Armada Acquisition I(US:AACI)2022-12-21 16:00Business Combination - The company anticipates completing only one business combination and will be solely dependent on a single business[79]. - The company has until February 17, 2023, to consummate a business combination unless further extended[82]. - The company may not have sufficient funds to close an initial business combination if it exhausts all working capital and loans[89]. - The company anticipates completing only one business combination, leading to a lack of diversification and potential economic risks associated with a single business performance[98]. - The business combination agreement with Rezolve Limited was announced on December 17, 2021, involving a series of transactions to merge and reorganize the companies[225]. - The business combination is subject to customary closing conditions, including stockholder approvals and regulatory approvals[228]. - The amendment to the business combination agreement extended the termination date to January 31, 2023, or 15 days prior to the last date for consummating a business combination[233]. - Key Company Shareholders have agreed to vote in favor of the Company Reorganization and the Business Combination Agreement as part of the Transaction Support Agreement[273]. - A First Amendment to the Business Combination Agreement was executed on November 10, 2022, extending the termination date and changing the structure of the Business Combination[272]. Financial Position - As of September 30, 2022, the company had cash of $177,578 and a working capital deficit of $3,149,327, raising substantial doubt about its ability to continue as a going concern[199]. - The company had a net loss of $3,622,794 for the year ended September 30, 2022, which included formation and operating costs of $4,391,263 and stock-based compensation of $111,852, partially offset by trust interest income of $1,025,942[237]. - The company incurred $3,537,515 in IPO-related costs, including $1,500,000 in underwriting fees[242]. - For the year ended September 30, 2022, the company reported a net loss of $3,622,794, primarily impacted by changes in operating assets and liabilities of $3,623,049[247]. - The company has a working capital deficit and expects to incur significant costs in pursuit of financing plans and its initial business combination[199]. - As of September 30, 2022, the company had a balance due to the Sponsor of $251,754 under loans, which are non-interest bearing and due upon completion of a business combination[249]. Shareholder Impact - Current public stockholders will own approximately 7.5% of the post-business combination entity, while existing shareholders of the target will own approximately 88.8%, resulting in limited influence for current stockholders[105]. - The company may require stockholders wishing to redeem shares to comply with specific requirements, complicating the redemption process[80]. - The company does not have a specified maximum redemption threshold, allowing for the possibility of consummating a business combination even if a substantial number of stockholders seek redemption[104]. - To approve a business combination, 5,547,000 public shares (approximately 32.1% of public shares) need to be voted in favor, assuming no other shares are purchased[146]. - The potential concentration of ownership by anchor investors may adversely affect the trading price of common stock and complicate business combinations[152]. - The holders of Founder Shares and Private Shares are entitled to registration rights, allowing them to demand registration of securities up to two times[269]. Regulatory and Compliance Risks - The company is subject to compliance with the Sarbanes-Oxley Act, which may increase the time and costs of completing acquisitions[208]. - The company is subject to a new 1% U.S. federal excise tax on stock repurchases starting in 2023, which may impact investment value[174][176]. - Nasdaq may delist the company's securities, limiting transaction capabilities and imposing additional trading restrictions[167]. - The company must meet initial listing requirements to remain on Nasdaq; failure to do so could have significant adverse consequences[171]. - The company is classified as an emerging growth company, allowing it to take advantage of certain exemptions from disclosure requirements, which may make its securities less attractive to investors[205]. - If deemed an investment company, the company may face burdensome compliance requirements that could hinder its ability to complete a business combination[200]. Operational Challenges - The management team has limited experience managing a public company, which may lead to operational inefficiencies and compliance challenges[138][140]. - The absence of employment agreements or keyman insurance for officers may lead to risks associated with the unexpected loss of key personnel[92]. - The company does not intend to have full-time employees prior to the initial business combination, which may negatively impact its ability to consummate the transaction[96]. - The company may face conflicts of interest due to the involvement of its officers and directors in determining suitable target businesses[81]. - The company may face increased competition for attractive targets due to the rise in special purpose acquisition companies, potentially raising costs and complicating the acquisition process[111]. Trust Account and Redemption - Following the IPO, $150,000,000 from the net proceeds was placed in the Trust Account[222]. - The trust account proceeds may be reduced due to third-party claims, potentially lowering the per-share redemption price below $10.00[185]. - Bankruptcy proceedings could subject trust account proceeds to claims that take priority over stockholder claims, affecting return amounts[186]. - The company intends to use substantially all funds held in the Trust Account to complete its initial business combination, with an estimated annual franchise tax obligation of $200,000[248]. - The investments in the Trust Account have a maturity of 185 days or less, minimizing exposure to interest rate risk[275]. Miscellaneous - The company has not paid any cash dividends on its common stock to date and does not intend to do so prior to completing its initial business combination[216]. - The company maintains its executive offices at 1760 Market Street, Suite 602, Philadelphia, Pennsylvania 19103[210]. - The company completed its IPO on August 17, 2021, raising gross proceeds of $150 million from the sale of 15,000,000 units at $10.00 per unit[221]. - The company issued warrants to purchase up to 7,500,000 shares of common stock, which could affect the attractiveness of the company as an acquisition target[154]. - The company may issue shares at a price less than $9.20 per share, which could adjust the exercise price of warrants and complicate business combination efforts[91].