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Charlton Aria Acquisition Corporation(CHARU) - 2024 Q4 - Annual Report
CHARUCharlton Aria Acquisition Corporation(CHARU)2025-03-24 21:18

IPO and Financing - The Company completed its IPO on October 25, 2024, selling 7,500,000 units at 10.00perunit,generatingtotalgrossproceedsof10.00 per unit, generating total gross proceeds of 75,000,000[18]. - A private placement of 240,000 units was also completed, generating total proceeds of 2,400,000[20].−Theunderwritersexercisedanover−allotmentoptiononNovember19,2024,purchasing1,000,000additionalunitsforgrossproceedsof2,400,000[20]. - The underwriters exercised an over-allotment option on November 19, 2024, purchasing 1,000,000 additional units for gross proceeds of 10,000,000[22]. - The net proceeds of 75,187,500fromtheIPOandprivateplacementweredepositedintoatrustaccountforthebenefitofpublicshareholders[86].−Theanticipatedamountinthetrustaccountis75,187,500 from the IPO and private placement were deposited into a trust account for the benefit of public shareholders[86]. - The anticipated amount in the trust account is 10.025 per public share, which will be available for redemption upon completion of the initial business combination[42]. - Total cash held in the trust account amounted to 85,212,500followingtheIPOandthepartialexerciseoftheover−allotmentoption[104].−Thecompanygenerated85,212,500 following the IPO and the partial exercise of the over-allotment option[104]. - The company generated 85,831,209 in cash from financing activities, primarily from the IPO proceeds of 85,000,000and85,000,000 and 2,550,000 from private placements[109]. - The company intends to effectuate its initial business combination using cash from the IPO, private placement, and other financing methods[91]. Business Combination Plans - The Company must complete an initial business combination with a total aggregate fair market value of at least 80% of the assets held in the trust account[25]. - The deadline to consummate the initial business combination is April 25, 2026, with the possibility of two three-month extensions[39]. - The Company intends to structure the initial business combination to acquire 100% of the target business, but may acquire less than 100% under certain conditions[26]. - The company has not yet selected a specific initial business combination target but intends to target businesses with enterprise values greater than the net proceeds from the offering[41]. - The company may require additional financing to complete the initial business combination if the cash portion of the purchase price exceeds the available amount in the trust account[41]. - The company is currently in search of a target for its initial business combination, with management's past experiences in SPACs being limited[144]. Financial Performance - The company currently has no revenue and has incurred losses since inception, relying on the sale of securities and loans to fund operations[24]. - The company reported a net income of 266,838fortheperiodfromMarch22,2024,toDecember31,2024,primarilyfromdividendsearnedoninvestmentsheldinthetrustaccount[102].−TotalnetincomefortheperiodfromMarch22,2024,throughDecember31,2024,was266,838 for the period from March 22, 2024, to December 31, 2024, primarily from dividends earned on investments held in the trust account[102]. - Total net income for the period from March 22, 2024, through December 31, 2024, was 266,838[208]. - The company reported a loss from operations amounting to 591,293[208].−Basicanddilutednetlosspersharefornon−redeemableClassAandClassBordinaryshareswas591,293[208]. - Basic and diluted net loss per share for non-redeemable Class A and Class B ordinary shares was 0.07[208]. - The company incurred stock-based compensation expenses totaling 249,695[208].−Cashflowsfromoperatingactivitiesresultedinanetcashusedof249,695[208]. - Cash flows from operating activities resulted in a net cash used of 171,290[214]. - Cash flows from investing activities showed a net cash used of 85,212,500duetothepurchaseofinvestmentsheldinthetrustaccount[214].ManagementandGovernance−Thecompanyhastwoexecutiveofficers:WillGarner(CEO)andYuanmeiMa(CFO),whoarenotobligatedtodevotespecifichoursuntiltheinitialbusinesscombinationiscompleted[61].−Theboardofdirectorsconsistsoffivemembers,withtermsdividedintothreeclasses,eachservingathree−yearterm[145].−Theauditcommitteeiscomposedofindependentdirectorsandisresponsibleforoverseeingtheindependentregisteredpublicaccountingfirmandensuringcompliancewithapplicablelaws[150][151].−Thecompensationcommittee,alsomadeupofindependentdirectors,istaskedwithdeterminingexecutivecompensationandensuringalignmentwithshareholderinterests[152].−ThecurrentCEO,Robert(Will)W.Garner,hasextensiveexperienceinlawandinvestment,havingservedinvariousadvisoryrolessince2013[136].−CFOYuanmeiMahasastrongbackgroundinfinancialmanagementforpubliccompanies,previouslyholdingCFOpositionsatmultiplefirmsincludingThunderPowerHoldings,Inc.[137].−ThecompanyhasaclawbackpolicyallowingtheCompensationCommitteetorequirereimbursementoferroneouslyawardedcompensationincaseofaccountingrestatements[156].−ThemonthlycashcompensationfortheCEOissetat85,212,500 due to the purchase of investments held in the trust account[214]. Management and Governance - The company has two executive officers: Will Garner (CEO) and Yuanmei Ma (CFO), who are not obligated to devote specific hours until the initial business combination is completed[61]. - The board of directors consists of five members, with terms divided into three classes, each serving a three-year term[145]. - The audit committee is composed of independent directors and is responsible for overseeing the independent registered public accounting firm and ensuring compliance with applicable laws[150][151]. - The compensation committee, also made up of independent directors, is tasked with determining executive compensation and ensuring alignment with shareholder interests[152]. - The current CEO, Robert (Will) W. Garner, has extensive experience in law and investment, having served in various advisory roles since 2013[136]. - CFO Yuanmei Ma has a strong background in financial management for public companies, previously holding CFO positions at multiple firms including Thunder Power Holdings, Inc.[137]. - The company has a clawback policy allowing the Compensation Committee to require reimbursement of erroneously awarded compensation in case of accounting restatements[156]. - The monthly cash compensation for the CEO is set at 7,500, while the CFO will receive $5,000 until certain conditions are met[159][160]. Internal Controls and Compliance - Management identified material weaknesses in internal controls over financial reporting due to inadequate segregation of duties and insufficient written policies[128]. - Remediation steps are planned to improve internal controls, including enhancing board composition and consulting with third-party professionals[129]. - The company has not experienced any changes in internal control over financial reporting that materially affected its operations during the reporting period[131]. - The company has established a policy for the approval of related party transactions, requiring audit committee review[185]. - The company’s independent directors will have regularly scheduled meetings to ensure compliance with Nasdaq requirements[187]. Risks and Concerns - The company has a going concern matter, indicating substantial doubt about its ability to continue operations without completing a business combination[199]. - The company has encountered intense competition from other entities in identifying and acquiring target businesses[58]. - The company has not adopted any cybersecurity risk management program, as it currently does not face significant cybersecurity risks[64]. - The company has no off-balance sheet financing arrangements as of December 31, 2024[113]. Shareholder Rights and Restrictions - A public shareholder can redeem no more than 15% of the shares sold in the IPO without prior consent, which aims to prevent large shareholders from blocking the initial business combination[47]. - The insiders have agreed to waive their redemption rights concerning any founder shares and public shares held by them in connection with the initial business combination[42]. - The company’s insiders have agreed not to transfer their founder shares until certain conditions are met, including a six-month lock-up after the initial business combination[171]. - The total beneficial ownership of directors and officers as a group is 220,000 shares, representing 2.1% of the total[166].