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Finnovate Acquisition (FNVT) - 2024 Q4 - Annual Report
FNVTFinnovate Acquisition (FNVT)2025-06-05 12:15

Initial Public Offering and Trust Account - The company completed its Initial Public Offering on November 8, 2021, selling 15,000,000 Units at 10.00perUnit,generatinggrossproceedsof10.00 per Unit, generating gross proceeds of 172,500,000[24]. - An additional 2,250,000 Units were sold due to the underwriters' full over-allotment exercise, bringing total gross proceeds to 175,950,000,whichwasplacedinaTrustAccount[26].−FollowingtheIPO,thecompanyplaced175,950,000, which was placed in a Trust Account[26]. - Following the IPO, the company placed 175,950,000 in the Trust Account, which was initially invested in U.S. government securities[164]. - The Trust Account holds approximately 10,208,877,equatingtoabout10,208,877, equating to about 11.80 per share as of December 31, 2024, available for the initial Business Combination[94]. - The Trust Account must maintain a minimum value of 10.20perPublicShare;ifreducedbelowthisamount,theactualredemptionpricemaybesignificantlyless[108].−AsofDecember31,2024,theTrustAccountheldapproximately10.20 per Public Share; if reduced below this amount, the actual redemption price may be significantly less[108]. - As of December 31, 2024, the Trust Account held approximately 10.21 million of the Initial Public Offering proceeds and interest earned[194]. Business Combination and Extensions - The company entered into a Business Combination Agreement with Scage Future on August 21, 2023, with an Aggregate Merger Consideration Amount of 800,000,000tobepaidinnewlyissuedordinaryshares[40][41].−ThecompanyextendedthedeadlineforitsinitialBusinessCombinationfromMay8,2023,toMay8,2024,andsubsequentlytoNovember8,2024,andthentoMay8,2025[33][34][35].−TheBusinessCombinationAgreementmaybeterminatediftheClosingdoesnotoccurbyJuly31,2025[60].−TheOutsideDatefortheBusinessCombinationhasbeenextendedfromFebruary29,2024,toOctober31,2024[65].−ShareholdersapprovedanextensionofthebusinesscombinationdeadlinetoNovember8,2025,allowingmoretimetocompletetheinitialbusinesscombination[204].ShareholderRedemptions−OnMay8,2023,shareholdersredeemed12,626,668ClassAOrdinarySharesforapproximately800,000,000 to be paid in newly issued ordinary shares[40][41]. - The company extended the deadline for its initial Business Combination from May 8, 2023, to May 8, 2024, and subsequently to November 8, 2024, and then to May 8, 2025[33][34][35]. - The Business Combination Agreement may be terminated if the Closing does not occur by July 31, 2025[60]. - The Outside Date for the Business Combination has been extended from February 29, 2024, to October 31, 2024[65]. - Shareholders approved an extension of the business combination deadline to November 8, 2025, allowing more time to complete the initial business combination[204]. Shareholder Redemptions - On May 8, 2023, shareholders redeemed 12,626,668 Class A Ordinary Shares for approximately 132.6 million at a redemption price of about 10.50pershare[31].−Shareholdersholding856,543ClassAordinarysharesexercisedtheirrighttoredeemsuchsharesforaprorataportionofthefundsintheTrustAccount[81].−OnMay2,2024,shareholdersredeemed2,374,826ClassAordinarysharesforapproximately10.50 per share[31]. - Shareholders holding 856,543 Class A ordinary shares exercised their right to redeem such shares for a pro rata portion of the funds in the Trust Account[81]. - On May 2, 2024, shareholders redeemed 2,374,826 Class A ordinary shares for approximately 11.33 per share, totaling about 26,907,976[173].−OnNovember6,2024,shareholdersredeemed1,383,214ClassAordinarysharesforapproximately26,907,976[173]. - On November 6, 2024, shareholders redeemed 1,383,214 Class A ordinary shares for approximately 11.68 per share, totaling about 16.16million[174].−OnMay6,2025,shareholdersredeemed742,834ClassAordinarysharesforapproximately16.16 million[174]. - On May 6, 2025, shareholders redeemed 742,834 Class A ordinary shares for approximately 12.18 per share, totaling about 9.0million[175].FinancialPerformanceandReporting−AsofDecember31,2024,thecompanyreportedanetlossof9.0 million[175]. Financial Performance and Reporting - As of December 31, 2024, the company reported a net loss of 215,486, primarily due to 1,622,093information,general,andadministrativeexpenses,offsetby1,622,093 in formation, general, and administrative expenses, offset by 1,406,607 in interest earned[189]. - The company had cash outside the Trust Account of only 769availableforworkingcapitalneedsasofDecember31,2024[191].−FortheyearendedDecember31,2024,thecompanyused769 available for working capital needs as of December 31, 2024[191]. - For the year ended December 31, 2024, the company used 877,915 in operating activities, driven by interest earned and a net loss[192]. - The company had 42,397,606providedfrominvestingactivities,mainlyfromcashwithdrawnduetoredemptionspayments[193].−ThecompanyhasnotpaidanycashdividendsonitsOrdinarySharestodateanddoesnotintendtodosopriortothecompletionofaninitialBusinessCombination[150].RegulatoryandComplianceMatters−Thecompanyisrequiredtofileannual,quarterly,andcurrentreportswiththeSEC,includingauditedfinancialstatements[122].−NasdaqnotifiedtheCompanyofnon−compliancewithlistingrules,leadingtoadelistingnoticeonNovember8,2024,withsecuritiesquotedonOTCMarketssinceNovember12,2024[180].−ThecompanyhasidentifiedamaterialweaknessinitsinternalcontroloverfinancialreportingasofDecember31,2024,whichcouldadverselyaffectinvestorconfidenceandoperationalresults[133].ManagementandOperationalStructure−Thecompanyhastwoclassesofshares:redeemableOrdinarySharesandnon−redeemableOrdinaryShares,withearningsandlossessharedproratabetweenthetwoclasses[215].−ThecompanyhasenteredintoanAdministrativeServicesAgreementforofficespaceandsupportservicesatacostof42,397,606 provided from investing activities, mainly from cash withdrawn due to redemptions payments[193]. - The company has not paid any cash dividends on its Ordinary Shares to date and does not intend to do so prior to the completion of an initial Business Combination[150]. Regulatory and Compliance Matters - The company is required to file annual, quarterly, and current reports with the SEC, including audited financial statements[122]. - Nasdaq notified the Company of non-compliance with listing rules, leading to a delisting notice on November 8, 2024, with securities quoted on OTC Markets since November 12, 2024[180]. - The company has identified a material weakness in its internal control over financial reporting as of December 31, 2024, which could adversely affect investor confidence and operational results[133]. Management and Operational Structure - The company has two classes of shares: redeemable Ordinary Shares and non-redeemable Ordinary Shares, with earnings and losses shared pro rata between the two classes[215]. - The company has entered into an Administrative Services Agreement for office space and support services at a cost of 3,000 per month, which will terminate on October 1, 2024[120]. - As of the report date, the company has two officers, who are not obligated to devote specific hours but will allocate time as necessary until the initial Business Combination is completed[121]. Risks and Challenges - The company faces intense competition from established entities and other blank check companies, which may limit its ability to acquire sizable target businesses[117]. - Certain executive officers and directors may have fiduciary duties to other entities, potentially limiting the company's acquisition opportunities[118]. - The company may experience increased costs and risks in finding a suitable target for its initial Business Combination due to competition and market conditions[130]. - Recent fluctuations in inflation and interest rates could complicate the company's ability to consummate its initial Business Combination[131]. - Changes in international trade policies and tariffs may adversely affect the company's search for an initial Business Combination target and the performance of a post-Business Combination company[135]. Accounting and Financial Standards - The company recognizes the accretion from initial book value to redemption amount immediately upon the closing of the Initial Public Offering[214]. - Management reviews accounting policies and estimates to ensure financial statements are presented fairly in accordance with GAAP[212]. - The calculation of diluted income per Ordinary Share does not consider the effect of Warrants issued in connection with the Initial Public Offering, as their exercise is contingent upon future events[216]. - The company is classified as an "emerging growth company" and will remain so until it meets certain revenue or market value thresholds, including total annual gross revenue of at least 1.235billionoramarketvalueexceeding1.235 billion or a market value exceeding 700 million[127].