Keen Vision Acquisition (KVAC) - 2025 Q4 - Annual Report

IPO and Financial Proceeds - The company completed its IPO on July 27, 2023, raising gross proceeds of $149.5 million by selling 14,950,000 units at $10.00 per unit[27]. - A private placement with KVC Sponsor LLC generated an additional $6.78575 million from the sale of 678,575 private units at $1.00 each[28]. - The total net proceeds of $151.36875 million from the IPO and private placement were deposited into a trust account for public shareholders[29]. - The company incurred $6,597,980 in IPO-related costs, including $2,990,000 in underwriting fees[129]. - A total of $151,368,750 from the IPO and private placement was deposited in the Trust Account for the benefit of public shareholders[121]. - The company intends to use substantially all net proceeds from the IPO to acquire a target business and cover related expenses[130]. Merger and Acquisition Strategy - The company has entered into a merger agreement with Medera, with an aggregate consideration of $622.56 million, payable in newly issued shares valued at $10.00 each[33]. - The merger with Medera will result in the issuance of approximately 62,578,505 shares to Medera shareholders at closing[33]. - The company is targeting businesses in biotech, consumer goods, and agriculture, focusing on those with strong ESG imperatives and significant growth potential[30][40]. - The company aims to identify acquisition targets with a total enterprise value not exceeding $1 billion[40]. - The company has established a rigorous selection process for potential acquisitions, emphasizing due diligence to ensure sustainable shareholder value creation[32]. - The company has a binding letter of intent with Novoheart Group Limited, valuing NVH at $100 million, with a requirement for available cash of at least $10 million at closing[36]. - The company plans to leverage its management team's extensive networks and experience to enhance the likelihood of successful business combinations[34]. - The company intends to utilize cash from the IPO and private placement for business combinations, with no specific allocation for other purposes[42]. - Target businesses must have a fair market value of at least 80% of the Trust Account balance at the time of the business combination[49]. - The company aims to acquire 100% of the equity interests or assets of the target business, but may also consider less than 100% acquisitions[49]. - The management will focus on selecting target businesses with flexible operating models to adapt to market changes and sustainability concerns[43]. - The company will conduct extensive due diligence on prospective target businesses, including financial reviews and management assessments[47]. Shareholder Rights and Redemption - Shareholders may convert their shares into their pro rata share of the Trust Account or participate in a tender offer for their shares[55]. - Public shareholders have the right to redeem their shares for a pro rata share of the Trust Account, regardless of their vote on the proposed business combination[63]. - The company may require public shareholders to tender their shares to the transfer agent to exercise redemption rights, which could incur costs[66][67]. - If the initial business combination is not approved, public shareholders who exercised their conversion rights will not be entitled to convert their shares for the Trust Account[69]. - The company will assess all claims against it before distributing amounts from the Trust Account, as creditors may have priority over public shareholders[70]. Risks and Challenges - The company may face challenges in evaluating the management of target businesses and ensuring their capability to manage a public company[52]. - There is a risk of dependency on the performance of a single business due to the lack of diversification in acquisitions[51]. - The company anticipates sourcing target businesses from various unaffiliated financial community members, including investment bankers and venture capital funds[44]. - The company is considering acquiring a China-based company, which may involve risks related to PRC laws and regulations that are often vague and uncertain[75]. - Approval from Chinese authorities may be required for the company to continue listing on U.S. exchanges or issue securities to foreign investors post-business combination[76]. - There is uncertainty regarding future permissions from the PRC government, which could materially affect the company's ability to list on U.S. exchanges[78]. - If permission is denied or rescinded post-business combination, the company may incur increased costs for compliance or face penalties, adversely affecting its operations[79]. - New laws or regulations in China could require the company to change its business practices, potentially decreasing demand for its products or services and reducing revenues[80]. Corporate Governance and Management - The company is classified as an emerging growth company, allowing it to take advantage of certain exemptions from reporting requirements, which may affect the attractiveness of its securities[96]. - The company can delay the adoption of certain accounting standards until they apply to private companies, benefiting from an extended transition period[97]. - The company will remain an emerging growth company until it meets specific revenue or market value thresholds, including total annual gross revenue of at least $1.235 billion[98]. - The audit committee consists of independent directors, including Mr. Peter Ding, Mr. William Chu, and Prof. Albert Yu, ensuring financial literacy and oversight of financial statements[181]. - The compensation committee, chaired by Prof. Albert Yu, will review and recommend compensation arrangements related to initial business combinations, with no other compensation paid to existing shareholders prior to such arrangements[187]. - The nominating committee, also composed of independent directors, oversees the selection of board nominees, considering qualifications such as independence and relevant experience[184]. - The company will only enter into business combinations approved by a majority of independent directors, ensuring oversight and governance compliance[179]. - The audit committee is responsible for reviewing annual audited financial statements and discussing significant financial reporting issues with management and auditors[182]. - Mr. Ding is qualified as an "audit committee financial expert," enhancing the board's financial oversight capabilities[183]. - The company emphasizes the importance of independent directors in maintaining governance standards and ensuring unbiased decision-making[178]. Financial Position and Performance - For the year ended December 31, 2025, the company reported a net income of $1,910,263, which included dividend and interest earned on marketable securities of $2,653,771, offset by operating costs of $743,509[135]. - For the year ended December 31, 2024, the company had a net income of $7,409,180, with dividend income from marketable securities of $8,869,907 and operating costs of $1,460,753[136]. - As of December 31, 2025, the company had cash of $11,206 and investments held in the Trust Account of $57,003,115[127]. - As of December 31, 2025, the company had 4,822,346 ordinary shares subject to possible redemption, classified as temporary equity[145]. - The company has no long-term debt or off-balance sheet financing arrangements as of December 31, 2025[137]. - The company expects to incur increased expenses due to being a public company, particularly for legal, financial reporting, and due diligence expenses[134]. - The company is committed to pay a Deferred Discount of 2% of the gross offering proceeds of the Initial Public Offering, amounting to $2,990,000, to the underwriter upon consummation of a Business Combination[140]. - The company has not been subject to any market or interest rate risk as of December 31, 2025, with investments in U.S. government treasury obligations[147]. - The company began incurring a monthly fee of $10,000 for general and administrative services starting August 1, 2023[138]. - The company has identified critical accounting policies that may materially affect reported amounts in financial statements[141]. - The company has not experienced any changes in internal control over financial reporting that materially affected its operations during the most recent fiscal quarter[153]. Insider Ownership and Transactions - KVC Sponsor LLC holds 4,276,075 ordinary shares, representing 77.65% of the outstanding shares[210]. - Kenneth Wong owns 4,321,075 ordinary shares, accounting for 78.48% of the total[210]. - All executive officers and directors collectively own 4,416,075 ordinary shares, which is 80.20% of the outstanding shares[210]. - Karpus Investment Management and Wolverine Asset Management LLC own 294,134 (5.34%) and 297,589 (5.40%) ordinary shares, respectively[210]. - The company has not entered into any employment agreements with executive officers or provided benefits upon termination[203]. - The company will pay a $10,000 monthly administrative fee to the sponsor for up to 9 months, extendable to 21 months if necessary[204]. - No compensation will be paid to existing shareholders or their affiliates prior to the business combination[204]. - After the initial business combination, compensation for directors or management will be determined by a compensation committee of independent directors[205]. - The company has agreed not to consummate a business combination with any entity affiliated with its officers or directors without independent fairness opinions and disinterested director approval[198]. - All ongoing transactions with officers and directors will require prior approval by the audit committee and a majority of independent directors[197]. - In September 2021, a total of 3,737,500 insider shares were issued to the Sponsor for an aggregate contribution of $25,000[214]. - If the underwriters do not exercise the over-allotment option, up to 487,500 ordinary shares may be subject to forfeiture and cancellation[214]. - Initial shareholders, officers, and directors may loan funds to meet working capital needs, with loans evidenced by promissory notes[216]. - Up to $1,000,000 of the notes may be converted into private units at a price of $10.00 per unit upon consummation of the business combination[216]. - Conversion of notes could result in the issuance of units to acquire 100,000 ordinary shares and 100,000 warrants if $1,000,000 is converted[216]. - Shareholders have approved the issuance of units and underlying securities upon conversion of such notes[216]. - If a business combination is not completed, loans would be repaid from funds not held in the Trust Account[216].