Financial Performance and Capital Structure - The company completed its initial public offering of 26,450,000 Units at $10.00 per Unit, generating gross proceeds of $264,500,000[30]. - A private placement of 12,190,000 private placement warrants was consummated at $1.00 per warrant, resulting in gross proceeds of $12,190,000[31]. - The company issued a promissory note of up to $720,000 to the sponsor, evidencing its indebtedness related to contributions for the extension[47]. - The company has not secured third-party financing for the initial business combination, which may be necessary if the transaction requires more cash than available[61]. - The company expects to fund dissolution costs from $1,550,000 held outside the trust account and up to $100,000 from the trust account for dissolution expenses[91]. - The per-share redemption amount upon dissolution is projected to be $10.20, but actual amounts may be lower due to creditor claims[92]. - The trust account will initially contain $10.20 per Class A ordinary share, which may incentivize public shareholders to redeem their shares[127]. - Public shareholders may only receive an estimated $10.20 per public share upon redemption, which could be less if claims against the trust account reduce proceeds[148]. - The company has incurred costs related to financing and acquisition plans, raising substantial doubt about its ability to continue as a going concern if additional funds are not raised by August 7, 2023[201]. Business Combination Strategy - The company aims to acquire businesses that can benefit from its extensive networks and expertise, particularly those at an inflection point requiring additional management or innovation[39]. - The company has identified criteria for evaluating target businesses, focusing on those with unrecognized value or significant expansion opportunities[39]. - The company is in advanced discussions with Helios Investment Partners for a potential business combination to create Helios Energy Transition Infrastructure (HETI), focused on natural gas and low-carbon energy in Africa[51]. - The proposed transaction is subject to significant contingencies, including due diligence and shareholder approvals, with no binding agreement currently in place[51]. - The company plans to structure its initial business combination to acquire 100% of the target business, but may acquire less than 100% if it meets certain objectives[52]. - The company may only complete one business combination with the proceeds from the initial public offering and private placement warrants, leading to a lack of diversification[181]. - The company may face challenges in obtaining additional financing for its initial business combination, which could lead to restructuring or abandonment of the deal, potentially resulting in public shareholders receiving approximately $10.20 per share upon liquidation[194]. Shareholder Rights and Redemption Process - The company will provide public shareholders the opportunity to redeem their Class A ordinary shares at a per-share price equal to the aggregate amount in the trust account, including interest, divided by the number of outstanding public shares[71]. - The company has removed the limitation on redeeming public shares that would cause net tangible assets to be less than $5,000,001, allowing for greater flexibility in business combinations[72]. - If the total cash consideration for redemptions exceeds the available cash, the company will not complete the business combination or redeem any shares[72]. - Public shareholders are restricted from redeeming more than 15% of the shares sold in the initial public offering without prior consent, aimed at preventing large shareholders from blocking business combinations[80]. - The company intends to conduct redemptions in conjunction with a proxy solicitation or tender offer, depending on legal requirements and transaction timing[73]. - Shareholders will have the option to redeem their shares either through a general meeting or a tender offer, with the decision made at the company's discretion[73]. - If a shareholder vote is not required, the company will follow tender offer rules, ensuring compliance with SEC regulations[78]. - The redemption process will require public shareholders to tender their shares electronically or physically before the scheduled vote on the business combination[83]. - If the initial business combination is not completed, the company may pursue a different target until August 7, 2023[87]. - The company has no specified maximum redemption threshold, allowing for the completion of a business combination even if a majority of shareholders disagree[188]. Management and Operational Experience - The management team has a cumulative 33 years of financial services experience and 47 years of operational experience, enhancing the company's ability to identify and execute business combinations[32]. - The management team has been involved in transactions totaling tens of billions of dollars across various sectors, providing a strong foundation for future acquisitions[33]. - The board members are representatives of sophisticated financial institutions, which will aid in sourcing potential acquisition targets[35]. - The company currently has four officers who will devote time as needed until the initial business combination is completed, with no full-time employees planned prior to that[102]. - Members of the management team may become involved in litigation or investigations, which could divert attention and resources away from completing an initial business combination[175]. Regulatory and Compliance Considerations - The company is classified as an "emerging growth company," allowing it to take advantage of certain exemptions from reporting requirements[57]. - The company will remain a smaller reporting company until it exceeds a market value of $250 million or annual revenues of $100 million[60]. - The company has reporting obligations under the Exchange Act, including the requirement to file annual, quarterly, and current reports with the SEC[103]. - The company is required to evaluate its internal control procedures for the fiscal year ending December 31, 2022, as mandated by the Sarbanes-Oxley Act[105]. - Compliance with the Sarbanes-Oxley Act may increase the time and costs associated with completing a business combination, particularly if the target business is not compliant with internal control provisions[197]. - The SEC has proposed rules that may increase costs and time needed to complete a business combination, potentially leading to earlier liquidation[156]. - Compliance with new regulations may lead to ongoing uncertainty and additional costs related to disclosure and governance practices[212]. Risks and Challenges - The company may face competition from other entities with greater resources in identifying and acquiring target businesses, which could limit its acquisition capabilities[99]. - The competition for attractive business combination targets has increased, potentially raising costs and complicating the ability to find suitable targets[133]. - The company may face claims of operating as an unregistered investment company if it does not complete its initial business combination within 24 months of its IPO[160]. - The company may incur substantial debt to complete the initial business combination, which could negatively impact shareholder value[179]. - The company may face increased costs and risks if attempting to complete multiple business combinations simultaneously[184]. - There is a risk of pursuing a business combination with a private company with limited information, potentially resulting in lower profitability than expected[185]. - The company may not maintain control of the target business after the initial business combination, which could affect the management's ability to operate profitably[204]. - The company may migrate to another jurisdiction in connection with its initial business combination, which could impose taxes on shareholders and complicate the enforcement of future agreements[209]. - The company may need to seek additional financing to fund the operations or growth of the target business post-combination, which could have a material adverse effect on its development[194]. Shareholder Engagement and Governance - The company is not required to hold an annual general meeting until one year after the first fiscal year end following its Nasdaq listing, limiting shareholder engagement[164]. - The company has not yet selected any specific target businesses for its initial business combination, making it difficult to assess potential risks and merits[165]. - The company may engage its underwriter to provide additional services post-initial public offering, which could create potential conflicts of interest[135]. - The sponsor and directors have agreed not to propose amendments that would affect the redemption rights of Class A ordinary shares without providing an opportunity for redemption[193]. - Personal and financial interests of directors and officers may influence their motivation in identifying and selecting target businesses[227].
Onyx Acquisition I(ONYX) - 2022 Q4 - Annual Report