Initial Public Offering and Trust Account - The company completed its Initial Public Offering on March 16, 2021, raising gross proceeds of $345.0 million from the sale of 34,500,000 units at $10.00 per unit, with offering costs of approximately $19.9 million[23]. - A total of $345.0 million from the Initial Public Offering and certain proceeds from a private placement were placed in a trust account, invested only in U.S. government securities or money market funds[26]. - The company has approximately $333 million available from the Initial Public Offering and private placement warrants to complete its Initial Business Combination, after accounting for $12.1 million in deferred underwriting commissions[149]. - The proceeds held in the trust account may yield negative interest rates, potentially reducing the per-share redemption amount below $10.00[206]. Business Combination Strategy - The company intends to focus on identifying target businesses primarily in North America, Europe, or Asia, particularly in sectors undergoing transformation due to the fourth industrial revolution[18]. - Key sectors of interest include automotive (electric and autonomous vehicles), energy (storage and renewables), manufacturing (automation and AI), and transportation (data analytics and alternative fuels)[20]. - The management team has over 70 years of combined experience in private equity, M&A, and corporate development, which will be leveraged to identify and evaluate acquisition opportunities[30]. - The company plans to conduct extensive due diligence on potential acquisition targets, including financial, operational, and legal reviews[33]. - The company anticipates structuring its Initial Business Combination to acquire 100% of the equity interests or assets of the target business, but may also acquire less than 100% to meet specific objectives[39]. - Target business candidates are sourced from various unaffiliated sources, including investment market participants and private equity groups, with potential proprietary deal flow opportunities from the management team's business relationships[45]. Risks and Challenges - The company has no operating history and no revenues, which poses a high degree of risk for investors[102]. - The lack of business diversification may expose the company to risks associated with relying on the performance of a single business after the Initial Business Combination[51]. - The ongoing COVID-19 pandemic may adversely affect the company's search for a business combination and the operations of potential target businesses[114]. - The company faces intense competition from other entities with similar business objectives, which may have greater resources and experience[96]. - The number of blank check companies seeking business combination targets has increased, potentially limiting the company's competitive edge[97]. - The company may face significant operational challenges if it seeks to combine with large, complex businesses, which could delay desired improvements[166]. - The company may not be able to adequately address risks associated with cross-border business combinations, potentially impacting operations negatively[165]. Shareholder Rights and Redemption - Public shareholders will have the opportunity to redeem their Class A ordinary shares at a per-share price of $10.00 upon completion of the Initial Business Combination[65]. - The company will not redeem public shares if the business combination does not close, and all shares submitted for redemption will be returned to the holders[66]. - A public shareholder can redeem no more than 15% of the shares sold in the Initial Public Offering without prior consent from the company[75]. - If the Initial Business Combination is not completed, public shareholders who elected to redeem their shares will not be entitled to a pro rata share of the trust account[80]. - If the Initial Business Combination is not completed by the deadline, public shareholders will receive a redemption amount of $10.00 per share, subject to potential claims from creditors[86]. - The company may conduct redemptions without a shareholder vote under SEC tender offer rules, but will seek shareholder approval if required by law or stock exchange listing requirements[55]. Financial Structure and Obligations - The company may need to obtain additional financing to complete its Initial Business Combination if the transaction requires more cash than available from the trust account or if significant public shares are redeemed[44]. - The company may incur substantial debt to complete its Initial Business Combination, which could negatively impact shareholders' investment value[188]. - The company may face limitations on its ability to borrow additional amounts for various purposes due to existing debt obligations[194]. - The company has agreed not to incur any indebtedness unless it obtains a waiver from the lender regarding claims to the trust account funds[188]. Management and Governance - The management team will utilize a broad network of industry relationships to identify promising business combination opportunities[29]. - The company is not prohibited from pursuing Initial Business Combinations with affiliated companies, but will seek independent opinions to ensure fairness[34]. - The company may need to recruit additional managers post-business combination, but there is no assurance that it will be able to find suitable candidates[54]. - The company’s key personnel are critical for the success of the Initial Business Combination, and their loss could negatively impact operations and profitability[214]. Regulatory and Compliance Issues - The company is classified as an "emerging growth company," allowing it to take advantage of certain reporting exemptions[98]. - The company intends to delay the adoption of certain accounting standards under the extended transition period provided for emerging growth companies[99]. - The company is exempt from certain SEC rules protecting investors in blank check companies due to having net tangible assets exceeding $5,000,000[121]. - Changes in laws or regulations could adversely affect the company's ability to negotiate and complete its initial business combination[140]. Market Conditions and External Factors - The ability to complete the initial business combination may be negatively impacted by market conditions, including COVID-19 and geopolitical events, which could limit available financing[116]. - The competition for attractive targets has increased due to the rise in special purpose acquisition companies, potentially raising acquisition costs[168]. - The company may depend on loans from its sponsor or affiliates if the net proceeds from its Initial Public Offering are insufficient to fund its operations until March 16, 2023[103].
Ross Acquisition II(ROSS) - 2021 Q4 - Annual Report