IPO and Trust Account - The company raised gross proceeds of 10.00 per unit, incurring offering costs of approximately 232.3 million in a trust account, which is invested in U.S. government securities or money market funds until a business combination is completed[25]. - The company incurred transaction costs of 12.65 million in underwriters' fees and discounts[26]. - The company has approximately 10.10 per share upon liquidation of the trust account, with potential for less[150]. - Claims against the Company could reduce the funds in the trust account, potentially leading to a per share redemption amount of less than 10.10 per public share, but there is no assurance that the sponsor can satisfy these obligations[219]. Business Combination Agreement - The company entered into a Business Combination Agreement with XCF Global Capital, Inc., valuing XCF at a pre-money equity value of 10.00 per share for NewCo Common Stock[48]. - The Business Combination Agreement is subject to several closing conditions, including stockholder approvals and regulatory clearances[49]. - The Business Combination Agreement may be terminated if certain stockholder approvals are not obtained by specified deadlines[53]. - The Business Combination Termination Date has been extended to March 31, 2025[54]. - XCF will reimburse the Company for all expenses related to the Business Combination, including regulatory filing fees and advisor expenses[55][56]. - The Sponsor Letter Agreement includes lock-up restrictions for shares of NewCo Common Stock for 12 months post-Closing, with certain exceptions[59]. Company Structure and Ownership - As of December 17, 2024, the company had 5,312,124 shares of Class A common stock and 1,608,333 shares of Class B common stock outstanding[37]. - The company’s anchor investors purchased approximately 22.98 million units in the IPO, holding about 79.9% of the outstanding shares post-IPO[24]. - Initial stockholders and management team members collectively owned approximately 73.8% of the issued and outstanding shares of common stock as of the date of the Annual Report[117]. - If stockholder approval is sought for the initial business combination, the affirmative vote of a majority of shares voted, including founder shares, will be required for approval[117]. Regulatory and Compliance Risks - The company may face risks related to compliance with laws and regulations, which could adversely affect its ability to negotiate and complete its initial business combination[114]. - The company may be unable to complete an initial business combination with certain potential target companies if regulatory approvals are required[114]. - The SEC's new SPAC Rules effective July 1, 2024, impose additional disclosure requirements and could materially adversely affect the ability to negotiate and complete initial business combinations[161]. - If deemed an investment company under the Investment Company Act, the company may face burdensome compliance requirements that could hinder its ability to complete a business combination[156]. Business Strategy and Investment Criteria - The company has developed investment criteria focusing on businesses that support social value and have strong fundamentals[66][67]. - The acquisition process includes extensive due diligence, including financial and operational reviews[69]. - The company anticipates structuring its initial business combination to acquire at least 50% of the voting securities of the target business[78]. - The initial business combination must involve target businesses with an aggregate fair market value of at least 80% of the net assets held in the trust account[75]. - The company does not intend to purchase multiple businesses in unrelated industries for its initial business combination[80]. Conflicts of Interest - Directors and officers may have conflicts of interest in evaluating target businesses due to their ownership of founder shares and warrants[70]. - The personal and financial interests of the company's directors and officers may influence their motivation in selecting a target business for combination[195]. - The underwriters are entitled to deferred underwriting commissions that will only be released upon the completion of an initial business combination, creating potential conflicts of interest[196]. - The company may engage in business combinations with affiliated entities, which could raise potential conflicts of interest[192]. - The company has not adopted a policy prohibiting its directors and officers from having financial interests in transactions, which may lead to conflicts with the company's interests[189]. Market and Economic Conditions - The ongoing military conflict between Russia and Ukraine has led to significant volatility in U.S. and global markets, impacting capital markets and economic stability[139]. - The company is monitoring the geopolitical situation, which could adversely affect its ability to search for and consummate a business combination[139]. - Economic slowdowns in operational markets could adversely affect the company's financial condition, liquidity, and results of operations post-business combination[138]. Operational Risks - The company has no operating history and no revenues, making it difficult for investors to evaluate its ability to achieve business objectives[111]. - The loss of key executive officers and directors could adversely affect the company's operations and ability to complete a business combination[155]. - The complexity of potential target businesses may delay or prevent the achievement of desired operational improvements post-combination[171][172]. - The company may pursue acquisition opportunities outside of its management's expertise, which could lead to inadequate risk assessment[135]. - The loss of key personnel from a target business upon completion of the initial business combination could adversely affect operations and profitability[166]. Financial Considerations - The company may issue additional shares or debt securities to complete a business combination, which could dilute existing stockholders' equity interests[106]. - The company may redeem unexpired warrants prior to their exercise, potentially making them worthless for investors[108]. - The ability of public stockholders to redeem shares for cash may hinder the company's financial condition and attractiveness to potential business combination targets[121]. - If too many public stockholders exercise their redemption rights, the company may not meet minimum net worth or cash requirements for business combinations, potentially leading to alternate strategies[122]. - The deferred underwriting commissions will not be adjusted for shares redeemed, impacting the per share value for non-redeeming stockholders[123]. Listing and Trading Issues - The company’s securities were delisted from Nasdaq due to failure to complete a business combination within 36 months of the IPO[29]. - Nasdaq has determined to delist the Company's securities from The Nasdaq Capital Market effective October 14, 2024, due to the failure to complete business combinations within 36 months of the IPO[206]. - Following the delisting, the Company's securities now trade on the OTC Pink Marketplace, which may lead to reduced liquidity and increased trading restrictions[207]. - The market for the Company's Common Stock is characterized by volatility and limited trading activity, potentially depressing the stock price[208]. - The Company may face significant material adverse consequences, including being classified as a "penny stock," which imposes stricter trading rules[209]. - NewCo plans to list on NYSE or Nasdaq in connection with a Business Combination, requiring compliance with more rigorous initial listing requirements[210].
Crixus BH3 Acquisition pany(BHAC) - 2024 Q4 - Annual Report