Hennessy Capital Investment Corp VII-A(HVII) - 2024 Q4 - Annual Report

Preliminary Information Cover Page & Registrant Information This section provides the cover page details for the Form 10-K annual report for Hennessy Capital Investment Corp. VII (HVII), a Cayman Islands exempted company, for the fiscal year ended December 31, 2024 - HVII is a Cayman Islands exempted company, filing its annual report for the fiscal year ended December 31, 2024[2] - HVII is classified as a non-accelerated filer, smaller reporting company, and emerging growth company, and is a shell company[9] - As of March 28, 2025, there were 19,690,000 Class A ordinary shares and 6,333,333 Class B ordinary shares issued and outstanding[10] Registered Securities on Nasdaq | Title of Each Class | Trading Symbol(s) | Name of Each Exchange on Which Registered | | :------------------------------------------------------------------------------- | :---------------- | :---------------------------------------- | | Class A ordinary shares, par value $0.0001 per share | HVII | The Nasdaq Stock Market LLC | | Rights, each right entitling the holder to receive one-twelfth (1/12) of one Class A ordinary share upon the consummation of an initial business combination | HVIIR | The Nasdaq Stock Market LLC | | Units, each consisting of one Class A ordinary share and one right | HVIIU | The Nasdaq Stock Market LLC | Table of Contents This section presents the table of contents for the Form 10-K report, outlining the various parts and items included in the filing, along with their corresponding page numbers - The table of contents provides a structured overview of the report's sections, including Part I (Business, Risk Factors), Part II (Market Information, MD&A, Financial Statements), Part III (Directors, Executive Compensation, Security Ownership), and Part IV (Exhibits)[14] Cautionary Note Regarding Forward-Looking Statements This section warns readers that the report contains forward-looking statements, which are not guarantees of future performance and involve risks and uncertainties, with HVII undertaking no obligation to update them except as required by law - Forward-looking statements are not guarantees of future performance and actual results may differ materially due to various risks and uncertainties[16] - Key risks include HVII's ability to select and complete an initial business combination, performance expectations of target businesses, retention of key personnel, potential conflicts of interest, and ability to obtain additional financing[18] - HVII undertakes no obligation to update or revise any forward-looking statements, except as required under applicable securities laws[17] Frequently Used Terms This section defines key terms used throughout the report, such as 'completion window,' 'founder shares,' 'private placement units,' 'public shares,' and 'sponsor,' to ensure clarity and consistent understanding of the company's operations and structure - The 'completion window' refers to the 24-month period from the IPO closing for HVII to consummate an initial business combination, after which public shares will be redeemed[20] - 'Founder shares' are Class B ordinary shares, automatically converting to Class A shares upon business combination, while 'private placement units' were sold to the sponsor and underwriters[20] - The 'sponsor' is HC VII Sponsor LLC, an affiliate of Daniel J. Hennessy and Thomas D. Hennessy, who are HVII's Chairman/CEO and President/COO, respectively[21] PART I Item 1. Business Hennessy Capital Investment Corp. VII (HVII) is a newly organized Special Purpose Acquisition Company (SPAC) formed on September 27, 2024, to effect a business combination, focusing on industrial technology and energy transition sectors with an enterprise value of $500 million or greater - HVII is a SPAC incorporated on September 27, 2024, for the purpose of effecting a business combination[23] - HVII intends to focus on industrial technology and energy transition sectors for its initial business combination, seeking targets with an aggregate enterprise value of $500 million or greater[28][46][49] - The management team, led by Daniel J. Hennessy, has a track record of 13 business combinations since 2014, positioning them as experienced SPAC sponsors[30][34][39] - A total of $190,000,000 from the IPO and private placement proceeds was placed in a trust account, to be invested in U.S. government treasury obligations or money market funds[26] IPO and Private Placement Details | Event | Date | Gross Proceeds | | :-------------------- | :--------------- | :------------- | | IPO Consummation | January 21, 2025 | $190.0 million | | Private Placement | January 21, 2025 | $6.9 million | Overview - HVII is a newly organized special purpose acquisition company (SPAC) incorporated on September 27, 2024, to effect a business combination[23] - Upon closing, $190,000,000 was placed in a trust account, invested in U.S. government treasury obligations or money market funds[26] - HVII intends to focus on industrial technology and energy transition sectors, seeking businesses with an aggregate enterprise value of $500 million or greater[28] IPO and Private Placement Financials | Event | Date | Gross Proceeds | | :-------------------- | :--------------- | :------------- | | IPO Consummation | January 21, 2025 | $190.0 million | | Private Placement | January 21, 2025 | $6.9 million | HVII's Sponsor - HVII's sponsor, HC VII Sponsor LLC, is responsible for initiating HVII's formation, identifying and acquiring businesses, and holding security interests[29] - The management team, including Daniel J. Hennessy and Thomas D. Hennessy, has extensive experience, having announced, completed, or advised on 13 business combinations since 2014[30][34][37] - Daniel J. Hennessy, Chairman and CEO, is a seasoned SPAC sponsor executive with over 30 years in private equity and 10 years in the SPAC asset class[34][40] Competitive Strengths - HVII's competitive strengths include an experienced SPAC management team with a track record of successful business combinations, a seasoned Board of Directors with relevant industry expertise, substantial capital markets experience, and an established network of third-party advisors[34][41][44][45] - The management team has completed SPAC business combinations with a combined total enterprise value of $6.7 billion and raised over $900 million in PIPE and backstop capital[44] - HVII's network of advisors has identified over 1,500 potential targets and completed meaningful reviews of 115 potential acquisition targets for prior Hennessy SPACs[45] Investment Strategy - HVII's investment strategy targets industrial technology and energy transition companies with an expected aggregate enterprise value of $500 million or greater[46][49] - Key acquisition criteria include large addressable markets, scalable and sustainable growth platforms, strong competitive positioning with differentiated technology, experienced management teams, a partnership approach, and businesses that benefit from being publicly traded[49] Initial Business Combination - HVII has 24 months from its IPO closing to consummate an initial business combination, with provisions for redemption of public shares if unsuccessful[50][52] - The initial business combination requires approval by a majority of HVII's board of directors, including a majority of independent directors[53] - HVII may need additional financing to complete a business combination or satisfy redemptions, which could lead to dilution or increased debt[54] - Nasdaq rules require the business combination to have an aggregate fair market value of at least 80% of the trust account value[55] - Conflicts of interest may arise due to officers' and directors' ownership of founder shares and private placement units, and their obligations to other entities[60][61][62] Financial Position - As of January 21, 2025, HVII had approximately $190,000,000 in its trust account available for a business combination, offering liquidity and capital for target businesses[63] - HVII has the flexibility to use cash, debt, equity securities, or a combination thereof for its business combination, but has not secured third-party financing[63][64] Competition - HVII faces intense competition from other SPACs, private investors, private equity groups, and public companies for acquisition opportunities[121] - Many competitors possess greater technical, financial, human, and industry resources, potentially placing HVII at a competitive disadvantage[121] Employees - HVII currently has three individual independent contractor service providers for its officer positions and does not intend to have any employees prior to completing its initial business combination[124] Periodic Reporting and Financial Information - HVII is required to provide audited financial statements of prospective target businesses, which may limit the pool of potential targets if they cannot meet GAAP/IFRS and PCAOB audit standards[125] - HVII is an 'emerging growth company' and 'smaller reporting company,' allowing it to take advantage of certain exemptions from SEC reporting requirements, which may affect investor attractiveness and market volatility[129][132] - HVII is a Cayman Islands exempted company and has received a 30-year tax exemption from the Cayman Islands government[128] Item 1A. Risk Factors This section details significant risks associated with investing in HVII, a SPAC, including challenges in completing a business combination, potential conflicts of interest, substantial dilution for public shareholders, market volatility, and regulatory changes - HVII is a SPAC with no operational revenue, making its ability to select a suitable business target and complete an initial business combination uncertain[134][301] - Conflicts of interest may arise due to the sponsor and management team's significant investment in founder shares, which could be worthless if a business combination is not completed, potentially influencing their decisions[136][244] - Public shareholders face significant dilution risks from founder shares, private placement shares, and potential future equity issuances for business combinations or financing[239][276][281] - There is a risk that HVII could be deemed an investment company under the Investment Company Act, which would impose burdensome compliance requirements and restrict its activities, potentially hindering its ability to complete a business combination[255][259] - Geopolitical conflicts (Russia-Ukraine, Israel-Hamas) and increased inflation could adversely affect HVII's search for and consummation of an initial business combination, leading to market disruptions and volatility[233][238] Risks Relating to HVII's Search for, Consummation of, or Inability to Consummate, a Business Combination and Post-Business Combination Risks - HVII may complete an initial business combination without public shareholder approval, as founder shares will vote in favor, potentially against the majority of public shareholders' interests[135][144] - The ability of public shareholders to redeem shares for cash may make HVII's financial condition unattractive to potential targets, hindering business combination efforts[146] - Failure to complete a business combination within 24 months will result in liquidation, with public shareholders receiving approximately $10.00 per share (or less) and share rights expiring worthless[151][152] - HVII's management, sponsor, or affiliates may purchase public shares to influence a vote or meet closing conditions, potentially reducing the public float and influencing the outcome of a business combination vote[155][157] - Cross-border business combinations expose HVII to additional risks, including regulatory approvals (e.g., CFIUS), currency fluctuations, and differing legal/commercial requirements[160][221] Risks Relating to HVII's Sponsor and Management Team - The nominal purchase price of founder shares ($0.004 per share) compared to the IPO price ($10.00 per unit) creates significant dilution risk for public shareholders upon business combination[239] - The sponsor and management team's financial interests in founder shares (which become worthless if no business combination occurs) may create conflicts of interest, potentially leading them to pursue riskier targets[241][244] - Officers and directors allocate time to other businesses, potentially causing conflicts of interest and negatively impacting HVII's ability to complete a business combination[245][248] Implied Value Dilution Example | Metric | Value | | :------------------------------------------ | :----------- | | Public shares | 19,000,000 | | Founder shares | 6,708,333 | | Private placement shares | 690,000 | | Total shares | 26,398,333 | | Total funds in trust account | $182,400,000 | | Initial implied value per share before BC | $10.00 | | Implied value per share after BC | $6.91 | | Decrease in implied value per share | 30.9% | Risks Relating to HVII's Securities - HVII risks being deemed an investment company under the Investment Company Act, which would impose significant regulatory burdens and restrict its activities, potentially forcing liquidation[255][259] - To mitigate investment company risk, HVII may liquidate trust account securities and hold funds in cash, reducing potential interest income and the per-share redemption amount for public shareholders[261][262] - Nasdaq may delist HVII's securities if it fails to meet listing requirements, limiting liquidity and potentially subjecting it to additional trading restrictions[267][270] - The issuance of additional ordinary or preference shares, or the conversion of Class B shares at a greater than one-to-one ratio due to anti-dilution provisions, could significantly dilute existing shareholders' equity interests[273][276] General Risk Factors - HVII is a newly incorporated company with no operating history or revenues, providing no basis for investors to evaluate its ability to achieve its business objective[301] - Past performance of HVII's management team is not indicative of future performance, and investors should not rely on it as a guarantee of success[302] - Reincorporation in another jurisdiction in connection with a business combination may result in adverse tax consequences for shareholders or share right holders[303] - As a Cayman Islands exempted company, shareholders may face difficulties in protecting their interests or enforcing U.S. federal securities laws due to differences in legal frameworks[310][311][314] Item 1B. Unresolved Staff Comments HVII reports that there are no unresolved staff comments from the SEC regarding its previous filings - There are no unresolved staff comments[318] Item 1C. Cybersecurity As a SPAC with no business operations, HVII does not consider itself to face significant cybersecurity risk and has not adopted a formal cybersecurity risk management program, though it acknowledges reliance on third-party digital technologies - HVII, as a SPAC with no business operations, does not consider itself to face significant cybersecurity risk and has not adopted a formal cybersecurity risk management program[319] - HVII relies on third-party digital technologies, and sophisticated attacks could lead to corruption or misappropriation of assets and data[320] - Management will report cybersecurity incidents and response plans to the board of directors[320] - As of the report date, HVII has not identified any material risks from cybersecurity threats or previous incidents[321] Item 2. Properties HVII does not own any material real estate or physical properties; its principal executive offices are located in Zephyr Cove, NV, with costs covered by a monthly fee paid to an affiliate of its sponsor - HVII does not own any real estate or other physical properties materially important to its operation[322] - Its principal executive offices are located at 195 US Hwy 50, Suite 309, Zephyr Cove, NV 89448, with costs covered by a $15,000 per month fee paid to an affiliate of its sponsor[322] Item 3. Legal Proceedings HVII's management reports no pending litigation against the company, its officers, or directors - To the knowledge of HVII's management, there is no litigation currently pending against HVII, any of its officers or directors in their capacity as such, or against any of its property[323] Item 4. Mine Safety Disclosures This item is not applicable to HVII - This item is not applicable[324] PART II Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities This section details the market information for HVII's securities, including trading symbols and commencement dates on Nasdaq, along with information on record holders, dividend policy, and recent sales of unregistered securities - HVII's units (HVIIU), Class A ordinary shares (HVII), and share rights (HVIIR) are traded on the Nasdaq Global Market, with units commencing trading on January 17, 2025, and separate shares/rights on February 6, 2025[326] - As of March 28, 2025, there were five holders of units, one holder of Class A ordinary shares, eight holders of Class B ordinary shares, and one holder of share rights[327] - HVII has not paid cash dividends and does not intend to prior to a business combination; future dividends are at the board's discretion and subject to Cayman Islands law and potential debt covenants[329] Recent Sales of Unregistered Securities | Security Type | Date | Shares/Units | Purchase Price (per share/unit) | Gross Proceeds | | :------------------------ | :--------------- | :----------- | :------------------------------ | :------------- | | Class B ordinary shares | Oct 8, 2024 | 5,750,000 | $0.004 | $25,000 | | Additional founder shares | Jan 10, 2025 | 958,333 | No additional consideration | N/A | | Private placement units | Jan 21, 2025 | 690,000 | $10.00 | $6,900,000 | Underwriting Discounts | Type of Discount | Amount | | :------------------------ | :------------- | | Cash underwriting discount | $3,800,000 | | Deferred underwriting discount | Up to $7,600,000 | Item 6. [Reserved] This item is reserved and contains no information - This item is reserved[336] Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations This section provides an overview of HVII's financial condition and results of operations, emphasizing its status as a SPAC with no operating revenues, detailing liquidity, capital resources, and contractual obligations - HVII is a SPAC with no operating revenues to date; its activities from inception (September 27, 2024) through December 31, 2024, were organizational and related to its IPO[338][341] - Following the IPO and private placement on January 21, 2025, $190,000,000 was placed in the trust account, with $12,656,782 in transaction costs[344][345] - Funds outside the trust account are used for identifying target businesses, due diligence, and transaction costs, with potential loans from the sponsor or management for working capital[348][349] - HVII has contractual obligations including $15,000 per month for office space and administrative support to an affiliate of its sponsor, and $10,000 per month to its CFO[353][354] Financial Performance (Inception to Dec 31, 2024) | Metric | Amount | | :-------------------------------------- | :--------- | | Net loss | $(47,952) | | Basic and diluted net loss per Class B ordinary share | $(0.01) | Overview - HVII is a SPAC incorporated on September 27, 2024, aiming to effect a business combination using cash from its IPO, private placement, and potential debt or equity[338] - The issuance of additional ordinary or preference shares or significant indebtedness could dilute public shareholders' equity, subordinate rights, or affect market prices[339] Results of Operations - HVII has not generated operating revenues to date, with activities focused on formation and IPO preparation[341] Net Loss (Inception to Dec 31, 2024) | Metric | Amount | | :-------- | :--------- | | Net loss | $(47,952) | Liquidity and Capital Resources - HVII's liquidity prior to IPO was from sponsor's Class B share purchase and loans, which were repaid post-IPO[343] - Funds in the trust account are primarily for the initial business combination, with remaining proceeds for working capital or other acquisitions[346] - HVII may need additional financing for a business combination or redemptions, which could lead to dilution or increased debt[350] Post-IPO Capital (January 21, 2025) | Source | Gross Proceeds | | :-------------------- | :------------- | | Initial Public Offering | $190,000,000 | | Private Placement | $6,900,000 | | Total in Trust Account | $190,000,000 | Off-Balance Sheet Financing Arrangements - HVII has no off-balance sheet arrangements, such as variable interest entities, or guarantees of debt[352] Contractual Obligations - HVII has no long-term debt or lease obligations, but pays $15,000 per month for office/administrative support and $10,000 per month to its CFO[353] - Underwriters are entitled to a deferred underwriting discount of up to $7,600,000, payable upon completion of the initial business combination[354] Critical Accounting Estimates - HVII has not identified any critical accounting estimates[355] Item 7A. Quantitative and Qualitative Disclosures about Market Risk As a smaller reporting company, HVII is not required to provide quantitative and qualitative disclosures about market risk - HVII is a smaller reporting company and is not required to provide quantitative and qualitative disclosures about market risk[356] Item 8. Financial Statements and Supplementary Data This section refers to HVII's audited financial statements and related notes, which are included elsewhere in the report - HVII's financial statements and notes are included starting on page F-1 of the report[357] Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure HVII reports no changes in or disagreements with its accountants on accounting and financial disclosure matters - There have been no changes in or disagreements with accountants on accounting and financial disclosure[358] Item 9A. Controls and Procedures HVII's management evaluated the effectiveness of its disclosure controls and procedures as of December 31, 2024, concluding they were effective, with certain reports omitted due to the company's status as a newly public and emerging growth company - HVII's disclosure controls and procedures were evaluated as effective as of December 31, 2024[359] - The report on management's assessment of internal control over financial reporting and auditor attestation is omitted due to HVII's status as a newly public company and emerging growth company[361] - There were no material changes in internal control over financial reporting during the most recent fiscal quarter[362] Item 9B. Other Information This section states that there is no other material information to report, and no director or officer adopted, modified, or terminated a Rule 10b5-1 trading arrangement during the three months ended December 31, 2024 - No director or officer informed the company of the adoption, modification, or termination of a Rule 10b5-1 trading arrangement during the three months ended December 31, 2024[363] Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections This item is not applicable to HVII - This item is not applicable[364] PART III Item 10. Directors, Executive Officers and Corporate Governance This section outlines HVII's leadership structure, including its directors and executive officers, their ages, and titles, highlighting the management team's extensive experience in private equity and SPACs, and the board's independent committees - Daniel J. Hennessy and Thomas D. Hennessy have significant experience in private equity and SPACs, having been involved in numerous business combinations[367][368] - HVII's board of directors consists of seven members, with founder shares holders having the right to elect and remove directors prior to the initial business combination[377] - Five directors (Mr. Allen, Mr. Bonner, Ms. Brunelle, Mr. Saade, and Ms. Sharma) are independent, and they form the audit and compensation committees[379][381][384] - HVII has adopted a Code of Ethics and an Insider Trading Policy to ensure ethical conduct and compliance[390][393] Directors and Executive Officers | Name | Age | Title | | :---------------- | :-- | :------------------------------------------- | | Daniel J. Hennessy | 67 | Chairman of the Board and CEO | | Thomas D. Hennessy | 40 | President, COO, and Director | | Nicholas Geeza | 39 | Executive Vice President, CFO, and Secretary | | Grant R. Allen | 46 | Independent Director | | Brian Bonner | 68 | Independent Director | | Anna Brunelle | 57 | Independent Director | | Javier Saade | 53 | Independent Director | | Poonam Sharma | 47 | Independent Director | Directors and Executive Officers - Daniel J. Hennessy has served as Chairman and CEO since HVII's formation and has extensive experience in private equity and SPACs, including leadership roles in Hennessy Capital Acquisition Corps I-VI[367] - Thomas D. Hennessy, President and COO, also has significant SPAC experience, including CEO roles at Compass Digital Acquisition Corp. and two[368] - Nicholas Geeza, Executive Vice President, CFO, and Secretary, holds similar roles in other SPACs and has a background in finance and business development[369][370] Number and Terms of Office of Officers and Directors - HVII's board has seven members; holders of founder shares have the exclusive right to elect and remove directors prior to the initial business combination[377] - Officers are appointed by the board and serve at its discretion, without specific terms of office[378] Director Independence - A majority of HVII's board (Mr. Allen, Mr. Bonner, Ms. Brunelle, Mr. Saade, and Ms. Sharma) are independent directors as per Nasdaq standards and SEC rules[379] - The audit committee is entirely composed of independent directors[379] Committees of the Board of Directors - HVII has an audit committee and a compensation committee, both composed solely of independent directors, operating under approved charters[380][381][384] - Ms. Sharma chairs the audit committee and qualifies as an 'audit committee financial expert'[381][382] - Mr. Bonner chairs the compensation committee, which reviews and approves CEO compensation and makes recommendations for other officers[384][386] Director Nominations - HVII does not have a standing nominating committee; independent directors recommend nominees[388] - The board considers educational background, diversity, business knowledge, integrity, and independence for director nominees[389] Code of Ethics - HVII has adopted a Code of Ethics applicable to its directors, officers, and service providers, available on the SEC's website[390][392] Insider Trading Policy - HVII has adopted an insider trading policy to govern securities transactions by directors, officers, and employees, promoting compliance with insider trading laws[393] Item 11. Executive Compensation HVII's executive officers and directors did not receive compensation for services rendered prior to the IPO, with post-IPO compensation limited to expense reimbursements and monthly fees for office support and CFO services, and founder shares granted to independent directors and certain officers - No compensation was paid to officers or directors for services rendered prior to HVII's initial public offering[395] - HVII pays $15,000 per month to an affiliate of its sponsor for office space and administrative support, and $10,000 per month to its CFO, Nicholas Geeza[395] - Independent directors (Mr. Allen, Mr. Bonner, Ms. Brunelle, Mr. Saade) each received 25,000 founder shares, and Ms. Sharma received 30,000 founder shares for their service[395] - Post-business combination, any compensation for directors or management will be determined by the compensation committee and fully disclosed to shareholders[396] Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters This section details the beneficial ownership of HVII's ordinary shares as of March 28, 2025, highlighting significant ownership by HC VII Sponsor LLC and its managing members, Daniel J. Hennessy and Thomas D. Hennessy, in Class B ordinary shares - HC VII Sponsor LLC, Daniel J. Hennessy, and Thomas D. Hennessy collectively hold a significant portion of Class B ordinary shares, which convert to Class A shares upon business combination[400] - The table does not reflect beneficial ownership of share rights, as they are not exercisable within 60 days of the report[399] Beneficial Ownership of Ordinary Shares (March 28, 2025) | Name and Address of Beneficial Owner | Class A Ordinary Shares Beneficially Owned | Percentage of Class A Ordinary Shares | Class B Ordinary Shares Beneficially Owned | Percentage of Class B Ordinary Shares | | :----------------------------------- | :----------------------------------------- | :------------------------------------ | :----------------------------------------- | :------------------------------------ | | HC VII Sponsor LLC | 500,000 | 2% | 5,203,333 | 78% | | Daniel J. Hennessy | 500,000 | 2% | 5,203,333 | 78% | | Thomas D. Hennessy | 500,000 | 2% | 5,953,333 | 89% | | Nicholas Geeza | — | — | 250,000 | 4% | | Grant R. Allen | — | — | 25,000 | * | | Brian Bonner | — | — | 25,000 | * | | Anna Brunelle | — | — | 25,000 | * | | Javier Saade | — | — | 25,000 | * | | Poonam Sharma | — | — | 30,000 | * | | All directors and executive officers and directors as a group (8 individuals) | 500,000 | 2% | 6,333,333 | 100% | | The K2 Principal Fund, L.P. | 1,700,000 | 8.6% | — | — | | Linden Advisors LP | 1,213,732 | 6.2% | — | — | | Tenor Capital Management Company, L.P. | 1,500,000 | 7.6% | — | — | Item 13. Certain Relationships and Related Transactions, and Director Independence This section details transactions and relationships between HVII and its related parties, including the sponsor, officers, and directors, covering the issuance of founder shares, private placement units, expense reimbursements, and monthly fees for administrative support and CFO services - Founder shares were initially purchased by the sponsor for $25,000 and later transferred to officers and independent directors[401] - The sponsor and underwriters purchased 690,000 private placement units for $6,900,000, which are subject to transfer restrictions[402] - HVII reimburses its sponsor, officers, and directors for out-of-pocket expenses and pays $15,000 per month for office/administrative support and $10,000 per month to its CFO[405][407][408] - HVII's audit committee reviews and approves related party transactions and ensures that any business combination with an affiliated entity is deemed fair from a financial point of view by an independent firm[414][416] - A majority of HVII's board members are independent directors, as defined by Nasdaq listing standards and SEC rules[420] Certain Relationships and Related Transactions - Founder shares were issued to the sponsor for $25,000 and subsequently transferred to Nicholas Geeza, Thomas D. Hennessy, and independent directors[401] - The sponsor and underwriters purchased 690,000 private placement units for $6,900,000, with transfer restrictions[402] - Officers and directors have fiduciary obligations to other entities, potentially creating conflicts of interest in presenting business opportunities[403] - HVII reimburses out-of-pocket expenses and pays monthly fees for administrative support ($15,000) and CFO services ($10,000)[405][407][408] Related Party Transactions Policy - HVII has not yet adopted a formal policy for reviewing related party transactions, but its Code of Ethics requires avoiding conflicts of interest[412][413] - The audit committee is responsible for reviewing and approving related party transactions, requiring a majority affirmative vote[414] - HVII will obtain a fairness opinion from an independent firm for any business combination with an affiliated entity[416] Director Independence - Mr. Allen, Mr. Bonner, Ms. Brunelle, Mr. Saade, and Ms. Sharma are determined to be independent directors as per Nasdaq listing standards and SEC rules[420] Item 14. Principal Accountant Fees and Services This section details the fees paid to WithumSmith+Brown, PC, HVII's independent registered public accounting firm, for services rendered during the period from inception through December 31, 2024, and outlines the pre-approval policy for audit and non-audit services - The audit committee, formed upon IPO consummation, now pre-approves all auditing and permitted non-audit services[425] Fees Paid to WithumSmith+Brown, PC (Inception to Dec 31, 2024) | Fee Type | Amount | | :---------------- | :--------- | | Audit Fees | $87,300 | | Audit-Related Fees | None | | Tax Fees | None | | All Other Fees | None | PART IV Item 15. Exhibits and Financial Statement Schedules This section lists all exhibits and financial statement schedules filed as part of the Form 10-K report, including various agreements, corporate governance documents, and certifications - The report includes an Index to Financial Statements and a detailed Exhibit Index, listing documents such as the Underwriting Agreement, Amended and Restated Memorandum and Articles of Association, and various other agreements[428][430] - Exhibits are available for inspection at SEC public reference facilities or on the SEC website[428] Item 16. Form 10-K Summary This item is not applicable to HVII - This item is not applicable[434] Financial Statements Report of Independent Registered Public Accounting Firm WithumSmith+Brown, PC, HVII's independent registered public accounting firm, issued an unqualified opinion on the company's financial statements as of December 31, 2024, and for the period from September 27, 2024 (inception) through December 31, 2024, confirming fair presentation in conformity with U.S. GAAP - WithumSmith+Brown, PC provided an unqualified opinion on HVII's financial statements for the period ended December 31, 2024[438] - The audit was conducted in accordance with PCAOB standards, assessing risks of material misstatement[440][441] - The auditor did not perform an audit of internal control over financial reporting[440] Balance Sheet as of December 31, 2024 The balance sheet as of December 31, 2024, shows HVII with total assets of $993,266, primarily consisting of deferred offering costs, total liabilities of $1,016,218, and a shareholders' deficit of $(22,952) - Current assets include cash of $20,005 and prepaid expenses of $20,829[444] - Liabilities include accrued expenses ($33,366), accrued offering costs ($456,062), a promissory note to a related party ($76,790), and deferred legal fees ($450,000)[444] - Shareholders' deficit includes 6,708,333 Class B ordinary shares outstanding[445] Balance Sheet Summary (December 31, 2024) | Category | Amount | | :----------------------- | :---------- | | Total Assets | $993,266 | | Total Liabilities | $1,016,218 | | Total Shareholders' Deficit | $(22,952) | Statement of Operations for the Period from September 27, 2024 (Inception) through December 31, 2024 For the period from inception (September 27, 2024) through December 31, 2024, HVII reported a net loss of $47,952, primarily due to formation, general, and administrative costs, resulting in a basic and diluted net loss per Class B ordinary share of $(0.01) - The weighted average Class B ordinary shares outstanding for the period was 5,833,333[449] Statement of Operations Summary (Inception to Dec 31, 2024) | Metric | Amount | | :-------------------------------------- | :--------- | | Formation, general and administrative costs | $47,952 | | Net loss | $(47,952) | | Basic and diluted net loss per Class B ordinary share | $(0.01) | Statement of Changes in Shareholders' Deficit for the Period from September 27, 2024 (Inception) through December 31, 2024 This statement shows the changes in HVII's shareholders' deficit from its inception on September 27, 2024, to December 31, 2024, with the deficit increasing to $(22,952) due to a net loss of $47,952, partially offset by the issuance of Class B ordinary shares and additional paid-in capital totaling $25,000 - The issuance of 6,708,333 Class B ordinary shares contributed $25,000 to equity (par value $671, additional paid-in capital $24,329)[452] Changes in Shareholders' Deficit (Inception to Dec 31, 2024) | Item | Amount ($) | | :--------------------------------- | :--------- | | Balance as of September 27, 2024 | — | | Class B ordinary shares issued | 671 | | Additional paid-in capital | 24,329 | | Net loss | (47,952) | | Balance as of December 31, 2024 | (22,952) | Statement of Cash Flows for the Period from September 27, 2024 (Inception) through December 31, 2024 For the period from inception (September 27, 2024) through December 31, 2024, HVII's cash flows from operating activities resulted in a net outflow of $35,415, offset by net cash provided by financing activities of $55,420, leading to an ending cash balance of $20,005 - Financing activities included $25,000 from founder shares and $76,790 from a related-party promissory note, partially offset by $46,370 in deferred offering costs payments[456] - Noncash activities included $456,062 in deferred offering costs accrued and $450,000 in deferred legal fees[456] Cash Flow Summary (Inception to Dec 31, 2024) | Cash Flow Activity | Amount ($) | | :--------------------------------- | :--------- | | Net cash used in operating activities | (35,415) | | Net cash provided by financing activities | 55,420 | | Net change in cash | 20,005 | | Cash, end of the period | 20,005 | Notes to Financial Statements The notes to the financial statements provide detailed information on HVII's organization, business operations as a SPAC, and significant accounting policies, covering IPO details, related party transactions, commitments, contingencies, and shareholder equity structure - HVII is a blank check company incorporated on September 27, 2024, with no operations until a business combination[459][460] - The IPO on January 21, 2025, raised $190,000,000, and a concurrent private placement raised $6,900,000, with proceeds placed in a trust account[461][462][466] - The trust account funds are invested in U.S. government treasury obligations or money market funds and will be released upon business combination or liquidation[466] - HVII is an 'emerging growth company' and has elected to use the extended transition period for new accounting standards[475][476] - Related party transactions include the issuance of founder shares to the sponsor, officers, and directors, and a promissory note from the sponsor, which was repaid[501][505] - The company has administrative service agreements and payments to its CFO, and faces risks from geopolitical instability[507][508][511]