IPO and Financial Structure - The company completed its Initial Public Offering on November 22, 2021, raising gross proceeds of 10.00 per unit, with offering costs of approximately 276,000,000 from the IPO and private placement was placed in a U.S.-based trust account[22]. - The company has 725,000, providing options for liquidity events, capital for growth, or debt reduction[60]. - The anticipated cash consideration for public shares upon redemption is expected to be 10.00, but this may be reduced due to creditor claims[120]. - The company has access to 100,000[124]. - If the trust account proceeds fall below 5,000,001[129]. - Claims of creditors may have priority over shareholders' claims in the event of bankruptcy, potentially reducing the per-share amount received[211]. Acquisition Strategy and Focus - The company aims to focus on acquiring global high-growth premium consumer-facing brands that resonate emotionally with millennial and Gen-Z consumers, targeting businesses with long-term growth prospects and robust recurring revenues[19]. - The company intends to pursue acquisition opportunities that exhibit strong fundamentals, such as visible recurring revenues and scalable growth, which can lead to attractive free cash flow characteristics[38]. - The management's strategy includes identifying companies with a large addressable market and a strong existing customer base, particularly those with emotional engagement with younger consumers[38]. - The company is optimistic about its ability to identify and evaluate potential business combinations through its disciplined sourcing strategy[33]. - The company recognizes the impact of COVID-19 on its acquisition process and the operations of potential target businesses[43]. - The company anticipates receiving acquisition opportunities from various unaffiliated sources, including investment bankers and private investment funds[67]. - The company may engage professional firms for business acquisitions in the future, potentially paying finder's fees tied to transaction completion[67]. - The company may face intense competition from other entities in acquiring target businesses, which could limit its options[132]. - The increased number of blank check companies may lead to a scarcity of attractive targets, potentially increasing the cost of initial business combinations[187]. Business Combination and Redemption Process - The company plans to structure its initial business combination to ensure that the post-transaction entity will own or acquire at least 50% of the voting securities of the target business[45]. - The initial business combination must involve a target with a fair market value equal to at least 80% of the net assets held in the trust account[69]. - The post-transaction company must own or acquire 50% or more of the issued and outstanding voting securities of the target[70]. - The company intends to provide public shareholders the opportunity to redeem shares upon completion of the initial business combination, either through a general meeting or a tender offer[95]. - Redemptions will be conducted under SEC rules, with the offer remaining open for at least 20 business days, and cannot complete the business combination until the tender offer period expires[98]. - If the initial business combination is not approved, shareholders who elected to redeem will not be entitled to redeem their shares for the pro rata share of the trust account[113]. - The company has 18 months from the closing of the Initial Public Offering to complete its initial business combination, after which it will redeem public shares at a price based on the trust account balance[115]. - If the initial business combination is not completed within the required time period, public shareholders may receive only approximately 5,000,001 after redemptions to proceed with a business combination[158]. - If a significant number of shares are submitted for redemption, the company may need to restructure the transaction or seek third-party financing, potentially leading to dilution[160]. Management and Operational Risks - The management team has extensive experience in sourcing, structuring, and operating businesses, which positions the company well to create shareholder value[29]. - The management team has developed a network of relationships with business leaders to identify brands that can leverage current market trends[28]. - The management's ability to assess the target's management team may not be accurate, posing additional risks[79]. - The company may incur losses if the identification and evaluation of a target business do not lead to a successful combination[73]. - The lack of diversification may expose the company to significant economic and regulatory risks[78]. - The company may need to reserve a portion of cash in the trust account to meet minimum cash requirements for the initial business combination, which could limit available funds for the transaction[160]. - The company may depend on loans from its sponsor or management team to fund its search for a target business if net proceeds are insufficient[197]. - The company has incurred and expects to continue incurring significant costs in pursuit of acquisition plans since the completion of the Initial Public Offering[195]. Regulatory and Compliance Considerations - The company is classified as an "emerging growth company" and will remain so until it meets certain revenue or market value thresholds[57]. - The company is also a "smaller reporting company," allowing it to provide reduced disclosure obligations until it exceeds specific market value or revenue thresholds[58]. - The company intends to take advantage of reduced disclosure obligations as a smaller reporting company[138]. - If deemed an investment company under the Investment Company Act, the company may face burdensome compliance requirements and restrictions on activities[213]. - The company must ensure that investment securities do not constitute more than 40% of its assets to avoid being classified as an investment company[216]. Shareholder Rights and Approval - Shareholder approval may be required if the issuance of ordinary shares exceeds 20% of the outstanding shares[83]. - The company may seek to recruit additional managers post-business combination, but there is no assurance of their availability[81]. - Public shareholders may redeem shares without voting, and initial shareholders have agreed to vote in favor of the business combination[103]. - A public shareholder is restricted from redeeming more than 15% of the shares sold in the Initial Public Offering without prior consent[106]. - Shareholders must tender their certificates or deliver shares electronically to exercise redemption rights[108]. - The company must seek shareholder approval for any amendments related to the redemption process or shareholder rights[117]. - If the company fails to comply with redemption procedures, shareholders may not be able to redeem their shares[179].
bleuacacia ltd(BLEU) - 2021 Q4 - Annual Report