Going Concern and Financial Viability - The company has substantial doubt about its ability to continue as a "going concern" due to potential conflicts of interest and financial interests of independent directors[78]. - If the initial business combination is not completed by April 7, 2024, the company will cease operations and redeem public shares at a per-share price of $10.30, subject to creditor claims[93]. - The company may seek to extend the Combination Period, which would require public shareholder approval and could adversely affect the trust account[82]. - The company may not be able to obtain additional financing to complete its initial business combination, which could impact the number of shareholders requesting redemption[122]. - If the Charter Extension is not approved, the company will face mandatory liquidation if a business combination is not completed by April 7, 2024[185]. Regulatory and Compliance Issues - The company has received a deficiency notice from Nasdaq for failing to maintain a minimum of 400 public holders of its ordinary shares, risking delisting[107]. - The company received a notice from Nasdaq indicating non-compliance with the Minimum Total Holders Rule, requiring a plan for compliance by November 9, 2023[221]. - The SEC adopted the 2024 SPAC Rules on January 24, 2024, which will impact SPAC business combination transactions starting July 1, 2024[198]. - The 2024 SPAC Rules require additional disclosures related to SPAC business combinations, including dilution and conflicts of interest[198]. Business Combination Challenges - The company may face challenges in selecting an appropriate target business and completing the initial business combination within the prescribed timeframe[141]. - The company may face increased costs and risks in finding suitable business combination targets due to competition and regulatory reviews[108]. - The company has faced intense competition from other entities seeking business combination partners, which may limit its ability to acquire larger partners due to financial resource constraints[149]. - The initial business combination must involve a partner with a fair market value of at least 80% of the net assets held in the trust account[251]. Financial Performance and Projections - The company has not generated any revenues to date and only incurs expenses related to being a public company and due diligence activities[167]. - The aggregate market value of the outstanding Class A ordinary shares was approximately $45.1 million as of June 30, 2023[187]. - Following the extraordinary general meeting on June 30, 2023, shareholders redeemed approximately $200.9 million (about $10.70 per share) from the trust account[234]. - The company has incurred approximately $373,500 under an amended Second Promissory Note, increasing the principal sum from $300,000 to $750,000[166]. Cybersecurity Risks - Cyber incidents could lead to information theft, operational disruption, and financial loss, impacting the company's business[84]. - The company lacks sufficient resources to protect against cyber incidents, which could have material adverse consequences on its business[84]. Management and Strategy - The management team is now led by CEO Suresh Guduru and COO/CFO C. Brian Coad, following a change in board composition on May 23, 2023[218][230]. - The company has shifted its strategy to focus on technology firms for potential business combinations, aiming for partners with a valuation of $500 million or higher[238][245]. - The company aims to provide a more expeditious and cost-effective method for business combination partners to go public compared to traditional IPOs[254]. - The management team seeks to partner with committed founders and leadership teams who have a clear vision and the ability to execute their business plans[267]. Shareholder and Trust Account Information - The trust account funds may not be protected against third-party claims or bankruptcy, which could affect the amount returned to shareholders[141]. - The per-public-share redemption amount upon dissolution could be less than $10.30 due to creditor claims, despite intentions to pay that amount[95]. - The company has instructed to liquidate investments in the trust account and hold funds in an interest-bearing demand deposit account[177]. - Following the conversion of Class B ordinary shares, there are 8,964,415 Class A ordinary shares outstanding, with the sponsor holding approximately 53% of these shares[155]. Future Outlook and Opportunities - The company believes that the rapid evolution of technology presents significant acquisition opportunities in the market[264]. - The company aims to identify business combination partners that can leverage access to U.S. capital markets for growth and international expansion[233]. - The directors and officers have extensive experience in conducting due diligence and seek partners that offer a robust risk-adjusted return profile with substantial upside potential[269].
Cartica Acquisition p(CITE) - 2023 Q4 - Annual Report