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ROSECLIFF ACQU(RCLF) - 2022 Q4 - Annual Report
RCLFROSECLIFF ACQU(RCLF)2023-03-31 20:35

IPO and Fundraising - The company raised gross proceeds of 253millionfromitsInitialPublicOffering(IPO)byselling25,300,000unitsat253 million from its Initial Public Offering (IPO) by selling 25,300,000 units at 10.00 per unit, including an over-allotment option[19]. - The company also generated 7.06millionfromthesaleof4,706,667privateplacementwarrantsat7.06 million from the sale of 4,706,667 private placement warrants at 1.50 each[20]. - A total of 253millionfromtheIPOproceedswasplacedinaTrustAccount,whichwillbeinvestedinU.S.governmentsecuritiesuntilaBusinessCombinationiscompletedorfundsaredistributed[21].−ThecompanyhasuntilFebruary17,2024,tocompleteaBusinessCombination,havingreceivedaone−yearextensionfromthepreviousdeadline[24].BusinessCombinationStrategy−ThecompanyintendstopursueaBusinessCombinationwithatechnologycompanythatalignswithitsmanagementteam′sexpertiseandoperationalcapabilities[28].−Thecompanyhasidentifiedkeycriteriaforevaluatingpotentialacquisitiontargets,includingsustainablecompetitivedifferentiationandsignificantaddressablemarketrelativetocurrentsize[30].−ThecompanyanticipatesstructuringitsinitialBusinessCombinationtoacquire100253 million from the IPO proceeds was placed in a Trust Account, which will be invested in U.S. government securities until a Business Combination is completed or funds are distributed[21]. - The company has until February 17, 2024, to complete a Business Combination, having received a one-year extension from the previous deadline[24]. Business Combination Strategy - The company intends to pursue a Business Combination with a technology company that aligns with its management team's expertise and operational capabilities[28]. - The company has identified key criteria for evaluating potential acquisition targets, including sustainable competitive differentiation and significant addressable market relative to current size[30]. - The company anticipates structuring its initial Business Combination to acquire 100% of the target business's equity interests or assets[41]. - Initial Business Combination must involve operating businesses or assets with a fair market value of at least 80% of the assets held in the Trust Account[40]. Stockholder Considerations - Initial stockholders own approximately 91.32% of the outstanding shares of common stock, increasing the likelihood of receiving necessary stockholder approval for Business Combination[48]. - The company may complete its initial Business Combination without stockholder approval, potentially limiting Public Stockholders' ability to vote[49]. - The company plans to provide Public Stockholders the opportunity to redeem their shares for a pro rata portion of the Trust Account upon completion of a Business Combination[23]. - If the initial Business Combination is not completed within the required timeframe, Public Stockholders may receive only approximately 10.00 per share upon liquidation[55]. Financial Risks and Challenges - The ability of Public Stockholders to redeem shares for cash may hinder the company's financial condition and attractiveness to potential Business Combination targets[50]. - The company faces intense competition from other entities seeking similar Business Combination opportunities, which may limit its ability to acquire sizable targets[43]. - The ongoing COVID-19 pandemic and geopolitical tensions, such as the invasion of Ukraine, may adversely affect the company's search for a Business Combination[57][60]. - The company may face significant costs in pursuing acquisition plans, and funds outside the Trust Account may be insufficient to operate until the Expiration Date[72]. Regulatory and Compliance Issues - The company is exempt from certain SEC rules related to blank check companies, which may affect investor protections[67]. - Proposed SEC rules could impose additional disclosure requirements and increase costs related to business combination transactions, potentially affecting the company's operations[90]. - The company is classified as an "emerging growth company," allowing it to take advantage of certain exemptions from disclosure requirements, which may affect the attractiveness of its securities[192]. - The company has identified a material weakness in its internal control over financial reporting, which may lead to potential misstatements in financial statements[198]. Management and Operational Concerns - The company does not intend to have full-time employees prior to completing its initial Business Combination, relying on its three officers[44]. - The management team believes that recent technological breakthroughs have created attractive business opportunities, particularly in the wake of COVID-19[16]. - The company may face challenges in assessing acquisition targets outside of its management's areas of expertise, potentially affecting the success of the Business Combination[99]. - The company’s management team is critical to the success of the initial business combination, and their departure could adversely affect operations[159]. Market and Economic Factors - The ability to raise equity and debt financing is crucial for the company to complete a Business Combination, which may be impacted by market volatility[58]. - The company may face adverse effects if any bank holding its funds fails, impacting financial condition and access to funds[81]. - The company’s ability to find attractive target businesses may be adversely affected by economic downturns or slower growth in the target country[152]. - Cyber incidents or attacks could lead to information theft, data corruption, operational disruption, and financial loss, posing a risk to the company's business[190]. Shareholder Rights and Liabilities - Stockholders may be held liable for claims by third parties against the company to the extent of distributions received upon redemption of their shares[93]. - The company is not required to hold an annual stockholder meeting until after the consummation of the initial Business Combination, limiting stockholder engagement[96]. - The company may not be able to maintain control of a target business post-combination, which could affect profitability and operations[153]. - The company may face conflicts of interest if it engages in Business Combinations with target businesses affiliated with its Sponsor, directors, or officers[114].