complete the initial Business Combination, the company will redeem Public Shares at a per-share price based on the aggregate amount in the Trust Account, minus taxes payable up to $100,000[288]. - There will be no liquidating distributions for warrant holders if the initial Business Combination is not completed within the Combination Period[288]. Business Combination Plans and Strategy - The company plans to focus its search for a suitable initial Business Combination on companies developing breakthrough technology in life sciences or sustainable technology, but may pursue opportunities in various industries[174]. - The company intends to focus its search for target businesses in the healthcare industry, particularly those based in Asia (excluding China, Hong Kong, and Macau)[201]. - The company may only be able to complete one Business Combination with the proceeds from the IPO and the sale of Private Placement Warrants, leading to a lack of diversification[195]. - The company may attempt to complete multiple Business Combinations simultaneously, which could increase costs and risks[199]. - If the company cannot complete its initial Business Combination, it may have to abandon the proposed transaction and seek alternative candidates[187]. Regulatory and Compliance Risks - If deemed an investment company, the company may face compliance requirements that could hinder its ability to complete the initial Business Combination[169]. - The company must ensure that investment securities do not constitute more than 40% of its assets to avoid being classified as an investment company[170]. - Compliance with the Sarbanes-Oxley Act may increase the time and costs necessary to complete an acquisition, particularly if the target company is not compliant with internal control provisions[180]. - The company is subject to the Foreign Corrupt Practices Act, which could expose it to liabilities if violations occur[281]. - The company must comply with various SEC regulations, which may become more stringent under the 2024 SPAC Rules effective July 1, 2024[277]. Conflicts of Interest and Governance - Key personnel may negotiate compensation agreements that could create conflicts of interest in selecting target businesses[189]. - Conflicts of interest may arise due to officers and directors being affiliated with entities engaged in similar business activities[218]. - The company may face potential conflicts of interest if it engages in a Business Combination with target businesses affiliated with its Initial Shareholders, officers, or directors[222]. - Initial Shareholders are expected to own approximately 75% of the issued and outstanding ordinary shares at the time of any shareholder vote, allowing them to approve amendments without Public Shareholder votes[238]. Market and Economic Risks - Companies in the life sciences sector face significant regulatory risks that can adversely affect revenues and profitability[203]. - The expiration of patents can lead to market share loss and reduced profits due to competition from generic products[205]. - Healthcare companies are sensitive to changes in government reimbursement policies, which can impact profitability[205]. - Economic, political, and legal conditions in the country of operations could significantly impact business results and prospects[273]. - Changes in laws or regulations could adversely affect the company's ability to negotiate and complete business combinations[276]. Share Structure and Securities - The company has 7,369,890 Class A ordinary shares and 17,939,643 warrants issued and outstanding, with warrants exercisable at $11.50 beginning 30 days after an initial Business Combination[232]. - The company may issue additional Class A ordinary shares or preference shares to complete its initial Business Combination, which could significantly dilute the equity interest of investors in the IPO[231]. - The company has not registered the Class A ordinary shares issuable upon exercise of the warrants under federal or state securities laws, potentially causing the warrants to expire worthless[235]. - The company may issue additional Class A ordinary shares or equity-linked securities for capital raising at a Newly Issued Price of less than $9.20 per share, which could impact the funding of the initial Business Combination[248]. Operational Risks - The complexity of potential Business Combination targets may delay or prevent achieving desired operational improvements[209]. - Key personnel's departure could negatively impact operations and profitability post-combination[213]. - The company may face challenges in assessing the management of prospective target businesses, which could affect the success of the Business Combination[190]. - The absence of a specified maximum redemption threshold may allow the company to complete a Business Combination even if a substantial majority of Public Shareholders disagree[182]. Miscellaneous - The company is classified as an "emerging growth company," allowing it to take advantage of certain exemptions from disclosure requirements, which may affect the attractiveness of its securities to investors[260]. - The company has not opted out of the extended transition period for new financial accounting standards, which may complicate financial comparisons with other public companies[261]. - The Sponsor and its affiliates invested a total of $700,000 for extensions from January 3, 2024, to May 3, 2024[215]. - The Sponsor purchased 5,502,490 Founder Shares for approximately $0.00043 per share, totaling $25,000[215].
Valuence Merger Corp. I(VMCAU) - 2024 Q4 - Annual Report