IPO and Financing - The company completed its Initial Public Offering on February 15, 2022, raising gross proceeds of $143,750,000 from the sale of 14,375,000 Units at $10.00 per Unit[23]. - An additional $6,537,500 was generated from the private sale of 653,750 Private Placement Units at $10.00 each[24]. - A total of $146,625,000 was placed in the Trust Account at the consummation of the Initial Public Offering[25]. - The company may seek additional financing to complete its initial Business Combination, targeting businesses larger than what can be acquired with the net proceeds from the Initial Public Offering[44]. - The company issued a promissory note for $300,000 for working capital, with $15,600 funded as of December 31, 2023[152]. - The Company entered into a promissory note with Mazaii Corp Ltd. for a principal amount of up to $250,000, which became null and void as the Business Combination was not consummated[153]. - The Company needs to raise additional funds to meet operational expenditures and may issue additional securities or incur debt if unable to complete the Business Combination[154]. - A.G.P. will receive a fee of 3.5% of the gross proceeds from the Initial Public Offering, totaling approximately $5,031,250, payable upon the consummation of the initial Business Combination[158]. Business Combination - The company has extended its time to complete a business combination until February 15, 2026, after three extensions, with 62,488 Public Shares currently outstanding[31]. - The company entered into a Business Combination Agreement with Instinct Brothers Co., Ltd on February 28, 2025, with a total consideration of $200,000,000 to be paid in common stock valued at $10.00 per share[32]. - Nasdaq rules require that the company must complete a Business Combination with an aggregate fair market value of at least 80% of the assets held in the Trust Account[34]. - If the initial Business Combination is not completed by February 15, 2026, the company will redeem 100% of its Public Shares for a pro rata portion of the funds in the Trust Account[35]. - The company will only complete an initial Business Combination in which it owns or acquires 50% or more of the outstanding voting securities of the target[49]. - The company may focus its search for an initial Business Combination in a single industry, leading to a lack of diversification and increased risk[53]. - The company anticipates that its Sponsor and affiliates may engage in privately negotiated purchases of Public Shares to facilitate the initial Business Combination[62]. - The company may seek stockholder approval for its initial Business Combination if required by law or applicable stock exchange rules[57]. - A majority of outstanding shares must vote in favor of the initial Business Combination for it to be approved[75]. - The company may conduct redemptions without a stockholder vote if not required by law or stock exchange rules[69]. - The company will provide Public Stockholders with redemption rights upon the completion of the initial Business Combination[74]. - The anticipated per-share redemption amount for Public Stockholders upon dissolution is approximately $11.41 as of December 31, 2023[87]. - The company plans to redeem Public Shares at a price equal to the aggregate amount in the Trust Account, minus up to $100,000 for dissolution expenses, if unable to complete the initial Business Combination[94]. - If the Business Combination is not completed by February 15, 2026, the Company will cease operations and liquidate, raising substantial doubt about its ability to continue as a going concern[159]. Financial Performance - As of December 31, 2024, the company reported a net loss of $440,564, which includes general and administrative costs of $741,798 and a provision for income taxes of $81,983[142]. - For the year ended December 31, 2023, the company had a net loss of $2,305,489, primarily due to general and administrative costs of $2,300,807[143]. - Following the Initial Public Offering, approximately $146 million (approximately $10.29 per Public Share) was removed from the Trust Account due to stockholder redemptions[148]. - As of December 31, 2024, the company had a working capital deficit of $2,090,343 and only $1,674 in its operating bank account[145]. - As of December 31, 2023, approximately $1,746,543 remained in the Trust Account after stockholder redemptions[149]. - The company intends to use substantially all funds in the Trust Account to complete its initial Business Combination, with interest earned expected to cover tax obligations[150]. Corporate Governance - The company has a board of directors consisting of three members, with terms divided into two classes serving two-year terms[204]. - Tarek Tabsh serves as the Chief Executive Officer and Chairman, bringing over 20 years of experience in building and scaling innovative businesses[192]. - Steven Berg, the Chief Financial Officer, has over 30 years of experience in investment banking and the cannabis industry, focusing on strategy and capital raising[198]. - Emily Paxhia, a director since February 2022, co-founded a cannabis-focused hedge fund and has significant advisory experience in the cannabis sector[199]. - Francis Knuettel II, a director since February 2022, has extensive experience in financial management and controls, particularly in the cannabis industry[200]. - The company has established three standing committees: Audit Committee, Compensation Committee, and Nominating Committee[206]. - The Audit Committee reviews all payments made to the Sponsor, officers, or directors on a quarterly basis[220]. - The Compensation Committee is responsible for reviewing and recommending compensation arrangements related to the initial Business Combination[211]. - The company has adopted a Code of Conduct and Ethics applicable to directors, officers, and employees[218]. - Insider trading policies were adopted on February 10, 2022, to promote compliance with trading laws and regulations[219]. Internal Controls and Compliance - The company did not maintain effective internal control over financial reporting as of December 31, 2024, due to a material weakness related to the failure to timely close books and records for each fiscal period and timely file regulatory filings[185]. - The company’s disclosure controls and procedures were not operating effectively as of the end of the reporting period, impacting timely decision-making regarding required disclosures[182]. - Management's internal control over financial reporting is designed to provide reasonable assurance regarding the reliability of financial reporting in accordance with GAAP[184]. - There were no changes to the internal control over financial reporting during the fiscal quarter ended December 31, 2024, that materially affected the internal control[188]. - The company does not expect that its disclosure controls and procedures will prevent all errors and instances of fraud, providing only reasonable assurance[183]. - The company must comply with reporting obligations under the Exchange Act, including filing annual, quarterly, and current reports with the SEC[101]. - The company has not paid any cash dividends on its Common Stock to date and does not intend to do so prior to the completion of its initial Business Combination[123]. - The company is classified as an "emerging growth company" and will remain so until it has total annual gross revenue of at least $1.235 billion or the market value of its Class A Common Stock held by non-affiliates exceeds $700 million[107]. - The company plans to file a Registration Statement on Form 8-A with the SEC to voluntarily register its securities under Section 12 of the Exchange Act, thus becoming subject to the rules and regulations of the Exchange Act[104]. Risks and Challenges - The company may incur losses from costs associated with identifying and evaluating prospective target businesses that do not result in completed transactions[52]. - The company may face intense competition from other entities with similar business objectives, which may limit its ability to acquire larger target businesses[98]. - The company may not be able to complete its initial Business Combination if a proposed transaction is subject to regulatory review or approval[111]. - Claims against the Trust Account could potentially reduce the per-share redemption price below $10.20 due to creditor claims[91]. - The company seeks to limit claims against the Trust Account by having vendors and service providers execute waivers regarding their claims[92]. - The company may face increased costs and time to complete its initial Business Combination due to proposed SEC rules affecting SPACs[111]. - The company has not identified any cybersecurity threats that materially affect its business strategy or financial condition in fiscal year 2023[114].
Relativity Acquisition (RACY) - 2024 Q4 - Annual Report