Financial Performance - As of June 30, 2023, the Company reported a net income of 159,937 for the same period in 2022[121]. - The Company had cash of 1,264,028 as of June 30, 2023[124]. - The assets held in the Trust Account include 86,250,000 from the sale of 8,625,000 units at 75,000 each month into the Trust Account[115]. - The company has no current business combination under consideration and has not contacted any prospective target businesses[168]. - The company has not identified a specific target business or country for a potential business combination[168]. Regulatory and Compliance Risks - The company may be subject to review by CFIUS regarding foreign investment regulations, which could impact potential business combinations[158][160]. - The company may face limitations on foreign ownership and potential CFIUS impacts, which could restrict attractive transaction opportunities[161]. - The PRC government may impose new regulations that could materially affect the combined company's operations and the value of its securities[280]. - The CSRC's new administrative measures require domestic companies seeking overseas listings to fulfill filing procedures, which may delay business combinations[289]. - The Negative List effective January 1, 2022, requires domestic enterprises in prohibited industries to obtain approval before overseas listings, impacting potential business combinations[290]. Legal and Operational Risks in China - The legal environment in China may limit the company's ability to enforce VIE Agreements, potentially impacting financial results[173]. - The post-combination entity may face significant uncertainties in enforcing VIE Agreements under PRC law, which could negatively impact its ability to consolidate financial results in accordance with U.S. GAAP or IFRS[183]. - The PRC Data Security Law and the Personal Information Protection Law impose significant obligations on data activities, potentially affecting the company's operations[260]. - The PRC regulations on foreign-invested enterprises may significantly limit the company's ability to use Renminbi from offshore financing for new investments in China[303]. - The PRC government continues to play a significant role in regulating industry development and economic growth, which could adversely affect the company's business[250]. Internal Control and Audit Concerns - The company identified material weaknesses in internal control over financial reporting, specifically ineffective controls over the period-end process for accruing excise tax[151]. - The company’s management believes that the financial statements present fairly its financial position and results of operations despite the identified material weaknesses[152]. - The PCAOB has identified deficiencies at audit firms in mainland China and Hong Kong, which may affect the company's audit quality[269]. - The PCAOB is unable to inspect or investigate registered public accounting firms in mainland China and Hong Kong, which may limit access to U.S. capital markets[274]. Tax and Financial Liabilities - The company has not recognized any unrecognized tax benefits or accrued interest and penalties related to unrecognized tax benefits as of June 30, 2023[144]. - The PRC tax authorities may impose corporate income tax on indirect transfers of equity interests in PRC resident enterprises, potentially at a rate of up to 10%[243]. - If the company is deemed a PRC tax resident, dividends paid to overseas stockholders may be subject to a withholding tax of up to 10.0%[254]. Market and Economic Conditions - Economic, political, and legal developments in China could materially affect the company's business and any potential business combinations[248]. - Any slowdown in China's economic growth could lead to delays or cancellations in customer purchases, impacting the company's net revenues[306]. - The company may experience challenges in obtaining information for shareholder investigations or litigation due to legal obstacles in China[299].
Acri Capital Acquisition (ACAC) - 2023 Q2 - Quarterly Report