AlphaTime Acquisition p(ATMC) - 2024 Q4 - Annual Report

Part I Business The company is a Cayman Islands-domiciled blank check company (SPAC) focused on a business combination in Asia, having signed a definitive merger agreement with HCYC Group Company Limited - The company is a blank check company incorporated on September 15, 2021, for the purpose of effecting a business combination and has generated no revenue[17] - On January 5, 2024, the Company entered into a definitive Agreement and Plan of Merger with HCYC Group Company Limited, a Cayman Islands exempted company[29][30] - The deadline to consummate a business combination has been extended to October 4, 2025, contingent on monthly extension payments of $55,000 deposited into the Trust Account[27] Trust Account and Share Redemption Summary | Date | Event | Shares Redeemed | Redemption Price/Share | Amount Removed from Trust | Remaining Trust Balance | Outstanding Shares | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Dec 28, 2023 | First Redemption | 2,160,774 | ~$10.78 | ~$23,302,146 | ~$51,108,602 | 6,873,426 | | Dec 20, 2024 | Second Redemption | 3,403,976 | ~$11.41 | ~$38,852,320 | ~$15,240,284 | 3,469,450 | - The company's acquisition criteria focus on targets with strong management, revenue and earnings growth potential, and strong free cash flow generation[41] - The company will not consummate a business combination with an entity or business with China operations consolidated through a VIE structure[39] Risk Factors The company faces substantial risks as a SPAC, including potential liquidation, limited resources due to redemptions, extensive risks related to acquiring a business in China, and a Nasdaq non-compliance notice - The company's independent auditor's report expresses substantial doubt about its ability to continue as a "going concern" due to a working capital deficiency of $3,314,762 as of December 31, 2024[74] - The company received a notice from Nasdaq on November 29, 2024, for non-compliance with the Minimum Public Holders Rule, with a deadline of May 28, 2025, to regain compliance[137][139] - There are significant risks associated with a potential business combination in China, including changes in PRC laws, government intervention, and cybersecurity regulations from the CAC[65][256][261] - The requirement to complete a business combination within a limited timeframe may give potential targets leverage in negotiations and reduce the company's ability to conduct thorough due diligence[89] - The Holding Foreign Companies Accountable Act (HFCAA) poses a risk of delisting if the company's auditor cannot be inspected by the PCAOB for two consecutive years[325][327][335] Risks Related to our Search for, Consummation of, or Inability to Consummate, a Business Combination This section outlines risks inherent in finding and completing a business combination, including no operating history, liquidation risk, and a depleted trust account making the company less attractive to targets Risks Related to Our Securities This section details risks associated with the company's securities, primarily the potential for NASDAQ delisting due to non-compliance and dilution from future share issuances Risks Related to Our Management This section focuses on risks related to the company's leadership, including high dependency on the management team and potential conflicts of interest due to their obligations to other businesses Post Business Combination Risks This section describes risks that could emerge after a business combination, including potential asset write-downs, inability to maintain control, and general operational risks Risks Related to Acquiring and Operating a Business Outside of the United States This section details the heightened risks of acquiring a non-U.S. business, with a strong emphasis on the legal, regulatory, and political uncertainties in the People's Republic of China General Risk Factors This section covers broader risks, including potential adverse tax changes, difficulties for U.S. investors in protecting their interests, and reduced disclosure requirements as an emerging growth company Unresolved Staff Comments The company reports that it has no unresolved staff comments - Not applicable[350] Cybersecurity As a SPAC with no operations, the company does not consider itself to face significant cybersecurity risk and has not adopted a formal risk management program - The company states it does not face significant cybersecurity risk due to its nature as a SPAC with no operations[351] - No formal cybersecurity risk management program has been adopted; management is responsible for assessing threats[352] Properties The company maintains its executive offices in New York, NY, with space provided by its Sponsor for a monthly fee - The company's executive office is located at 500 Fifth Avenue, Suite 938, New York, NY 10110, with costs covered by a $10,000 monthly fee paid to the Sponsor[354] Legal Proceedings The company reports no material pending litigation, arbitration, or governmental proceedings - None[355] Mine Safety Disclosures This item is not applicable to the company - Not applicable[356] Part II Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities The company's securities trade on Nasdaq, no dividends are planned, and significant shareholder redemptions have reduced outstanding shares and trust account funds - The company's Units (ATMCU), Ordinary Shares (ATMC), Rights (ATMCR), and Warrants (ATMCW) are traded on the Nasdaq Global Market[359] - The company has not paid and does not intend to pay any cash dividends on its Ordinary Shares[361] Shareholder Redemptions | Date | Event | Shares Redeemed | Redemption Price/Share | Total Redemption Amount | | :--- | :--- | :--- | :--- | :--- | | Dec 28, 2023 | First Redemption | 2,160,774 | ~$10.78 | ~$23,302,146 | | Dec 20, 2024 | Second Redemption | 3,403,976 | ~$11.41 | ~$38,852,320.60 | - Following two redemptions, the number of outstanding Ordinary Shares was reduced to 3,469,450[369] Management's Discussion and Analysis of Financial Condition and Results of Operations The company is a pre-combination SPAC with no revenue, a working capital deficit of $3.3 million, and substantial doubt about its ability to continue as a going concern - The company is a blank check company with no operations or revenues to date, with activities limited to organizational matters and searching for a business combination[371][373] Results of Operations | Period | Net Income | Source of Income | Operating Costs/Loss | | :--- | :--- | :--- | :--- | | Year ended Dec 31, 2024 | $1,498,591 | $2,782,552 (Trust Account) | $1,283,961 | | Year ended Dec 31, 2023 | $1,941,118 | $3,130,199 (Trust Account) | $1,189,081 | - As of December 31, 2024, the company had a cash balance of $1,425 and a working capital deficit of $3,314,762, raising substantial doubt about its ability to continue as a going concern[380][389] - The company has relied on promissory notes from its Sponsor to fund extensions, with $1,262,500 outstanding as of December 31, 2024[380][402] Quantitative and Qualitative Disclosures About Market Risk As a smaller reporting company, this disclosure is not required, but the company notes no material exposure to interest rate risk from its trust account investments - The company is a smaller reporting company and is not required to provide this information[417] - Funds in the Trust Account are invested in short-term U.S. government securities, and the company believes there is no material exposure to interest rate risk[390] Financial Statements and Supplementary Data This section formally incorporates the company's financial statements and supplementary data by reference - This section refers to the financial statements which appear following Item 15 of the report[418] Changes in and Disagreements with Accountants on Accounting and Financial Disclosure The company reports no changes in or disagreements with its accountants - None[419] Controls and Procedures Management concluded that the company's disclosure controls and internal control over financial reporting were effective as of December 31, 2024 - Management concluded that the company's disclosure controls and procedures were effective as of December 31, 2024[420] - Based on an assessment using the COSO framework, management concluded that the company's internal control over financial reporting was effective as of December 31, 2024[424] Other Information The company reports no other information for this item - None[426] Disclosure Regarding Foreign Jurisdictions that Prevent Inspections This item is not applicable to the company - Not applicable[427] Part III Directors, Executive Officers and Corporate Governance This section details the company's leadership, board structure, and governance, noting a majority-independent board with established audit and compensation committees - The company has five directors and two executive officers, with biographies provided for key personnel[429][430][431] - The board has determined that three of five directors are independent, satisfying the NASDAQ requirement for a majority-independent board[438] - The Audit Committee and Compensation Committee consist entirely of independent directors[443][445] - The company has adopted a Code of Ethics but does not have a standing nominating committee; nominations are handled by independent directors[449][454] Executive Compensation No officers or directors have received cash compensation, though the Sponsor is reimbursed for administrative services, with future compensation to be set post-business combination - No cash compensation has been paid to any officers or directors[468] - The company reimburses its Sponsor $10,000 per month for office space, utilities, and administrative services[468] - After a business combination, compensation for remaining management will be determined by a compensation committee composed of independent directors[469] Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters The Sponsor and Chairwoman are the principal shareholders, with all officers and directors as a group beneficially owning approximately 58.18% of outstanding shares Beneficial Ownership as of April 15, 2025 | Beneficial Owner | Number of Shares | Percentage of Outstanding | | :--- | :--- | :--- | | Xinfeng Feng (Chairwoman) | 2,134,200 | 61.51% | | Alphamade Holding LP (Sponsor) | 1,099,200 | 31.87% | | All executive officers and directors as a group (6 individuals) | 2,018,000 | 58.18% | Certain Relationships and Related Transactions, and Director Independence This section outlines transactions with the Sponsor, including the initial share purchase, private placements, and promissory notes to fund business combination extensions - The Sponsor acquired 1,725,000 Founder Shares for an initial investment of $25,000[476] - The Sponsor purchased an aggregate of 409,200 Private Placement Units at $10.00 per unit[477] - The company entered into non-interest bearing promissory notes with the Sponsor to fund extensions, with $1,262,500 outstanding as of Dec 31, 2024[481][482] - An administrative services agreement is in place for the Sponsor to provide services for a $10,000 monthly fee[478] - The board has determined that directors Li Wei, Wen He, and Michael Coyne are independent[488] Principal Accountant Fees and Services The company's auditor is UHY LLP, with aggregate audit fees of approximately $192,821 for FY2024 and $117,989 for FY2023 Accountant Fees (UHY LLP) | Fee Type | FY 2024 | FY 2023 | | :--- | :--- | :--- | | Audit Fees | $192,821 | $117,989 | | Audit-Related Fees | $0 | $0 | | Tax Fees | $0 | $0 | | All Other Fees | $0 | $0 | Part IV Exhibits and Financial Statement Schedules This section lists key documents filed with the Form 10-K, including the merger agreement with HCYC Group, charter documents, and various related agreements - Key exhibits filed include the Merger Agreement with HCYC, charter documents, warrant and rights agreements, and support agreements related to the merger[494][495] Form 10-K Summary The company reports no summary for this item - None[497] Financial Statements Report of Independent Registered Public Accounting Firm The auditor issued a clean opinion on the financial statements but included an explanatory paragraph expressing substantial doubt about the company's ability to continue as a going concern - The auditor's report expresses substantial doubt about the Company's ability to continue as a going concern[506] - The going concern uncertainty is based on significant costs, insufficient working capital, and the requirement to complete a business combination or face liquidation[506] Financial Statements Data The financial statements show total assets of $15.26 million, a shareholders' deficit of $5.73 million, and a net income of $1.5 million for 2024 derived from trust account interest Balance Sheet Summary (as of Dec 31, 2024) | Account | Amount (USD) | | :--- | :--- | | Assets | | | Cash | $1,425 | | Investment held in Trust Account | $15,240,284 | | Total Assets | $15,257,022 | | Liabilities | | | Total Current Liabilities | $3,331,500 | | Deferred underwriting commission | $2,415,000 | | Total Liabilities | $5,746,500 | | Equity | | | Ordinary shares subject to possible redemption | $15,240,284 | | Total Shareholders' Deficit | ($5,729,762) | Statement of Operations Summary (for year ended Dec 31, 2024) | Account | Amount (USD) | | :--- | :--- | | Formation and operating costs | ($1,283,961) | | Income earned on Trust Account | $2,782,552 | | Net Income | $1,498,591 | Notes to the Financial Statements The notes detail the company's SPAC status, merger agreement with HCYC Group, business combination extension until October 2025, and significant related-party transactions with its Sponsor - The company has extended its combination period up to October 4, 2025, requiring monthly deposits of $55,000 into the Trust Account, funded by notes from the Sponsor[537] - Ordinary shares subject to possible redemption are classified as temporary equity and measured at their redemption value of $11.41 per share as of Dec 31, 2024[565] - Related party transactions include promissory notes from the Sponsor to fund extensions, with $1,262,500 outstanding as of Dec 31, 2024[583][587] - The company has a commitment to pay a deferred underwriting commission of $2,415,000 from the Trust Account upon completion of a business combination[590]