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Distoken Acquisition (DIST) - 2023 Q4 - Annual Report
DISTDistoken Acquisition (DIST)2024-04-17 01:58

SPAC Regulations and Compliance - The company is subject to the new 2024 SPAC Rules adopted by the SEC, which will become effective on July 1, 2024, impacting SPAC business combination transactions[10] - The company is required to provide additional disclosures regarding dilution and conflicts of interest involving sponsors and their affiliates in SPAC transactions[11] - The company anticipates that the 2024 SPAC Rules may materially affect its ability to negotiate and complete its initial business combination[11] - The company is committed to complying with applicable laws, regulations, and stock exchange rules during the business combination process[12] Business Combination Timeline and Financials - The company has an initial business combination deadline set for November 18, 2024, with a potential extension through an amendment to its articles of association[13] - Shareholders approved an extension to complete the initial business combination until November 18, 2024, allowing for up to twelve monthly extensions[24] - The company has approximately 41.44millioninthetrustaccountavailableforabusinesscombinationasofDecember31,2023[41]−Thecompanyhasaccesstoapproximately41.44 million in the trust account available for a business combination as of December 31, 2023[41] - The company has access to approximately 96,000 held outside of the trust account as of December 31, 2023, to cover potential claims, with estimated liquidation costs not exceeding 50,000[86]−Thecompanyisrequiredtohavenettangibleassetsofatleast50,000[86] - The company is required to have net tangible assets of at least 5,000,001 prior to or upon completion of the initial business combination[90] Financial Transactions and Trust Account - The company plans to deposit up to 360,000intothetrustaccountinconnectionwiththeExtensionAmendment[14]−Atotalof360,000 into the trust account in connection with the Extension Amendment[14] - A total of 70.38 million from the IPO and private placement proceeds was placed in a trust account[21] - Approximately 31.9millionwasredeemedbyshareholders,resultinginaproratapaymentofabout31.9 million was redeemed by shareholders, resulting in a pro rata payment of about 10.57 per share[24] - The expected per-share redemption amount upon dissolution is approximately 10.50basedonthetrustaccountbalanceasofDecember31,2023[81]−Thetrustaccountmustmaintainaminimumof10.50 based on the trust account balance as of December 31, 2023[81] - The trust account must maintain a minimum of 10.20 per public share; if reduced, shareholders may not receive this amount upon redemption[85] Acquisition Strategy and Target Businesses - The company is exploring various acquisition opportunities to enhance its business portfolio[12] - The management team is focused on acquiring growth businesses with a total enterprise value between 100millionand100 million and 200 million[33] - Target sectors include innovative e-commerce and online agricultural trading, which are strategically significant to Asian markets[34] - The company aims to acquire businesses that can generate strong, stable, and increasing free cash flow with predictable revenue streams[35] - The target business must have a fair market value of at least 80% of the trust account balance at the time of the business combination agreement[54] Management and Operational Focus - The company is focused on retaining key employees and directors to ensure successful business operations post-combination[12] - The management team has significant experience in mergers and acquisitions within the Asian markets, although there is no assurance of completing a business combination[19] - The management team believes their extensive relationships in Asia will help identify business combination opportunities with significant potential upside[37] - The company intends to structure the business combination to acquire 100% of the equity interests or assets of the target business[55] Risks and Challenges - The company may face intense competition from other entities with similar business objectives, which could limit acquisition opportunities[93] - If multiple acquisitions are pursued, the company may face challenges in negotiations and due diligence, potentially delaying business combinations[59] - The company may initially depend on the performance of a single business operation, limiting diversification and increasing risk exposure[58] - The company has not yet selected a target business for acquisition, indicating a lack of specific business combination under consideration[45] Shareholder Rights and Redemption - Shareholders may redeem their shares for their pro rata share of the trust account, which must have at least 5,000,001innettangibleassetspriortoconsummation[64][65]−ThecompanyhasagreedtoredeempublicsharesatapriceequaltotheamountinthetrustaccountiftheinitialbusinesscombinationisnotcompletedwithintheCombinationPeriod[77]−Initialshareholdershavewaivedrightstoliquidatingdistributionsfromthetrustaccountiftheinitialbusinesscombinationisnotcompleted[78]−Therearenoredemptionrightsforthecompany′sofficers,directors,orinitialshareholdersregardingtheirshares[71]AdditionalFinancialArrangements−Thecompanyissuedanunsecuredpromissorynotetothesponsorintheaggregateprincipalamountofupto5,000,001 in net tangible assets prior to consummation[64][65] - The company has agreed to redeem public shares at a price equal to the amount in the trust account if the initial business combination is not completed within the Combination Period[77] - Initial shareholders have waived rights to liquidating distributions from the trust account if the initial business combination is not completed[78] - There are no redemption rights for the company's officers, directors, or initial shareholders regarding their shares[71] Additional Financial Arrangements - The company issued an unsecured promissory note to the sponsor in the aggregate principal amount of up to 1,000,000 on February 26, 2024[13] - The company issued an unsecured promissory note of up to 1milliontothesponsorforworkingcapitalneeds,with1 million to the sponsor for working capital needs, with 265,688 borrowed as of April 16, 2024[28] - The company may need to request additional funds from the trust account to cover dissolution costs if remaining funds are insufficient[80] - The company may utilize cash, debt, or equity securities in the business combination, providing flexibility in structuring the deal[41] Corporate Governance and Structure - The company filed its amended and restated memorandum and articles of association on February 15, 2023, with an extension amendment on November 14, 2023[89] - The company has four executive officers and does not plan to hire full-time employees before completing the initial business combination[98]