Financial Position and Capital Needs - The company has incurred significant costs related to acquisition plans and expects to continue incurring these costs [152]. - The company may need to borrow funds from its sponsor or affiliates to address capital needs, but there is no obligation for them to provide such loans [154]. - Approximately $175,950,000 plus interest will be available to complete the business combination and pay related fees and expenses [178]. - The company may incur substantial debt to complete a business combination, which could negatively impact the value of shareholders' investments [176]. - The company may face challenges in obtaining additional financing for its initial business combination, which could lead to restructuring or abandonment of the transaction [191]. - The company may issue additional Class A ordinary shares or preferred shares to complete its initial business combination, which could significantly dilute the interest of current shareholders [270]. Shareholder Redemption and Claims - If the initial business combination is not completed, public shareholders may receive approximately $10.20 per share upon liquidation of the trust account, with potential for receiving less [153]. - The company is subject to potential claims from third parties that could reduce the funds in the trust account, impacting the per-share redemption amount for shareholders [156]. - Shareholders may be held liable for claims against the company to the extent of distributions received upon redemption of their shares [170]. - The sponsor is liable if claims reduce the trust account funds below $10.20 per public share, but the sponsor's ability to satisfy these obligations is uncertain [158]. Regulatory and Compliance Risks - Changes in laws or regulations may adversely affect the company's ability to negotiate and complete its initial business combination [165]. - The SEC has proposed rules that could increase costs and time needed to complete the initial business combination, potentially leading to earlier liquidation of funds [168]. - The company may face burdensome compliance requirements if deemed an investment company under the Investment Company Act, which could hinder business combination efforts [163]. - Compliance with the Sarbanes-Oxley Act may increase the time and costs associated with completing an acquisition, particularly if the target company is not compliant [197]. - The company is subject to changing laws and regulations that have increased costs and the risk of non-compliance, impacting management's focus on revenue-generating activities [279]. Business Combination Risks - The company may face risks associated with acquiring early-stage or financially unstable businesses, which could impact operations and profitability [181]. - The company may complete its initial business combination with a target that does not meet its general criteria and guidelines, potentially affecting the success of the combination [174]. - The company is not required to obtain an independent valuation opinion for the business it acquires, relying instead on the judgment of its board of directors [175]. - The company may attempt to complete multiple business combinations simultaneously, which could increase costs and operational risks [180]. - The company may pursue acquisition opportunities in various industries or geographic locations, focusing on technology-based businesses with significant Israeli connections [172]. Market and Economic Conditions - Economic uncertainty and volatility in financial markets, exacerbated by geopolitical tensions, may adversely affect the company's ability to identify and consummate an initial business combination [200]. - The current economic downturn has led to increased difficulty in completing the initial business combination due to rising inflation and higher interest rates [204]. - Recent volatility in capital markets may affect the ability to obtain financing for the initial business combination, potentially leading to significant dilution for existing shareholders [208]. Management and Operational Risks - The management of the target business may not possess the necessary skills to manage a public company, which could negatively impact post-combination operations [217]. - Key personnel from the target business may resign after the initial business combination, potentially affecting profitability and operations [218]. - The company may negotiate employment or consulting agreements with key personnel in connection with a business combination, which could lead to conflicts of interest [223]. - The company may pursue acquisition opportunities outside of its management's areas of expertise, potentially affecting the evaluation and operation of such businesses [224]. - The company is dependent on a small group of officers and directors, and their unexpected departure could adversely affect operations [226]. Conflicts of Interest - Conflicts of interest may arise as officers and directors allocate their time to other businesses, impacting the ability to complete a business combination [228]. - The company may engage in business combinations with entities affiliated with its sponsor, officers, or directors, raising potential conflicts of interest [232]. - The personal and financial interests of the sponsor and management may influence the selection of target business combinations [235]. - EarlyBirdCapital may have a conflict of interest in rendering services to the company in connection with the initial business combination, as it will receive a fee based on the total gross proceeds raised [277]. Share Structure and Securities - The company has approximately 19.5% of its ordinary shares owned by initial shareholders, which may facilitate amendments to its memorandum and articles of association with a two-thirds majority approval [188]. - The company may amend the terms of public warrants with the approval of at least a majority of the outstanding public warrants, potentially increasing the exercise price or shortening the exercise period [189]. - The potential issuance of a substantial number of additional Class A ordinary shares upon exercise of warrants could make the company a less attractive acquisition vehicle [252]. - The company may redeem outstanding warrants at a price of $0.01 per warrant if the last reported sales price of Class A ordinary shares equals or exceeds $18.00 per share for any 20 trading days within a 30 trading-day period [250]. - The company has established a unit structure that may cause its units to be worth less than those of other blank check companies, as each unit contains three-quarters of one redeemable warrant [244]. Legal and Jurisdictional Issues - The company may face difficulties in protecting shareholder interests due to its incorporation under the laws of the Cayman Islands, which may limit legal recourse in U.S. courts [255]. - If the company is unable to consummate its initial business combination within 18 months from the closing of its initial public offering, public shareholders may have to wait beyond this period for redemption from the trust account [263]. Financial Reporting and History - The company is classified as an "emerging growth company," which allows it to take advantage of certain exemptions from reporting requirements, potentially making its securities less attractive to investors [194]. - The company has not opted out of the extended transition period for new financial accounting standards, which may complicate comparisons with other public companies [195]. - As a "smaller reporting company," the company can provide only two years of audited financial statements, which may hinder comparisons with other public companies [196]. - The company has no operating history and no revenues, making it difficult to evaluate its ability to achieve its business objectives [276]. Market Risks - There is currently a limited market for the company's securities, which adversely affects liquidity and price [253]. - The company may face significant material adverse consequences if its securities are delisted from Nasdaq, including reduced liquidity and increased regulatory scrutiny [243]. - Nasdaq may delist the company's securities if certain financial and share price levels are not maintained, limiting investors' ability to transact [242].
Finnovate Acquisition (FNVT) - 2022 Q4 - Annual Report