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Alphavest Acquisition Corp(ATMVU) - 2023 Q4 - Annual Report
ATMVUAlphavest Acquisition Corp(ATMVU)2024-04-16 21:26

Financial Overview - As of December 31, 2023, the Company had not commenced any operations and generated no revenues, with expectations to do so only after completing a Business Combination[18]. - The Initial Public Offering (IPO) on December 22, 2022, raised gross proceeds of 60millionfromthesaleof6,000,000unitsat60 million from the sale of 6,000,000 units at 10.00 per unit, with an additional 9millionfromtheover−allotmentoption[19].−FollowingtheIPO,approximately9 million from the over-allotment option[19]. - Following the IPO, approximately 70,380,000 was deposited into a trust account, with 550,000allocatedforfeesandexpenses,and550,000 allocated for fees and expenses, and 650,000 available for working capital[21]. - As of December 31, 2023, the company had a working capital deficiency of 324,822,raisingsubstantialdoubtaboutitsabilitytocontinueasagoingconcern[70].−Approximately324,822, raising substantial doubt about its ability to continue as a going concern[70]. - Approximately 650,000 will be available outside the trust account for working capital requirements, with offering expenses estimated at 550,000[130].BusinessCombinationTimeline−TheCompanyextendedthedeadlinetocompleteabusinesscombinationfromDecember22,2023,toMarch22,2024,bydepositing550,000[130]. Business Combination Timeline - The Company extended the deadline to complete a business combination from December 22, 2023, to March 22, 2024, by depositing 165,000 into the trust account[27]. - The company has up to 15 months from the closing of its Initial Public Offering (IPO) to complete an initial business combination, extendable up to 24 months with sponsor deposits of 55,000permonthforeachextension[36].−ThecompanyhasextendedthedeadlinetocompleteitsinitialbusinesscombinationfromDecember22,2023,toDecember22,2024,allowingforupto24monthstotalfromtheclosingofitsInitialPublicOffering[95].−Theshareholdersapprovedanextensionforcompletingthebusinesscombinationfrom12monthsto15months,withapotentialextensionupto24months[128].BusinessCombinationStrategy−TheCompanyhasidentifiedAsiaasaprimaryfocusforpotentialbusinesscombinations,targetingprivatecompanieswithstrongmanagementandgrowthpotential[29][30].−Themanagementteamaimstoleverageitsexperienceinmergersandacquisitionstocreateshareholdervaluethroughoperationalefficiencyandrevenuegrowth[31].−TheCompanyplanstoacquirebusinessesthatcanbenefitfrombeingpubliclytradedandhaveaccesstobroadercapitalsources[34].−Thecompanymaycompleteitsbusinesscombinationwithasingletargetbusinessormultipletargetbusinessessimultaneously,butthiscouldleadtoincreasedcostsandrisksthatmaynegativelyimpactoperationsandprofitability[169].−Thecompanymaypursueacquisitionopportunitieswithearly−stagecompaniesorfinanciallyunstablebusinesses,whichcouldresultinvolatilerevenuesorearnings[153].RegulatoryandMarketChallenges−TherearesignificantregulatoryrisksassociatedwithpotentialbusinesscombinationsinvolvingcompaniesoperatinginChina,includinggovernmentinterventionandchangesinregulations[57].−ThecompanymayfaceregulatorychallengesincompletingabusinesscombinationwithcompaniesinChinaduetoexistingorfutureU.S.lawsandregulations[65].−Thecompanymayfacechallengesincompletingabusinesscombinationduetoitsmajorshareholderbeinganon−U.S.personandthemajorityofitsofficersanddirectorshavingsignificanttiestoChina[59].−Themarketfordirectorsandofficersliabilityinsurancehasbecomemoreexpensiveandlessfavorable,impactingtheabilitytonegotiateinitialbusinesscombinations[90].−Increasedcompetitionamongspecialpurposeacquisitioncompaniesmayleadtohighercostsandfewerattractivetargetsavailableforbusinesscombinations[89].ShareholderConsiderations−Thecompanymaycompleteitsinitialbusinesscombinationevenifamajorityofpublicshareholdersdonotsupportit,asinitialshareholdershaveagreedtovoteinfavorregardlessofpublicvotes[71][73].−Thecompanyrequiresatleast55,000 per month for each extension[36]. - The company has extended the deadline to complete its initial business combination from December 22, 2023, to December 22, 2024, allowing for up to 24 months total from the closing of its Initial Public Offering[95]. - The shareholders approved an extension for completing the business combination from 12 months to 15 months, with a potential extension up to 24 months[128]. Business Combination Strategy - The Company has identified Asia as a primary focus for potential business combinations, targeting private companies with strong management and growth potential[29][30]. - The management team aims to leverage its experience in mergers and acquisitions to create shareholder value through operational efficiency and revenue growth[31]. - The Company plans to acquire businesses that can benefit from being publicly traded and have access to broader capital sources[34]. - The company may complete its business combination with a single target business or multiple target businesses simultaneously, but this could lead to increased costs and risks that may negatively impact operations and profitability[169]. - The company may pursue acquisition opportunities with early-stage companies or financially unstable businesses, which could result in volatile revenues or earnings[153]. Regulatory and Market Challenges - There are significant regulatory risks associated with potential business combinations involving companies operating in China, including government intervention and changes in regulations[57]. - The company may face regulatory challenges in completing a business combination with companies in China due to existing or future U.S. laws and regulations[65]. - The company may face challenges in completing a business combination due to its major shareholder being a non-U.S. person and the majority of its officers and directors having significant ties to China[59]. - The market for directors and officers liability insurance has become more expensive and less favorable, impacting the ability to negotiate initial business combinations[90]. - Increased competition among special purpose acquisition companies may lead to higher costs and fewer attractive targets available for business combinations[89]. Shareholder Considerations - The company may complete its initial business combination even if a majority of public shareholders do not support it, as initial shareholders have agreed to vote in favor regardless of public votes[71][73]. - The company requires at least 5,000,001 in net tangible assets to proceed with its initial business combination, which may be jeopardized if too many shareholders exercise their redemption rights[79]. - The ability of public shareholders to redeem shares for cash may deter potential business combination targets, complicating the acquisition process[78]. - If the initial business combination is not completed within the prescribed time frame, the company will redeem public shares at a pro rata amount, potentially as low as 10.20pershare[101].−Ifthecompanydoesnotconductredemptionsaccordingtotenderofferrules,shareholdersholdingover1510.20 per share[101]. - If the company does not conduct redemptions according to tender offer rules, shareholders holding over 15% of ordinary shares will lose the ability to redeem those excess shares[121]. Operational Considerations - The company currently maintains executive offices at a cost of 10,000 per month for office space and administrative services[47]. - The company has no full-time employees and relies on its management team to devote necessary time until the initial business combination is completed[48]. - The company does not intend to have any full-time employees prior to the completion of the initial business combination, which may affect operational capabilities[212]. - The investigation and negotiation for each target business will require substantial management time and costs, and if a specific business combination is not completed, those costs may not be recoverable[159]. Financial Risks and Liabilities - The company may need to obtain additional financing for general corporate purposes following the initial business combination, with no limitations on raising funds through equity or debt securities[40]. - The company may incur substantial debt to complete a business combination, which could negatively impact its financial condition[186]. - The company may face material losses on investments if the initial business combination is unsuccessful and the trust account is liquidated[83]. - If the trust account proceeds are reduced below $10.20 per share due to claims, shareholders may receive less than the expected amount upon redemption[138]. Management and Governance - The company is classified as an "emerging growth company," allowing it to take advantage of certain exemptions from reporting requirements[52]. - The company is currently compliant with NASDAQ listing rules after appointing an independent director to the Board and Audit Committee[181]. - Conflicts of interest may arise if management members negotiate employment agreements with target businesses, influencing their decision-making[209]. - Officers and directors may allocate time to other businesses, potentially impacting their commitment to the company's affairs and the search for business combinations[211]. Miscellaneous - The company may seek to amend its governing instruments to facilitate the completion of its initial business combination[191]. - The determination of the offering price for the Initial Public Offering (IPO) is more arbitrary compared to typical operating companies due to the lack of historical operations or financial results[201]. - The independent directors may choose not to enforce indemnification obligations, which could reduce the funds available for distribution to public shareholders[139].