Rigel Resource Acquisition (RRAC) - 2023 Q4 - Annual Report

IPO and Trust Account - The company completed its Initial Public Offering on November 9, 2021, raising gross proceeds of $300 million from the sale of 30 million units, including 2.5 million units from the underwriter's over-allotment option [20]. - A total of $306 million from the IPO and private placement was placed in a trust account, with an initial value of $10.20 per unit, which may be invested in U.S. government securities [22]. - The company has the obligation to complete a Business Combination with a fair market value equal to at least 80% of the net assets held in the Trust Account [24]. - Holders of 5,429,967 Class A ordinary shares redeemed their shares for cash at a redemption price of approximately $10.73 per share, totaling an aggregate redemption amount of $58,279,780 [32]. - If the initial Business Combination is not completed by August 9, 2024, Public Shareholders may receive approximately $10.20 per share or less upon liquidation [85]. - If the initial Business Combination is not completed within the required time period, public shareholders may receive approximately $10.20 per share upon liquidation of the Trust Account [129]. - If the initial Business Combination is not completed by August 9, 2024, shareholders may receive only approximately $10.20 per share upon liquidation [117]. - The per-share amount for shareholders may be reduced if liquidation claims deplete the Trust Account [110]. - The company’s Sponsor is liable for claims that reduce the Trust Account below $10.20 per public share, but there is no guarantee of sufficient funds to cover such obligations [106][107]. - The Trust Account may be reduced below $10.20 per public share if indemnification obligations are not enforced by the independent directors [108]. Business Combination Plans - The company entered into a Business Combination Agreement on March 11, 2024, with Blyvoor Gold Resources and Blyvoor Gold Operations, marking a significant step towards its initial Business Combination [39]. - The business combination transaction involves a merger with Merger Sub, resulting in Newco becoming a publicly traded company on NASDAQ under the name Aurous Resources [40]. - The initial Business Combination must involve assets with a fair market value equal to at least 80% of the net assets held in the Trust Account [72]. - The company intends to structure the initial Business Combination to acquire 100% of the target business's equity interests or assets [73]. - The company plans to target "green" metals and innovative mining technologies, emphasizing sustainability and competitive advantages [64]. - The acquisition strategy aims to leverage Orion's network to identify and acquire businesses in the metals and mining industry, focusing on value creation [62]. - The company may attempt to complete multiple Business Combinations simultaneously, which could increase costs and risks, negatively impacting operations and profitability [138]. - The company may incur substantial debt to complete a Business Combination, which could negatively impact financial condition and shareholder value [134]. - The company may face challenges in securing financing for operations or growth of the target business, which could adversely affect development [146]. - The company may need additional financing to complete the initial Business Combination or fund the target business's operations, which may not be available on acceptable terms [145]. Shareholder Rights and Approvals - The Company’s public shareholders will have the opportunity to redeem their shares in conjunction with the Rigel Stockholder Approval [48]. - The Sponsors have agreed to vote in favor of the Transactions and not to transfer any Newco Ordinary Shares for 12 months post-closing [54][55]. - Initial shareholders, directors, and officers have agreed to vote in favor of the initial Business Combination, potentially facilitating approval [79]. - The ability of Public Shareholders to redeem shares for cash may deter potential Business Combination targets, complicating negotiations [81]. - The company may seek shareholder approval for its initial Business Combination, with potential purchases of shares or warrants from public shareholders, which could influence voting outcomes and reduce public float [90]. - The absence of a specified maximum repurchase threshold may allow the company to complete a Business Combination that a majority of shareholders do not agree with [141]. - Amendments to the company's charter can be made with the approval of at least two-thirds of ordinary shares, facilitating easier completion of Business Combinations [143]. Risks and Challenges - The company anticipates intense competition from established entities, including private investors and other blank check companies, which may limit its financial resources for acquisitions [74]. - The company faces significant competition from other entities for Business Combination opportunities, which may limit its ability to acquire sizable target businesses due to relatively limited financial resources [95][96]. - The number of special purpose acquisition companies (SPACs) has increased, leading to heightened competition for attractive targets, potentially increasing costs and complicating the acquisition process [97][98]. - The COVID-19 pandemic and other global events may adversely affect the company's ability to complete a Business Combination [87]. - Adverse global or regional economic conditions, such as recession or inflation, could negatively impact the ability to find attractive target businesses [155]. - Geopolitical tensions, including sanctions related to Russia and trade restrictions with China, may adversely affect market conditions and business operations [157]. - The company may face litigation risks related to the identified material weakness in internal controls, which could adversely affect business operations and financial condition [208]. - The departure of key personnel from a target business post-Combination could negatively impact operations and profitability [166]. - Management's unfamiliarity with U.S. securities laws could lead to regulatory issues and operational challenges after the initial Business Combination [168]. Financial Reporting and Compliance - A material weakness in internal control over financial reporting was identified, which could adversely affect the accuracy and timeliness of financial reporting, impacting investor confidence [204]. - As of December 31, 2023, management concluded that disclosure controls and procedures were not effective, raising concerns about timely financial information reporting [205]. - The company lacks operating revenues and has no basis to evaluate its ability to achieve its business objective of completing an initial Business Combination [198]. - The company is classified as a "smaller reporting company," which allows it to provide only two years of audited financial statements until certain market value and revenue thresholds are met [203]. - The Sarbanes-Oxley Act compliance obligations may increase the time and costs of completing an acquisition, particularly for a blank check company [154]. - The company may be classified as a Passive Foreign Investment Company (PFIC), which could result in adverse U.S. federal income tax consequences for U.S. investors [200]. - The company has 15,000,000 public warrants and 14,000,000 private placement warrants classified as derivative liabilities, which may lead to significant fluctuations in financial results due to fair value changes [209]. - There is substantial doubt about the company's ability to continue as a "going concern," with significant costs expected in pursuit of acquisition plans [210]. Management and Governance - The company currently has four officers and does not plan to hire full-time employees before completing its initial Business Combination [75]. - Directors and officers are not required to commit full time to the company's affairs, which may negatively impact the ability to complete the initial Business Combination [173]. - Certain directors and officers may be affiliated with entities engaged in similar business activities, creating potential conflicts of interest [174]. - Business opportunities may be presented to other entities before being offered to the company, which could affect the selection of target businesses [175]. - The company has not adopted a policy to prohibit directors and officers from having financial interests in investments related to the company, leading to potential conflicts [176]. - Key personnel may negotiate employment or consulting agreements in connection with the initial Business Combination, potentially leading to conflicts of interest [172]. Securities and Market Conditions - The NYSE may delist the company's securities if certain financial and share price levels are not maintained, impacting trading ability [178]. - If securities are delisted and not listed on another exchange, it could lead to reduced liquidity and limited market quotations [179]. - The company may amend the terms of the warrants with the approval of at least 65% of the outstanding public warrants, which could adversely affect holders [184]. - The company plans to file a post-effective amendment to the registration statement covering the issuance of Class A ordinary shares within 60 business days after the initial Business Combination [182]. - The company has the ability to redeem outstanding warrants at a price of $0.01 per warrant if the Reference Value equals or exceeds $18.00 per share for any 20 trading days within a 30-trading day period [185]. - Holders of warrants may receive fewer Class A ordinary shares upon exercise if the company requires a cashless exercise, potentially reducing the investment's upside [187]. - Each Unit contains one-half of one redeemable warrant, which may make the Units worth less compared to other blank check companies that include a whole warrant [188]. - The company has issued 15 million warrants to purchase Class A ordinary shares at a price of $11.50 per share, which may affect the market price and complicate future Business Combinations [150].