Financial Position and Capital Requirements - The company has approximately $953,069 available outside the trust account as of December 31, 2024, to fund working capital requirements[155] - The net proceeds from the IPO and the sale of private placement units provided the company with $69 million in trust account funds for completing its initial business combination[177] - The company may incur significant costs in pursuit of acquisition plans, and management's plans to address capital needs may involve loans from affiliates, which are not guaranteed[155] - The company may face challenges in obtaining additional financing for its initial business combination, which could lead to restructuring or abandonment of the transaction[187] - The trust account may be reduced due to third-party claims, potentially leading to a per-share redemption amount of less than $10.00[259] - The trust account funds will be invested in U.S. government treasury bills or money market funds, which could yield negative interest rates, affecting the per-share redemption amount[262] Business Combination Risks and Challenges - If the initial business combination is not completed within the required time period, public stockholders may receive only approximately $10.00 per share upon liquidation of the trust account[155] - There is uncertainty regarding the company's ability to complete an initial business combination due to potential changes in laws or regulations[164] - The company may be forced to cease operations and liquidate if it does not have sufficient funds available to complete the initial business combination[155] - The company may complete its initial business combination with a single target business, which could result in a lack of diversification and expose it to various economic, competitive, and regulatory risks[178] - There is a risk that the company may pursue a business combination with a private company, which typically has limited public information available, potentially leading to unexpected profitability outcomes[180] - The company may face challenges in obtaining stockholder approval for a business combination if the target does not meet its general criteria and guidelines, which could complicate the transaction process[169] - If the business combination is subject to CFIUS review, it may face delays or prohibitions, impacting the ability to complete the transaction[182] - The company may incur substantial costs in investigating potential acquisitions, which would not be recoverable if the acquisition does not proceed[172] - The company may attempt to simultaneously complete multiple business combinations, which could increase costs and risks, negatively impacting operations and profitability[179] Regulatory and Compliance Considerations - The SEC adopted final rules on January 24, 2024, regarding the regulation of SPACs under the Investment Company Act, which could impact the company's operations[159] - If deemed an investment company, the company may face burdensome compliance requirements and restrictions that could hinder the completion of an initial business combination[161] - Compliance with the Sarbanes-Oxley Act may increase the time and costs associated with completing an acquisition, particularly if the target business is not compliant[190] - The company is classified as an "emerging growth company," allowing it to take advantage of certain exemptions from disclosure requirements, which may affect investor attractiveness[240] - The company is also a "smaller reporting company," permitting reduced disclosure obligations, including only two years of audited financial statements[242] - 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[241] Management and Governance Issues - Past performance of the management team is not indicative of future performance or success in identifying suitable candidates for business combinations[167] - The company is dependent on a small group of individuals for its operations, and their departure could adversely affect its ability to operate[203] - Key personnel may negotiate employment agreements with target businesses, which could create conflicts of interest in selecting advantageous business combinations[204] - The company’s directors and officers may have conflicts of interest due to their involvement in other business activities, impacting their commitment to the company[206] - Certain directors and officers may be affiliated with entities engaged in similar business activities, leading to potential conflicts in business opportunity presentations[207] Shareholder Rights and Dilution Risks - The nominal purchase price for founder shares may lead to significant dilution of public shares upon the initial business combination, as the implied value of public shares is initially $10.00[215] - The potential issuance of additional shares could significantly dilute the equity interest of investors and may affect the market price of the company's common stock[275] - The company may redeem outstanding warrants at a price of $0.01 per warrant if the Reference Value equals or exceeds $18.00 per share[277] - If the company calls the warrants for redemption, it may require holders to exercise on a "cashless basis," resulting in fewer shares received[279] - The company may not hold an annual stockholder meeting until after the initial business combination, limiting stockholder rights[239] - The absence of a specified maximum redemption threshold may allow the company to complete a business combination even if a substantial majority of stockholders disagree[217] Market and Competitive Environment - The increasing number of special purpose acquisition companies (SPACs) may lead to a scarcity of attractive targets, raising costs and complicating the acquisition process[198] - Competition for available targets may increase, potentially resulting in less favorable financial terms for the company[199] - The market for directors and officers liability insurance has become less favorable, with fewer insurers providing quotes and premiums generally increasing[243] Miscellaneous Financial Considerations - The Inflation Reduction Act of 2022 imposes a 1% excise tax on stock repurchases by publicly traded domestic corporations, which may apply to redemptions in connection with business combinations[246] - The excise tax could make transactions with the company less appealing to potential business combination targets, depending on various factors including the fair market value of redemptions[247] - The company will not use trust funds to pay any excise tax that may be incurred[248] - The company has authorized the issuance of up to 40,000,000 shares of common stock, with 22,353,625 shares currently available for issuance[271] - The exercise price for public warrants is set at $11.50 per share, which is higher than typical offerings in similar blank check companies, increasing the likelihood of warrants expiring worthless[276] - The registration of a significant number of securities for trading may adversely affect the market price of the company's common stock[270]
CO2 Energy Transition Corp.(NOEMU) - 2024 Q4 - Annual Report