IPO and Fundraising - The company completed its initial public offering on June 26, 2020, raising gross proceeds of $40 million from the sale of 4,000,000 units at $10.00 per unit[27]. - A private placement of 240,000 units was simultaneously completed, generating an additional $2.4 million in gross proceeds[28]. - The total proceeds held in the trust account reached $46 million after subsequent sales of additional units[29]. - The company intends to use cash from the initial public offering and private placements for the initial business combination, which may involve financially unstable or early-stage businesses[36]. - The company may seek additional funds through private offerings of debt or equity securities to finance the initial business combination[39]. Business Combination and Acquisition Strategy - The company has a target to acquire growth businesses with a total enterprise value between $200 million and $300 million[20]. - The management team aims to leverage its operational experience across various sectors, including biopharmaceuticals and information technology, to identify acquisition opportunities[17]. - The company seeks to acquire businesses with significant revenue and earnings growth potential through new product development and increased production capacity[22]. - The management team emphasizes the importance of long-term revenue visibility and strong free cash flow generation in target companies[24]. - The initial business combination must involve target businesses with a fair market value of at least 80% of the trust account value at the time of the agreement[38]. - Target business candidates are sourced from various unaffiliated sources, including investment bankers and private equity funds[41]. - The fair market value of the target business will be determined based on standards accepted by the financial community, including gross margins and comparable business values[50]. - The company anticipates acquiring 100% of the equity interest or assets of the target business, but may acquire less than 100% if it becomes the majority shareholder[49]. - Shareholder approval may not be required for certain types of transactions, such as asset purchases or stock purchases not involving a merger[55]. Shareholder Engagement and Redemption - Shareholders redeemed a total of 1,025,281 shares during the extension votes, indicating a level of shareholder engagement and concern[32]. - The company has extended its period to consummate its initial business combination multiple times, with the latest extension allowing until January 23, 2023[34]. - Shareholders approved an extension for the initial business combination until April 23, 2023, with a total deposit of $2,489,244 into the Trust Account[35]. - The redemption process will allow public shareholders to redeem their shares either through a shareholder meeting or a tender offer[60]. - The company will not proceed with the redemption if the aggregate cash consideration exceeds the available cash in the trust account[65]. - Initial shareholders have agreed to waive their redemption rights concerning their founder shares and any public shares they may hold[58]. - The tender offer for redeeming public shares will remain open for at least 20 business days[61]. - Following redemptions, the remaining funds in the Trust Account were approximately $4.4 million, equating to about $10.85 per public share[81]. - A total of 2,375,991 shares were redeemed in the first extension, leaving 2,075,936 ordinary shares outstanding[81]. - In the second extension, 159,203 shares were redeemed, resulting in 1,816,733 ordinary shares outstanding[81]. Financial Reporting and Compliance - The company is required to file annual, quarterly, and current reports with the SEC, including audited financial statements[102]. - The company must provide audited financial statements of the prospective target business as part of the tender offer materials[103]. - The company is classified as an "emerging growth company," allowing it to take advantage of certain exemptions from reporting requirements[105]. - The company will remain an emerging growth company until it has total annual gross revenue of at least $1.235 billion or the market value of its ordinary shares exceeds $700 million[107]. - The definitive proxy statement for the annual stockholder meeting will be filed with the SEC on February 9, 2023[148]. Internal Controls and Management - Management assessed the effectiveness of internal control over financial reporting and identified a material weakness related to complex financial instruments[144]. - The company plans to enhance its internal control processes to better evaluate complex accounting standards[145]. - There were no changes in internal control over financial reporting that materially affected the company during the most recent fiscal quarter[147]. - The company does not include an attestation report of internal controls from its independent registered public accounting firm due to its emerging growth company status[146]. Competition and Market Challenges - The company faces intense competition from other entities with similar business objectives, which may limit its ability to acquire larger target businesses[100]. - The requirement to acquire a target business with a fair market value equal to at least 80% of the Trust Account value may hinder negotiations with potential targets[100].
Brilliant Acquisition (BRLI) - 2022 Q4 - Annual Report