Part I Item 1. Business Finnovate Acquisition Corp. is a blank check company focused on acquiring technology businesses with an Israeli connection, having raised $175.95 million in its November 2021 IPO * The company is a blank check company formed to effect a business combination with one or more businesses19 * The acquisition strategy targets Israel-related technology companies in sectors like payments, insuretech, and digital banking36 Initial Public Offering (IPO) Details | Metric | Value | | :--- | :--- | | IPO Date | November 8, 2021 | | Units Offered (incl. over-allotment) | 17,250,000 | | Price per Unit | $10.00 | | Gross Proceeds from Units | $172,500,000 | | Private Warrants Sold | 8,800,000 | | Gross Proceeds from Private Warrants | $8,800,000 | | Total Funds Placed in Trust Account | $175,950,000 | * The company has 18 months from its IPO to complete an initial business combination, or it will liquidate84 Item 1A. Risk Factors The company faces significant SPAC-specific risks, including acquisition deadlines, intense competition, potential redemptions, and post-combination operational and foreign investment challenges * The company must complete its initial business combination within 18 months of its IPO, potentially limiting due diligence and increasing negotiation leverage for targets136142 * Increased competition from a growing number of SPACs may hinder finding attractive targets and raise acquisition costs137138 * Acquiring a company in Israel or another foreign jurisdiction introduces risks such as currency fluctuations, complex tax laws, and political instability202205208 * The company may be classified as a Passive Foreign Investment Company (PFIC), leading to adverse U.S. federal income tax consequences for U.S. investors269 * Sponsor, officers, and directors face a potential conflict of interest as they lose their investment in founder shares if a business combination is not completed227228 Item 1B. Unresolved Staff Comments The company confirms the absence of any unresolved staff comments from the SEC * There are no unresolved staff comments275 Item 2. Property The company's executive offices are in George Town, Grand Cayman, with a monthly administrative services fee of $3,000 paid to the sponsor * The company's executive offices are located at The White House, 20 Genesis Close, George Town, Grand Cayman KY1 1208, Cayman Islands276 * An administrative services agreement with the sponsor incurs a cost of $3,000 per month for office space and support services276 Item 3. Legal Proceedings The company is not currently involved in any material litigation, arbitration, or governmental proceedings * There is no material litigation, arbitration, or governmental proceeding currently pending against the company or its management277 Item 4. Mine Safety Disclosures This item is not applicable to the company's operations * Not applicable278 Part II Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities The company's securities trade on Nasdaq, with $175.95 million from IPO proceeds held in trust, and no dividends paid or intended before a business combination * The company's securities are traded on Nasdaq under symbols: Units (FNVTU), Class A ordinary shares (FNVT), and Warrants (FNVTW)280 * No cash dividends have been paid, nor are they intended prior to completing a business combination282 * A total of $175,950,000 from the IPO and private warrant sales was placed in the trust account293 Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations Since inception, the company has generated no revenue, reporting a $639,546 net loss as of December 31, 2021, with activities focused on its IPO and business combination search Financial Highlights (as of Dec 31, 2021) | Metric | Value | | :--- | :--- | | Net Loss | $639,546 | | Cash outside Trust Account | $1,011,771 | | Investment held in Trust Account | $175,952,102 | | Working Capital Loan Outstanding | $449,765 | * Primary liquidity requirements before a business combination include legal, accounting, due diligence, and regulatory reporting expenses309 * EarlyBirdCapital is engaged as a business combination advisor, with a fee of 3.5% of gross IPO proceeds payable upon consummation315 Item 7A. Quantitative and Qualitative Disclosures about Market Risk The company faces no material market or interest rate risk, as trust account funds are invested in low-risk, short-term U.S. government obligations * As of December 31, 2021, the company was not subject to any material market or interest rate risk327 * Trust account proceeds are invested in low-risk, short-term U.S. government treasury obligations or money market funds327 Item 8. Financial Statements and Supplementary Data This section presents the company's audited financial statements from inception (March 15, 2021) to December 31, 2021, including the Balance Sheet and Statement of Operations * The financial statements cover the period from March 15, 2021 (inception) through December 31, 2021442 Key Balance Sheet Figures (Dec 31, 2021) | Account | Amount | | :--- | :--- | | Total Assets | $177,633,484 | | Total Liabilities | $668,396 | | Class A ordinary shares subject to possible redemption | $175,950,000 | | Total Shareholder's Equity | $1,015,088 | Statement of Operations (Inception to Dec 31, 2021) | Account | Amount | | :--- | :--- | | Loss from Operations | ($190,972) | | Total other income (expense) | ($448,574) | | Net Loss | ($639,546) | Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure Since inception, the company has had no disagreements with its independent registered public accountants regarding accounting principles or financial disclosure * There have been no disagreements with the company's independent registered public accountants330 Item 9A. Controls and Procedures Management assessed the company's disclosure controls and procedures as effective as of December 31, 2021, with no material changes in internal controls * The company's disclosure controls and procedures were deemed effective as of December 31, 2021332 * A management report on internal controls over financial reporting is not required due to the transition period for newly public companies334 Part III Item 10. Directors, Executive Officers and Corporate Governance The company's board includes five members, with three independent directors, and has established audit and compensation committees, while addressing potential conflicts of interest Key Executive Officers and Directors | Name | Position | | :--- | :--- | | David Gershon | Chairman of the Board and Chief Executive Officer | | Ron Golan | Director and Chief Financial Officer | | Jonathan Ophir | Chief Investment Officer | | Mitch Garber | Director | | Gustavo Schwed | Director | | Nadav Zohar | Director | * The board of directors has determined that Gustavo Schwed, Mitch Garber, and Nadav Zohar are independent directors346 * The company has established an Audit Committee and a Compensation Committee, both composed of independent directors351352355 * Potential conflicts of interest exist due to officers' and directors' affiliations with other entities that may compete for business opportunities366369 Item 11. Executive Compensation No cash compensation has been paid to officers or directors, who are reimbursed for expenses, with future compensation determined post-business combination * No cash compensation has been paid to any officers or directors for services rendered382 * The sponsor, officers, and directors will be reimbursed for documented out-of-pocket expenses related to identifying and completing a business combination382 * Compensation for management after a business combination will be determined by the post-combination company's board and compensation committee384 Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters As of April 12, 2022, the sponsor and affiliates beneficially owned 19.5% of ordinary shares, with founder shares subject to a 180-day post-combination lock-up Beneficial Ownership (as of April 12, 2022) | Name of Beneficial Owner | Approximate Percentage of Outstanding Class A Ordinary Shares | | :--- | :--- | | Finnovate Sponsor, LP and affiliated entities | 19.5% | | Saba Capital Management, L.P. | 6.1% | | All officers, directors and director nominees as a group | 0.4% | * Prior to the initial business combination, only holders of founder shares (Class B ordinary shares) have the right to vote on the appointment of directors390 * Founder shares are subject to a lock-up period until 180 days after the completion of the initial business combination, with certain exceptions393 Item 13. Certain Relationships and Related Transactions, and Director Independence Related party transactions include the sponsor's purchase of founder shares and private warrants, a $3,000 monthly administrative fee, and potential working capital loans * The sponsor purchased 4,312,500 founder shares for an aggregate price of $25,000403 * The sponsor purchased 8,243,038 private warrants at $1.00 per warrant in a private placement404 * The company pays its sponsor $3,000 per month for office space and administrative services406 * The sponsor may provide working capital loans, with up to $1,500,000 convertible into warrants at $1.00 per warrant; $449,765 was outstanding as of December 31, 2021411 Item 14. Principal Accounting Fees and Services For fiscal year 2021, Marcum LLP received $154,500 in audit fees, with all services pre-approved by the audit committee Fees Paid to Marcum LLP for Fiscal Year 2021 | Fee Category | Amount | | :--- | :--- | | Audit Fees | $154,500 | | Audit-Related Fees | $0 | | Tax Fees | $0 | | All Other Fees | $0 | * Since its formation, the audit committee pre-approves all auditing and permitted non-audit services430 Part IV Item 15. Exhibits, Financial Statement Schedules This section provides an index of the financial statements and a comprehensive list of all exhibits filed with the Annual Report * This section provides an index of the financial statements and a list of all exhibits filed with the Annual Report433434 Item 16. Form 10-K Summary This item is not applicable to the company's filing * Not applicable437
Finnovate Acquisition (FNVT) - 2021 Q4 - Annual Report