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APx Acquisition I(APXI) - 2023 Q4 - Annual Report
APXIAPx Acquisition I(APXI)2024-09-13 20:46

IPO and Trust Account - The company completed its IPO on December 9, 2021, raising gross proceeds of 172,500,000fromthesaleof17,250,000unitsat172,500,000 from the sale of 17,250,000 units at 10.00 per unit[17]. - A total of 175,950,000wasplacedinaU.S.−basedtrustaccount,whichincludes175,950,000 was placed in a U.S.-based trust account, which includes 172,500,000 from the IPO and 8,950,000fromtheprivateplacementofwarrants[20].−AsofFebruary27,2023,shareholdersredeemed10,693,417publicsharesforanaggregateamountof8,950,000 from the private placement of warrants[20]. - As of February 27, 2023, shareholders redeemed 10,693,417 public shares for an aggregate amount of 111,346,281, leaving approximately 68,271,081intheTrustAccount[25].−FollowingtheSeptember2023EGM,approximately68,271,081 in the Trust Account[25]. - Following the September 2023 EGM, approximately 63,340,058 remained in the Trust Account after redemptions of 757,463 public shares for about 8,273,281[30].−Atotalof201,496publicshareswereredeemedforanaggregateamountof8,273,281[30]. - A total of 201,496 public shares were redeemed for an aggregate amount of 2,246,585, leaving 62,410,856intheTrustAccountand5,597,624publicsharesoutstanding[35].−ThecurrentamountintheTrustAccountisapproximately62,410,856 in the Trust Account and 5,597,624 public shares outstanding[35]. - The current amount in the Trust Account is approximately 11.20 per public share, which may increase by the lesser of 0.025perpublicshareor0.025 per public share or 125,000 per month if the Combination Period is extended[76]. - The anticipated amount in the Trust Account is 11.20perpublicshare,butthiscouldbereducedduetothird−partyclaimsagainsttheTrustAccount[125].−TheTrustAccountproceedsareinvestedinU.S.governmenttreasuryobligationswithamaturityof185daysorless,whichmayyieldnegativeinterestrates,potentiallyloweringtheper−shareredemptionamount[131].−TheTrustAccountfundsmaybereducedbelow11.20 per public share, but this could be reduced due to third-party claims against the Trust Account[125]. - The Trust Account proceeds are invested in U.S. government treasury obligations with a maturity of 185 days or less, which may yield negative interest rates, potentially lowering the per-share redemption amount[131]. - The Trust Account funds may be reduced below 11.20 per share due to negative interest rates or asset value reductions, impacting shareholder redemption amounts[130]. Business Combination and Agreements - The company entered into a Business Combination Agreement with OmnigenicsAI Corp and MultiplAI Health Ltd on March 25, 2024, for a proposed business combination[39]. - OmnigenicsAI will issue an aggregate amount of 4,000,000 Company Shares to Parent as part of the business combination[40]. - The obligations to consummate the proposed business combination are subject to conditions including shareholder approval and Nasdaq listing approval[43]. - The Business Combination Agreement may be terminated if the merger effective time does not occur by December 9, 2024[50]. - The MultiplAI Share Purchase Agreement was executed on March 13, 2024, as part of the business combination process[53]. - The company has entered into a Backstop Agreement obligating Theo to cover any shortfall exceeding 10,000,000incashafterSPACShareholderRedemptions[56].−ThecompanyplanstoutilizeremainingcashintheTrustAccountfromtheIPOandprivateplacementforitsinitialbusinesscombination,whichmayinvolvefinanciallyunstableorearly−stagebusinesses[60].−ThecompanymayseekadditionalfundsthroughprivateofferingsofdebtorequitysecuritiestocompleteitsinitialbusinesscombinationifcashfromtheTrustAccountisinsufficient[63].−Thecompanyanticipatesthattargetbusinesseswillbesourcedfromvariousunaffiliatedsources,includinginvestmentbankersandprivateinvestmentfunds[65].−Thecompanyisnotcurrentlyengagedinoperationsandwillnotdosountilthecompletionofitsinitialbusinesscombination[60].FinancialObligationsandRisks−Thecompanyissuedafirstpromissorynoteof10,000,000 in cash after SPAC Shareholder Redemptions[56]. - The company plans to utilize remaining cash in the Trust Account from the IPO and private placement for its initial business combination, which may involve financially unstable or early-stage businesses[60]. - The company may seek additional funds through private offerings of debt or equity securities to complete its initial business combination if cash from the Trust Account is insufficient[63]. - The company anticipates that target businesses will be sourced from various unaffiliated sources, including investment bankers and private investment funds[65]. - The company is not currently engaged in operations and will not do so until the completion of its initial business combination[60]. Financial Obligations and Risks - The company issued a first promissory note of 875,000 on February 28, 2023, to facilitate the first extension of the business combination period[26]. - A working capital promissory note of 500,000wasissuedtoTemplarSponsoronSeptember8,2023,withtheoptiontoconvertupto500,000 was issued to Templar Sponsor on September 8, 2023, with the option to convert up to 1,500,000 into warrants upon the consummation of the initial business combination[34]. - As of December 31, 2023, a principal balance of 520,600wasoutstandingontheworkingcapitalpromissorynote[34].−ThemaximumprincipalamountoftheWorkingCapitalPromissoryNotewasincreasedfrom520,600 was outstanding on the working capital promissory note[34]. - The maximum principal amount of the Working Capital Promissory Note was increased from 500,000 to 2,000,000tofundworkingcapitalneedsandextensionpayments[38].−Thecompanymayincursubstantialdebttocompleteabusinesscombination,whichcouldadverselyaffectleverageandfinancialcondition,impactingshareholdervalue[143].−Thecompanymayfacechallengesinobtainingadditionalfinancingnecessarytocompleteitsinitialbusinesscombination,whichcouldcompelittorestructureorabandonthetransaction[106].−Iftheinitialbusinesscombinationisnotcompleted,thefoundersharesandprivateplacementwarrantswillbeworthless,impactingthefinancialinterestsofsponsors[117].−Thecompanymayfacewrite−downsorrestructuringchargespost−combination,whichcouldnegativelyaffectfinancialconditionandmarketperception[123].ShareholderRightsandVoting−Shareholdersapprovedanamendmenttoextendtheterminationdateuptotwelvetimesforanadditionalonemontheachtime,withadepositof2,000,000 to fund working capital needs and extension payments[38]. - The company may incur substantial debt to complete a business combination, which could adversely affect leverage and financial condition, impacting shareholder value[143]. - The company may face challenges in obtaining additional financing necessary to complete its initial business combination, which could compel it to restructure or abandon the transaction[106]. - If the initial business combination is not completed, the founder shares and private placement warrants will be worthless, impacting the financial interests of sponsors[117]. - The company may face write-downs or restructuring charges post-combination, which could negatively affect financial condition and market perception[123]. Shareholder Rights and Voting - Shareholders approved an amendment to extend the termination date up to twelve times for an additional one month each time, with a deposit of 125,000 for each extension, allowing the termination date to extend to December 9, 2024[35]. - Holders of public shares will not have voting rights on the appointment of directors prior to the initial business combination, limiting their influence over management decisions[178]. - The company may not hold a shareholder vote for the initial business combination unless required by law or stock exchange listing requirements, which could lead to a situation where a majority of public shareholders do not support the combination[89]. - The ability of public shareholders to redeem shares for cash may make the company's financial condition unattractive to potential business combination targets[93]. - The company is obligated to offer redemption rights to public shareholders, which may limit its available resources for the initial business combination[91]. Management and Operational Risks - The company may need to recruit additional managers post-business combination, but there is no assurance that suitable candidates will be available[73]. - The company is dependent on a small group of key personnel, and their loss could adversely affect operations and profitability[160]. - Key personnel may negotiate employment agreements that could create conflicts of interest in selecting target businesses[163]. - The company has not adopted a policy to prohibit directors and officers from having financial interests in investments acquired or disposed of by the company, which may lead to conflicts of interest[167]. - The company may face significant risks due to a lack of diversification, which could adversely impact its performance in a single industry or product line[147]. - The company may pursue complex business combinations that require significant operational improvements, which could delay achieving desired results[149]. - If the company combines with a large, complex entity, it may encounter numerous operational risks that could hinder strategy implementation[150]. - The company may not maintain control over a target business post-combination, which could affect operational success[151]. Regulatory and Compliance Issues - The company received a deficiency letter from Nasdaq on December 21, 2023, due to the failure to file its Quarterly Report on Form 10-Q for Q3 2023, which is required for continued listing[173]. - To maintain its listing on Nasdaq, the company must meet minimum requirements, including a minimum shareholders' equity of 2.5millionandaminimummarketvalueof2.5 million and a minimum market value of 50 million[173]. - The company may face significant adverse consequences if its securities are delisted from Nasdaq, including reduced liquidity and potential classification as a "penny stock"[176]. - The company is required to file a registration statement for Class A ordinary shares issuable upon exercise of warrants within 15 business days after the closing of its initial business combination[191]. - If the Class A ordinary shares are not registered, warrant holders may only exercise their warrants on a cashless basis, resulting in fewer shares received[192]. Conflicts of Interest - The company may engage in business combinations with target businesses affiliated with its sponsors or directors, which could create potential conflicts of interest[169]. - The personal and financial interests of the company's officers and directors may influence the selection of target businesses, potentially leading to conflicts of interest[116]. - The company will require an independent investment banking firm to provide an opinion on the fairness of any business combination with affiliated entities, although conflicts of interest may still exist[169]. Financial Reporting and Internal Controls - Material weaknesses in internal control over financial reporting have been identified, including errors in warrant liabilities and classification of equity[209]. - The company has held funds in the Trust Account only in U.S. government treasury obligations or money market funds to mitigate the risk of being deemed an unregistered investment company[188]. - The company may incur additional costs if the forum provisions in its warrant agreement are found to be unenforceable, potentially affecting its financial condition[183].