IPO and Financial Structure - The company completed its Initial Public Offering on November 22, 2021, raising gross proceeds of $276.0 million from the sale of 27,600,000 units at $10.00 per unit, with offering costs of approximately $16.3 million[20]. - A total of $276,000,000 from the IPO and private placement was placed in a U.S.-based trust account[22]. - The company has $267,615,000 available for a business combination after offering expenses of $725,000, providing options for liquidity events, capital for growth, or debt reduction[60]. - The anticipated cash consideration for public shares upon redemption is expected to be $10.00 per share[92]. - The expected per-share redemption amount upon dissolution is approximately $10.00, but this may be reduced due to creditor claims[120]. - The company has access to $1,275,000 from the Initial Public Offering proceeds to cover potential claims and liquidation costs, estimated to be around $100,000[124]. - If the trust account proceeds fall below $10.00 per public share due to creditor claims, the actual redemption value may be significantly less[122]. - The company will not redeem public shares if it would cause net tangible assets to fall below $5,000,001[129]. - Claims of creditors may have priority over shareholders' claims in the event of bankruptcy, potentially reducing the per-share amount received[211]. Acquisition Strategy and Focus - The company aims to focus on acquiring global high-growth premium consumer-facing brands that resonate emotionally with millennial and Gen-Z consumers, targeting businesses with long-term growth prospects and robust recurring revenues[19]. - The company intends to pursue acquisition opportunities that exhibit strong fundamentals, such as visible recurring revenues and scalable growth, which can lead to attractive free cash flow characteristics[38]. - The management's strategy includes identifying companies with a large addressable market and a strong existing customer base, particularly those with emotional engagement with younger consumers[38]. - The company is optimistic about its ability to identify and evaluate potential business combinations through its disciplined sourcing strategy[33]. - The company recognizes the impact of COVID-19 on its acquisition process and the operations of potential target businesses[43]. - The company anticipates receiving acquisition opportunities from various unaffiliated sources, including investment bankers and private investment funds[67]. - The company may engage professional firms for business acquisitions in the future, potentially paying finder's fees tied to transaction completion[67]. - The company may face intense competition from other entities in acquiring target businesses, which could limit its options[132]. - The increased number of blank check companies may lead to a scarcity of attractive targets, potentially increasing the cost of initial business combinations[187]. Business Combination and Redemption Process - The company plans to structure its initial business combination to ensure that the post-transaction entity will own or acquire at least 50% of the voting securities of the target business[45]. - The initial business combination must involve a target with a fair market value equal to at least 80% of the net assets held in the trust account[69]. - The post-transaction company must own or acquire 50% or more of the issued and outstanding voting securities of the target[70]. - The company intends to provide public shareholders the opportunity to redeem shares upon completion of the initial business combination, either through a general meeting or a tender offer[95]. - Redemptions will be conducted under SEC rules, with the offer remaining open for at least 20 business days, and cannot complete the business combination until the tender offer period expires[98]. - If the initial business combination is not approved, shareholders who elected to redeem will not be entitled to redeem their shares for the pro rata share of the trust account[113]. - The company has 18 months from the closing of the Initial Public Offering to complete its initial business combination, after which it will redeem public shares at a price based on the trust account balance[115]. - If the initial business combination is not completed within the required time period, public shareholders may receive only approximately $10.00 per share upon liquidation[142]. - The company must maintain net tangible assets of at least $5,000,001 after redemptions to proceed with a business combination[158]. - If a significant number of shares are submitted for redemption, the company may need to restructure the transaction or seek third-party financing, potentially leading to dilution[160]. Management and Operational Risks - The management team has extensive experience in sourcing, structuring, and operating businesses, which positions the company well to create shareholder value[29]. - The management team has developed a network of relationships with business leaders to identify brands that can leverage current market trends[28]. - The management's ability to assess the target's management team may not be accurate, posing additional risks[79]. - The company may incur losses if the identification and evaluation of a target business do not lead to a successful combination[73]. - The lack of diversification may expose the company to significant economic and regulatory risks[78]. - The company may need to reserve a portion of cash in the trust account to meet minimum cash requirements for the initial business combination, which could limit available funds for the transaction[160]. - The company may depend on loans from its sponsor or management team to fund its search for a target business if net proceeds are insufficient[197]. - The company has incurred and expects to continue incurring significant costs in pursuit of acquisition plans since the completion of the Initial Public Offering[195]. Regulatory and Compliance Considerations - The company is classified as an "emerging growth company" and will remain so until it meets certain revenue or market value thresholds[57]. - The company is also a "smaller reporting company," allowing it to provide reduced disclosure obligations until it exceeds specific market value or revenue thresholds[58]. - The company intends to take advantage of reduced disclosure obligations as a smaller reporting company[138]. - If deemed an investment company under the Investment Company Act, the company may face burdensome compliance requirements and restrictions on activities[213]. - The company must ensure that investment securities do not constitute more than 40% of its assets to avoid being classified as an investment company[216]. Shareholder Rights and Approval - Shareholder approval may be required if the issuance of ordinary shares exceeds 20% of the outstanding shares[83]. - The company may seek to recruit additional managers post-business combination, but there is no assurance of their availability[81]. - Public shareholders may redeem shares without voting, and initial shareholders have agreed to vote in favor of the business combination[103]. - A public shareholder is restricted from redeeming more than 15% of the shares sold in the Initial Public Offering without prior consent[106]. - Shareholders must tender their certificates or deliver shares electronically to exercise redemption rights[108]. - The company must seek shareholder approval for any amendments related to the redemption process or shareholder rights[117]. - If the company fails to comply with redemption procedures, shareholders may not be able to redeem their shares[179].
bleuacacia ltd(BLEU) - 2021 Q4 - Annual Report