−Removed: Risk Factors.
−Removed: You should carefully consider the following risk factors and all the other information contained in this report, including the financial statements.
−Removed: If any of the following risks occur, our business, financial condition, liquidity or results of operations may be materially adversely affected.
−Removed: In that event, the trading price of our securities could decline, and you could lose all or part of your investment.
−Removed: The risk factors described below are not necessarily exhaustive and you are encouraged to perform your own investigation with respect to us and our business.
−Removed: Summary of Risk Factors
−Removed: Our business is subject to numerous risks and uncertainties.
−Removed: These risks include, but are not limited to:
−Removed: ● We have no operating history and no revenues, and you have no basis on which to evaluate our ability to achieve our business objective.
−Removed: ● Our independent registered public accounting firm’s report contains an explanatory paragraph that expresses substantial doubt about our ability to continue as a “going concern.”
−Removed: ● Our public stockholders may not be afforded an opportunity to vote on our initial business combination, and even if we hold a vote, holders of our founder shares will participate in such vote, which means we may complete our initial business combination even though a majority of our public stockholders do not support such initial business combination.
−Removed: ● If we seek stockholder approval of our initial business combination, our sponsor, officers and directors have agreed to vote in favor of such initial business combination, regardless of how our public stockholders vote, and depending on the number of stockholders who vote, our sponsor, officers and directors may have almost enough votes to approve our initial business combination based on the shares held by them.
−Removed: ● Your only opportunity to affect the investment decision regarding our initial business combination will be limited to the exercise of your right to redeem your public shares from us for cash, unless we seek stockholder approval of such initial business combination.
−Removed: ● The ability of our public stockholders to exercise redemption rights with respect to a large number of our public shares may not allow us to complete the most desirable business combination or optimize our capital structure.
−Removed: ● The ability of our public stockholders to exercise redemption rights with respect to a large number of our public shares could increase the probability that our initial business combination would be unsuccessful and that you would have to wait for liquidation in order to redeem your public shares.
−Removed: ● The requirement that we complete our initial business combination by September 30, 2025, unless an Extension Period applies, may give potential target businesses leverage over us in negotiating a business combination and may limit the time we have in which to conduct due diligence on potential business combination targets, in particular as we approach our dissolution deadline, which could undermine our ability to complete our initial business combination on terms that would produce value for our stockholders.
−Removed: ● We may not be able to complete our initial business combination by September 30, 2025 or during any Extension Period, in which case we would cease all operations, except for the purpose of winding up and we would redeem our public shares and liquidate, in which case our public stockholders may receive only $10.20 per share, or less than such amount in certain circumstances, and our warrants will expire worthless.
−Removed: ● Our search for a business combination, and any target business with which we ultimately consummate a business combination, may be materially adversely affected by current global geopolitical conditions resulting from the ongoing Russia-Ukraine conflict and the war in the Middle East.
−Removed: ● Our search for a business combination, and any target business with which we ultimately consummate a business combination, may be materially adversely affected by the status of debt and equity markets.
−Removed: ● As the number of special purpose acquisition companies evaluating targets increases, attractive targets may become scarcer and there may be more competition for attractive targets.
−Removed: This could increase the cost of our initial business combination and could even result in our inability to find a target or to consummate an initial business combination.
−Removed: ● If we seek stockholder approval of our initial business combination, our sponsor, directors, officers, advisors or any of their respective affiliates may elect to purchase public shares or public warrants from the public, which may influence a vote on a proposed business combination and reduce the public “float” of our common stock.
−Removed: ● If a stockholder fails to receive notice of our offer to redeem our public shares in connection with our initial business combination despite our compliance with the tender offer rules or proxy rules, or fails to comply with the procedures for tendering its shares, such shares may not be redeemed.
−Removed: ● You will not have any rights or interests in funds from the Trust Account, except under certain limited circumstances.
−Removed: To liquidate your investment, therefore, you may be forced to sell your public shares or warrants, potentially at a loss.
−Removed: ● You will not be entitled to protections normally afforded to investors of certain other blank check companies.
−Removed: ● If we seek stockholder approval of our initial business combination and we do not conduct redemptions pursuant to the tender offer rules, and if you or a “group” of stockholders are deemed to hold in excess of 15% of our public shares, you will lose the ability to redeem all such shares in excess of 15% of our public shares.
−Removed: ● Because of our limited resources and the significant competition for business combination opportunities, it may be more difficult for us to complete our initial business combination.
−Removed: If we are unable to complete our initial business combination within the prescribed time period, our public stockholders may receive only approximately $10.20 per share, or less in certain circumstances, on the liquidation of the Trust Account, and our warrants will expire worthless.
−Removed: ● If the funds not being held in the Trust Account are insufficient to allow us to operate until at least September 30, 2025, we may be unable to complete our initial business combination.
−Removed: ● If the funds not being held in the Trust Account are insufficient, it could limit the amount available to fund our search for a target business or businesses and complete our initial business combination and we will depend on loans from our management team or our sponsor or any of their respective affiliates to fund our search, to pay our taxes and to complete our initial business combination.
−Removed: If we are unable to obtain such loans, we may be unable to complete our initial business combination.
−Removed: ● The securities in which we invest the proceeds held in the Trust Account could bear a negative rate of interest, which could reduce the interest income available for payment of taxes or reduce the value of the assets held in trust such that the per share redemption amount received by stockholders may be less than $10.20 per share.
−Removed: ● If we have not completed our initial business combination by September 30, 2025, or during any Extension Period, our public stockholders may be forced to wait beyond such prescribed time period before redemption from the Trust Account.
−Removed: ● If third parties bring claims against us, the proceeds held in the Trust Account could be reduced and the per share redemption amount received by our public stockholders may be less than $10.20 per share.
−Removed: ● We identified a material weakness in our internal control over financial reporting and may identify additional material weaknesses in the future, or fail to maintain an effective system of internal control over financial reporting, which may result in material misstatements of our financial statements or cause us to fail to meet our periodic reporting obligations.
−Removed: ● Other risks related to the proposed Business Combination as described in the Registration Statement on Form S-4 initially filed by SAC with the SEC on November 12, 2024 with respect to the Business Combination, and as subsequently amended.
−Removed: We have no operating history and no revenues, and you have no basis on which to evaluate our ability to achieve our business objective.
−Removed: We have no operating results, and we did not commence operations until after the closing of our IPO in December 2021.
−Removed: Because we lack an operating history, you have no basis upon which to evaluate our ability to achieve our business objective of completing our initial business combination with one or more target businesses.
−Removed: We do not yet have any plans, arrangements or understandings with any prospective target business concerning a business combination and may be unable to complete our initial business combination.
−Removed: If we fail to complete our initial business combination, we will never generate any operating revenues.
−Removed: Past performance by our management team may not be indicative of future performance of an investment in us or of the future performance of any business we may acquire.
−Removed: Information or other references herein regarding performance by, or businesses associated with, members of our management team is presented for informational purposes only.
−Removed: Any past experience and performance, including related to acquisitions, of our management team or its affiliates or of businesses associated with our management team is not a guarantee:
−Removed: (1) that we will be able to successfully identify a suitable candidate for our initial business combination;
−Removed: (2) of any results with respect to any initial business combination we may consummate;
−Removed: or (3) that we will be able to adequately assess the risks of a potential transaction.
−Removed: You should not rely on the historical record and performance of our management team or its affiliates or of businesses associated our management team as indicative of the future performance of an investment in us or the returns we will, or are likely to, generate going forward.
−Removed: Further, our management team has been involved with a number of public and private companies, which have achieved different levels of performance.
−Removed: An investment in us is not an investment in our sponsor or in any other entity in which our sponsor or our management team is affiliated and does not in any way create an advisory relationship between our sponsor, our management team or any such entity, on the one hand, and any of our stockholders, on the other hand.
−Removed: Our independent registered public accounting firm’s report contains an explanatory paragraph that expresses substantial doubt about our ability to continue as a “going concern.”
−Removed: As of December 31, 2024, we had $494,974 in cash held outside the Trust Account and a working capital deficit of $3,862,447, respectively.
−Removed: Further, we expect to incur significant costs in pursuit of our acquisition plans.
−Removed: Our plans to raise capital and to consummate our initial business combination may not be successful.
−Removed: In addition, management is currently evaluating the impact of the Russia-Ukraine war, the war in the Middle East, interest rate fluctuations and increased inflation, and the recently adopted SEC rules and amendments affecting special purpose acquisition corporations like the Company, and has concluded that while it is reasonably possible that such matters could have a negative effect on the Company’s financial position, cash flows, results of its operations and/or search for a target company, the specific impacts are not readily determinable as of December 31, 2024.These factors, among others, raise substantial doubt about our ability to continue as a going concern.
−Removed: The financial statements contained elsewhere in this report do not include any adjustments that might result from our inability to continue as a going concern.
−Removed: Our public stockholders may not be afforded an opportunity to vote on our initial business combination, and even if we hold a vote, holders of our founder shares will participate in such vote, which means we may complete our initial business combination even though a majority of our public stockholders do not support such initial business combination.
−Removed: We may not hold a stockholder vote to approve our initial business combination unless the business combination would require stockholder approval under applicable law or stock exchange listing requirements or if we decide to hold a stockholder vote for business or other reasons.
−Removed: Except as required by applicable law or stock exchange rules, the decision as to whether we will seek stockholder approval of a proposed business combination or will allow stockholders to sell their public shares to us in a tender offer will be made by us, solely in our discretion, and will be based on a variety of factors, such as the timing of the transaction and whether the terms of the transaction would otherwise require us to seek stockholder approval.
−Removed: Even if we seek stockholder approval, the holders of our founder shares will participate in the vote on such approval.
−Removed: Accordingly, we may consummate our initial business combination even if holders of a majority of our outstanding public shares do not approve of the business combination we consummate.
−Removed: If we seek stockholder approval of our initial business combination, our sponsor, officers and directors have agreed to vote in favor of such initial business combination, regardless of how our public stockholders vote, and depending on the number of stockholders who vote, our sponsor, officers and directors may have almost enough votes to approve our initial business combination based on the shares held by them.
−Removed: Our sponsor, directors and officers have agreed (and their permitted transferees will agree) to vote any founder shares and any public shares held by them in favor of our initial business combination.
−Removed: The founder shares held by our sponsor and the Third-Party SAC Investors and the shares of Class A common stock held by our sponsor as a result of the Conversion, in the aggregate, represent approximately 99% of our issued and outstanding capital stock.
−Removed: As a result, we would not need any of the 37,987 public shares sold in our IPO and not redeemed in connection with the Special Meeting to be voted in favor of a transaction in order to have our initial business combination approved.
−Removed: We expect that our sponsor and its permitted transferees will own at least 99% of our outstanding shares of common stock at the time of any such stockholder vote.
−Removed: Accordingly, if we seek stockholder approval of our
−Removed: initial business combination, it is more likely that the necessary stockholder approval will be received than would be the case if our sponsor and its permitted transferees agreed to vote their founder shares in accordance with the majority of the votes cast by our public stockholders.
−Removed: Although none of our sponsor, directors or officers have any current intention to purchase our public shares, they are not restricted from doing so and there is no limit to the number of our public shares they may purchase.
−Removed: If they purchase any of our public shares and retain such shares until any stockholders vote on our initial business combination, the approval of our initial business combination by our stockholders will be even more likely.
−Removed: Your only opportunity to affect the investment decision regarding our initial business combination will be limited to the exercise of your right to redeem your public shares from us for cash, unless we seek stockholder approval of such initial business combination.
−Removed: Since our board of directors may complete our initial business combination without seeking stockholder approval, public stockholders may not have the right or opportunity to vote on the initial business combination.
−Removed: Accordingly, if we do not seek stockholder approval, your only opportunity to affect the investment decision regarding a potential business combination may be limited to exercising your redemption rights applicable to the outstanding public shares within the period of time (which will be at least 20 business days) set forth in our tender offer documents mailed to our public stockholders in which we describe our initial business combination.
−Removed: The ability of our public stockholders to redeem their public shares for cash may make our financial condition and liquidity unattractive to potential business combination targets, which may make it difficult for us to enter into a business combination with a target.
−Removed: We may seek to enter into a business combination transaction agreement with a prospective target that requires as a closing condition that we have a minimum net worth or a certain amount of cash.
−Removed: If too many public stockholders exercise their redemption rights, we would not be able to meet such closing condition and, as a result, would not be able to proceed with the business combination.
−Removed: Prospective targets will be aware of these risks and, thus, may be reluctant to enter into a business combination transaction with us.
−Removed: The ability of our public stockholders to exercise redemption rights with respect to a large number of our public shares may not allow us to complete the most desirable business combination or optimize our capital structure.
−Removed: At the time we enter into an agreement for our initial business combination, we will not know how many public stockholders may exercise their redemption rights and, therefore, we will need to structure the transaction based on our expectations as to the number of public shares that will be submitted for redemption.
−Removed: If our initial business combination agreement requires us to use a portion of the cash in the Trust Account to pay the purchase price or requires us to have a minimum amount of cash at closing, we will need to reserve a portion of the cash in the Trust Account to meet such requirements or arrange for third-party financing.
−Removed: In addition, if a larger number of public shares is submitted for redemption than we initially expected, we may need to restructure the transaction to reserve a greater portion of the cash in the Trust Account or arrange for third-party financing.
−Removed: Raising additional third-party financing may involve dilutive equity issuances or the incurrence of indebtedness at higher than desirable levels.
−Removed: Furthermore, this dilution would increase to the extent that the anti-dilution provision of the Class B common stock results in the issuance of shares of Class A common stock on a greater than one-to-one basis upon conversion of the Class B common stock at the time of our initial business combination.
−Removed: The above considerations may limit our ability to complete the most desirable business combination available to us or optimize our capital structure.
−Removed: The ability of our public stockholders to exercise redemption rights with respect to a large number of our public shares could increase the probability that our initial business combination would be unsuccessful and that you would have to wait for liquidation in order to redeem your public shares.
−Removed: If our initial business combination agreement requires us to use a portion of the cash in the Trust Account to pay the purchase price, or requires us to have a minimum amount of cash at closing, the probability that our initial business combination would be unsuccessful increases.
−Removed: If our initial business combination is unsuccessful, you would not be entitled to receive your pro rata portion of the Trust Account until we liquidate the Trust Account.
−Removed: If you are in need of immediate liquidity, you could attempt to sell your public shares in the open market;
−Removed: however, at such time our Class A common stock may trade at a discount to the pro rata amount per share in the Trust Account.
−Removed: In either situation, you may suffer a material loss on your investment or lose the benefit of funds expected
−Removed: to be expended in connection with the redemption of our public shares until we liquidate or you are able to sell your public shares in the open market.
−Removed: The requirement that we complete our initial business combination by September 30, 2025, unless an Extension Period applies, may give potential target businesses leverage over us in negotiating a business combination and may limit the time we have in which to conduct due diligence on potential business combination targets, in particular as we approach our dissolution deadline, which could undermine our ability to complete our initial business combination on terms that would produce value for our stockholders.
−Removed: Any potential target business with which we enter into negotiations concerning a business combination will be aware that we must complete our initial business combination by September 30, 2025, unless an Extension Period applies.
−Removed: Consequently, such target business may obtain leverage over us in negotiating a business combination, knowing that if we do not complete our initial business combination with that particular target business, we may be unable to complete our initial business combination with any target business.
−Removed: This risk will increase as we get closer to the timeframe described above.
−Removed: In addition, we may have limited time to conduct due diligence and may enter into our initial business combination on terms that we would have rejected upon a more comprehensive investigation.
−Removed: We may not be able to complete our initial business combination by September 30, 2025 or during any Extension Period, in which case we would cease all operations, except for the purpose of winding up and we would redeem our public shares and liquidate, in which case our public stockholders may receive only $10.20 per share, or less than such amount in certain circumstances, and our warrants will expire worthless.
−Removed: Our sponsor, officers and directors have agreed that we must complete our initial business combination by September 30, 2025, unless an Extension Period applies.
−Removed: If the Business Combination is not consummated, we may not be able to find an alternative suitable target business and complete our initial business combination within the prescribed time period.
−Removed: Our ability to complete our initial business combination may be negatively impacted by general market conditions, volatility in the capital and debt markets and the other risks described herein.
−Removed: If we have not completed our initial business combination within such time period, we will:
−Removed: (1) cease all operations, except for the purpose of winding up;
−Removed: (2) as promptly as reasonably possible but not more than 10 business days thereafter, subject to lawfully available funds therefor, redeem the public shares, at a per share price, payable in cash, equal to the aggregate amount then on deposit in the Trust Account, including interest earned on the funds held in the Trust Account (net of permitted withdrawals for tax and up to $100,000 of interest to pay dissolution expenses), divided by the number of then outstanding public shares, which redemption will completely extinguish public stockholders’ rights as stockholders (including the right to receive further liquidating distributions, if any), subject to applicable law;
−Removed: and (3) as promptly as reasonably possible following such redemption, subject to the approval of our remaining stockholders and our board of directors, dissolve and liquidate, subject in each case to our obligations under Delaware law to provide for claims of creditors and the requirements of other applicable law.
−Removed: In such case, our public stockholders may receive only $10.20 per share, or less than $10.20 per share, on the redemption of their public shares, and our warrants will expire worthless.
−Removed: Please see “— If third parties bring claims against us, the proceeds held in the Trust Account could be reduced and the per share redemption amount received by our public stockholders may be less than $10.20 per share” and other risk factors herein.
−Removed: If the net proceeds from our IPO and the Private Placement not being held in the Trust Account are insufficient, it could limit the amount available to fund our search for a target business or businesses and complete our initial business combination and we will depend on loans from our management team or our sponsor or any of their respective affiliates to fund our search, to pay our taxes and to complete our initial business combination.
−Removed: If we are unable to obtain such loans, we may be unable to complete our initial business combination.
−Removed: Our search for a business combination, and any target business with which we ultimately consummate a business combination, may be materially adversely affected by current global geopolitical conditions resulting from the ongoing Russia-Ukraine conflict and the war in the Middle East.
−Removed: Global markets are experiencing volatility and disruption following the geopolitical instability resulting from the ongoing Russia-Ukraine conflict and the war in the Middle East.
−Removed: In response to the ongoing Russia-Ukraine conflict, the North Atlantic Treaty Organization (“NATO”) deployed additional military forces to eastern Europe, and the United States, the United Kingdom, the European Union and other countries have announced various sanctions and restrictive actions against Russia, Belarus and related individuals and entities, including the removal of certain financial institutions from the Society for Worldwide Interbank Financial Telecommunication (SWIFT) payment system.
−Removed: Certain countries, including the United States, have also provided and may continue to provide military aid or other assistance to Ukraine and to Israel, increasing geopolitical tensions among a number of nations.
−Removed: The invasion of Ukraine by Russia and the war in the Middle East and the resulting measures that have been taken, and could be taken in the future, by NATO, the United States, the United Kingdom, the European Union, Israel and its neighboring states and other countries have created global security concerns that could have a lasting impact on regional and global economies.
−Removed: Although the length and impact of the ongoing conflicts are highly unpredictable, they could lead to market disruptions, including significant volatility in energy and other commodity prices, credit and capital markets, as well as supply chain interruptions and increased cyber-attacks against U.S.
−Removed: Additionally, any resulting sanctions could adversely affect the global economy and financial markets and lead to instability and lack of liquidity in capital markets.
−Removed: Any of the above mentioned factors, or any other negative impact on the global economy, capital markets or other geopolitical conditions resulting from the Russian invasion of Ukraine, the war in the Middle East and subsequent sanctions or related actions, could adversely affect our search for a business combination and any target business with which we may ultimately consummate a business combination.
−Removed: The extent and duration of the ongoing conflicts, resulting sanctions and any related market disruptions are impossible to predict, but could be substantial, particularly if current or new sanctions continue for an extended period of time or if geopolitical tensions result in expanded military operations on a global scale.
−Removed: Any such disruptions may also have the effect of heightening many of the other risks described elsewhere in this Annual Report on Form 10-K.
−Removed: If these disruptions or other matters of global concern continue for an extensive period of time, our ability to consummate a business combination, or the operations of a target business with which we may ultimately consummate a business combination, may be materially adversely affected.
−Removed: Our search for a business combination, and any target business with which we ultimately consummate a business combination, may be materially adversely affected by the status of debt and equity markets.
−Removed: Our ability to consummate a transaction may be dependent on the ability to raise equity and debt financing which may be materially adversely impacted by certain events, including as a result of increased market volatility, decreased market liquidity and third-party financing being available on terms acceptable to us or at all.
−Removed: Such events may also have the effect of heightening many of the other risk factors described in this “Risk Factors” section, such as those related to the market for our securities.
−Removed: As the number of special purpose acquisition companies evaluating targets increases, attractive targets may become scarcer and there may be more competition for attractive targets.
−Removed: If the Business Combination is not consummated, this could increase the cost of our initial business combination and could even result in our inability to find a target or to consummate an initial business combination.
−Removed: In recent years, the number of special purpose acquisition companies that have been formed has increased substantially.
−Removed: Many potential targets for special purpose acquisition companies have already entered into an initial business combination, and there are still many special purpose acquisition companies preparing for an initial public offering, as well as many such companies currently in registration.
−Removed: As a result, at times, fewer attractive targets may be available to consummate an initial business combination.
−Removed: In addition, because there are more special purpose acquisition companies seeking to enter into an initial business combination with available targets, the competition for available targets with attractive fundamentals or business models may increase, which could cause target companies to demand improved financial terms.
−Removed: Attractive deals could also become scarcer for other reasons, such as economic or industry sector downturns, geopolitical tensions, or increases in the cost of additional capital, or the imposition of unattractive covenants to obtain such capital, needed to close business combinations or operate targets post-business combination.
−Removed: If the Business Combination is not consummated, this could increase the cost of, delay or otherwise complicate or frustrate our ability to find and consummate an initial business combination, and may result in our inability to consummate an initial business combination on terms favorable to our investors altogether.
−Removed: Changes in the market for directors and officers liability insurance could make it more difficult and more expensive for us to negotiate and complete an initial business combination.
−Removed: In recent months, the market for directors and officers liability insurance for special purpose acquisition companies has changed in ways adverse to us and our management team.
−Removed: Fewer insurance companies are offering quotes for directors and officers liability coverage, the premiums charged for such policies have generally increased and the terms of such policies have generally become less favorable.
−Removed: These trends may continue into the future.
−Removed: The increased cost and decreased availability of directors and officers liability insurance could make it more difficult and more expensive for us to negotiate and complete an initial business combination.
−Removed: In order to obtain directors and officers liability insurance or modify its coverage as a result of becoming a public company, the post-business combination entity might need to incur greater expense and/or accept less favorable terms.
−Removed: Furthermore, any failure to obtain adequate directors and officers liability insurance could have an adverse impact on the post-business combination’s ability to attract and retain qualified officers and directors.
−Removed: In addition, after completion of any initial business combination, our directors and officers could be subject to potential liability from claims arising from conduct alleged to have occurred prior to such initial business combination.
−Removed: As a result, in order to protect our directors and officers, the post-business combination entity may need to purchase additional insurance with respect to any such claims (“run-off insurance”).
−Removed: The need for run-off insurance would be an added expense for the post-business combination entity and could interfere with or frustrate our ability to consummate an initial business combination on terms favorable to our investors.
−Removed: If we seek stockholder approval of our initial business combination, our sponsor, directors, officers, advisors or any of their respective affiliates may elect to purchase public shares or public warrants from the public, which may influence a vote on a proposed business combination and reduce the public “float” of our common stock.
−Removed: If we seek stockholder approval of our initial business combination and we do not conduct redemptions in connection with our initial business combination pursuant to the tender offer rules, our sponsor, directors, officers, advisors or any of their respective affiliates may purchase public shares or public warrants or a combination thereof in privately negotiated transactions or in the open
−Removed: market either prior to or following the completion of our initial business combination, although they are under no obligation or other duty to do so.
−Removed: Such a purchase may include a contractual acknowledgement that such public stockholder, although still the record holder of our shares, is no longer the beneficial owner thereof and therefore agrees not to exercise its redemption rights.
−Removed: In the event that our sponsor, directors, officers, advisors or any of their respective affiliates purchase public shares in privately negotiated transactions from public stockholders who have already elected to exercise their redemption rights, such selling public stockholders would be required to revoke their prior elections to redeem their shares.
−Removed: The price per share paid in any such transaction may be different than the amount per share a public stockholder would receive if it elected to redeem its public shares in connection with our initial business combination.
−Removed: The purpose of such purchases could be to vote such shares in favor of the business combination and thereby increase the likelihood of obtaining stockholder approval of our initial business combination or to satisfy a closing condition in an agreement with a target that requires us to have a minimum net worth or a certain amount of cash at the closing of our initial business combination, where it appears that such requirement would otherwise not be met.
−Removed: The purpose of such purchases could be to vote such shares in favor of the business combination and thereby increase the likelihood of obtaining stockholder approval of our initial business combination or to satisfy a closing condition in an agreement with a target that requires us to have a minimum net worth or a certain amount of cash at the closing of our initial business combination, where it appears that such requirement would otherwise not be met.
−Removed: The purpose of any such purchases of public warrants could be to reduce the number of such public warrants outstanding or to vote such public warrants on any matters submitted to the warrant holders for approval in connection with our initial business combination.
−Removed: Any such purchases of our securities may result in the completion of our initial business combination that may not otherwise have been possible.
−Removed: Any such purchases will be reported pursuant to Section 13 and Section 16 of the Exchange Act to the extent such purchasers are subject to such reporting requirements.
−Removed: In addition, if such purchases are made, the public “float” of our Class A common stock and the number of beneficial holders of our securities may be reduced, possibly making it difficult to maintain or obtain the quotation, listing or trading of our securities on a national securities exchange.
−Removed: Further, at any time at or prior to our initial business combination, subject to applicable securities laws (including with respect to material nonpublic information), our sponsor, directors, or officers or any of their respective affiliates may enter into transactions with investors and others to provide them with incentives to acquire public shares, vote their public shares in favor of our initial business combination or not redeem their public shares.
−Removed: If a stockholder fails to receive notice of our offer to redeem our public shares in connection with our initial business combination despite our compliance with the tender offer rules or proxy rules, or fails to comply with the procedures for tendering its shares, such shares may not be redeemed.
−Removed: We will comply with the tender offer rules or proxy rules, as applicable, when conducting redemptions in connection with our initial business combination.
−Removed: Despite our compliance with these rules, if a stockholder fails to receive our tender offer or proxy materials, as applicable, such stockholder may not become aware of the opportunity to redeem its public shares.
−Removed: In addition, the tender offer documents or proxy materials, as applicable, that we will furnish to holders of our public shares in connection with our initial business combination will describe the various procedures that must be complied with in order to validly tender or redeem public shares.
−Removed: For example, we may require our public stockholders seeking to exercise their redemption rights, whether they are record holders or hold their shares in “street name,” to either tender their certificates to our transfer agent prior to the date set forth in the tender offer or proxy materials documents mailed to such holders, or up to two business days prior to the initially scheduled vote on the proposal to approve the initial business combination in the event we distribute proxy materials, or to deliver their shares to the transfer agent electronically.
−Removed: In addition, we will require that beneficial holders identify themselves.
−Removed: In the event that a stockholder fails to comply with these procedures, its shares may not be redeemed.
−Removed: You will not have any rights or interests in funds from the Trust Account, except under certain limited circumstances.
−Removed: To liquidate your investment, therefore, you may be forced to sell your public shares or warrants, potentially at a loss.
−Removed: Our public stockholders will be entitled to receive funds from the Trust Account only upon the earlier to occur of:
−Removed: (1) the completion of our initial business combination, and then only in connection with those public shares that such stockholder properly elected to redeem, subject to the limitations described herein;
−Removed: (2) the redemption of any public shares properly submitted in connection with a stockholder vote to amend our amended and restated certificate of incorporation to modify the substance or timing of our
−Removed: obligation to provide our public stockholders the right to have their public shares redeemed in connection with our initial business combination or to provide for the redemption of our public shares in connection with an initial business combination or to redeem 100% of our public shares if we do not complete our initial business combination by September 30, 2025 or during any Extension Period, or with respect to any other provision relating to stockholder rights or pre-initial business combination activity;
−Removed: and (3) the redemption of all of our public shares if we are unable to complete our initial business combination by September 30, 2025 or during any Extension Period, subject to applicable law and as further described herein.
−Removed: In addition, if we are unable to complete an initial business combination within the prescribed time period for any reason, compliance with Delaware law may require that we submit a plan of dissolution to our then-existing stockholders for approval prior to the distribution of the proceeds held in the Trust Account.
−Removed: In that case, public stockholders may be forced to wait beyond September 30, 2025 or longer to the extent there is any applicable Extension Period before they receive funds from the Trust Account.
−Removed: In no other circumstances will a public stockholder have any right or interest of any kind in the Trust Account.
−Removed: Holders of warrants will not have any right to the proceeds held in the Trust Account with respect to such warrants.
−Removed: Accordingly, to liquidate your investment, you may be forced to sell your public shares or warrants, potentially at a loss.
−Removed: Our securities have been delisted from the NYSE.
−Removed: On March 21, 2024, we received correspondence from the staff of NYSE Regulation of the NYSE indicating that the staff has determined to commence proceedings to delist our Class A common stock, public warrants and units, because we had fallen below the NYSE’s continued listing standard requiring a listed acquisition company to maintain an average aggregate global market capitalization attributable to its publicly held shares over a consecutive 30 trading day period of at least $40.0 million.
−Removed: On April 8, 2024, the NYSE filed a Form 25 to delist our Class A common stock, public warrants and units, and to remove such securities from registration under Section 12(b) of the Exchange Act.
−Removed: The delisting became effective ten days after the filing of the Form 25, and the deregistration became effective 90 days after the Form 25 filing.
−Removed: Our Class A common stock, public warrants and units remain registered under Section 12(g) of the Exchange Act, and began trading on the OTC Pink Marketplace on or about March 22, 2024 under the ticker symbols “PORT,” “PORTW” and “PORTU,” respectively.
−Removed: We and the holders of our securities could be materially adversely impacted due to our securities being delisted from NYSE due to non-compliance with the above rules.
−Removed: The OTC Pink Marketplace is not a national securities exchange, and many companies have experienced limited liquidity when traded through this quotation system.
−Removed: Holders of our securities may, therefore, have difficulty selling their shares, should they decide to do so.
−Removed: In particular:
−Removed: ● the price of our securities will likely decrease as a result of the loss of market efficiencies associated with NYSE;
−Removed: ● holders may be unable to sell or purchase our securities when they wish to do so;
−Removed: ● potential targets may deem us a less attractive partner with which to consummate a business combination than a SPAC traded on an active trading market such as the Nasdaq or the NYSE;
−Removed: ● we may become subject to stockholder litigation;
−Removed: ● we have lost the interest of institutional investors in our securities;
−Removed: ● we have lost media and analyst coverage;
−Removed: ● we no longer have an active trading market for our securities, as our securities are only traded on one of the over-the-counter markets.
−Removed: If we seek stockholder approval of our initial business combination and we do not conduct redemptions pursuant to the tender offer rules, and if you or a “group” of stockholders are deemed to hold in excess of 15% of our public shares, you will lose the ability to redeem all such shares in excess of 15% of our public shares.
−Removed: If we seek stockholder approval of our initial business combination and we do not conduct redemptions in connection with our initial business combination pursuant to the tender offer rules, our amended and restated certificate of incorporation provides that a public stockholder, together with any affiliate of such stockholder or any other person with whom such stockholder is acting in concert or as a “group” (as defined under Section 13 of the Exchange Act), will be restricted from seeking redemption rights with respect to more than an aggregate of 15% of our public shares, without our prior consent, which we refer to as the “Excess Shares.” However, our amended and restated certificate of incorporation does not restrict our stockholders’ ability to vote all of their shares (including Excess Shares) for or against our initial business combination.
−Removed: Your inability to redeem the Excess Shares will reduce your influence over our ability to complete our initial business combination and you could suffer a material loss on your investment in us if you sell Excess Shares in open market transactions.
−Removed: Additionally, you will not receive redemption distributions with respect to the Excess Shares if we complete our initial business combination.
−Removed: As a result, you will continue to hold the Excess Shares and, in order to dispose of such shares, would be required to sell your Excess Shares in open market transactions, potentially at a loss.
−Removed: Because of our limited resources and the significant competition for business combination opportunities, it may be more difficult for us to complete our initial business combination.
−Removed: If we are unable to complete our initial business combination within the prescribed time period, our public stockholders may receive only approximately $10.20 per share, or less in certain circumstances, on the liquidation of the Trust Account, and our warrants will expire worthless.
−Removed: If the Business Combination is not consummated, we expect to encounter intense competition from other entities having a business objective similar to ours, including private investors (which may be individuals or investment partnerships), other blank check companies and other entities, domestic and international, competing for the types of businesses we intend to acquire.
−Removed: Many of these individuals and entities are well-established and have extensive experience in identifying and effecting, directly or indirectly, acquisitions of companies operating in or providing services to various industries.
−Removed: Many of these competitors possess greater technical, human and other resources or more local industry knowledge than we do and our financial resources will be relatively limited when contrasted with those of many of these competitors.
−Removed: Additionally, the number of blank check companies looking for business combination targets has increased compared to recent years and many of these blank check companies are sponsored by entities or persons that have significant experience with completing business combinations.
−Removed: While we believe there will be numerous target businesses we could potentially acquire with the net proceeds from our IPO and the Private Placement, our ability to compete with respect to the acquisition of certain target businesses that are sizable will be limited by our available financial resources.
−Removed: Although our management team and our sponsor and any of their respective affiliates may invest or further invest, as applicable, in us in the future, they are under no obligation or other duty to do so.
−Removed: This inherent competitive limitation gives others an advantage in pursuing the acquisition of certain target businesses.
−Removed: Furthermore, in the event we seek stockholder approval of our initial business combination and we are obligated to pay cash for public shares that are redeemed, it will potentially reduce the resources available to us for our initial business combination.
−Removed: Any of these obligations may place us at a competitive disadvantage in successfully negotiating and completing our initial business combination.
−Removed: If we are unable to complete our initial business combination within the prescribed time period, our public stockholders may receive only approximately $10.20 per share, or less in certain circumstances, on the liquidation of the Trust Account and our warrants will expire worthless.
−Removed: Please see “— If third parties bring claims against us, the proceeds held in the Trust Account could be reduced and the per-share redemption amount received by our public stockholders may be less than $10.20 per share” and other risk factors herein.
−Removed: If the funds not being held in the Trust Account are insufficient to allow us to operate until at least September 30, 2025, we may be unable to complete our initial business combination.
−Removed: The funds available to us outside of the Trust Account may not be sufficient to allow us to operate until at least September 30, 2025, assuming that our initial business combination is not completed during that time.
−Removed: We expect to incur significant costs in pursuit of our acquisition plans.
−Removed: Management’s plan to address this need for capital through potential additional loans from certain of our affiliates is discussed in the section of this report titled “Management’s Discussion and Analysis of Financial Condition and Results of Operations.” We believe that the funds available to us outside of the Trust Account will be sufficient to allow us to operate until September 30, 2025;
−Removed: however, we cannot assure you that our estimate is accurate.
−Removed: Of the funds available to us, we could use a portion of the funds available to us to pay fees to consultants to assist us with our search for a target business.
−Removed: We could also use a
−Removed: portion of the funds as a down payment or to fund a “no-shop” provision (a provision in letters of intent or merger agreements designed to keep target businesses from “shopping” around for transactions with other companies or investors on terms more favorable to such target businesses) with respect to a particular proposed business combination, although we do not have any current intention to do so.
−Removed: If we entered into a letter of intent or merger agreement where we paid for the right to receive exclusivity from a target business and were subsequently required to forfeit such funds (whether as a result of our breach or otherwise), we might not have sufficient funds to continue searching for, or conduct due diligence with respect to, a target business.
−Removed: If we are unable to complete our initial business combination within the prescribed time period, our public stockholders may receive only approximately $10.20 per share, or less in certain circumstances, on the liquidation of the Trust Account and our warrants will expire worthless.
−Removed: Please see “—If third parties bring claims against us, the proceeds held in the Trust Account could be reduced and the per-share redemption amount received by our public stockholders may be less than $10.20 per share” and other risk factors herein.
−Removed: If the funds not being held in the Trust Account are insufficient, it could limit the amount available to fund our search for a target business or businesses and complete our initial business combination and we will depend on loans from our management team or our sponsor or any of their respective affiliates to fund our search, to pay our taxes and to complete our initial business combination.
−Removed: If we are unable to obtain such loans, we may be unable to complete our initial business combination.
−Removed: Of the net proceeds from our IPO and the Private Placement, as of December 31, 2024, only $494,974 was available to us outside the Trust Account to fund our working capital requirements.
−Removed: If we are required to seek additional capital, we would need to borrow funds from our management team, sponsor or directors or any of their respective affiliates to operate or may be forced to liquidate.
−Removed: None of our management team or our sponsor or any of their respective affiliates is under any obligation or other duty to loan funds to us in such circumstances.
−Removed: Any such loans would be repaid only from funds held outside the Trust Account or from funds released to us upon completion of our initial business combination by September 30, 2025 or during any Extension Period.
−Removed: If we are unable to complete our initial business combination within the prescribed time period because we do not have sufficient funds available to us, we will be forced to cease operations and liquidate the Trust Account.
−Removed: In such case, our public stockholders may receive only $10.20 per share, or less in certain circumstances, and our warrants will expire worthless.
−Removed: Please see “—If third parties bring claims against us, the proceeds held in the Trust Account could be reduced and the per-share redemption amount received by our public stockholders may be less than $10.20 per share” and other risk factors herein.
−Removed: The securities in which we invest the proceeds held in the Trust Account could bear a negative rate of interest, which could reduce the interest income available for payment of taxes or reduce the value of the assets held in trust such that the per share redemption amount received by stockholders may be less than $10.20 per share.
−Removed: The funds in the Trust Account may only be invested in direct U.S.
−Removed: Treasury obligations having a maturity of 185 days or less, or in certain money market funds which invest only in direct U.S.
−Removed: Treasury obligations.
−Removed: While short-term U.S.
−Removed: Treasury obligations currently yield a positive rate of interest, they have briefly yielded negative interest rates in recent years.
−Removed: Central banks in Europe and Japan pursued interest rates below zero in recent years, and the Open Market Committee of the Federal Reserve has not ruled out the possibility that it may in the future adopt similar policies in the United States.
−Removed: In the event of very low or negative yields, the amount of interest income (which we may withdraw to pay income taxes, if any) would be reduced.
−Removed: In the event that we are unable to complete our initial business combination, our public stockholders are entitled to receive their pro-rata share of the proceeds held in the Trust Account, plus any interest income.
−Removed: If the balance of the Trust Account is reduced below $387,467 as a result of negative interest rates, the amount of funds in the Trust Account available for distribution to our public stockholders may be reduced below $10.20 per share.
−Removed: Subsequent to our completion of our initial business combination, we may be required to take write-downs or write-offs, restructuring and impairment or other charges that could have a significant negative effect on our financial condition, liquidity, results of operations and the price of our securities, which could cause you to lose some or all of your investment.
−Removed: Even if we conduct extensive due diligence on a target business with which we combine, we cannot assure you that this diligence will identify all material issues that may be present with a particular target business, that it would be possible to uncover all material issues through a customary amount of due diligence, or that factors outside of the target business and outside of our control will not later arise.
−Removed: As a result of these factors, we may be forced to later write-down or write-off assets, restructure our operations, or incur impairment or other charges that could result in a significant negative effect on our financial condition, liquidity, results of operations and the price of our securities.
−Removed: Even if our due diligence successfully identifies certain risks, unexpected risks may arise and previously known risks may materialize in a manner not consistent with our preliminary risk analysis.
−Removed: Even though these charges may be non-cash items and not have an immediate impact on our liquidity, the fact that we report charges of this nature could contribute to negative market perceptions about us or our securities.
−Removed: In addition, charges of this nature may cause us to violate net worth or other covenants to which we may be subject as a result of assuming pre-existing debt held by a target business or by virtue of our obtaining post-combination debt financing.
−Removed: Accordingly, any stockholders or warrant holders who choose to remain a stockholder or warrant holder following our initial business combination could suffer a reduction in the value of their securities.
−Removed: Such stockholders or warrant holders are unlikely to have a remedy for such reduction in value.
−Removed: If we have not completed our initial business combination by September 30, 2025, or during any Extension Period, our public stockholders may be forced to wait beyond such prescribed time period before redemption from the Trust Account.
−Removed: If we have not completed our initial business combination by September 30, 2025, or during any Extension Period, we will distribute the aggregate amount then on deposit in the Trust Account, including interest (net of permitted withdrawals for tax and less up to $100,000 of interest to pay dissolution expenses), pro rata to our public stockholders by way of redemption and cease all operations except for the purposes of winding up of our affairs, as further described herein.
−Removed: Any redemption of public stockholders from the Trust Account shall be effected prior to any voluntary winding up.
−Removed: If we are required to windup, liquidate the Trust Account and distribute such amount therein, pro rata, to our public stockholders, as part of any liquidation process, such winding up, liquidation and distribution are subject in each case to our obligations under Delaware law to provide for claims of creditors and the requirements of other applicable law.
−Removed: In that case, investors may be forced to wait beyond September 30, 2025 before the redemption proceeds of the Trust Account become available to them and they receive the return of their pro rata portion of the proceeds from the Trust Account.
−Removed: We have no obligation to return funds to investors prior to the redemption of our public shares or our liquidation unless, prior thereto, we consummate our initial business combination or amend certain provisions of our amended and restated certificate of incorporation and then only in cases where public stockholders have properly sought to redeem their shares of Class A common stock.
−Removed: Only upon redemption of our public shares or our liquidation will public stockholders be entitled to distributions if we have not completed our initial business combination within the required time period and do not amend certain provisions of our amended and restated certificate of incorporation prior thereto.
−Removed: If third parties bring claims against us, the proceeds held in the Trust Account could be reduced and the per share redemption amount received by our public stockholders may be less than $10.20 per share.
−Removed: Our placing of funds in the Trust Account may not protect those funds from third-party claims against us.
−Removed: Although we will seek to have all vendors, service providers (other than our independent registered public accounting firm), prospective target businesses or other entities with which we do business execute agreements with us waiving any right, title, interest or claim of any kind in or to any monies held in the Trust Account for the benefit of our public stockholders, such parties may not execute such agreements, or even if they execute such agreements they may not be prevented from bringing claims against the Trust Account, including, but not limited to, fraudulent inducement, breach of fiduciary responsibility or other similar claims, as well as claims challenging the enforceability of the waiver, in each case in order to gain advantage with respect to a claim against our assets, including the funds held in the Trust Account.
−Removed: If any third party refuses to execute an agreement waiving such claims to the monies held in the Trust Account, our management will perform an analysis of the alternatives available to it and will only enter into an agreement with a third party that has not executed a waiver if management believes that such third party’s engagement would be significantly more beneficial to us than any alternative.
−Removed: Making such a request of potential target businesses may make our acquisition proposal less attractive to them and, to the extent prospective target businesses refuse to execute such a waiver, it may limit the field of potential target businesses that we might pursue.
−Removed: Examples of possible instances where we may engage a third party that refuses to execute a waiver include the engagement of a third party consultant whose particular expertise or skills are believed by management to
−Removed: be significantly superior to those of other consultants that would agree to execute a waiver or in cases where we are unable to find a service provider willing to execute a waiver.
−Removed: In addition, there is no guarantee that such entities will agree to waive any claims they may have in the future as a result of, or arising out of, any negotiations, contracts or agreements with us and will not seek recourse against the Trust Account for any reason.
−Removed: Upon redemption of our public shares, if we are unable to complete our initial business combination by September 30, 2025, or during any Extension Period, or upon the exercise of a redemption right in connection with our initial business combination, we will be required to provide for payment of claims of creditors that were not waived that may be brought against us within the 10 years following redemption.
−Removed: Accordingly, the per share redemption amount received by our public stockholders could be less than the $10.20 per public share initially held in the Trust Account, due to claims of such creditors.
−Removed: Our sponsor has agreed that it will be liable to us if and to the extent any claims by a third party (other than our independent registered public accounting firm) for services rendered or products sold to us, or a prospective target business with which we have discussed entering into a business combination agreement, reduce the amount of funds in the Trust Account to below:
−Removed: (1) $10.20 per public share;
−Removed: or (2) the actual amount per public share held in the Trust Account as of the date of the liquidation of the Trust Account, if less than $10.20 per share due to reductions in the value of the trust assets, in each case net of permitted withdrawals for tax and up to $100,000 of interest to pay dissolution expenses, except as to any claims by a third party (including such target business) who executed a waiver of any and all rights to the monies held in the Trust Account (whether any such waiver is enforceable) and except as to any claims under our indemnity or contribution of the underwriter against certain liabilities, including liabilities under the Securities Act.
−Removed: We have not independently investigated or verified whether our sponsor has sufficient funds to satisfy its indemnity obligations and we believe that our sponsor’s only assets are securities of our Company and, therefore, our sponsor may not be able to satisfy those obligations.
−Removed: We have also not asked our sponsor to reserve for such indemnification obligations.
−Removed: As a result, if any such claims were successfully made against the Trust Account, the funds available for our initial business combination and redemptions of public shares could be reduced to less than $10.20 per public share.
−Removed: In such event, we may not be able to complete our initial business combination, and you would receive such lesser amount per share in connection with any redemption of your public shares.
−Removed: None of our officers or directors will indemnify us for claims by third parties, including, without limitation, claims by vendors and prospective target businesses.
−Removed: Our independent directors may decide not to enforce the indemnification obligations of our sponsor, resulting in a reduction in the amount of funds in the Trust Account available for distribution to our public stockholders.
−Removed: In the event that the proceeds in the Trust Account are reduced below the lesser of:
−Removed: (1) $10.20 per public share;
−Removed: or (2) the actual amount per public share held in the Trust Account as of the date of the liquidation of the Trust Account, if less than $10.20 per share due to reductions in the value of the trust assets, in each case net of permitted withdrawals for tax, and our sponsor asserts that it is unable to satisfy its obligations or that it has no indemnification obligations related to a particular claim, our independent directors would determine whether to take legal action against our sponsor to enforce its indemnification obligations.
−Removed: While we currently expect that our independent directors would take legal action on our behalf against our sponsor to enforce its indemnification obligations to us, it is possible that our independent directors in exercising their business judgment may choose not to do so in certain instances.
−Removed: For example, the cost of such legal action may be deemed by the independent directors to be too high relative to the amount recoverable or the independent directors may determine that a favorable outcome is not likely.
−Removed: If our independent directors choose not to enforce these indemnification obligations, the amount of funds in the Trust Account available for distribution to our public stockholders may be reduced below $10.20 per share.
−Removed: We may not have sufficient funds to satisfy indemnification claims of our directors and officers, and our obligation to indemnify our directors and officers may have certain adverse consequences.
−Removed: We have agreed to indemnify our officers and directors to the fullest extent permitted by law.
−Removed: However, our officers and directors have agreed to waive (and any other persons who may become an officer or director prior to the initial business combination will also be required to waive) any right, title, interest or claim of any kind in or to any monies in the Trust Account and not to seek recourse against the Trust Account for any reason whatsoever (except to the extent they are entitled to funds from the Trust Account due to their ownership of public shares).
−Removed: Accordingly, any indemnification provided will be able to be satisfied by us only if (i) we have sufficient funds outside of the Trust Account or (ii) we consummate an initial business combination by September 30, 2025 or during any Extension Period.
−Removed: Our obligation to indemnify our officers and directors may discourage stockholders from bringing a
−Removed: lawsuit against our officers or directors for breach of their fiduciary duty.
−Removed: These provisions also may have the effect of reducing the likelihood of derivative litigation against our officers and directors, even though such an action, if successful, might otherwise benefit us and our stockholders.
−Removed: Furthermore, a stockholder’s investment may be adversely affected to the extent we pay the costs of settlement and damage awards against our officers and directors pursuant to these indemnification provisions.
−Removed: If, after we distribute the proceeds in the Trust Account to our public stockholders, we file a bankruptcy petition or an involuntary bankruptcy petition is filed against us that is not dismissed, a bankruptcy court may seek to recover such proceeds, and the members of our board of directors may be viewed as having breached their fiduciary duties to our creditors, thereby exposing the members of our board of directors and us to claims of punitive damages.
−Removed: If, after we distribute the proceeds in the Trust Account to our public stockholders, we file a bankruptcy petition or an involuntary bankruptcy petition is filed against us that is not dismissed, any distributions received by our public stockholders could be viewed under applicable debtor/creditor and/or bankruptcy laws as either a “preferential transfer” or a “fraudulent conveyance.” As a result, a bankruptcy court could seek to recover some or all amounts received by our public stockholders.
−Removed: In addition, our board of directors may be viewed as having breached its fiduciary duty to our creditors and/or having acted in bad faith, thereby exposing itself and us to claims of punitive damages, by paying public stockholders from the Trust Account prior to addressing the claims of creditors.
−Removed: If, before distributing the proceeds in the Trust Account to our public stockholders, we file a bankruptcy petition or an involuntary bankruptcy petition is filed against us that is not dismissed, the claims of creditors in such proceeding may have priority over the claims of our public stockholders and the per share amount that would otherwise be received by our public stockholders in connection with our liquidation may be reduced.
−Removed: If, before distributing the proceeds in the Trust Account to our public stockholders, we file a bankruptcy petition or an involuntary bankruptcy petition is filed against us that is not dismissed, the proceeds held in the Trust Account could be subject to applicable bankruptcy law, and may be included in our bankruptcy estate and subject to the claims of third parties with priority over the claims of our public stockholders.
−Removed: To the extent any bankruptcy claims deplete the Trust Account, the per share amount that would otherwise be received by our public stockholders in connection with our liquidation would be reduced.
−Removed: If we are deemed to be an investment company under the Investment Company Act, we may be required to institute burdensome compliance requirements and our activities may be restricted, which may make it difficult for us to complete our initial business combination.
−Removed: If we are deemed to be an investment company under the Investment Company Act, our activities may be restricted, including:
−Removed: ● restrictions on the nature of our investments;
−Removed: ● restrictions on the enforceability of agreements entered into by us, each of which may make it difficult for us to complete our initial business combination;
−Removed: ● restrictions on the issuance of securities, each of which may make it difficult for us to complete our initial business combination.
−Removed: In addition, we may have imposed upon us burdensome requirements, including:
−Removed: ● registration as an investment company with the SEC (which may be impractical and would require significant changes in, among other things, our capital structure);
−Removed: ● adoption of a specific form of corporate structure;
−Removed: ● reporting, record keeping, voting, proxy and disclosure requirements and compliance with other rules and regulations that we are currently not subject to.
−Removed: In order not to be regulated as an investment company under the Investment Company Act, unless we can qualify for an exclusion, we must ensure that we are engaged primarily in a business other than investing, reinvesting or trading of securities and that our activities do not include investing, reinvesting, owning, holding or trading “investment securities” constituting more than 40% of our total assets (exclusive of U.S.
−Removed: government securities and cash items) on an unconsolidated basis.
−Removed: Our business is to identify and complete a business combination and thereafter to operate the post-transaction business or assets for the long term.
−Removed: We do not plan to buy businesses or assets with a view to resale or profit from their resale.
−Removed: We do not plan to buy unrelated businesses or assets or to be a passive investor.
−Removed: On March 30, 2022, the SEC announced the proposal of new rules and amendments concerning special purpose acquisition companies (“SPACs”) such as the Company that, if adopted, would provide a safe harbor for special purpose acquisition companies from the definition of “investment company” under Section 3(a)(1)(A) of the Investment Company Act, provided that they satisfy certain conditions that limit a special purpose acquisition company’s duration, asset composition, business purpose and activities.
−Removed: The duration component of the proposed safe harbor rule would require a special purpose acquisition company to file a Current Report on Form 8-K with the SEC announcing that it has entered into an agreement with the target company (or companies) to engage in an initial business combination no later than 18 months after the effective date of the special purpose acquisition company’s registration statement for its initial public offering.
−Removed: The special purpose acquisition company would then be required to complete its initial business combination no later than 24 months after the effective date of its registration statement for its initial public offering.
−Removed: However, on January 24, 2024, the SEC adopted the final rules and amendments related to SPACs, and such rules did not include the proposed safe harbor.
−Removed: Instead, the SEC’s adopting release provided guidance describing circumstances in which a SPAC could become subject to regulation under the Investment Company Act, including its duration, asset composition, business purpose, and the activities of the SPAC and its management team in furtherance of such goals.
−Removed: Under the new rules, there is uncertainty as to the applicability of the Investment Company Act to a SPAC.
−Removed: As we did not enter into a definitive business combination agreement within 18 months after the effective date of our registration statement relating to the Public Offering, and did not complete our business combination within 24 months of such date, it is possible that a claim could be made that we have been operating as an unregistered investment company.
−Removed: If we were deemed to be an investment company for purposes of the Investment Company Act, we might be forced to abandon our efforts to complete an initial business combination and instead be required to liquidate.
−Removed: If we are required to liquidate, our investors would not be able to realize the benefits of owning stock in a successor operating business, including the potential appreciation in the value of our stock and warrants following such a transaction, and our warrants would expire worthless.
−Removed: We do not believe that our principal activities currently subject us to the Investment Company Act.
−Removed: To this end, the proceeds held in the Trust Account have been invested only in United States “government securities” within the meaning of Section 2(a)(16) of the Investment Company Act having a maturity of 185 days or less or in money market funds meeting certain conditions under Rule 2a-7 promulgated under the Investment Company Act which invest only in direct U.S.
−Removed: government treasury obligations.
−Removed: Pursuant to the trust agreement, the trustee is not permitted to invest in other securities or assets.
−Removed: By restricting the investment of the proceeds to these instruments, and by having a business plan targeted at acquiring and growing businesses for the long term (rather than on buying and selling businesses in the manner of a merchant bank or private equity fund), we do not believe we are an “investment company” within the meaning of the Investment Company Act.
−Removed: The Trust Account is intended as a holding place for funds pending the earliest to occur of:
−Removed: (i) the completion of our primary business objective, which is a business combination;
−Removed: (ii) the redemption of any public shares properly submitted in connection with a stockholder vote to amend our amended and restated certificate of incorporation to modify the substance or timing of our obligation to provide our public stockholders the right to have their public shares redeemed in connection with our initial business combination or to provide for the redemption of our public shares in connection with an initial business combination or to redeem 100% of our public shares if we do not complete our initial business combination by September 30, 2025, or during any Extension Period, or with respect to any other provision relating to stockholder rights or pre-initial business combination activity;
−Removed: and (iii) absent a business combination, our return of the funds held in the Trust Account to our public stockholders as part of our redemption of the public shares.
−Removed: Because we have invested the proceeds only in permitted instruments, we believe we are not an investment company subject to the Investment Company Act.
−Removed: Changes in laws or regulations or in how such laws or regulations are interpreted or applied, or a failure to comply with any laws, regulations, interpretations or applications, may materially and adversely affect us, including our ability to negotiate and complete our initial business combination.
−Removed: We are subject to laws and regulations, and interpretations and applications of such laws and regulations, enacted by national, regional and local governments.
−Removed: In particular, we will be required to comply with certain SEC and other legal requirements, our business combination may be contingent on our ability to comply with certain laws, regulations, interpretations and applications and any post-business combination company may be subject to additional laws, regulations, interpretations and applications.
−Removed: Compliance with, and monitoring of, applicable laws, regulations, interpretations and applications may be difficult, time consuming and costly.
−Removed: Those laws and regulations and their interpretation and application may also change from time to time, including as a result of changes in economic, political, social and governmental policies, and those changes could have a material adverse effect on our business, investments, financial condition, liquidity and results of operations.
−Removed: In addition, a failure to comply with applicable laws or regulations, as interpreted and applied, could have a material adverse effect on us, including our ability to negotiate and complete our initial business combination.
−Removed: For example, on January 24, 2024, the SEC adopted a series of new rules relating to special purpose acquisition companies (“SPACs”) (the “SPAC Rules”) requiring, among other items, (i) additional disclosures relating to SPAC business combination transactions;
−Removed: (ii) additional disclosures relating to dilution and to conflicts of interest involving sponsors and their affiliates in both SPAC initial public offerings and SPAC initial business combinations (the “de-SPAC transactions”);
−Removed: (iii) the use of projections by SPACs in SEC filings in connection with proposed business combination transactions;
−Removed: and (iv) both the SPAC and the target company’s status as co-registrants on de-SPAC transaction registration statements.
−Removed: In addition, the SEC’s adopting release provided guidance describing circumstances in which a SPAC could become subject to regulation under the Investment Company Act, including its duration, asset composition, business purpose, and the activities of the SPAC and its management team in furtherance of such goals.
−Removed: Compliance with the SPAC Rules and related guidance may increase the costs and the time needed to negotiate and complete an initial business combination, may constrain the circumstances under which we could complete an initial business combination.
−Removed: Our stockholders may be held liable for claims by third parties against us to the extent of distributions received by them upon redemption of their shares.
−Removed: Under the DGCL, stockholders may be held liable for claims by third parties against a corporation to the extent of distributions received by them in a dissolution.
−Removed: The pro rata portion of the Trust Account distributed to our public stockholders upon the redemption of our public shares in the event we do not complete our initial business combination by September 30, 2025, or during any Extension Period, may be considered a liquidating distribution under Delaware law.
−Removed: If a corporation complies with certain procedures set forth in Section 280 of the DGCL intended to ensure that it makes reasonable provision for all claims against it, including a 60-day notice period during which any third-party claims can be brought against the corporation, a 90-day period during which the corporation may reject any claims brought, and an additional 150-day waiting period before any liquidating distributions are made to stockholders, any liability of stockholders with respect to a liquidating distribution is limited to the lesser of such stockholder’s pro rata share of the claim or the amount distributed to the stockholder, and any liability of the stockholder would be barred after the third anniversary of the dissolution.
−Removed: However, it is our intention to redeem our public shares as soon as reasonably possible following the prescribed time period in the event we do not complete our initial business combination and, therefore, we do not intend to comply with the foregoing procedures.
−Removed: Because we do not intend to comply with Section 280, Section 281(b) of the DGCL requires us to adopt a plan, based on facts known to us at such time that will provide for our payment of all existing and pending claims or claims that may be potentially brought against us within the 10 years following our dissolution.
−Removed: However, because we are a blank check company, rather than an operating company, and our operations will be limited to searching for prospective target businesses to acquire, the only likely claims to arise would be from our vendors (such as lawyers, investment bankers, consultants, etc.) or prospective target businesses.
−Removed: If our plan of distribution complies with Section 281(b) of the DGCL, any liability of stockholders with respect to a liquidating distribution is limited to the lesser of such stockholder’s pro rata share of the claim or the amount distributed to the stockholder, and any liability of the stockholder would likely be barred after the third anniversary of the dissolution.
−Removed: We cannot assure you that we will properly assess all claims that may be potentially brought against us.
−Removed: As such, our stockholders could potentially be liable for any claims to the extent of distributions received by them (but no more) and any liability of our stockholders may extend beyond the third anniversary of such date.
−Removed: Furthermore, if the pro rata portion of the Trust Account distributed to our public stockholders upon the redemption of our public shares in the event we do not complete our initial business combination within the prescribed time period is not considered a liquidating distribution under Delaware law and such redemption distribution is deemed to be unlawful, then pursuant to Section 174 of the DGCL, the statute of limitations for claims of creditors could then be six years after the unlawful redemption distribution, instead of three years, as in the case of a liquidating distribution.
−Removed: We may not hold an annual meeting of stockholders until after we consummate our initial business combination and you will not be entitled to any of the corporate protections provided by such a meeting.
−Removed: We may not hold an annual meeting of stockholders until after we consummate our initial business combination and thus may not be in compliance with Section 211(b) of the DGCL, which requires an annual meeting of stockholders be held for the purposes of electing directors in accordance with a company’s bylaws unless such election is made by written consent in lieu of such a meeting.
−Removed: Therefore, if our stockholders want us to hold an annual meeting prior to our consummation of our initial business combination, they may attempt to force us to hold one by submitting an application to the Delaware Court of Chancery in accordance with Section 211(c) of the DGCL.
−Removed: Until we hold an annual meeting of stockholders, public stockholders may not be afforded the opportunity to discuss company affairs with management.
−Removed: In addition, prior to our initial business combination, (a) as holders of our Class A common stock, our public stockholders will not have the right to vote on the election of our directors, and (b) only holders of a majority of the issued and outstanding shares of our Class B common stock may remove a member of our board of directors with or without cause.
−Removed: Although we included the sale of the shares of Class A common stock issuable upon exercise of the warrants under the Securities Act in the registration statement for our IPO, that registration statement may not be current or another registration statement covering such sale of the shares of Class A common stock may not be in place when a holder of the warrants desires to exercise the warrants, thus precluding such holder from being able to exercise its warrants except on a “cashless basis.” If the issuance of the shares upon exercise of warrants is not registered, qualified or exempt from registration or qualification, the holder of such warrant will not be entitled to exercise such warrant and such warrant may have no value and expire worthless.
−Removed: Although we included the sale of the shares of Class A common stock issuable upon exercise of the warrants in the registration statement for our IPO, because the warrants are not exercisable until 30 days after the completion of our initial business combination, we do not currently intend to file a post-effective amendment to the registration statement for our IPO (our “IPO registration statement”) or file a new registration statement covering the sale of the shares of Class A common stock issuable upon exercise of the warrants until after the initial business combination has been consummated.
−Removed: Under the terms of the warrant agreement, we have agreed that as soon as practicable, but in no event later than 15 business days after the closing of our initial business combination, we will use our commercially reasonable efforts to file a post-effective amendment to our IPO registration statement or a new registration statement, in our discretion, with the SEC and, within 60 business days after such closing, have an effective registration statement covering the sale of the shares of Class A common stock issuable upon exercise of the warrants and to maintain the effectiveness of such registration statement and a current prospectus relating to those shares of Class A common stock until the warrants expire or are redeemed.
−Removed: We cannot assure you that we will be able to do so if, for example, any facts or events arise which represent a fundamental change in the information set forth in the registration statement or prospectus, the financial statements contained or incorporated by reference therein are not current, complete or correct or the SEC issues a stop order.
−Removed: If the sale of the shares of Class A common stock issuable upon exercise of the warrants are not registered under the Securities Act, we will be required to permit holders to exercise their warrants on a cashless basis, in which case the number of shares of our Class A common stock that you will receive upon cashless exercise will be based on a formula, subject to a maximum number of shares equal to 0.361 of a share of our Class A common stock per whole warrant (subject to adjustment) in the case of such warrant exercise during the 30-day redemption period referred to in the warrant agreement.
−Removed: However, no warrant will be exercisable for cash or on a cashless basis, and we will not be obligated to issue any shares to holders seeking to exercise their warrants, unless the sale of the shares issuable upon such exercise is registered or qualified under the securities laws of the state of the exercising holder or an exemption from registration or qualification is available.
−Removed: Notwithstanding the above, if our Class A common stock is at the time of any exercise of a warrant not listed on a national securities exchange such that it satisfies the definition of a “covered security” under Section 18(b)(1) of the Securities Act, we may, at our option, require holders of warrants who exercise their warrants to do so on a “cashless basis” in accordance with Section 3(a)(9) of the Securities Act and, in the event we so elect, we will not be required to file or maintain in effect a registration statement or make available a current prospectus, but we will use our commercially reasonable efforts to register or qualify the sale of the shares issuable upon exercise of the warrants under applicable state blue sky laws to the extent an exemption is not available.
−Removed: In no event will we be required to net cash settle any warrant or issue securities or other compensation in exchange for the warrants in the event that we are unable to register or qualify the shares underlying the warrants under applicable state securities laws and no exemption is available.
−Removed: If the sale of the shares issuable upon exercise of the warrants is not so registered or qualified or exempt from registration or qualification, the holder of such warrant shall not be entitled to exercise such warrant and such warrant may have no value and expire worthless.
−Removed: In such event, holders who acquired their warrants as part of a purchase of units will have paid the full unit purchase price solely for the shares of Class A common stock included in those units.
−Removed: There may be a circumstance where an exemption from registration exists for holders of our private placement warrants to exercise their warrants while a corresponding exemption does not exist for holders of our public warrants.
−Removed: In such an instance, our sponsor and its permitted transferees would be able to exercise their warrants and sell the shares of Class A common stock underlying their warrants while holders of our public warrants would not be able to do so.
−Removed: If and when the warrants become redeemable by us, we may exercise our redemption right even if we are unable to register or qualify the sale of the underlying shares of Class A common stock for sale under all applicable state securities laws.
−Removed: In addition, we have not committed to register or qualify the sale of the shares issuable upon exercise of warrants under any non-U.S.
−Removed: securities laws.
−Removed: As a result, we may redeem the warrants as set forth above even if the holders are otherwise unable to exercise the warrants.
−Removed: The warrants may become exercisable and redeemable for a security other than the shares of Class A common stock, and you will not have any information regarding such other security at this time.
−Removed: In certain situations, including if we are not the surviving entity in our initial business combination, the warrants may become exercisable for a security other than the shares of Class A common stock.
−Removed: As a result, if the surviving company redeems your warrants for securities pursuant to the warrant agreement, you may receive a security in a company of which you do not have information at this time.
−Removed: Pursuant to the warrant agreement, the surviving company will be required to use commercially reasonable efforts to file a registration statement for the sale of the security underlying the warrants within 15 business days of the closing of an initial business combination.
−Removed: If you exercise your public warrants on a “cashless basis,” you will receive fewer shares of Class A common stock from such exercise than if you were to exercise such warrants for cash.
−Removed: There are circumstances in which the exercise of the public warrants may be required or permitted to be made on a cashless basis.
−Removed: First, if a registration statement covering the Class A common stock issuable upon exercise of the warrants is not effective by the 60th business day following the consummation of our initial business combination, warrant holders may, until such time as there is an effective registration statement and during any period when we shall have failed to maintain an effective registration statement or to make available a current prospectus, exercise warrants on a cashless basis pursuant to the exemption provided by Section 3(a)(9) of the Securities Act, provided that such exemption is available;
−Removed: if that exemption, or another exemption, is not available, holders will not be able to exercise their warrants on a cashless basis.
−Removed: Second, if we call the warrants for redemption in the circumstances described in Exhibit 4.5 to this report under the caption “Description of Securities—Public Warrants—Redemption of warrants for cash when the price per share of Class A common stock equals or exceeds $18.00,” warrant holders will be able to exercise their warrants on a cashless basis prior to redemption if we require or permit that warrants be exercised on a cashless basis in connection with such redemption.
−Removed: In the event of any such exercise on a cashless basis, a holder would pay the warrant exercise price by surrendering the warrants being exercised for that number of shares of Class A common stock equal to the quotient obtained by dividing (x) the product of the number of shares of Class A common stock underlying the warrants being exercised, multiplied by the excess of the “fair market value” of our Class A common stock (defined above) over the exercise price of the warrants by (y) the fair market value, and the number of shares of our Class A common stock received by a holder upon exercise will be fewer than it would have been had such holder exercised the warrant for cash.
−Removed: For example, if the holder is exercising 875 warrants at $11.50 per share through a cashless exercise when the shares of our Class A common stock have a fair market value of $17.50 per share when there is no effective registration statement, then, upon the cashless exercise, the holder will receive 300 shares of our Class A common stock.
−Removed: The holder would have received 875 shares of our Class A common stock if the exercise price was paid in cash.
−Removed: This will have the effect of reducing the potential “upside” of the holder’s investment in our Company because the warrant holder will hold a smaller number of shares of our Class A common stock upon a cashless exercise of the warrants they hold.
−Removed: Third, if we call the warrants for redemption in the circumstances described in Exhibit 4.5 to this report under the caption “Description of Securities—Public Warrants—Redemption of warrants for cash when the price per share of Class A common stock equals or exceeds $10.00,” holders who wish to exercise their warrants may do so on a cashless basis.
−Removed: In the event of an exercise on a cashless basis under those circumstances, a holder would receive that number of shares determined by reference to an agreed table based on the redemption date and the “fair market value” of Class A common stock.
−Removed: In any of these cases, this will have the effect of reducing the potential “upside” of the holder’s investment in our Company because the warrant holder will hold a smaller number of shares of our Class A common stock upon a cashless exercise of the warrants they hold.
−Removed: Our warrants are accounted for as a warrant liability and were recorded at fair value upon issuance, and any changes in fair value of our warrants in each period will be reported in earnings, which may have an adverse effect on the market price of our securities or may make it more difficult for us to consummate an initial business combination.
−Removed: We have 23,200,000 warrants outstanding (comprised of the 11,500,000 public warrants and 11,700,000 private placement warrants).
−Removed: We account for these warrants as a warrant liability, which means that we recorded them at fair value upon issuance and that any changes in their fair value in each period will be reported in earnings.
−Removed: Changes in the inputs and assumptions for the valuation
−Removed: model we use to determine the fair value of such liability may have a material impact on the estimated fair value of the embedded derivative liability.
−Removed: The share price of our Class A common stock represents the primary underlying variable that impacts the value of the derivative instruments.
−Removed: Additional factors that impact the value of the derivative instruments include the volatility of our stock price, discount rates and stated interest rates.
−Removed: As a result, our results of operations will fluctuate quarterly, based on various factors, such as the share price of our common stock, many of which are outside of our control.
−Removed: In addition, we may change the underlying assumptions used in our valuation model, which could result in significant fluctuations in our results of operations.
−Removed: If our stock price is volatile, we expect that we will recognize non-cash gains or losses on our warrants or any other similar derivative instruments each reporting period and that the amount of such gains or losses could be material.
−Removed: The impact of changes in fair value on earnings may have an adverse effect on the market price of our securities.
−Removed: In addition, potential targets may seek a business combination partner that does not have warrants that are accounted for as a warrant liability, which may make it more difficult for us to consummate an initial business combination with a target business.
−Removed: The grant of registration rights to our sponsor and its permitted transferees may make it more difficult to complete our initial business combination, and the future exercise of such rights may adversely affect the market price of our Class A common stock.
−Removed: Pursuant to a registration rights agreement that we entered into in connection with our IPO, our sponsor and its permitted transferees can demand that we register the resale of their founder shares after those shares convert to shares of our Class A common stock at the time of our initial business combination.
−Removed: In addition, our sponsor and its permitted transferees can demand that we register the resale of the private placement warrants and the shares of Class A common stock issuable upon exercise of the private placement warrants, and holders of warrants that may be issued upon conversion of working capital loans may demand that we register the resale of such warrants or the Class A common stock issuable upon exercise of such warrants.
−Removed: We will bear the cost of registering these securities.
−Removed: The registration and availability of such a significant number of securities for trading in the public market may have an adverse effect on the market price of our Class A common stock.
−Removed: In addition, the existence of the registration rights may make our initial business combination more costly or difficult to complete.
−Removed: This is because the stockholders of the target business may increase the equity stake they seek in the combined entity or ask for more cash consideration to offset the negative impact on the market price of our Class A common stock that is expected when the common stock owned by our sponsor or its permitted transferees, the private placement warrants owned by our sponsor or its permitted transferees or warrants issued in connection with working capital loans are registered for resale.
−Removed: Because we are not limited to evaluating target businesses in a particular industry, sector or geography, you will be unable to ascertain the merits or risks of any particular target business’s operations.
−Removed: If the Business Combination is not consummated, we may seek to complete a business combination with an operating company in any industry, sector or geography.
−Removed: However, we will not, under our amended and restated certificate of incorporation, be permitted to effectuate our initial business combination with another blank check company or similar company with nominal operations.
−Removed: To the extent we complete our initial business combination, we may be affected by numerous risks inherent in the business operations with which we combine.
−Removed: For example, if we combine with a financially unstable business or an entity lacking an established record of sales or earnings, we may be affected by the risks inherent in the business and operations of a financially unstable or a development stage entity.
−Removed: Although our officers and directors will endeavor to evaluate the risks inherent in a particular target business, we cannot assure you that we will properly ascertain or assess all of the significant risk factors or that we will have adequate time to complete due diligence.
−Removed: Furthermore, some of these risks may be outside of our control and leave us with no ability to control or reduce the chances that those risks will adversely impact a target business.
−Removed: We also cannot assure you that an investment in our units will ultimately prove to be more favorable to investors than a direct investment, if such opportunity were available, in a business combination target.
−Removed: Accordingly, any stockholders or warrant holders who choose to remain a stockholder or warrant holder following our initial business combination could suffer a reduction in the value of their securities.
−Removed: Such stockholders or warrant holders are unlikely to have a remedy for such reduction in value.
−Removed: We may seek acquisition opportunities in acquisition targets that may be outside of our management’s areas of expertise.
−Removed: If the Business Combination is not consummated, we will consider a business combination in sectors which may be outside of our management’s areas of expertise if such business combination candidate is presented to us and we determine that such candidate offers an attractive acquisition opportunity for our Company.
−Removed: In the event we elect to pursue an acquisition outside of the areas of our management’s expertise, our management’s expertise may not be directly applicable to its evaluation or operation, and the
−Removed: information contained in this report regarding the areas of our management’s expertise would not be relevant to an understanding of the business that we elect to acquire.
−Removed: As a result, our management may not be able to adequately ascertain or assess all of the significant risk factors relevant to such acquisition.
−Removed: Accordingly, any stockholders or warrant holders who choose to remain a stockholder or warrant holder following our initial business combination could suffer a reduction in the value of their securities.
−Removed: Such stockholders or warrant holders are unlikely to have a remedy for such reduction in value.
−Removed: We may engage one or more financial advisors to provide services to us in the future, which may include acting as an advisor in connection with an initial business combination or as placement agent in connection with a related financing transaction.
−Removed: These financial incentives may cause such advisors to have potential conflicts of interest in rendering any such services, including, for example, in connection with the sourcing and consummation of an initial business combination.
−Removed: We may engage one or more financial advisors to provide services to us in the future, including, for example, identifying potential targets, providing advisory services, acting as a placement agent in a private offering or arranging debt financing transactions.
−Removed: We may pay such advisors fair and reasonable fees or other compensation that would be determined at that time in an arm’s length negotiation.
−Removed: Such advisors’ financial interests tied to the consummation of a business combination transaction may give rise to potential conflicts of interest in providing any such services to us, including potential conflicts of interest in connection with the sourcing and consummation of an initial business combination.
−Removed: Although we have identified general guidelines and characteristics that we believe are important in evaluating prospective target businesses, we may enter into our initial business combination with a target that does not meet such guidelines and characteristics, and as a result, the target business with which we enter into our initial business combination may not have attributes entirely consistent with such guidelines and characteristics.
−Removed: Although we have identified general guidelines and characteristics for evaluating prospective target businesses, if the Business Combination is not consummated, it is possible that a target business with which we enter into our initial business combination will not have attributes entirely consistent with such guidelines and characteristics.
−Removed: If we complete our initial business combination with a target that does not meet some or all of these guidelines and characteristics, such combination may not be as successful as a combination with a business that does meet all of our guidelines and characteristics.
−Removed: In addition, if we announce a prospective business combination with a target that does not meet our general guidelines and characteristics, a greater number of public stockholders may exercise their redemption rights, which may make it difficult for us to meet any closing condition with a target business that requires us to have a minimum net worth or a certain amount of cash.
−Removed: In addition, if stockholder approval of the transaction is required by applicable law or stock exchange rules, or we decide to obtain stockholder approval for business or other reasons, it may be more difficult for us to attain stockholder approval of our initial business combination if the target business does not meet our general guidelines and characteristics.
−Removed: If we are unable to complete our initial business combination within the prescribed time period, our public stockholders may receive only approximately $10.20 per share, or less in certain circumstances, on the liquidation of the Trust Account and our warrants will expire worthless.
−Removed: We may seek acquisition opportunities with an early stage company, a financially unstable business or an entity lacking an established record of revenue or earnings, which could subject us to volatile revenues or earnings, intense competition and difficulties in obtaining and retaining key personnel.
−Removed: To the extent we complete our initial business combination with an early stage company, a financially unstable business or an entity lacking an established record of sales or earnings, we may be affected by numerous risks inherent in the operations of the business with which we combine.
−Removed: These risks include investing in a business without a proven business model and with limited historical financial data, volatile revenues or earnings, intense competition and difficulties in obtaining and retaining key personnel.
−Removed: Although our officers and directors will endeavor to evaluate the risks inherent in a particular target business, we may not be able to properly ascertain or assess all of the significant risk factors and we may not have adequate time to complete due diligence.
−Removed: Furthermore, some of these risks may be outside of our control and leave us with no ability to control or reduce the chances that those risks will adversely impact a target business.
−Removed: A slowdown in economic growth in the markets that our target business operates in may materially and adversely affect our business, financial condition, liquidity and results of operations, the value of our securities and the trading price of our shares following our business combination.
−Removed: Following the business combination, our results of operations, liquidity and financial condition may be dependent on, and may be adversely affected by, conditions in financial markets in the global economy, and, particularly in the markets where the target business operates.
−Removed: The specific economy could be adversely affected by various factors, such as political or regulatory action, including business corruption, social disturbances, terrorist attacks and other acts of violence or war, natural calamities, interest rates, inflation, commodity and energy prices and various other factors which may materially and adversely affect our business, financial condition, liquidity and results of operations, the value of our securities and the trading price of our shares following the business combination.
−Removed: We are generally not required to obtain an opinion regarding fairness from an independent investment banking firm or from an independent accounting firm, and consequently, you may have no assurance from an independent source that the price we are paying for the business is fair to our Company from a financial point of view.
−Removed: Unless we complete our initial business combination with an affiliated entity, we are not required to obtain an opinion from an independent investment banking firm that is a member of FINRA or from an independent accounting firm that the price we are paying is fair to our Company from a financial point of view.
−Removed: In addition, if our board of directors is not able to determine the fair market value of the target businesses or assets, in connection with the provision of our amended and restated certificate of incorporation that requires that an initial business combination be with one or more businesses or assets with a fair market value equal to at least 80% of the net assets held in the Trust Account (excluding the amount of any deferred underwriting discount), we will obtain an opinion from an independent investment banking firm that is a member of FINRA or from an independent accounting firm with respect to the satisfaction of such criteria.
−Removed: Other than the two circumstances described above, we are not required to obtain an opinion from an independent investment banking firm that is a member of FINRA or from an independent accounting firm.
−Removed: If no opinion is obtained, our stockholders will be relying on the judgment of our board of directors, who will determine fair market value based on standards generally accepted by the financial community.
−Removed: Such standards used will be disclosed in our tender offer documents or proxy solicitation materials, as applicable, related to our initial business combination.
−Removed: We may issue additional shares of Class A common stock or preferred stock to complete our initial business combination or under an employee incentive plan after completion of our initial business combination.
−Removed: We may also issue shares of Class A common stock upon the conversion of the Class B common stock at a ratio greater than one-to-one at the time of our initial business combination as a result of the anti-dilution provisions.
−Removed: Any such issuances would dilute the interest of our stockholders and likely present other risks.
−Removed: Our amended and restated certificate of incorporation authorizes the issuance of up to 200,000,000 shares of Class A common stock, par value $0.0001 per share, and 20,000,000 shares of Class B common stock, par value $0.0001 per share, and 1,000,000 shares of undesignated preferred stock, par value $0.0001 per share.
−Removed: As of December 31, 2024, there were 172,562,013 and 18,450,000 authorized but unissued shares of Class A and Class B common stock, respectively, available for issuance, which amount takes into account shares reserved for issuance upon exercise of outstanding warrants, but not shares reserved upon the conversion of the Class B common stock.
−Removed: Shares of Class B common stock are automatically convertible into shares of our Class A common stock at the time of our initial business combination, or earlier at the option of the holders thereof, initially at a one-for-one ratio but subject to adjustment as set forth herein.
−Removed: As of December 31, 2024, there were no shares of preferred stock issued and outstanding.
−Removed: We may issue a substantial number of additional shares of Class A common stock, and may issue shares of preferred stock, in order to complete our initial business combination or under an employee incentive plan after completion of our initial business combination.
−Removed: We may also issue shares upon conversion of the Class B common stock at a ratio greater than one-to-one at the time of our initial business combination as a result of the anti-dilution provisions.
−Removed: However, our amended and restated certificate of incorporation provides, among other things, that prior to our initial business combination, we may not issue additional shares of capital stock that would entitle the holders thereof to (1) receive funds from the Trust Account or (2) vote on any initial business combination,
−Removed: pre-initial business combination activity or amendments to the articles of our amended and restated certificate of incorporation that govern certain rights of holders related to our consummation of an initial business combination.
−Removed: The issuance of additional shares of common or preferred stock:
−Removed: ● may significantly dilute the equity interest of our investors;
−Removed: ● may subordinate the rights of holders of common stock if preferred stock is issued with rights senior to those afforded our common stock;
−Removed: ● could cause a change in control if a substantial number of shares of common stock are issued, which may affect, among other things, our ability to use our net operating loss carry forwards, if any, and could result in the resignation or removal of our present officers and directors;
−Removed: ● may have the effect of delaying or preventing a change of control of us by diluting the share ownership or voting rights of a person seeking to obtain control of us;
−Removed: ● may adversely affect prevailing market prices for our units, common stock and/or warrants;
−Removed: ● may not result in adjustment to the exercise price of our warrants.
−Removed: Resources could be wasted in researching initial business combinations that are not completed, which could materially adversely affect subsequent attempts to locate and acquire or merge with another business.
−Removed: If we are unable to complete our initial business combination within the prescribed time period, our public stockholders may receive only approximately $10.20 per share, or less than such amount in certain circumstances, on the liquidation of the Trust Account and our warrants will expire worthless.
−Removed: If the Business Combination is not consummated, we anticipate that the investigation of each specific target business and the negotiation, drafting and execution of relevant agreements, disclosure documents and other instruments will require substantial management time and attention and substantial costs for accountants, attorneys and others.
−Removed: If we decide not to complete a specific initial business combination, the costs incurred up to that point for the proposed transaction likely would not be recoverable.
−Removed: Furthermore, if we reach an agreement relating to a specific target business, we may fail to complete our initial business combination for any number of reasons, including those beyond our control.
−Removed: Any such event will result in a loss to us of the related costs incurred which could materially adversely affect subsequent attempts to locate and acquire or merge with another business.
−Removed: If we are unable to complete our initial business combination within the prescribed time period, our public stockholders may receive only approximately $10.20 per share, or less in certain circumstances, on the liquidation of the Trust Account and our warrants will expire worthless.
−Removed: Please see “—If third parties bring claims against us, the proceeds held in the Trust Account could be reduced and the per-share redemption amount received by our public stockholders may be less than $10.20 per share” and other risk factors herein.
−Removed: Our officers and directors will allocate some of their time to other businesses thereby causing conflicts of interest in their determination as to how much time to devote to our affairs.
−Removed: This conflict of interest could have a negative impact on our ability to complete our initial business combination.
−Removed: Our officers and directors are not required to, and will not, commit their full time to our affairs, which may result in a conflict of interest in allocating their time between our operations and our search for a business combination and their other responsibilities.
−Removed: We do not intend to have any full-time employees prior to the completion of our business combination.
−Removed: Each of our officers and directors is and/or may be engaged in several other business endeavors for which they may be entitled to substantial compensation and our officers and directors are not obligated to contribute any specific number of hours per week to our affairs.
−Removed: If our officers’ and directors’ other business affairs require them to devote substantial amounts of time to such affairs, it could limit their ability to devote time to our affairs which may have a negative impact on our ability to complete our initial business combination.
−Removed: We are dependent upon our officers and directors and their departure could adversely affect us.
−Removed: Our operations are dependent upon a relatively small group of individuals.
−Removed: We believe that our success depends on the continued service of our officers and directors, at least until we have completed our initial business combination.
−Removed: We do not have an employment agreement with, or key-man insurance on the life of, any of our other directors or officers.
−Removed: The unexpected loss of the services of one or more of our directors or officers could have a detrimental effect on us.
−Removed: Our ability to successfully effect our initial business combination and to be successful thereafter will be dependent upon the efforts of our key personnel, some of whom may join us following our initial business combination.
−Removed: The loss of key personnel could negatively impact the operations and financial results of our post-combination company.
−Removed: Our ability to successfully effect our initial business combination is dependent upon the efforts of our key personnel.
−Removed: The role of our key personnel in the target business, however, cannot presently be ascertained.
−Removed: Although some of our key personnel may remain with the target business in senior management or advisory positions following our initial business combination, we do not currently expect that any of them will do so.
−Removed: While we intend to closely scrutinize any individuals we engage after our initial business combination, we cannot assure you that our assessment of these individuals will prove to be correct.
−Removed: These individuals may be unfamiliar with the requirements of operating a company regulated by the SEC, which could cause us to have to expend time and resources helping them become familiar with such requirements.
−Removed: In addition, the officers and directors of an acquisition candidate may resign upon completion of our initial business combination.
−Removed: The departure of a business combination target’s key personnel could negatively impact the operations and financial results of our post-transaction company.
−Removed: The role of an acquisition candidate’s key personnel upon the completion of our initial business combination cannot be ascertained at this time.
−Removed: Although we contemplate that certain members of an acquisition candidate’s management team will remain associated with the acquisition candidate following our initial business combination, it is possible that members of the management of an acquisition candidate will not wish to remain in place.
−Removed: The loss of key personnel could negatively impact the operations and financial results of our post-transaction company.
−Removed: Our key personnel may negotiate employment or consulting agreements with a target business in connection with a particular business combination, and a particular business combination may be conditioned on the retention or resignation of such key personnel.
−Removed: These agreements may cause our key personnel to have conflicts of interest in determining whether to proceed with a particular business combination.
−Removed: Our key personnel may be able to remain with our Company after the completion of our initial business combination only if they are able to negotiate employment or consulting agreements in connection with the business combination.
−Removed: Such negotiations would take place simultaneously with the negotiation of the business combination and could provide for such individuals to receive compensation in the form of cash payments and/or our securities for services they would render to us after the completion of the business combination.
−Removed: Such negotiations also could make such key personnel’s retention or resignation a condition to any such agreement.
−Removed: The personal and financial interests of such individuals may influence their motivation in identifying and selecting a target business.
−Removed: However, we believe the ability of such individuals to remain with us after the completion of our initial business combination will not be the determining factor in our decision as to whether or not we will proceed with any potential business combination.
−Removed: The determination as to whether any of our key personnel will remain with us will be made at the time of our initial business combination.
−Removed: Members of our management team and board of directors have significant experience as board members, officers or executives of other companies.
−Removed: As a result, certain of those persons have been, may be, or may become, involved in proceedings, investigations and litigation relating to the business affairs of the companies with which they were, are, or may in the future be, affiliated.
−Removed: This may have an adverse effect on us, which may impede our ability to consummate an initial business combination.
−Removed: During the course of their careers, members of our management team and board of directors have had significant experience as board members, officers or executives of other companies.
−Removed: As a result of their involvement and positions in these companies, certain persons were, are now, or may in the future become, involved in litigation, investigations or other proceedings relating to the business affairs of such companies or transactions entered into by such companies.
−Removed: Any such litigation, investigations or other proceedings may divert our management team’s and board’s attention and resources away from identifying and selecting a target
−Removed: business or businesses for our initial business combination and may negatively affect our reputation, which may impede our ability to complete an initial business combination.
−Removed: Members of our management team and affiliated companies have been, or may in the future be, subject to media coverage and involved in civil disputes or governmental investigations unrelated to our business.
−Removed: Members of our management team have been (or intend to be) involved in a wide variety of businesses.
−Removed: Such involvement has, or may, lead to significant media coverage and public awareness.
−Removed: In addition, members of our management team and affiliated companies have been, or may in the future be, involved in civil disputes or governmental investigations unrelated to our business.
−Removed: Any such media coverage, public awareness, disputes or investigations may be detrimental to our reputation and could negatively affect our ability to identify and complete an initial business combination and may have an adverse effect on the price of our securities.
−Removed: We may have a limited ability to assess the management of a prospective target business and, as a result, may affect our initial business combination with a target business whose management may not have the skills, qualifications or abilities to manage a public company and comply with applicable rules and regulations.
−Removed: When evaluating the desirability of effecting our initial business combination with a prospective target business, our ability to assess the target business’s management may be limited due to a lack of time, resources or information.
−Removed: Our assessment of the capabilities of the target business’s management, therefore, may prove to be incorrect and such management may lack the skills, qualifications or abilities we suspected.
−Removed: Should the target business’s management not possess the skills, qualifications or abilities necessary to manage a public company and comply with applicable rules and regulations (including SEC reporting requirements), the operations and financial results of the post-combination company may be negatively impacted.
−Removed: Accordingly, any stockholders or warrant holders who choose to remain a stockholder or warrant holder following our initial business combination could suffer a reduction in the value of their securities.
−Removed: Such stockholders or warrant holders are unlikely to have a remedy for such reduction in value.
−Removed: The officers and directors of an initial business combination candidate may resign upon completion of our initial business combination.
−Removed: The departure of a business combination target’s key personnel could negatively impact the operations and financial results of our post-combination company.
−Removed: The role of an initial business combination candidate’s key personnel upon the completion of our initial business combination cannot be ascertained at this time.
−Removed: Although we contemplate that certain members of an acquisition candidate’s management team will remain associated with the initial business combination candidate following our initial business combination, it is possible that members of the management of an acquisition candidate will not wish to remain in place.
−Removed: As a result, we may need to reconstitute the management team of the post-transaction company in connection with our initial business combination, which may adversely impact our ability to complete an initial business combination in a timely manner or at all.
−Removed: Our sponsor, officers and directors are now, and/or may in the future become, affiliated with entities engaged in business activities similar to those intended to be conducted by us and, accordingly, may have conflicts of interest in determining to which entity a particular business opportunity or other transaction should be presented.
−Removed: Until we consummate our initial business combination, we intend to engage in the business of identifying and combining with one or more businesses.
−Removed: Our sponsor, officers and directors are now, and/or may in the future become, affiliated with entities (such as operating companies, investment vehicles or other blank check companies) that are engaged in a similar business.
−Removed: We do not have employment contracts with our officers and directors that will limit their ability to work at other businesses.
−Removed: As such, our officers and directors are not prohibited from sponsoring, or otherwise becoming involved with, any other blank check companies prior to us completing our initial business combination.
−Removed: As a result, our officers or directors could have conflicts of interest in determining whether to present business combination opportunities to us or to any other entity with which they may become involved.
−Removed: Each of our officers and directors presently has, and/or in the future may have, additional, fiduciary or contractual duties or obligations to one or more other entities pursuant to which such officer or director is or will be required to present a business combination opportunity to such entities.
−Removed: Accordingly, if any of our officers or directors becomes aware of a business combination opportunity which is suitable for an entity to which he or she has then-current fiduciary or contractual duties or obligations to present the opportunity to such entity, he or she will honor these duties or obligations to present such business combination opportunity to such entity.
−Removed: These conflicts may not be resolved in our favor and a potential target business may be presented to another entity prior to its presentation to us.
−Removed: Even if an officer or director of ours does not have any fiduciary or contractual duties or obligations to another
−Removed: entity, such officer or director may, nonetheless, choose to present business combination opportunities to other entities before presenting them to us if such officer or director is not prohibited by our amended and restated certificate of incorporation from doing so.
−Removed: Our amended and restated certificate of incorporation provides that we renounce our interest in any corporate opportunity offered to any director or officer unless such opportunity is offered to such person solely in his or her capacity as a director or officer of our Company and such opportunity is one we are legally and contractually permitted to undertake and would otherwise be reasonable for us to pursue, and to the extent the director or officer is permitted to refer that opportunity to us without violating another legal obligation.
−Removed: Our sponsor, officers and directors and their respective affiliates may have competitive pecuniary interests that conflict with our interests.
−Removed: We have not adopted a policy that expressly prohibits our sponsor, officers or directors or any of their respective affiliates from having a direct or indirect pecuniary or financial interest in any investment to be acquired or disposed of by us or in any transaction to which we are a party or have an interest.
−Removed: In fact, we may enter into a business combination with a target business that is affiliated with our sponsor, officers or directors.
−Removed: We do not have a policy that expressly prohibits any such persons from engaging for their own account in business activities of the types conducted by us.
−Removed: Accordingly, such persons or entities may have a conflict between their interests and ours.
−Removed: Affiliates of our sponsor have invested in entities in a diverse range of industries.
−Removed: As a result, there may be substantial overlap between companies that would be suitable business combination candidates for us and companies that would make an attractive investment and/or target for such other entities.
−Removed: We may engage in a business combination with one or more target businesses that have relationships with entities that may be affiliated with our sponsor, officers or directors which may raise potential conflicts of interest.
−Removed: In light of the involvement of our sponsor, officers and directors with other businesses, we may decide to acquire one or more businesses affiliated with or competitive with our sponsor, officers and directors and their respective affiliates.
−Removed: Our directors also serve as officers and board members for other entities.
−Removed: Such entities may compete with us for business combination opportunities.
−Removed: Our sponsor, officers and directors are not currently aware of any specific opportunities for us to complete our initial business combination with any entities with which they are affiliated, and there have been no substantive discussions concerning a business combination with any such entity or entities.
−Removed: Although we will not be specifically focusing on, or targeting, any transaction with any affiliated entities, we would pursue such a transaction if we determined that a combination with such affiliated entity was in our best interests and such transaction was approved by a majority of our independent directors.
−Removed: Despite our agreement to obtain an opinion from an independent investment banking firm that is a member of FINRA or from an independent accounting firm, regarding the fairness to our Company from a financial point of view of a business combination with one or more domestic or international businesses affiliated with our sponsor, officers or directors, potential conflicts of interest still may exist and, as a result, the terms of the business combination may not be as advantageous to our public stockholders as they would be absent any conflicts of interest.
−Removed: Since our sponsor will lose its entire investment in us if our initial business combination is not completed within the prescribed time period (other than with respect to any public shares it may hold), a conflict of interest may arise in determining whether a particular business combination target is appropriate for our initial business combination.
−Removed: As of March 31, 2025, our sponsor held an aggregate of 312,506 founder shares and 4,200,000 public shares, representing 99.1 % of our outstanding public shares and an aggregate of 11,700,000 private placement warrants entitling the holder thereof to purchase one share of our Class A common stock at a price of $11.50 per share, subject to adjustment.
−Removed: The founder shares will be worthless if we do not complete an initial business combination by September 30, 2025 or during any Extension Period.
−Removed: The founder shares are identical to the public shares, except that:
−Removed: (1) only holders of the founder shares have the right to vote on the election of directors and to remove directors prior to our initial business combination;
−Removed: (2) the founder shares are subject to certain transfer restrictions contained in a letter agreement;
−Removed: (3) our sponsor, directors and officers have entered into a letter agreement with us, pursuant to which they have agreed to:
−Removed: (a) waive their redemption rights with respect to any founder shares and any public shares held by them in connection with the completion of our initial business combination, (b) waive their redemption rights with respect to any founder shares and public shares held by them in connection with a stockholder vote to approve an amendment to our amended and restated certificate of incorporation to (A) modify the substance or timing of our obligation to provide our public stockholders the right to have their public shares redeemed in connection with our initial business combination or to provide for the redemption of our public shares in connection with an initial business combination or to redeem 100% of our public shares if we have not consummated our initial business combination by September 30, 2025, or during any Extension Period, or (B) with respect to any other provision relating to stockholder rights or pre-initial business combination activity;
−Removed: and (c) waive their rights to liquidating distributions from the Trust Account with respect to any founder shares held by them if we fail to complete our initial business combination by September 30, 2025, or during any Extension Period (although they will be entitled to liquidating distributions from the Trust Account with respect to any public shares they hold if we fail to complete our initial business combination by September 30, 2025, or during any Extension Period);
−Removed: (4) the founder shares are automatically convertible into shares of our Class A common stock at the time of our initial business combination, or earlier at the option of the holders thereof, on a one-for-one basis, subject to adjustment, as described herein;
−Removed: and (5) the holders of founder shares are entitled to registration rights.
−Removed: If we submit our initial business combination to our public stockholders for a vote, our sponsor and officers and directors have agreed (and their permitted transferees will agree), pursuant to the terms of a letter agreement entered into with us, to vote their founder shares and any public shares held by them purchased during or after our IPO in favor of our initial business combination.
−Removed: While we do not expect our board of directors to approve any amendment to or waiver of the letter agreement or registration rights agreement prior to our initial business combination, it may be possible that our board of directors, in exercising its business judgment and subject to its fiduciary duties, chooses to approve one or more amendments to or waivers of such agreements in connection with the consummation of our initial business combination.
−Removed: Any such amendments or waivers would not require approval from our stockholders, may result in the completion of our initial business combination that may not otherwise have been possible and may have an adverse effect on the value of an investment in our securities.
−Removed: The personal and financial interests of our sponsor, officers and directors may influence their motivation in identifying and selecting a target business combination, completing an initial business combination and influencing the operation of the business following the initial business combination.
−Removed: This risk may become more acute as the deadline for completing our initial business combination nears.
−Removed: In particular, because the founder shares and any shares issued upon conversion thereof (including the public shares issued to the sponsor upon the Conversion) were purchased at approximately $0.004 per share, the holders of our founder shares (including our officers and directors that directly or indirectly own founder shares) and public shares issued upon conversion thereof could make a substantial profit after our initial business combination even if our public stockholders lose money on their investment as a result of the post-combination value of their shares of Class A common stock (after accounting for any adjustments in connection with an exchange or other transaction contemplated by the business combination) being less than the amount they purchased those shares ($10.00 per share in the case of public stockholders that purchased in our IPO).
−Removed: For example, a holder of 1,000 founder shares would have paid approximately $4.00 to obtain such shares.
−Removed: At the time of an initial business combination, such holder would be able to convert such founder shares into 1,000 shares of our Class A common stock, and would receive the same consideration in connection with our initial business combination as a public stockholder for the same number of shares of our Class A common stock.
−Removed: If the value of the shares of our Class A common stock on a post-combination basis (after accounting for any adjustments in connection with an exchange or other transaction contemplated by the business combination) were to decrease to $5.00 per share of our Class A common stock, the holder of our founder shares would obtain a profit of approximately $4,996 on account of the 1,000 founder shares that the holder had converted into shares of Class A common stock in connection with the initial business combination.
−Removed: By contrast, for example, a public stockholder holding 1,000 shares of Class A common stock, which were purchased by such public stockholder in our IPO, would lose approximately $5,000 in connection with the same transaction.
−Removed: We may issue notes or other debt securities, or otherwise incur substantial debt, to complete our initial business combination, which may materially and adversely affect our leverage, liquidity and financial condition and thus negatively impact the value of our stockholders’ investment in us.
−Removed: Although we have no current commitments to issue any notes or other debt securities, or to otherwise incur debt, we may choose to incur substantial debt to complete our initial business combination.
−Removed: We have agreed that we will not incur any indebtedness unless we have obtained from the lender a waiver of any right, title, interest or claim of any kind in or to the monies held in the Trust Account.
−Removed: As such, no issuance of debt will affect the per share amount available for redemption of the public shares from the Trust Account.
−Removed: Nevertheless, the incurrence of debt could have a variety of negative effects, including:
−Removed: ● default and foreclosure on our assets if our operating revenues after an initial business combination are insufficient to repay our debt obligations;
−Removed: ● acceleration of our obligations to repay the indebtedness even if we make all principal and interest payments when due if we breach certain covenants that require the maintenance of certain financial ratios or reserves without a waiver or renegotiation of that covenant;
−Removed: ● our immediate payment of all principal and accrued interest, if any, if the debt is payable on demand;
−Removed: ● our inability to obtain necessary additional financing if the debt contains covenants restricting our ability to obtain such financing while the debt security is outstanding;
−Removed: ● our inability to pay dividends on our common stock;
−Removed: ● using a substantial portion of our cash flow to pay principal and interest on our debt, which will reduce the funds available for dividends on our common stock if declared, expenses, capital expenditures, acquisitions and other general corporate purposes;
−Removed: ● limitations on our flexibility in planning for and reacting to changes in our business and in the industry in which we operate;
−Removed: ● increased vulnerability to adverse changes in general economic, industry and competitive conditions and adverse changes in government regulation;
−Removed: ● limitations on our ability to borrow additional amounts for expenses, capital expenditures, acquisitions, debt service requirements, execution of our strategy and other purposes and other disadvantages compared to our competitors who have less debt.
−Removed: We may only be able to complete one business combination with the proceeds from our IPO and the Private Placement, which will cause us to be solely dependent on a single business which may have a limited number of products or services.
−Removed: This lack of diversification may materially negatively impact our operations and financial results.
−Removed: As of December 31, 2024, the Trust Account held $429,151 in funds available to complete our initial business combination.
−Removed: We may effectuate our initial business combination with a single target business or multiple target businesses simultaneously or within a short period of time.
−Removed: However, we may not be able to effectuate our initial business combination with more than one target business because of various factors, including the existence of complex accounting issues and the requirement that we prepare and file pro forma financial statements with the SEC that present operating results and the financial condition of several target businesses as if they had been operated on a combined basis.
−Removed: By completing our initial business combination with only a single entity, our lack of diversification may subject us to numerous economic, competitive and regulatory risks.
−Removed: Further, we would not be able to diversify our operations or benefit from the possible spreading of risks or offsetting of losses, unlike other entities which may have the resources to
−Removed: complete several business combinations in different industries or different areas of a single industry.
−Removed: Accordingly, the prospects for our success may be:
−Removed: ● solely dependent upon the performance of a single business, property or asset;
−Removed: ● dependent upon the development or market acceptance of a single or limited number of products, processes or services.
−Removed: This lack of diversification may subject us to numerous economic, competitive and regulatory risks, any or all of which may have a substantial adverse impact upon the particular industry in which we may operate subsequent to our initial business combination, as well as on our operations and financial results.
−Removed: We may attempt to simultaneously complete business combinations with multiple prospective targets, which may hinder our ability to complete our initial business combination and give rise to increased costs and risks that could negatively impact our financial results and condition.
−Removed: If we determine to simultaneously acquire several businesses that are owned by different sellers, we will need for each of such sellers to agree that our purchase of its business is contingent on the simultaneous closings of the other business combinations, which may make it more difficult for us, and delay our ability, to complete our initial business combination.
−Removed: With multiple business combinations, we could also face additional risks, including additional burdens and costs with respect to possible multiple negotiations and due diligence investigations (if there are multiple sellers) and the additional risks associated with the subsequent assimilation of the operations and services or products of the acquired companies in a single operating business.
−Removed: If we are unable to adequately address these risks, it could negatively impact our financial results and condition.
−Removed: We may attempt to complete our initial business combination with a private company about which little information is available, which may result in a business combination with a company that is not as profitable as we suspected, if at all.
−Removed: In pursuing our acquisition strategy, we may seek to effectuate our initial business combination with a privately held company.
−Removed: Very little public information generally exists about private companies, and we could be required to make our decision on whether to pursue a potential initial business combination on the basis of limited information, which may result in a business combination with a company that is not as attractive as we anticipated, if at all.
−Removed: Our management may not be able to maintain control of a target business after our initial business combination.
−Removed: Upon loss of control of a target business, new management may not possess the skills, qualifications or abilities necessary to profitably operate such business.
−Removed: As in the Business Combination, we may structure our initial business combination so that the post-transaction company in which our public stockholders own shares will own less than 100% of the equity interests or assets of a target business, but we will only complete such business combination if the post-transaction company owns or acquires 50% or more of the outstanding voting securities of the target or otherwise acquires a controlling interest in the target business sufficient for us not to be required to register as an investment company under the Investment Company Act.
−Removed: We will not consider any transaction that does not meet such criteria.
−Removed: Even if the post-transaction company owns 50% or more of the voting securities of the target, our stockholders prior to our initial business combination may collectively own a minority interest in the post-business combination company, depending on valuations ascribed to the target and us in our initial business combination.
−Removed: For example, we could pursue a transaction in which we issue a substantial number of new shares of common stock in exchange for all of the outstanding capital stock of a target or issue a substantial number of new shares of Class A common stock to third parties in connection with financing our initial business combination.
−Removed: In this case, we would acquire a 100% interest in the target.
−Removed: However, as a result of the issuance of a substantial number of new shares of common stock, our stockholders immediately prior to such transaction could own less than a majority of our outstanding shares of common stock subsequent to such transaction.
−Removed: In addition, other minority stockholders may subsequently combine their holdings resulting in a single person or group obtaining a larger share of the company’s stock than we initially acquired.
−Removed: Accordingly, this may make it more likely that our management will not be able to maintain our control of the target business.
−Removed: We do not have a specified maximum redemption threshold.
−Removed: The absence of such a redemption threshold may make it possible for us to complete our initial business combination with which a substantial majority of our stockholders do not agree.
−Removed: Our amended and restated certificate of incorporation does not provide a specified maximum redemption threshold.
−Removed: As a result, we may be able to complete our initial business combination even though a substantial majority of our public stockholders do not agree with the transaction and have redeemed their shares or, if we seek stockholder approval of our initial business combination and do not conduct redemptions of public shares in connection with our initial business combination pursuant to the tender offer rules, have entered into privately negotiated agreements to sell their shares to our sponsor, officers, directors, advisors or any of their respective affiliates.
−Removed: In the event the aggregate cash consideration we would be required to pay for all public shares that are validly submitted for redemption plus any amount required to satisfy cash conditions pursuant to the terms of the proposed business combination exceed the aggregate amount of cash available to us, we will not complete the business combination or redeem any shares, all public shares submitted for redemption will be returned to the holders thereof, and we instead may search for an alternate business combination (including, potentially, with the same target).
−Removed: In order to effectuate an initial business combination, blank check companies have, in the recent past, amended various provisions of their charters and modified governing instruments, including their warrant agreements.
−Removed: We cannot assure you that we will not seek to amend our amended and restated certificate of incorporation or governing instruments, including our warrant agreement, in a manner that will make it easier for us to complete our initial business combination that some of our stockholders or warrant holders may not support.
−Removed: In order to effectuate an initial business combination, blank check companies have, in the recent past, amended various provisions of their charters and modified governing instruments, including their warrant agreements.
−Removed: For example, blank check companies have amended the definition of business combination, increased redemption thresholds, extended the time to consummate an initial business combination and, with respect to their warrants, amended their warrant agreements to require the warrants to be exchanged for cash and/or other securities.
−Removed: In connection with the Merger Agreement, we intend to seek approval from the holders of SAC Public Warrants to amend the Warrant Agreement, dated as of December 9, 2021, between us and Continental, as warrant agent, to provide that, as contemplated by the Merger Agreement, immediately prior to the Closing, each of the issued and outstanding SAC Public Warrants automatically will convert into 0.1 newly issued share of our Class A common stock, with any fractional entitlement being rounded down.
−Removed: We cannot assure you that we will not seek to amend our amended and restated certificate of incorporation or governing instruments or extend the time to consummate an initial business combination in order to effectuate our initial business combination.
−Removed: To the extent any such amendment would be deemed to fundamentally change the nature of any of the securities issued in our IPO, we would register, or seek an exemption from registration for, the affected securities.
−Removed: Certain provisions of our amended and restated certificate of incorporation that relate to our pre-business combination activity (and corresponding provisions of the trust agreement governing the release of funds from the Trust Account) may be amended with the approval of holders of at least 65% of the outstanding shares of our common stock, which is a lower amendment threshold than that of some other blank check companies.
−Removed: It may be easier for us, therefore, to amend our amended and restated certificate of incorporation and the trust agreement to facilitate the completion of an initial business combination that some of our stockholders may not support.
−Removed: Our amended and restated certificate of incorporation provides that any of its provisions (other than provisions relating to the appointment and removal of directors prior to our initial business combination, which may only be amended with the approval of the holders of a majority of the outstanding shares of our Class B common stock) related to pre-business combination activity (including the requirement to deposit proceeds from our IPO and the Private Placement into the Trust Account and not release such amounts, except in specified circumstances and to provide redemption rights to public stockholders as described herein) may be amended if approved by holders of at least 65% of the outstanding shares of our common stock, and corresponding provisions of the trust agreement governing the release of funds from the Trust Account may be amended if approved by holders of at least 65% of the outstanding shares of our common stock.
−Removed: In all other instances, our amended and restated certificate of incorporation provides that it may be amended by holders of a majority of the outstanding shares of our common stock, subject to applicable provisions of the DGCL, or applicable stock exchange rules.
−Removed: We may not issue additional securities with the right to vote on amendments to our amended and restated certificate of incorporation or on our initial business combination.
−Removed: Our sponsor, which owned 99.1% of our Class A common stock and 20.2% of our Class B common stock as of March 31, 2025, may participate in any vote to amend our amended and restated certificate of incorporation and/or trust agreement and will have the discretion to vote in any manner they choose.
−Removed: As a result, we may be able to amend the provisions of our amended and restated certificate of incorporation which govern our
−Removed: pre-business combination behavior more easily than some other blank check companies, and this may increase our ability to complete our initial business combination with which you do not agree.
−Removed: Our stockholders may pursue remedies against us for any breach of our amended and restated certificate of incorporation.
−Removed: Our sponsor, officers and directors have agreed, pursuant to a written agreement, that they will not propose any amendment to our amended and restated certificate of incorporation to modify the substance or timing of our obligation to provide our public stockholders the right to have their public shares redeemed in connection with our initial business combination or to redeem 100% of our public shares if we do not complete our initial business combination by September 30, 2025, or during any Extension Period, or with respect to any other provision relating to stockholder rights or pre-initial business combination activity, unless we provide our public stockholders with the opportunity to redeem their public shares upon approval of any such amendment at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the Trust Account, divided by the number of then outstanding public shares.
−Removed: These agreements are contained in a letter agreement that we have entered into with our sponsor, officers and directors.
−Removed: Our public stockholders are not parties to, or third-party beneficiaries of, these agreements and, as a result, will not have the ability to pursue remedies against our sponsor, officers or directors for any breach of these agreements.
−Removed: As a result, in the event of a breach, our stockholders would need to pursue a stockholder derivative action, subject to applicable law.
−Removed: Certain agreements related to our IPO may be amended without stockholder approval.
−Removed: Certain agreements, including the letter agreement among us and our sponsor, officers and directors, and the registration rights agreement among us and our sponsor, may be amended without stockholder approval.
−Removed: These agreements contain various provisions that our public stockholders might deem to be material.
−Removed: While we do not expect our board to approve any amendment to any of these agreements prior to our initial business combination, it may be possible that our board, in exercising its business judgment and subject to its fiduciary duties, chooses to approve one or more amendments to any such agreement in connection with the consummation of our initial business combination.
−Removed: Any such amendments would not require approval from our stockholders, may result in the completion of our initial business combination that may not otherwise have been possible, and may have an adverse effect on the value of an investment in our securities.
−Removed: We may be unable to obtain additional financing to complete our initial business combination or to fund the operations and growth of a target business, which could compel us to restructure or abandon a particular business combination.
−Removed: If the net proceeds from our IPO and the Private Placement prove to be insufficient, because of (1) the size of our initial business combination, (2) the depletion of the available net proceeds in search of a target business, (3) the obligation to redeem for cash a significant number of public shares from stockholders who elect redemption in connection with our initial business combination or (4) the terms of negotiated transactions to purchase shares in connection with our initial business combination, we may be required to seek additional financing or to abandon the proposed business combination.
−Removed: We cannot assure you that such financing will be available on acceptable terms, if at all.
−Removed: None of our sponsor, officers or directors, or any entity affiliated with our sponsor, officers or directors, is obligated to provide, or seek, any such financing or, except as expressly set forth herein, to provide any other services to us.
−Removed: To the extent that additional financing proves to be unavailable when needed to complete our initial business combination, we would be compelled to either restructure the transaction or abandon that particular business combination and seek an alternative target business candidate.
−Removed: In addition, even if we do not need additional financing to complete our initial business combination, we may require such financing to fund the operations or growth of the target business.
−Removed: The failure to secure additional financing could have a material adverse effect on the continued development or growth of the target business.
−Removed: If we are unable to complete our initial business combination in the prescribed time period, our public stockholders may receive only approximately $10.20 per share, or less in certain circumstances, on the liquidation of the Trust Account, and our warrants will expire worthless.
−Removed: Our sponsor and any other holder of our founder shares will control the election of our board of directors until consummation of our initial business combination and will hold a substantial interest in us.
−Removed: As a result, our sponsor (and any such other holders) will elect all of our directors prior to the consummation of our initial business combination and may exert a substantial influence on actions requiring a stockholder vote, potentially in a manner that you do not support.
−Removed: The founder shares will entitle the holders to elect all of our directors prior to the consummation of our initial business combination.
−Removed: Holders of our public shares will have no right to vote on the election of directors during such time.
−Removed: In addition, prior to the completion of an initial business combination, only holders of a majority of our founder shares may remove a member of the board of directors with or without cause.
−Removed: These provisions of our amended and restated certificate of incorporation may only be amended by
−Removed: the holders of a majority of the outstanding shares of our Class B common stock.
−Removed: As a result, you will not have any influence over the election or removal of our directors prior to our initial business combination.
−Removed: Although none of our sponsor, directors or officers have any current intention to purchase additional securities of ours, they are not restricted from doing so and there is no limit to the number of our securities they may purchase.
−Removed: Factors that would be considered in making such additional purchases would include consideration of the current trading price of our Class A common stock.
−Removed: In addition, as a result of its substantial ownership in our Company, our sponsor may exert a substantial influence on other actions requiring a stockholder vote, potentially in a manner that you do not support, including amendments to our amended and restated certificate of incorporation and approval of major corporate transactions.
−Removed: If our sponsor purchases any additional shares of common stock in the aftermarket or in privately negotiated transactions, this would increase their influence over these actions.
−Removed: Accordingly, our sponsor will exert significant influence over actions requiring a stockholder vote.
−Removed: Our sponsor paid an aggregate of $25,000 for the founder shares, or approximately $0.004 per founder share.
−Removed: As a result of this low initial price, the holders of our founder shares (including our officers and directors that directly or indirectly own founder shares) and any public shares issued upon conversion thereof stand to make a substantial profit even if an initial business combination subsequently declines in value or is unprofitable for our public stockholders.
−Removed: As a result of the low acquisition cost of our founder shares, the holders of our founder shares (including our officers and directors that directly or indirectly own founder shares) and public shares issued upon conversion thereof (including in connection with the Conversion) could make a substantial profit even if we select and consummate an initial business combination with an acquisition target that subsequently declines in value or is unprofitable for our public stockholders.
−Removed: Thus, such parties may have more of an economic incentive for us to enter into an initial business combination with a riskier, weaker-performing or financially unstable business, or an entity lacking an established record of revenues or earnings, than would be the case if such parties had paid for their founder shares at a purchase price that is about the same as the prices that public stockholders purchased their public shares in our IPO or the aftermarket.
−Removed: We may amend the terms of the warrants in a manner that may be adverse to holders of the public warrants with the approval by the holders of a majority of the outstanding public warrants.
−Removed: As a result, the exercise price of your warrants could be increased, the warrants could be converted into cash or stock (at a ratio different than initially provided), the exercise period could be shortened, the number of shares of our Class A common stock purchasable upon exercise of a warrant could be decreased, and changes designed to result in accounting for the warrants as equity could be effected, all without your approval.
−Removed: Our warrants were issued in registered form under a warrant agreement between Continental, as warrant agent, and us.
−Removed: The warrant agreement provides that the terms of the warrants may be amended without the consent of any holder to cure any ambiguity, mistake (including to conform the warrant agreement to the description thereof herein) or correct any defective provision, but requires the approval by the holders of a majority of the outstanding public warrants to make any change that adversely affects the interests of the holders of our warrants.
−Removed: Accordingly, we may amend the terms of the warrants in a manner adverse to a holder if holders of a majority of the outstanding public warrants approve of such amendment and, solely with respect to any amendment to the terms of the private placement warrants or any provision of the warrant agreement with respect to the private placement warrants, a majority of the outstanding private placement warrants approve such amendment.
−Removed: Although our ability to amend the terms of the warrants with the consent of a majority of the outstanding public warrants is unlimited, examples of such amendments could be amendments to, among other things, increase the exercise price of the warrants, convert the warrants into cash or stock (at a ratio different than initially provided), shorten the exercise period, decrease the number of shares of our common stock purchasable upon exercise of a warrant or effect accounting for the warrants as equity.
−Removed: Our sponsor may purchase public warrants with the intention of reducing the number of public warrants outstanding or to vote such public warrants on any matters submitted to warrant holders for approval, including amending the terms of the warrants in a manner adverse to the interests of the holders of public warrants.
−Removed: While our sponsor has no current commitments, plans or intentions to engage in such transactions and have not formulated any terms or conditions for such transactions, there is no limit on the number of our public warrants that our sponsor may purchase and it is not currently known how many public warrants, if any, our sponsor may hold at the time of our initial business combination or at any other time during which the terms of the warrants may be proposed to be amended.
−Removed: In connection with the Merger Agreement, we intend to seek approval from the holders of SAC Public Warrants to amend the Warrant Agreement, dated as of December 9, 2021, between us and Continental, as warrant agent, to provide that, as contemplated by
−Removed: the Merger Agreement, immediately prior to the Closing, each of the issued and outstanding SAC Public Warrants automatically will convert into 0.1 newly issued share of our Class A common stock, with any fractional entitlement being rounded down.
−Removed: Our warrant agreement designates the courts of the State of New York or the United States District Court for the Southern District of New York as the sole and exclusive forum for certain types of actions and proceedings that may be initiated by holders of our warrants, which could limit the ability of warrant holders to obtain a favorable judicial forum for disputes with our Company.
−Removed: Our warrant agreement provides that, subject to applicable law, (i) any action, proceeding or claim against us arising out of or relating in any way to the warrant agreement, including under the Securities Act, will be brought and enforced in the courts of the State of New York or the United States District Court for the Southern District of New York, and (ii) that we irrevocably submit to such jurisdiction, which jurisdiction shall be the exclusive forum for any such action, proceeding or claim.
−Removed: We will waive any objection to such exclusive jurisdiction and that such courts represent an inconvenient forum.
−Removed: Notwithstanding the foregoing, these provisions of the warrant agreement will not apply to suits brought to enforce any liability or duty created by the Exchange Act or any other claim for which the federal courts of the United States of America have exclusive jurisdiction.
−Removed: Any person or entity purchasing or otherwise acquiring any interest in any of our warrants shall be deemed to have notice of and to have consented to the forum provisions in our warrant agreement.
−Removed: If any action, the subject matter of which is within the scope of the forum provisions of the warrant agreement, is filed in a court other than a court of the State of New York or the United States District Court for the Southern District of New York (in this context, a “foreign action”) in the name of any holder of our warrants, such holder shall be deemed to have consented to:
−Removed: (x) the personal jurisdiction of the state and federal courts located in the State of New York in connection with any action brought in any such court to enforce the forum provisions (in this context, an “enforcement action”), and (y) having service of process made upon such warrant holder in any such enforcement action by service upon such warrant holder’s counsel in the foreign action as agent for such warrant holder.
−Removed: This choice-of-forum provision may limit a warrant holder’s ability to bring a claim in a judicial forum that it finds favorable for disputes with our Company, which may discourage such lawsuits.
−Removed: Alternatively, if a court were to find this provision of our warrant agreement inapplicable or unenforceable with respect to one or more of the specified types of actions or proceedings, we may incur additional costs associated with resolving such matters in other jurisdictions, which could materially and adversely affect our business, financial condition, liquidity and results of operations and result in a diversion of the time and resources of our management and board of directors.
−Removed: We may redeem your unexpired warrants prior to their exercise at a time that is disadvantageous to you, thereby making such warrants worthless.
−Removed: We have the ability to redeem outstanding public warrants at any time after they become exercisable and prior to their expiration, at a price of $0.01 per warrant, provided that the last reported sale price of our Class A common stock equals or exceeds $18.00 per share (as adjusted for stock splits, stock dividends, reorganizations, recapitalizations and the like) for any 20 trading days within a 30 trading-day period ending on the third trading day prior to the date we send the notice of redemption to all the warrant holders.
−Removed: If and when the public warrants become redeemable by us, we may exercise our redemption right even if we are unable to register or qualify the underlying securities for sale under all applicable state securities laws.
−Removed: Redemption of the outstanding warrants could force you to:
−Removed: (1) exercise your warrants and pay the exercise price therefor at a time when it may be disadvantageous for you to do so;
−Removed: (2) sell your warrants at the then-current market price when you might otherwise wish to hold your warrants;
−Removed: or (3) accept the nominal redemption price which, at the time the outstanding warrants are called for redemption, is likely to be substantially less than the market value of your redeemable warrants.
−Removed: However, none of the private placement warrants will be redeemable by us (except under certain circumstances in connection with the redemption described in the next paragraph) so long as they are held by our sponsor or its permitted transferees.
−Removed: In addition, we have the ability to redeem the outstanding public warrants at any time after they become exercisable and prior to their expiration, at a price of $0.10 per warrant, provided that the last reported sale price of our Class A common stock equals or exceeds $10.00 per share (as adjusted for stock splits, stock dividends, reorganizations, recapitalizations and the like) for any 20 trading days within a 30 trading-day period ending on the third trading day prior to the date we send the notice of redemption to the warrant holders, and provided further that holders will be able to exercise their warrants on a cashless basis prior to redemption for a number of Class A common stock determined based on the redemption date and the fair market value of our Class A common stock.
−Removed: Any such redemption may have similar consequences to the redemption described above.
−Removed: In addition, such redemption may occur at a time when the warrants are “out-of-the-money,” in which case you would lose any potential embedded value from a subsequent increase in the value of the Class A common stock had your warrants remained outstanding.
−Removed: Our warrants and founder shares may have an adverse effect on the market price of our Class A common stock and make it more difficult to effectuate our initial business combination.
−Removed: As of March 31, 2025, our sponsor held 312,506 founder shares, 4,200,000 public shares issued in connection with the Conversion and 11,700,000 private placement warrants.
−Removed: The founder shares are convertible into shares of Class A common stock, as provided herein, on a one-for-one basis, subject to adjustment as set forth herein.
−Removed: In addition, if our management team, sponsor or directors or any of their respective affiliates make any working capital loans, up to $1,500,000 of such loans may be converted into warrants, at the price of $1.00 per warrant, at the option of the lender.
−Removed: Such warrants would be identical to the private placement warrants.
−Removed: To the extent we issue shares of Class A common stock to effectuate a business combination, the potential for the issuance of a substantial number of additional shares of Class A common stock upon exercise of these warrants or conversion rights could make us a less attractive acquisition vehicle to a target business.
−Removed: Any such issuance will increase the number of outstanding shares of our Class A common stock and reduce the value of the Class A common stock issued to complete the business combination.
−Removed: Therefore, our warrants and founder shares may make it more difficult to effectuate a business combination or increase the cost of acquiring the target business.
−Removed: The private placement warrants are identical to the warrants sold as part of the units in our IPO except that, so long as they are held by our sponsor or its permitted transferees:
−Removed: (1) they will not be redeemable by us, except under certain limited circumstances;
−Removed: (2) they (including the Class A common stock issuable upon exercise of these warrants) may not, subject to certain limited exceptions, be transferred, assigned or sold, until 30 days after the completion of our initial business combination;
−Removed: (3) they may always be exercised by the holders on a cashless basis;
−Removed: and (4) the holders thereof (including with respect to the shares of common stock issuable upon exercise of these warrants) are entitled to registration rights.
−Removed: Because each unit contains one-half of one warrant and only a whole warrant may be exercised, the units may be worth less than units of other blank check companies.
−Removed: Each unit contains one-half of one redeemable warrant.
−Removed: Because, pursuant to the warrant agreement, the warrants may only be exercised for a whole number of shares, only a whole warrant may be exercised at any given time and therefore you will need to hold units in integral multiples of two in order for you to exercise your warrants prior to their separation from the units.
−Removed: Further, only whole warrants will trade.
−Removed: This is different from the units of some blank check companies whose units include one share of common stock and one warrant to purchase one whole share.
−Removed: We have established the components of the units in this way in order to reduce the dilutive effect of the warrants upon completion of a business combination since the warrants will be exercisable in the aggregate for one-half of the number of shares compared to units that each contain a warrant to purchase one whole share, thus making us, we believe, a more attractive merger partner for target businesses.
−Removed: Nevertheless, this unit structure may cause our units to be worth less than if they included a warrant to purchase one whole share.
−Removed: A provision in our warrant agreement may make it more difficult for us to consummate an initial business combination.
−Removed: Unlike most blank check companies, if (i) we issue additional shares of Class A common stock or equity-linked securities for capital raising purposes in connection with the closing of our initial business combination at a Newly Issued Price of less than $9.20 per share, (ii) the aggregate gross proceeds from such issuances represent more than 60% of the total equity proceeds, and interest thereon, available for the funding of our initial business combination on the date of the consummation of our initial business combination (net of redemptions), and (iii) the Market Value is below $9.20 per share, then the exercise price of the warrants will be adjusted (to the nearest cent) to be equal to 115% of the higher of the Market Value and the Newly Issued Price, the $18.00 per share redemption trigger price described in Exhibit 4.5 to this report under the captions “Description of Securities—Public Warrants—Redemption of warrants for cash when the price per share of Class A common stock equals or exceeds $18.00” and “Description of Securities—Public Warrants—Redemption of warrants for cash when the price per share of Class A common stock equals or exceeds $10.00” will be adjusted (to the nearest cent) to be equal to 180% of the higher of the Market Value and the Newly Issued Price, and the $10.00 per share redemption trigger described in Exhibit 4.5 to this report under the caption “Description of Securities—Public
−Removed: Warrants—Redemption of warrants for cash when the price per share of Class A common stock equals or exceeds $10.00” will be adjusted (to the nearest cent) to be equal to the higher of the Market Value and the Newly Issued Price.
−Removed: This may make it more difficult for us to consummate an initial business combination with a target business.
−Removed: An active trading market for our securities may not develop or be maintained, which would adversely affect the liquidity and price of our securities.
−Removed: The price of our securities may vary significantly due to one or more potential business combinations and general market or economic conditions.
−Removed: Furthermore, an active trading market for our securities may never develop or, if developed, it may not be maintained.
−Removed: You may be unable to sell your securities unless an active trading market develops and is maintained.
−Removed: Because we must furnish our stockholders with target business financial statements, we may lose the ability to complete an otherwise advantageous initial business combination with some prospective target businesses.
−Removed: The federal proxy rules require that a proxy statement with respect to a vote on a business combination meeting certain financial significance tests include historical and/or pro forma financial statement disclosure.
−Removed: We will include the same financial statement disclosure in connection with our tender offer documents, whether or not they are required under the tender offer rules.
−Removed: These financial statements may be required to be prepared in accordance with, or be reconciled to, accounting principles generally accepted in the United States of America (“GAAP”), or international financial reporting standards as issued by the International Accounting Standards Board, depending on the circumstances and the historical financial statements may be required to be audited in accordance with the standards of the Public Company Accounting Oversight Board (United States) (“PCAOB”).
−Removed: These financial statement requirements may limit the pool of potential target businesses we may acquire because some targets may be unable to provide such financial statements in time for us to disclose such financial statements in accordance with federal proxy rules and complete our initial business combination by September 30, 2025 or during any Extension Period.
−Removed: We are an emerging growth company and a smaller reporting company within the meaning of the Securities Act, and if we take advantage of certain exemptions from disclosure requirements available to emerging growth companies or smaller reporting companies, this could make our securities less attractive to investors and may make it more difficult to compare our performance with other public companies.
−Removed: We are an “emerging growth company” within the meaning of the Securities Act, as modified by the JOBS Act, and we may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies, including, but not limited to, not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements, and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and stockholder approval of any golden parachute payments not previously approved.
−Removed: We could be an emerging growth company for up to five years, although circumstances could cause us to lose that status earlier, including if the market value of our common stock held by non-affiliates equals or exceeds $700 million as of the end of any second quarter of a fiscal year, in which case we would no longer be an emerging growth company as of the end of such fiscal year.
−Removed: Accordingly, stockholders may not have access to certain information they may deem important.
−Removed: We cannot predict whether investors will find our securities less attractive because we will rely on these exemptions.
−Removed: If some investors find our securities less attractive as a result of our reliance on these exemptions, the trading prices of our securities may be lower than they otherwise would be, there may be a less active trading market for our securities and the trading prices of our securities may be more volatile.
−Removed: Further, Section 102(b)(1) of the JOBS Act exempts emerging growth companies from being required to comply with new or revised financial accounting standards until private companies (that is, those that have not had a Securities Act registration statement declared effective or do not have a class of securities registered under the Exchange Act) are required to comply with the new or revised financial accounting standards.
−Removed: The JOBS Act provides that a company can elect to opt out of the extended transition period and comply with the requirements that apply to non-emerging growth companies but any such election to opt out is irrevocable.
−Removed: We have elected not to opt out of such extended transition period, which means that when a financial accounting standard is issued or revised and it has different application dates for public or private companies, we, as an emerging growth company, can adopt the new or revised standard at the time private companies adopt the new or revised standard.
−Removed: This may make comparison of our financial statements with another public company which is neither an emerging growth company nor an emerging growth company which has
−Removed: opted out of using the extended transition period difficult or impossible because of the potential differences in accounting standards used.
−Removed: Additionally, we are a “smaller reporting company” as defined in Item 10(f)(1) of Regulation S-K.
−Removed: Smaller reporting companies may take advantage of certain reduced disclosure obligations, including, among other things, providing only two years of audited financial statements.
−Removed: We will remain a smaller reporting company until the last day of the fiscal year in which (1) the market value of our common stock held by non-affiliates equals or exceeds $250 million as of the end of that fiscal year’s second fiscal quarter and (2) our annual revenues equaled or exceeded $100 million during such completed fiscal year or the market value of our common stock held by non-affiliates equals or exceeds $700 million as of the end of that fiscal year’s second fiscal quarter.
−Removed: To the extent we take advantage of such reduced disclosure obligations, it may also make comparison of our financial statements with other public companies difficult or impossible.
−Removed: Compliance obligations under the Sarbanes-Oxley Act may make it more difficult for us to effectuate our initial business combination, require substantial financial and management resources, and increase the time and costs of completing an initial business combination, and present risks of non-compliance in the event we successfully consummate our initial business combination.
−Removed: Section 404 of the Sarbanes-Oxley Act requires that we evaluate and report on our system of internal controls.
−Removed: Only in the event we are deemed to be a large accelerated filer or an accelerated filer, and no longer qualify as an emerging growth company, will we be required to comply with the independent registered public accounting firm attestation requirement on the effectiveness of our internal control over financial reporting.
−Removed: As a result, for as long as we remain an emerging growth company, we will not be required to comply with the independent registered public accounting firm attestation requirement on the effectiveness of our internal control over financial reporting.
−Removed: The fact that we are a blank check company makes compliance with the requirements of the Sarbanes-Oxley Act particularly burdensome on us as compared to other public companies because a target business with which we seek to complete our initial business combination may not be in compliance with the provisions of the Sarbanes-Oxley Act regarding adequacy of its internal controls.
−Removed: The development of the internal control of any such entity to achieve compliance with the Sarbanes-Oxley Act may increase the time and costs necessary to complete any such initial business combination.
−Removed: Moreover, there can be no assurance that the incumbent management team of a business combination target will have the necessary experience or knowledge to develop the appropriate level of internal control over financial reporting and otherwise maintain compliance with the applicable requirements of the Sarbanes-Oxley Act.
−Removed: If we complete our business combination and the management team of the combined entity is unable to comply with the applicable requirements of the Sarbanes-Oxley Act, our operations might suffer and we could be materially and adversely affected.
−Removed: Provisions in our amended and restated certificate of incorporation and Delaware law may inhibit a takeover of us, which could limit the price investors might be willing to pay in the future for our Class A common stock and could entrench management.
−Removed: Our amended and restated certificate of incorporation contains provisions that may discourage unsolicited takeover proposals that stockholders may consider to be in their best interests.
−Removed: These provisions include the ability of the board of directors to designate the terms of and issue new series of preferred stock, which may make more difficult the removal of management and may discourage transactions that otherwise could involve payment of a premium over prevailing market prices for our securities.
−Removed: Section 203 of the DGCL affects the ability of an “interested stockholder” to engage in certain business combinations for a period of three years following the time that the stockholder becomes an “interested stockholder.” We have elected in our amended and restated certificate of incorporation not to be subject to Section 203 of the DGCL.
−Removed: Nevertheless, our amended and restated certificate of incorporation contains provisions that have the same effect as Section 203 of the DGCL, except that it provides that our sponsor, officers and directors, their affiliates and their transferees will not be deemed to be “interested stockholders,” regardless of the percentage of our voting stock owned by them, and will therefore not be subject to such restrictions.
−Removed: These charter provisions may limit the ability of third parties to acquire control of our Company.
−Removed: Provisions in our amended and restated certificate of incorporation and Delaware law may have the effect of discouraging lawsuits against our directors and officers.
−Removed: Our amended and restated certificate of incorporation requires (unless our board, acting on our behalf, consents in writing to the selection of an alternative forum (which consent may be given at any time, including during the pendency of litigation)), to the fullest extent permitted by law, that (i) any derivative action or proceeding brought on our behalf, (ii) any action asserting a claim of breach of a fiduciary duty owed by any current or former director, officer or other employee to us or our stockholders, (iii) any action asserting a claim against us, our directors, officers or employees arising pursuant to any provision of the DGCL or our amended and restated certificate of incorporation or bylaws, (iv) any action asserting a claim against us or our directors, officers or employees governed by the internal affairs doctrine of the State of Delaware or (v) any other action asserting an “internal corporate claim” as defined in Section 115 of the DGCL may, in each case, be brought by a stockholder (including a beneficial owner) only in the Court of Chancery in the State of Delaware, except any action (A) as to which the Court of Chancery of the State of Delaware determines that there is an indispensable party not subject to the jurisdiction of the Court of Chancery (and the indispensable party does not consent to the personal jurisdiction of the Court of Chancery within ten days following such determination), (B) which is vested in the exclusive jurisdiction of a court or forum other than the Court of Chancery, (C) for which the Court of Chancery does not have subject matter jurisdiction, or (D) arising under the Securities Act, as to which the Court of Chancery and the federal district court for the District of Delaware shall concurrently be the sole and exclusive forums.
−Removed: Although we believe this provision benefits us by providing increased consistency in the application of Delaware law in the types of lawsuits to which it applies, a court may determine that this provision is unenforceable, and to the extent it is enforceable, the provision may have the effect of discouraging lawsuits against our directors and officers, although our stockholders will not be deemed to have waived our compliance with federal securities laws and the rules and regulations thereunder.
−Removed: Notwithstanding the foregoing, our amended and restated certificate of incorporation provides that the exclusive forum provision will not apply to suits brought to enforce a duty or liability created by the Exchange Act or any other claim for which the federal courts of the United States of America have exclusive jurisdiction.
−Removed: Section 27 of the Exchange Act creates exclusive federal jurisdiction over all suits brought to enforce any duty or liability created by the Exchange Act or the rules and regulations thereunder.
−Removed: Section 22 of the Securities Act creates concurrent jurisdiction for federal and state courts over all suits brought to enforce any duty or liability created by the Securities Act or the rules and regulations thereunder.
−Removed: As noted above, our amended and restated certificate of incorporation provides that the Court of Chancery and the federal district court for the District of Delaware shall concurrently be the sole and exclusive forums for any action arising under the Securities Act.
−Removed: Accordingly, there is uncertainty as to whether a court would enforce such provision, and our stockholders will not be deemed to have waived our compliance with the federal securities laws and the rules and regulations thereunder.
−Removed: Any person or entity purchasing or otherwise acquiring any interest in any shares of our capital stock shall be deemed to have notice of, and to have consented to, the forum provisions in our amended and restated certificate of incorporation.
−Removed: If any action the subject matter of which is within the scope of the forum provisions is filed in a court other than a court located within the State of Delaware (in this context, a “foreign action”) in the name of any stockholder, such stockholder shall be deemed to have consented to:
−Removed: (x) the personal jurisdiction of the state and federal courts located within the State of Delaware in connection with any action brought in any such court to enforce the forum provisions (in this context, an “enforcement action”), and (y) having service of process made upon such stockholder in any such enforcement action by service upon such stockholder’s counsel in the foreign action as agent for such stockholder.
−Removed: This forum selection clause may discourage claims or limit stockholders’ ability to submit claims in a judicial forum that they find favorable and may result in additional costs for a stockholder seeking to bring a claim.
−Removed: While we believe the risk of a court declining to enforce this forum selection clause is low, if a court were to determine the forum selection clause to be inapplicable or unenforceable in an action, we may incur additional costs in conjunction with our efforts to resolve the dispute in an alternative jurisdiction, which could result in a diversion of the time and resources of our officers and directors and have a material adverse effect on us.
−Removed: If our management team pursues a company with operations or opportunities outside of the United States for our initial business combination, we may face additional burdens in connection with investigating, agreeing to and completing such combination, and if we effect such initial business combination, we would be subject to a variety of additional risks that may materially and adversely affect us.
−Removed: If the Business Combination is not consummated and our management team pursues a company with operations or opportunities outside of the United States for our initial business combination, we would be subject to risks associated with cross-border business combinations, including in connection with investigating, agreeing to and completing our initial business combination, conducting due diligence in a foreign jurisdiction, having such transaction approved by any local governments, regulators or agencies and changes in the purchase price based on fluctuations in foreign exchange rates.
−Removed: If we effect our initial business combination with such a company, we would be subject to any special considerations or risks associated with companies operating in an international setting, including any of the following:
−Removed: ● costs and difficulties inherent in managing cross-border business operations and complying with commercial and legal requirements of overseas markets;
−Removed: ● rules and regulations regarding currency redemption;
−Removed: ● imposition of withholding taxes;
−Removed: ● laws governing the manner in which future business combinations may be effected;
−Removed: ● tariffs and trade barriers;
−Removed: ● regulations related to customs and import/export matters;
−Removed: ● longer payment cycles;
−Removed: ● tax consequences, such as variations in tax law as compared to the United States;
−Removed: ● changes in local regulations as part of a response to the COVID-19 pandemic;
−Removed: ● currency fluctuations and exchange controls, including devaluations and other exchange rate movements;
−Removed: ● rates of inflation, price instability and interest rate fluctuations;
−Removed: ● challenges in collecting accounts receivable;
−Removed: ● cultural and language differences;
−Removed: ● employment regulations;
−Removed: ● crime, strikes, riots, civil disturbances, terrorist attacks, natural disasters and wars;
−Removed: ● deterioration of political relations with the United States;
−Removed: ● obligatory military service by personnel;
−Removed: ● government appropriation of assets.
−Removed: We may not be able to adequately address these additional risks.
−Removed: If we were unable to do so, we may be unable to complete such initial business combination or, if we complete such initial business combination, our operations might suffer, either of which may materially and adversely affect us.
−Removed: If our management following our initial business combination is unfamiliar with U.S.
−Removed: securities laws, they may have to expend time and resources becoming familiar with such laws, which could lead to various regulatory issues.
−Removed: Following our initial business combination, one or more of our officers and directors could resign from their positions, and the management of the target business at the time of the business combination could remain in place.
−Removed: Management of the target business may not be familiar with U.S.
−Removed: securities laws.
−Removed: If new management is unfamiliar with U.S.
−Removed: securities laws, they may have to expend time and resources becoming familiar with such laws.
−Removed: This could be expensive and time-consuming and could lead to various regulatory issues, which may materially and adversely affect us.
−Removed: Cyber incidents or attacks directed at us could result in information theft, data corruption, operational disruption and/or financial loss.
−Removed: We depend on digital technologies, including information systems, infrastructure and cloud applications and services, including those of third parties with which we may deal.
−Removed: Sophisticated and deliberate attacks on, or security breaches in, our systems or infrastructure, or the systems or infrastructure of third parties or the cloud, could lead to corruption or misappropriation of our assets, proprietary information and sensitive or confidential data.
−Removed: As an early stage company without significant investments in data security protection, we may not be sufficiently protected against such occurrences.
−Removed: We may not have sufficient resources to adequately protect against, or to investigate and remediate any vulnerability to, cyber incidents.
−Removed: It is possible that any of these occurrences, or a combination of them, could have material adverse consequences on operations and financial results.
−Removed: Terrorist attacks, communal disturbances, civil unrest and other acts of violence or war may result in a loss of investor confidence and a decline in the value of our securities and trading price of our shares following our initial business combination.
−Removed: Terrorist attacks, civil unrest and other acts of violence or war may negatively affect the markets in which we may operate our business following our initial business combination and also adversely affect the worldwide financial markets.
−Removed: Events of this nature in the future, as well as social and civil unrest, could influence the economy in which our target business operates, and could have a material adverse effect on us, the value of our securities and the trading price of our shares following our initial business combination.
−Removed: federal excise tax could be imposed on us in connection with redemptions.
−Removed: On August 16, 2022, the Inflation Reduction Act of 2022 (the “IRA”) was signed into federal law.
−Removed: The IRA provides for, among other things, a new U.S.
−Removed: federal 1% excise tax on certain repurchases (including redemptions) of stock by publicly traded U.S.
−Removed: corporations and certain U.S.
−Removed: subsidiaries of publicly traded non-U.S.
−Removed: corporations (each, a “covered corporation”).
−Removed: Because we are a Delaware corporation and our securities are trading on the OTC Pink Marketplace, we are a “covered corporation” for this purpose.
−Removed: The excise tax is imposed on the repurchasing corporation itself, not its stockholders from which shares are repurchased.
−Removed: The amount of the excise tax is generally 1% of the fair market value of the shares repurchased at the time of the repurchase.
−Removed: However, for purposes of calculating the excise tax, repurchasing corporations are permitted to net the fair market value of certain new stock issuances against the fair market value of stock repurchases during the same taxable year.
−Removed: In addition, certain exceptions apply to the excise tax.
−Removed: Department of Treasury has been given authority to provide regulations and other guidance to carry out, and prevent the abuse or avoidance of the excise tax.
−Removed: The IRA applies only to repurchases that occur after December 31, 2022.
−Removed: In connection with the First Extension Special Meeting, the holders of 18,849,935 shares of our Class A common stock properly exercised their right to redeem their shares for an aggregate redemption amount of $197.7 million, resulting in 4,150,065 shares of our Class A common stock issued and outstanding and subject to possible redemption.
−Removed: The trustee processed the redemptions and withdrew the $197.7 million payable to the holders redeeming 18,849,935 shares of our Class A common stock on July 7, 2023.
−Removed: In connection with the Second Extension Special Meeting, the holders of 2,986,952 shares of our Class A common stock properly exercised their right to redeem their shares for an aggregate redemption amount of $32.2 million, resulting in 1,163,113 shares of our Class A common stock issued and outstanding and subject to possible redemption.
−Removed: In connection with the Third Extension Special Meeting, the holders of 1,125,126 shares of our Class A common stock properly exercised their right to redeem their shares for an aggregate redemption amount of $12.5 million, resulting in 37,987 shares of our Class A common stock issued and outstanding and subject to possible redemption.
−Removed: Such redemptions may be subject to the excise tax.
−Removed: If a business combination occurs any time after December 31, 2022, any redemption or other repurchase that occurs in connection with the business combination may be subject to the excise tax.
−Removed: Whether and to what extent we would be subject to the excise tax would depend on a number of factors, including (i) the fair market value of the redemptions and repurchases in connection with the business combination, (ii) the nature and amount of the equity issued in connection with the business combination (or otherwise issued not in connection with the business combination but issued within the same taxable year of the business combination), and (iii) the content of regulations and other guidance from the U.S.
−Removed: Department of the Treasury.
−Removed: In addition, because the excise tax would be payable by us, and not by the redeeming holder, the mechanics of any required payment of the excise tax have not been determined.
−Removed: The foregoing could cause a reduction in the cash available on hand to complete the business combination.
−Removed: We identified material weaknesses in our internal control over financial reporting and may identify additional material weaknesses in the future, or fail to maintain an effective system of internal control over financial reporting, which may result in material misstatements of our financial statements or cause us to fail to meet our periodic reporting obligations.
−Removed: In connection with the audit of our financial statements as of and for the year ended December 31, 2022, we identified a material weakness in our internal control over financial reporting related to the presentation of our statements of cash flows, specifically we incorrectly presented dividends earned and reinvested in money market mutual funds on the trust account within the cash flows from operating activities section on our statement of cash flows and did not present a sale and purchase of marketable securities held in the trust account.
−Removed: Additionally, in connection with the audit of our financial statements as of and for the year ended December 31, 2023, we identified a material weakness in our internal control over financial reporting related to the recognition of excise tax liability, specifically we did not establish an excise tax liability in connection with the stockholders’ redemption of Class A common stock.
−Removed: A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting such that there is a reasonable possibility that a material misstatement of the annual or interim financial statements will not be prevented or detected on a timely basis.
−Removed: Management, with oversight from the board of directors and the audit committee of the board of directors implemented a remediation plan for these material weaknesses, including, among other things, additional post-closing review procedures including consulting with subject matter experts related to the accounting for marketable securities and stockholder redemptions.
−Removed: We cannot be certain as to the timing of completion of our evaluation, testing, and remediation actions or their effect on our operations.
+Added: General Risks Relating to Our Business
+Added: We are employing a business model with a limited track record, which may make our business difficult to evaluate.
+Added: We began as an audiovisual content filtering company.
+Added: In 2021, as a result of the Reorganization Plan, we fully divested ourselves of the assets related to the content filtering business.
+Added: Today, we operate by offering and producing our own original content, distributing original content, releasing licensed films or shows, consulting with content filmmakers, maintaining engagement with our existing users, conducting research and development to create new intellectual property and devising new methods to monetize existing intellectual property.
+Added: Few if any peer companies exist, and none have yet established long-term track records that might assist you in predicting whether our business model can be implemented and sustained over an extended period of time.
+Added: It may be difficult for you to evaluate our potential future performance without the benefit of established long-term track records from companies implementing a similar business model.
+Added: Our ability to succeed and generate operating profits and positive operating cash flow will depend on our ability, among other things, to continue to:
+Added: ● Develop and execute our business model;
+Added: ● Attract and maintain an adequate customer base;
+Added: ● Raise additional capital, if necessary, in the future;
+Added: ● Protect ourselves against pending and potential lawsuits threatening our ability to provide our services;
+Added: ● Attract and retain qualified personnel.
+Added: We cannot be certain that our business strategy will be successful because this strategy is still relatively new and even if successful, we may face difficulty in managing our growth.
+Added: We may encounter unanticipated problems as we continue to refine our business model, which may adversely affect our results of operations and financial condition.
+Added: We have a history of net losses and cannot guarantee that we will be able to become profitable or maintain profitability.
+Added: We recorded net loss attributable to controlling interests of $170.5 million in fiscal 2025 and $88.3 million in fiscal 2024, net income of $13.4 million in fiscal 2023, a net loss of $13.7 million in fiscal 2022, net income of $17.1 million in fiscal 2021, and net income of $15.6 thousand in fiscal 2020.
+Added: Prior to 2020, we recorded a net loss in all prior reporting periods.
+Added: If our ability to generate positive net income remains inconsistent in the future, the value of our Common Stock would likely be materially and adversely affected.
+Added: If our efforts to attract and retain customers are not successful, our business will be adversely affected.
+Added: Our ability to continue to attract customers will depend, in part, on our ability to consistently provide our customers with compelling content choices and a quality experience for selecting and viewing our original content.
+Added: Furthermore, the relative service levels, content offerings, pricing and related features of competitors to our service may adversely impact our ability to attract and retain customers.
+Added: If consumers do not perceive our service as valuable, including if we introduce new or adjust existing features, adjust pricing or service offerings, or change the mix of content in a manner that is not favorably received by them, we may not be able to attract and retain customers.
+Added: In addition, many of our customers try our service resulting from word-of-mouth advertising from existing customers.
+Added: If our efforts to satisfy our existing customers are not successful, we may not be able to attract new customers, and, as a result, our ability to maintain and/or grow our business will be adversely affected.
+Added: Customers may cease to use our service for many reasons, including the need to cut household expenses, unsatisfactory availability of content, competitive services providing a better value or experience and customer service issues not being satisfactorily resolved.
+Added: We must continually add new customers both to replace departed customers and to grow our business beyond our current customer base.
+Added: If we are unable to compete successfully with current and new competitors in retaining existing customers and attracting new customers, our business will be adversely affected.
+Added: Further, if excessive numbers of customers cease using our service, we may be required to incur significantly higher marketing costs than we currently anticipate, to replace these customers with new customers.
+Added: The popularity of SVOD releases are difficult to predict and can change rapidly, leading to significant fluctuations in our revenues.
+Added: A low public acceptance rate of our content may adversely affect our results of operations.
+Added: The production and distribution of feature films, SVOD and other content are inherently risky businesses, largely because the revenues derived from the sale or licensing of such content depend primarily on widespread public acceptance, which is difficult to predict.
+Added: In addition, we must invest substantial amounts in the marketing of feature films and SVOD before we learn whether these feature films and streaming programs and products will reach anticipated levels of popularity and financial return with viewers.
+Added: The popularity of our content depends on many factors, only some of which are within our control.
+Added: Examples include the quality and public acceptance of competing content available or released at or near the same time, the availability of alternative forms of leisure and entertainment activities and our ability to maintain or develop strong brand awareness and target key audience demographics.
+Added: If we are not able to create and distribute content that is popular with consumers and affiliates, our revenues may decline or fail to grow to the extent we anticipate when making investment decisions.
+Added: The underperformance of a feature film, particularly an “event” film (which typically has high production and marketing costs), can have an adverse impact on our results of operations in both the year of release and in the future.
+Added: The video industry is subject to rapid technological change.
+Added: We must continue to enhance and improve our technology.
+Added: Our current software and related web-based technology is developed and in use.
+Added: We must continue to enhance and improve the performance, functionality and reliability of the systems upon which our business model is built.
+Added: The development of any software is characterized by rapid technological change, rapid introduction or changes in user requirements and preferences, short development
+Added: cycles, frequent introduction of new products and services, new technologies and the emergence of new industry standards and practices that could render our existing technology obsolete.
+Added: Our success will depend, in part, on our ability to continue to develop new technologies that enhance our existing technology, to address the varied needs of existing and new customers while also responding to technological advances and emerging industry standards and practices on a cost-effective and timely basis.
+Added: The development of our technology involves significant technical and business risks.
+Added: We may fail to use new technologies effectively or to adapt our proprietary technology and systems to customer requirements or emerging industry standards.
+Added: If we are unable to adapt to changing market conditions, strategic partner and customer requirements or emerging industry standards, that will have a material adverse effect on our ability to succeed.
+Added: Changes in competitive offerings for entertainment video, including the potential rapid adoption of piracy-based video offerings, could adversely impact our business.
+Added: The market for entertainment video is intensely competitive and subject to rapid change.
+Added: Through new and existing distribution channels, consumers have increasing options to access entertainment video.
+Added: The various economic models underlying these channels include subscription, transactional, ad-supported and piracy-based services.
+Added: All have the potential to capture meaningful segments of the entertainment video market in the future.
+Added: Piracy, in particular, threatens to damage our business, as its fundamental proposition to consumers is so compelling and difficult to compete against:
+Added: virtually all content for free.
+Added: Furthermore, in light of the compelling consumer proposition, piracy services are subject to rapid global growth.
+Added: Traditional providers of entertainment video, including broadcasters and cable network operators, as well as internet based e-commerce entertainment video providers, are increasing their internet-based video offerings.
+Added: Several of these competitors have long operating histories, large customer bases, strong brand recognition and significant financial, marketing and other resources.
+Added: They may secure better terms from suppliers, adopt more aggressive pricing and devote more resources to product development, technology, infrastructure, content acquisitions and marketing.
+Added: New competitors may enter the market or existing providers may adjust their services with unique offerings or approaches to providing entertainment video.
+Added: Companies also may enter into business combinations or alliances that strengthen their competitive positions.
+Added: If we are unable to successfully, or profitably, compete with current and new competitors, our business will be adversely affected, and we may not be able to increase or maintain market share, revenues, or profitability.
+Added: If we are not able to manage change and growth, our business could be adversely affected.
+Added: We are expanding our operations and scaling our service to effectively, and reliably, handle anticipated growth in both customers and features related to our service.
+Added: We are building out crowd-sourcing expertise to help us select content to fund, create and distribute.
+Added: If we are not able to manage the growing complexity of our business, including improving, refining, or revising our systems and operational practices related to our video operations, our business may be adversely affected.
+Added: If we fail to maintain or, in new markets establish, a positive reputation with customers concerning our service, including the content we offer and the way in which we allow the customer to help us choose the content that is ultimately added to the service, we may not be able to attract or retain customers, and our operating results may be adversely affected.
+Added: We believe that a positive reputation is important to attract and retain customers who have a number of choices for obtaining entertainment video.
+Added: To the extent our content is perceived as low quality, or we fail to sufficiently differentiate our content offerings from our competitors, our ability to establish and maintain a positive reputation may be adversely impacted.
+Added: Furthermore, to the extent our marketing, customer service and public relations efforts are not effective or create a negative consumer reaction, our ability to establish and maintain a positive reputation may be adversely impacted.
+Added: As we expand into new markets, we need to establish our reputation with new customers.
+Added: To the extent we are unsuccessful in creating positive impressions, our business in new markets may be adversely impacted.
+Added: Changes in how we market our service could adversely affect our marketing expenses and our customer base may be adversely affected.
+Added: We utilize a broad mix of marketing and public-relations programs, including social media sites such as Facebook, YouTube, X and Tik Tok, to promote our service to potential customers.
+Added: We may limit or discontinue the use or support of certain marketing sources or activities if advertising rates increase or if we become concerned that customers or potential customers deem certain marketing practices intrusive or damaging to our brand.
+Added: If the available marketing channels are curtailed, our ability to attract new customers may be adversely affected.
+Added: If companies that promote our service determine that we negatively impact their businesses, decide to compete more directly with our business, enter a similar business, or choose to exclusively support our competitors, we may no longer have access to certain marketing
+Added: If we are unable to maintain or replace our sources of customers with similarly effective sources, or if the cost of our existing sources increases, our customer base and marketing expenses may be adversely affected.
+Added: We face risks, such as unforeseen costs and potential liability, in connection with content we acquire and/or distribute through our service.
+Added: As a distributor of content, we face potential liability for negligence, copyright and trademark infringement, or other claims based on the nature and content of the materials that we acquire and/or distribute.
+Added: In 2016, in connection with the Disney Litigation, the United States District Court for the Central District of California (the “California Court”) granted a preliminary injunction requiring us to cease certain business operations related to the filtering and streaming of copyrighted motion pictures for which we had not properly obtained a license.
+Added: The preliminary injunction was issued pursuant to claims by the plaintiffs that we were unlawfully decrypting and streaming their Copyrighted Works, and violating the Digital Millennium Copyright Act (the “DMCA”).
+Added: The preliminary injunction ultimately led to us filing a voluntary petition for relief under chapter 11 of the Bankruptcy Code, in 2017.
+Added: In 2019, the California Court found us liable for copyright infringement, and violating the DMCA, with respect to certain motion pictures.
+Added: Damages related to the respective copyright infringements, and DMCA violations, totaled $62.0 million.
+Added: In 2020, we entered into the Disney Settlement Agreement as part of our Reorganization Plan and the Bankruptcy Court issued a final decree closing the Bankruptcy Case.
+Added: For more information regarding the Disney Litigation, see “— Part I, Item 3.
+Added: Legal Proceedings —Disney Litigation.”
+Added: The issuance of the preliminary injunction required us to cease all business operations related to our content filtering service as it was constituted at the time the preliminary injunction was issued.
+Added: As this was our primary line of business, this led to a complete loss of revenue for us.
+Added: Using the resources available to us, we immediately began working on a new content filtering system that could be operated with the preliminary injunction in place.
+Added: We also pivoted the business, creating our own original content and licensing content from other creators.
+Added: It took nearly four years to resolve the litigation, resulted in us filing for and reorganizing under chapter 11 bankruptcy, and resulted in more than $5.0 million in legal fees.
+Added: We also may face potential liability for content used in promoting our service, including marketing materials and features on our website (www.angel.com) such as customer reviews.
+Added: To the extent we do not accurately anticipate costs or mitigate risks, including for content that we obtain but ultimately do not make available on our service, or if we become liable for content we acquire and/or distribute, our business may suffer.
+Added: Litigation to defend such claims could be costly and the expenses and damages arising from any liability or unforeseen production risks could harm our operating results.
+Added: We may not be indemnified or insured against such claims or costs of these types.
+Added: Theatrical distribution typically involves significant risk and high upfront marketing costs, which can cause our financial results to vary from time to time.
+Added: We incur significant marketing and advertising costs before and throughout a theatrical release in an effort to drive public awareness of the film and increase ticket sales.
+Added: For instance, marketing costs are generally incurred before and throughout the theatrical release of a film and are expensed as incurred.
+Added: Therefore, we typically incur losses with respect to a particular film prior to and during the film’s theatrical exhibition, and profitability for the film may not be realized until after its theatrical release window.
+Added: Further, we may revise the release date of a film as the production schedule changes or in such a manner as we believe is likely to maximize revenues or for other business reasons.
+Added: Additionally, there can be no assurance that any of the films scheduled for release will be completed and/or in accordance with the anticipated schedule or budget, or that the film will ever be released.
+Added: We rely upon a number of partners to make our service available on their devices.
+Added: We currently offer customers the ability to receive content through a host of internet-connected screens, including TVs, digital video players, TV set-top boxes and mobile devices.
+Added: We work with various tech companies and distributors, including Roku, Google, Apple and Samsung, to make our service available through the TV set-top boxes of such service providers, pursuant to their standard terms.
+Added: We intend to continue to broaden our capability to transmit TV shows and movies to other platforms and partners over time.
+Added: If we are not successful in maintaining existing and creating new relationships, or if we encounter technological, content licensing, regulatory or other impediments to delivering our content to our customers via those devices, our ability to grow our business could be adversely impacted.
+Added: Furthermore, the devices are manufactured and sold by entities other than us and while these entities should be responsible for the devices’ performance, the connection between us and those devices may nonetheless result in customer dissatisfaction toward us and such dissatisfaction could result in claims against us or otherwise adversely impact our business.
+Added: Any significant disruption in or unauthorized access to our computer systems or those of third parties that we utilize in our operations, including those relating to cybersecurity or arising from cyber-attacks, could result in a loss or degradation of service, unauthorized disclosure of data, including customer and corporate information, or theft of intellectual property, including digital content assets, which could adversely impact our business.
+Added: Our reputation and ability to attract, retain and serve our customers is dependent upon the reliable performance and security of our computer systems and those of third parties that we utilize in our operations.
+Added: These systems may be subject to damage or interruption from earthquakes, adverse weather conditions, other natural disasters, terrorist attacks, power loss, telecommunications failures and cybersecurity breaches.
+Added: Interruptions in these systems, or with the internet in general, could leave our service unavailable or degraded, or otherwise hinder our ability to deliver content to our customers.
+Added: Service interruptions, errors in our software or the unavailability of computer systems used in our operations could diminish the overall attractiveness of our service to existing and potential customers.
+Added: Our computer systems and those of third parties we use in our operations are vulnerable to cybersecurity breaches, including cyber-attacks such as computer viruses, denial of service attacks, physical or electronic break-ins and similar disruptions.
+Added: These systems periodically experience directed attacks intended to lead to interruptions and delays in our service and operations as well as loss, misuse or theft of data.
+Added: The addition of new features or upgrades also increases our exposure to vulnerabilities, and generative AI could intensify these cybersecurity risks.
+Added: Any attempt by hackers to obtain our data (including customer and corporate information) or intellectual property (including digital content assets), disrupt our service or otherwise access our systems, or those of third parties we use, if successful, could harm our business, be expensive to remedy and damage our reputation.
+Added: We have implemented certain systems and processes to thwart hackers and protect our data and systems.
+Added: To date, hackers have not had a material impact on our service or systems; however, there can be no assurance that hackers may not be successful in the future.
+Added: Efforts to prevent hackers from disrupting our service or otherwise accessing our systems are expensive to implement and may limit the functionality of or otherwise negatively impact our service offering and systems.
+Added: Any significant disruption to our service or access to our systems could result in a loss of customers and adversely affect our business and results of operation.
+Added: We utilize our own communications and computer hardware systems located either in our facilities or in that of a third-party Web hosting provider.
+Added: In addition, we utilize third-party “cloud” computing services in connection with our business operations.
+Added: We also utilize our own and third-party content delivery networks to help us deliver TV shows and movies in high volume to our customers over the internet.
+Added: Problems faced by us or our third-party Web hosting, “cloud” computing or other network providers, including technological or business-related disruptions, as well as cybersecurity threats, could adversely impact the experience of our customers.
+Added: We rely upon certain third-party cloud computing service providers to operate certain aspects of our service and any disruption of or interference with our use of such services from our providers would impact our operations and our business would be adversely impacted.
+Added: Several third-party cloud computing services providers provide us with a distributed computing infrastructure platform for business operations, or what is commonly referred to as a “cloud” computing service.
+Added: We have designed our software and computer systems to utilize data processing, storage capabilities and other services provided by such providers.
+Added: Currently, we run the vast majority of our computing using such third-party cloud computing services.
+Added: Given this, along with the fact that we cannot easily switch our operations to another cloud provider, any disruption of or interference with our use of such services from our providers would impact our operations and our business would be adversely impacted.
+Added: If the technology we use in operating our business fails, becomes unavailable, or does not operate as expected, our business and operating results could be adversely impacted.
+Added: We utilize a combination of proprietary and third-party technology to operate our business.
+Added: We also use technology to recommend and merchandise content to our consumers as well as to enable fast and efficient delivery of content to our customers and their various consumer electronic devices.
+Added: For example, we have built and deployed our video on a content delivery network (“CDN”).
+Added: To the extent Internet Service Providers do not interconnect with our CDN, or if we experience difficulties in its operation, our ability to efficiently, and effectively, deliver our content to our customers could be adversely impacted and our business and results of operation could be adversely affected.
+Added: We also utilize third party technology to help market our service, process payments and otherwise manage the daily operations of our business.
+Added: If our technology or that of third parties we utilize in our operations fails or otherwise operates improperly, our ability to operate our service, retain existing customers and add new customers may be impaired.
+Added: Also, any harm to our customers’ personal computers or other devices caused by software used in our operations could have an adverse effect on our business, results of operations and financial condition.
+Added: If government regulations relating to the internet or other areas of our business change, we may need to alter the manner in which we conduct our business or incur greater operating expenses.
+Added: The adoption or modification of laws or regulations relating to the internet or other areas of our business could limit or otherwise adversely affect the manner in which we currently conduct our business.
+Added: In addition, the continued growth and development of the market for online commerce may lead to more stringent consumer protection laws, which may impose additional burdens on us.
+Added: If we are required to comply with new regulations or legislation or new interpretations of existing regulations or legislation, this compliance could cause us to incur additional expenses or alter our business model.
+Added: Changes in laws or regulations that adversely affect the growth, popularity or use of the internet, including laws impacting net neutrality, could decrease the demand for our service and increase our cost of doing business.
+Added: Within such a regulatory environment, coupled with potentially significant political and economic power of local network operators, we may experience discriminatory or anti-competitive practices that could impede our growth, cause us to incur additional expense or otherwise negatively affect our business.
+Added: Changes in how network operators handle and charge for access to data that travel across their networks could adversely impact our business.
+Added: We rely upon the ability of consumers to access our service through the internet.
+Added: If network operators block, restrict or otherwise impair access to our service over their networks, our service and business could be negatively affected.
+Added: To the extent that network operators implement usage-based pricing, including meaningful bandwidth caps, or otherwise try to monetize access to their networks by data providers, we could incur greater operating expenses and our new customer acquisition and retention could be negatively impacted.
+Added: Furthermore, to the extent network operators create tiers of internet access service and either charge us for or prohibit us from being available through these tiers, our business could be negatively impacted.
+Added: Most network operators that provide consumers with access to the internet also provide these consumers with multichannel video programming.
+Added: As such, many network operators have an incentive to use their network infrastructure in a manner adverse to our continued growth and success.
+Added: While we believe that consumer demand, regulatory oversight and competition will help check these incentives, to the extent that network operators are able to provide preferential treatment to their data as opposed to ours or otherwise implement discriminatory network management practices, our business could be negatively impacted.
+Added: Privacy concerns could limit our ability to collect and leverage our customer data and disclosure of customer data could adversely impact our business and reputation.
+Added: In the ordinary course of business, and in particular in connection with merchandising our service to our customers, we collect and utilize data supplied by our customers.
+Added: We must comply with various international, federal and state laws and regulations related to the handling, use and protection of data, and may become subject to additional legislation in the future.
+Added: Any actual or perceived failure to comply with data privacy laws or regulations, or related contractual or other obligations, or any perceived privacy rights violation, could lead to investigations, claims and proceedings by governmental entities and private parties, damages for breach of contract and other significant costs, penalties and other liabilities, as well as harm to our reputation and market position.
+Added: Other businesses have been criticized by privacy groups and governmental bodies for attempts to link personal identities and other information to data collected on the internet regarding users’ browsing and other habits.
+Added: Increased regulation of data utilization practices, including self-regulation or findings under existing laws that limit our ability to collect and use data, could have an adverse effect on our business.
+Added: In addition, if we were to disclose data about our customers in a manner that was objectionable to them, our business reputation could be adversely affected, and we could face potential legal claims that could impact our operating results.
+Added: Our reputation and relationships with customers would be harmed if our customer data, particularly billing data, were accessed by unauthorized persons.
+Added: We maintain personal data regarding our customers.
+Added: This data is maintained on our own systems as well as those of third parties we use in our operations.
+Added: With respect to billing data, such as credit card numbers, we do not store such information on our servers, but rely on third party services that are Payment Card Industry Data Security Standard compliant for storing and accessing billing information.
+Added: We take measures to protect against unauthorized intrusion into our customers’ data.
+Added: Despite those measures, we, our payment processing services and other third-party services we use could experience an unauthorized intrusion into our customers’ data.
+Added: In the event of such a breach, current and potential customers may become unwilling to provide the information to us necessary for them to become customers.
+Added: Additionally, we could face legal claims for such a breach.
+Added: The costs relating to any data breach could be material, and we cannot be sure that our insurance coverage will be adequate or sufficient to protect us from or to mitigate liabilities relating to a data
+Added: breach, that such coverage will continue to be available on commercially reasonable terms or at all, or that such coverage will pay future claims.
+Added: For these reasons, should an unauthorized intrusion into our customers’ data occur, our business could be adversely affected.
+Added: We are subject to payment processing risk.
+Added: Our customers pay for our service using a variety of payment methods, including credit and debit cards.
+Added: We rely on internal systems as well as those of third parties to process payments.
+Added: Acceptance and processing of these payment methods are subject to certain rules and regulations and require payment of interchange and other fees.
+Added: To the extent there are disruptions in our payment processing systems, increases in payment processing fees, material changes in the payment ecosystem, such as large re-issuances of payment cards, delays in receiving payments from payment processors and/or changes to rules or regulations concerning payment processing, our revenue, operating expenses and operating results could be adversely impacted.
+Added: In addition, from time to time, we encounter fraudulent use of payment methods, which could impact our results of operation, and, if not adequately controlled and managed, could create negative consumer perceptions of our service.
+Added: If our trademarks and other proprietary rights are not adequately protected to prevent use or appropriation by our competitors, the value of our brand and other intangible assets may be diminished, and our business may be adversely affected.
+Added: We rely and expect to continue to rely on a combination of proprietary information, invention assignment, non-competition and arbitration agreements with our employees, consultants and third parties with whom we have relationships, as well as trademark, copyright, patent and trade secret protection laws, to protect our proprietary rights.
+Added: We may also seek to enforce our proprietary rights through court proceedings.
+Added: We have applied and we expect to apply for trademark registrations and the issuance of patents from time to time.
+Added: Such applications may not be approved, third parties may challenge any copyrights, patents or trademarks issued to or held by us, third parties may knowingly or unknowingly infringe our intellectual property rights and we may not be able to prevent infringement or misappropriation without substantial expense to us.
+Added: If the protection of our intellectual property rights is inadequate to prevent use or misappropriation by third parties, the value of our brand and other intangible assets may be diminished, competitors may be able to mimic our service and methods of operations more effectively, the perception of our business and service to customers and potential customers may become confused in the marketplace and our ability to attract customers may be adversely affected.
+Added: We currently hold various domain names relating to our brand.
+Added: Failure to protect our domain names could adversely affect our reputation and brand and make it more difficult for customers to find our website and our service.
+Added: We may be unable, without significant cost or at all, to prevent third parties from acquiring domain names that are similar to, infringe upon or otherwise decrease the value of our trademarks and other proprietary rights.
+Added: Intellectual property claims against us could be costly and result in the loss of significant rights related to, among other things, our website, our recommendation and merchandising technology and marketing activities.
+Added: Trademark, copyright, patent and other intellectual property rights are important to us and other companies.
+Added: Our intellectual property rights extend to our technology, business processes and the content on our website.
+Added: From time to time, third parties may allege that we have violated their intellectual property rights.
+Added: If we are unable to obtain sufficient rights, successfully defend our use, develop non-infringing technology or otherwise alter our business practices on a timely basis in response to claims for infringement, misappropriation, misuse or other violation of third-party intellectual property rights, our business and competitive position may be adversely affected.
+Added: In addition, the use or adoption of new and emerging technologies may increase our exposure to intellectual property claims.
+Added: For example, the development and use of generative AI tools remain subject to uncertain legal frameworks, and the availability of copyright and other intellectual property protection for AI-generated material is uncertain.
+Added: Many companies are devoting significant resources to developing patents that could potentially affect many aspects of our business.
+Added: There are numerous patents that broadly claim means and methods of conducting business on the internet.
+Added: Defending against intellectual property claims, whether they are with or without merit or are determined in our favor, would result in costly litigation and the diversion of technical and management personnel.
+Added: It also may result in our inability to use our current website, streaming technology, our recommendation and merchandising technology or inability to market our service and merchandise our products.
+Added: As a result of such disputes, we may have to develop non-infringing technology, enter into royalty or licensing agreements, adjust our merchandising or marketing activities or take other actions to resolve the claims.
+Added: These actions, if required, may be costly or unavailable on terms acceptable to us, which would adversely affect our business operations.
+Added: In 2016, in connection with the Disney Litigation, the California Court granted a preliminary injunction requiring us to cease certain business operations related to the filtering and streaming of copyrighted motion pictures for which we had not properly obtained a license.
+Added: The preliminary injunction was issued pursuant to claims by the plaintiffs that we were unlawfully decrypting and streaming their Copyrighted Works and violating the DMCA.
+Added: The preliminary injunction ultimately led to us filing a voluntary petition for relief under chapter 11 of the Bankruptcy Code, in 2017.
+Added: In 2019, the California Court found us liable for copyright infringement, and violating
+Added: the DMCA, with respect to certain motion pictures.
+Added: Damages related to the respective copyright infringements, and DMCA violations, totaled $62.0 million.
+Added: In 2020, we entered into the Disney Settlement Agreement as part of our Reorganization Plan and the Bankruptcy Court issued a final decree closing the Bankruptcy Case.
+Added: For more information regarding the Disney Litigation, see “— Part I, Item 3.
+Added: Legal Proceedings —Disney Litigation.”
+Added: We may be engaged in legal proceedings that could cause us to incur unforeseen expenses and could occupy a significant amount of our management’s time and attention.
+Added: From time to time, we may be subject to litigation or claims that could negatively affect our business operations and financial position.
+Added: It is possible that a portion of our working capital could be required to fund expenses in our defense of future legal matters.
+Added: As we grow, we expect the number of litigation matters against us to increase.
+Added: To date, these matters have included claims of defamation and copyright infringement, litigation that is typically expensive to defend.
+Added: Litigation disputes could cause us to incur unforeseen expenses, could occupy a significant amount of our management’s time and attention and could negatively affect our business operations and financial position.
+Added: See “—Part I, Item 3.
+Added: Legal Proceedings” for more information.
+Added: We may seek additional capital that may result in stockholder dilution or others having rights senior to those of our stockholders.
+Added: From time to time, we may seek to obtain additional capital, either through equity, equity-linked or debt securities.
+Added: The decision to obtain additional capital will depend on many factors, including but not limited to the following:
+Added: ● our degree of success in capturing a larger portion of the overall market for entertainment video;
+Added: ● the costs of establishing or acquiring development, marketing and distribution capabilities for our content;
+Added: ● the costs of preparing, filing and prosecuting patent applications, maintaining and enforcing our issued patents and defending intellectual property-related claims;
+Added: ● the extent to which we acquire or invest in customer service, exclusive digital distribution of original content or technologies and other strategic relationships;
+Added: ● the costs of financing unanticipated working capital requirements and responding to competitive pressures.
+Added: If we raise additional funds through the issuance of equity, equity-linked or debt securities, such securities may have rights, preferences or privileges senior to the rights of our Common Stock and our stockholders may experience dilution.
+Added: We depend on our senior management to achieve our objectives, and our loss of, or inability to obtain, key personnel or inability to attract and retain highly skilled employees could delay or hinder implementation of our business and growth strategies, which could adversely affect the value of your investment and our ability to pay dividends.
+Added: Our success depends on the diligence, experience and skill of our Board and officers.
+Added: Neal Harmon is a director and our Chief Executive Officer.
+Added: Jeffrey Harmon is our Chief Content Officer.
+Added: Jordan Harmon is our President.
+Added: Elizabeth Ellis is our Chief Operating Officer.
+Added: Glen Nickle is our Chief Legal Officer.
+Added: Scott Klossner is our Chief Financial Officer.
+Added: We have neither employment agreements with, nor key man insurance for, any of our officers and the loss of any of them, but particularly Messrs.
+Added: Neal, Jeffrey and Jordan Harmon, could harm our business, financial condition, cash flow and results of operations.
+Added: Any such event would likely result in a material adverse effect on our business, results of operations and financial condition.
+Added: To achieve our objectives, we rely on the hiring of new qualified employees.
+Added: In our industry, there is substantial and continuous competition for highly skilled business, product development, technical and other personnel.
+Added: We may not be successful in recruiting new personnel or in retaining and motivating existing personnel, which may be disruptive to our operations.
+Added: Our ability to monetize content that we distribute is heavily reliant on factors outside of our control.
+Added: Our ability to monetize content that we distribute is heavily reliant on factors outside of our control, including, but not limited to, the potential loss of key talent, the potential for budget overruns, the quality of the content produced, the timeliness of the production and subsequent release schedule, and the relationship of the creator with the audience.
+Added: If we are unable to find ways to mitigate the risks associated with these external factors, or factors within our control, it may have a material adverse impact on our business, results of operations and financial condition.
+Added: Holders of our Common Stock will have only limited rights regarding our management, and will thus not have the ability to actively influence the day-to-day management of our business and affairs.
+Added: Our Board will have sole power and authority over our day-to-day management, subject only to the requirements of the DGCL.
+Added: Holders of our Common Stock will not have an active role in our day-to-day management.
+Added: The holders of each class of Common Stock vote together as a single class on each matter to be voted on by our stockholders, including the election of directors.
+Added: On each such matter, each outstanding share of Class A Common Stock is entitled to one vote and each outstanding share of Class B Common Stock is entitled to ten votes.
+Added: We may change our operational policies and business and growth strategies without stockholder consent, which may subject us to different and more significant risks in the future.
+Added: Our Board determines our operational policies and our business and growth strategies.
+Added: Our directors may make changes to, or approve transactions that deviate from, those policies and strategies without a vote of, or notice to, our stockholders or debtholders.
+Added: This could result in us conducting operational matters or pursuing different business or growth strategies than those contemplated in this Annual Report.
+Added: Under any of these circumstances, we may expose ourselves to different and more significant risks in the future, which could materially and adversely affect our business and growth.
+Added: The ability of a stockholder to recover all or any portion of such stockholder’s investment in the event of a dissolution or termination may be limited.
+Added: In the event of a dissolution or termination of us, the proceeds realized from the liquidation of our assets will be distributed among the stockholders, but only after the satisfaction of the claims of our third-party creditors.
+Added: The ability of a stockholder to recover all or any portion of such stockholder’s investment under such circumstances will, accordingly, depend on the amount of net proceeds realized from such liquidation and the number of claims to be satisfied therefrom.
+Added: There can be no assurance that we will recognize gains on such liquidation, nor is there any assurance that holders of our Common Stock will receive a distribution in such a case.
+Added: Our Board and our executive officers will have limited liability for, and will be indemnified and held harmless from, our losses.
+Added: We will indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative (other than an action by or in the right of us) by reason of the fact that he/she is or was a director, officer, employee or agent of us, or is or was serving at the request of us as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise, against expenses (including attorneys’ fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by him/her in connection with such action, suit or proceeding if he/she acted in good faith and in a manner he/she reasonably believed to be in or not opposed to the best interests of us, and, with respect to any criminal action or proceeding, had no reasonable cause to believe his/her conduct was unlawful.
+Added: A successful claim for such indemnification could deplete our assets by the amount paid.
+Added: Our business may be subject to regulatory or legislative changes.
+Added: We may face government regulation and legal uncertainties in connection with our business.
+Added: There may be a number of federal, state or local legislative or regulatory proposals under consideration of which we are not aware or which may be considered or adopted in the future.
+Added: Any new legislation or regulation, or the application or interpretation of existing laws or regulations, may negatively impact our growth, impose additional burdens on us or alter how we do business.
+Added: This could decrease the demand for our services, increase our cost of doing business or otherwise have a material adverse effect on our business, results of operations and financial condition.
+Added: Members of our Board and our executive officers may have other business interests and obligations to other entities.
+Added: Neither our directors nor our executive officers will be required to manage us as their sole and exclusive function and they may have other business interests and may engage in other activities in addition to those relating to us, provided that such activities do not compete with our business or otherwise breach their agreements with us; provided, that our executive officers and employee directors are all full-time employees of our company and are expected to spend such time fulfilling their duties as is necessary to do so.
+Added: On the other hand, our non-employee directors are not full-time with our company and must only spend such time managing our company as they deem
+Added: necessary to fulfill their fiduciary duties to our company.
+Added: We depend on our directors and executive officers to successfully operate our company.
+Added: Their other business interests and activities could divert time and attention from operating our business.
+Added: Provisions in our governing documents and under Delaware law could discourage a takeover that stockholders may consider favorable.
+Added: Our charter documents may discourage, delay or prevent a merger or acquisition that a stockholder may consider favorable because they provide for a right of first refusal on our behalf.
+Added: As a Delaware corporation, we are subject to certain Delaware anti-takeover provisions.
+Added: Under Delaware law, a corporation may not engage in a business combination with any holder of 15.0% or more of its capital stock unless the holder has held the stock for three years or, among other things, the board of directors has approved the transaction.
+Added: Financial forecasting may differ materially and adversely from actual results.
+Added: Given the dynamic nature of our business, and the inherent limitations in predicting the future, forecasts of our revenues, contribution margins, net income and number of total customers and other financial and operating data may differ materially and adversely from actual results.
+Added: Such discrepancies could cause a decline in the price of our Common Stock.
+Added: Our future indebtedness may limit our ability to declare and pay dividends and may affect our operations, including our ability to repay existing debt obligations.
+Added: We may seek debt financing to assist with the financing of our future operations.
+Added: Our ability to make principal and interest payments with respect to any such debt incurred depends on future performance, which performance is subject to many factors, some of which will be outside of our control.
+Added: In addition, most of such indebtedness will likely be secured by substantially all of our assets and will contain restrictive covenants that limit our ability to repay our existing debt obligations and to incur additional indebtedness.
+Added: Payment of principal and interest on such indebtedness, as well as compliance with the requirements and covenants of such indebtedness, could limit our ability to repay existing debt obligations in a timely fashion, if at all.
+Added: Such leverage may also adversely affect our ability to finance future operations and capital needs, or to pursue other business opportunities and make results of operations more susceptible to adverse business conditions.
+Added: All of the above could limit our ability to declare and pay dividends.
+Added: An investment in us is a speculative investment, and therefore, no assurance can be given that our investors or stockholders will realize their investment objectives.
+Added: No assurance can be given that investors or stockholders will realize a return on their investments in us or that they will not lose their entire investment.
+Added: There is a risk that we will not be able to successfully implement our business plan which could have an adverse effect on our ability to generate revenue and in turn, provide a return to investors.
+Added: Further, we filed for bankruptcy in 2017 and as of September 30, 2020, the Reorganization Plan was confirmed and effective.
+Added: We obtained a chapter 11 bankruptcy discharge and the terms of the Reorganization Plan require us to pay $9.9 million over fourteen years in fifty-six equal quarterly payments of $177.0 thousand (with an option to reduce the payment to $7.8 million by paying the loan off in three to five years) with the first payment becoming due October 15, 2020.
+Added: This also includes all payment obligations under the promissory note payable to the Studios pursuant to the Disney Settlement Agreement, which promissory note has a term of fourteen years.
+Added: The Company elected to pay the entire settlement amount within the five year period and as such, as of the year ended 2025, the required settlement amount of $7.8 million has been fully repaid.
+Added: If, upon the expiration of fourteen years after the Reorganization Plan Effective Date and there is no breach or violation of the Disney Settlement Agreement that remains uncured after written notice is received and there have not been four instances of unpermitted conduct in violation of the Disney Settlement Agreement, subject to a Notice of Default (as defined in the Disney Settlement Agreement), in a consecutive five year period, then the Note shall be cancelled, and the original Note marked “Paid and Cancelled” shall be returned to us.
+Added: For more information regarding the Reorganization Plan and Disney Settlement Agreement, see “Part I, Item 3.
+Added: Legal Proceedings—Disney Litigation.”
+Added: We may be found in violation of the Disney Settlement Agreement in relation to the unauthorized use of Copyrighted Works by a Studio or its affiliates.
+Added: If a Studio prevails in an Enforcement Action against us, our business would be adversely impacted and this would significantly impair our ability to continue as a going concern.
+Added: In accordance with the Disney Settlement Agreement and the No Use Covenant described thereunder, we must certify that no Copyrighted Works of the Studios or their affiliates are stored on our computers or servers in compliance with the list(s) provided by the Studios of their Copyrighted Works.
+Added: Thereafter, any unauthorized use (as described in the Disney Settlement Agreement) by us of a Copyrighted Work owned or controlled by a Studio or its affiliate without the express written authorization of a Studio or its affiliate
+Added: is a “Strike,” regarded as unpermitted conduct in violation of the Disney Settlement Agreement, subject to a Notice of Default.
+Added: If we incur four Strikes within a consecutive five-year period, any Studio may institute an Enforcement Action against us.
+Added: If a Studio prevails in an Enforcement Action, it shall be entitled to all available remedies, including:
+Added: (i) acceleration of the Note, if the Note has not been canceled and (ii) foreclosure on all collateral pledged under the Security Agreement, which comprises all of our assets and all of the equity in Angel Studios owned by Neal Harmon and Jeffrey Harmon and would significantly adversely affect our financial condition and our ability to continue our business operations.
+Added: For more information regarding the Disney Litigation, Reorganization Plan and Disney Settlement Agreement see “Part I, Item 3.
+Added: Legal Proceedings —Disney Litigation.”
+Added: We are subject to liens on our personal property, including our intellectual property, under the Reorganization Plan, which if enforced, would significantly impair our intellectual property rights and our ability to continue as a going concern.
+Added: Pursuant to the Reorganization Plan, performance under the Note as well as the Express Covenants shall be secured by a first priority fully perfected lien, which was placed on all equity in Angel Studios owned by Neal and Jeff Harmon and all of our assets currently owned and controlled by us, our affiliates and subsidiaries, or acquired, created, owned and controlled by us after the Reorganization Plan Effective Date, including intellectual property, such as patents, patent applications, trademarks, tradenames, copyrights and copyright applications.
+Added: In the event of a violation of the Express Covenants or an uncured default of the payment obligations as described within the Note, the Studios can institute an Enforcement Action in Bankruptcy Court.
+Added: If the Studios prevail in an Enforcement Action against us, the Compliance Lien (as defined in the Disney Settlement Agreement) will be enforced and foreclosed upon, disposing of any collateral that could be used to satisfy the list of claims in accordance with the priorities set forth in the Reorganization Plan.
+Added: The disposition of equity owned by Neal and Jeff Harmon could lead to a change in control of Angel Studios and investors would have limited rights to determine new management or the direction of Angel Studios.
+Added: The Compliance Lien will remain in effect for fourteen years from the Reorganization Plan Effective Date.
+Added: For more information regarding the Reorganization Plan and Disney Settlement Agreement, see “Part I, Item 3.
+Added: Legal Proceedings —Disney Litigation.”
+Added: Any liens on our intellectual property enforced under the Reorganization Plan would have a material adverse effect on our ability to continue our business operations.
+Added: We do not intend to pay dividends for the foreseeable future.
+Added: We intend to retain all of our earnings for the future operation and expansion of our business and do not anticipate making any cash distributions at any time in the foreseeable future.
+Added: Artificial intelligence technologies present both competitive risks and strategic opportunities for our business.
+Added: Advances in generative artificial intelligence are lowering the barriers to film and TV show creation, which could enable new competitors to produce films and TV shows at reduced cost and timelines.
+Added: AI-generated films and TV shows may also create consumer confusion, market saturation, or quality concerns that could affect audience willingness to engage with entertainment generally.
+Added: If we are unable to effectively integrate AI into our operations, or if competitors are able to leverage AI capabilities more effectively than we can, our competitive position and results of operations could be adversely affected.
+Added: Our increasing use of artificial intelligence tools in engineering and operations introduces new risks.
+Added: We use AI-assisted development tools in our engineering processes, including for code generation, and are expanding AI use across operational functions.
+Added: Our reliance on AI tools presents risks, including potential errors, biases, or vulnerabilities in AI-generated code or outputs that may not be detected through our quality assurance processes;
+Added: dependence on third-party AI platforms and models that may change in availability, pricing, capability, or terms of use;
+Added: potential intellectual property risks associated with AI-generated material and code, including uncertainty regarding ownership, licensing, and infringement;
+Added: potential regulatory changes affecting the use of AI in film and TV show creation, distribution, or customer interactions;
+Added: and risks related to the collection, processing, and use of member data in AI systems, including privacy and data protection concerns.
+Added: We have implemented quality review processes and vendor oversight practices to manage these risks, although these measures may not prevent all adverse outcomes.
+Added: Any of these risks, if realized, could increase our costs, disrupt our operations, or subject us to legal liability.
+Added: Risks Relating to Our Bitcoin Treasury Strategy
+Added: Our bitcoin treasury strategy exposes us to various risks, including risks associated with bitcoin
+Added: Our bitcoin treasury strategy exposes us to various risks, including the following:
+Added: Bitcoin is a highly volatile asset.
+Added: Bitcoin is a highly volatile asset that has traded below $77,000 per bitcoin and above $126,000 per bitcoin on BitGo during 2025.
+Added: The trading price of bitcoin was significantly lower during prior periods, and such decline may occur again in the future.
+Added: Bitcoin does not pay interest or dividends.
+Added: Bitcoin does not pay interest or other returns and we can only generate cash from our bitcoin holdings if we sell our bitcoin or implement strategies to create income streams or otherwise generate cash by using our bitcoin holdings.
+Added: Even if we pursue any such strategies, we may be unable to create income streams or otherwise generate cash from our bitcoin holdings, and any such strategies may subject us to additional risks.
+Added: Our bitcoin holdings significantly impact our financial results and the market price of our Common Stock .
+Added: Our bitcoin holdings have significantly affected our financial results and if we continue to increase our overall holdings of bitcoin in the future, they will have an even greater impact on our financial results and the market price of our Common Stock.
+Added: Our bitcoin treasury strategy has not been tested over an extended period of time or under different market conditions .
+Added: We are continually examining the risks and rewards of our strategy to acquire and hold bitcoin.
+Added: This strategy has not been tested over an extended period of time or under different market conditions.
+Added: For example, although we believe bitcoin, due to its limited supply, has the potential to serve as a hedge against inflation in the long term, the short-term price of bitcoin declined in recent periods during which the inflation rate increased.
+Added: If bitcoin prices were to decline or our bitcoin treasury strategy otherwise proves unsuccessful, our financial condition, results of operations and the market price of our Common Stock would be materially adversely impacted.
+Added: We are subject to counterparty risks, including in particular risks relating to our custodians .
+Added: In an effort to mitigate our counterparty risks, we currently store all of the bitcoin we own in custody accounts at U.S.-based, institutional-grade custodians.
+Added: Applicable insolvency law with respect to the holding of digital assets in custodial accounts is not fully developed, and if our custodially-held bitcoin were considered to be the property of our custodians’ estates in the event that any such custodians were to enter bankruptcy, receivership or similar insolvency proceedings, we could be treated as a general unsecured creditor of such custodians, inhibiting our ability to exercise ownership rights with respect to such bitcoin, or delaying or hindering our access to our bitcoin holdings, and this may ultimately result in the loss of the value related to some or all of such bitcoin, which could have a material adverse effect on our financial condition as well as the market price of our Common Stock.
+Added: The broader digital assets industry is subject to counterparty risks, which could adversely impact the adoption rate, price and use of bitcoin .
+Added: A series of high-profile bankruptcies, closures, liquidations, regulatory enforcement actions and other events relating to companies operating in the digital asset industry in recent years have highlighted the counterparty risks applicable to owning and transacting in digital assets.
+Added: Although these bankruptcies, closures, liquidations and other events have not resulted in any loss or misappropriation of our bitcoin, nor have such events adversely impacted our access to our bitcoin, they have, in the short-term, likely negatively impacted the adoption rate and use of bitcoin.
+Added: Additional bankruptcies, closures, liquidations, regulatory enforcement actions or other events involving participants in the digital assets industry in the future may further negatively impact the adoption rate, price and use of bitcoin, limit the availability to us of financing collateralized by bitcoin, or create or expose additional counterparty risks.
+Added: Changes in the trading price of bitcoin could have significant accounting impacts, including increasing the volatility of our results .
+Added: The Company has adopted ASU No.
+Added: 2023-08, which requires us to measure our bitcoin holdings at fair value in our statement of financial position, and to recognize gains and losses from changes in the fair value of our bitcoin in net income each reporting period.
+Added: 2023-08 also requires us to provide certain interim and annual disclosures with respect to our bitcoin holdings.
+Added: Volatility in the price of bitcoin could have a material impact on the carrying value of our digital assets on our balance sheet, increase the volatility of our financial results, and it could also have adverse tax consequences, which in turn could have a material adverse effect on our financial results and the market price of our Common Stock.
+Added: The broader digital assets industry, including the technology associated with digital assets, the rate of adoption and development of, and use cases for, digital assets, market perception of digital assets, and the legal, regulatory, and accounting treatment of digital assets are constantly developing and changing, and there may be additional risks in the future that are not possible to predict.
+Added: Changes in our ownership of bitcoin could have accounting, regulatory and other impacts .
+Added: While we currently own bitcoin directly, we may investigate other potential approaches to owning bitcoin, including indirect ownership (for example, through ownership interests in a fund that owns bitcoin).
+Added: If we were to own all or a portion of our bitcoin in a different manner, the accounting treatment for our bitcoin, our ability to use our bitcoin as collateral for additional borrowings, and the regulatory requirements to which we are subject, may correspondingly change.
+Added: For example, the volatile nature of bitcoin may force us to liquidate our holdings to repay the obligations for which our bitcoin was used as collateral, which could be negatively affected by any disruptions in the crypto market, and if our bitcoin is not liquidated in an orderly manner, the value of the proceeds received may not accurately reflect the market value of bitcoin, all of which could negatively affect our business and implementation of our bitcoin treasury strategy.
+Added: Our bitcoin holdings are and will be less liquid than cash and cash equivalents and may not be able to serve as a source of liquidity for us to the same extent as cash and cash equivalents.
+Added: We intend to adopt bitcoin as our primary treasury reserve asset.
+Added: Historically, the bitcoin market has been characterized by significant volatility in price, limited liquidity and trading volumes compared to sovereign currencies markets, relative anonymity, a developing regulatory landscape, potential susceptibility to market abuse and manipulation, compliance and internal control failures at exchanges, and various other risks inherent in its entirely electronic, virtual form and decentralized network.
+Added: During times of market instability, we may not be able to sell our bitcoin at favorable prices or at all.
+Added: For example, a number of bitcoin trading venues temporarily halted deposits and withdrawals in 2022.
+Added: As a result, our bitcoin holdings may not be able to serve as a source of liquidity for us to the same extent as cash and cash equivalents.
+Added: Further, bitcoin we hold with our custodians and transact with our trade execution partners does not enjoy the same protections as are available to cash or securities deposited with or transacted by institutions subject to regulation by the Federal Deposit Insurance Corporation or the Securities Investor Protection Corporation.
+Added: Additionally, we may be unable to enter into term loans or other capital raising transactions collateralized by our unencumbered bitcoin or otherwise generate funds using our bitcoin holdings, including in particular during times of market instability or when the price of bitcoin has declined significantly.
+Added: If we are unable to sell our bitcoin, enter into additional capital raising transactions using bitcoin as collateral, or otherwise generate funds using our bitcoin holdings, or if we are forced to sell our bitcoin at a significant loss, in order to meet our working capital requirements, our business and financial condition could be negatively impacted.
+Added: Bitcoin is a highly volatile asset, and fluctuations in the price of bitcoin have in the past influenced and are likely to continue to influence our financial results and the market price of our Common Stock.
+Added: Bitcoin is a highly volatile asset, and fluctuations in the price of bitcoin have in the past influenced and are likely to continue to influence our financial results and the market price of our Common Stock.
+Added: Our financial results and the market price our Common Stock would be adversely affected, and our business and financial condition would be negatively impacted, if the price of bitcoin decreased substantially (as it has in the past), including as a result of:
+Added: ● decreased user and investor confidence in bitcoin, including due to the various factors described herein;
+Added: ● investment and trading activities, such as (i) trading activities of highly active retail and institutional users, speculators, miners and investors, (ii) actual or expected significant dispositions of bitcoin by large holders, including the expected liquidation;
+Added: of digital assets seized by governments or associated with entities that have filed for bankruptcy protection, such as the (a) transfers of bitcoin to creditors of the hacked cryptocurrency exchange Mt.
+Added: Gox which began in July 2024;
+Added: (b) transfers of bitcoin to claimants following proceedings related to a 2016 hack of Bitfinex-which claims are currently being adjudicated, (c) sales of bitcoin by the German government following the seizure of about 50,000 bitcoin in January 2024 from the operator of Movie2k.to, or (d) potential sales of 69,370 bitcoin seized from the Silk Road marketplace by the U.S.
+Added: Department of Justice;
+Added: and (iii) actual or perceived manipulation of the spot or derivative markets for bitcoin or spot bitcoin exchange-traded products;
+Added: ● negative publicity, media or social media coverage, or sentiment due to events in or relating to, or perception of, bitcoin or the broader digital assets industry, for example, (i) public perception that bitcoin can be used as a vehicle to circumvent sanctions, including sanctions imposed on Russia or certain regions related to the ongoing conflict between Russia and Ukraine, or to fund criminal or terrorist activities, such as the purported use of digital assets by Hamas to fund its terrorist attack against Israel in October 2023;
+Added: (ii) expected or pending civil, criminal, regulatory enforcement or other high profile actions against major participants in the bitcoin ecosystem, including the SEC’s enforcement action against Binance Holdings Ltd.;
+Added: (iii) additional filings for bankruptcy protection or bankruptcy proceedings of major digital asset industry participants, such as the bankruptcy proceeding of FTX Trading and its affiliates;
+Added: and (iv) the actual or perceived environmental impact of bitcoin and related activities, including environmental concerns raised by private individuals, governmental and non-governmental organizations, and other actors related to the energy resources consumed in the bitcoin mining process;
+Added: ● changes in consumer preferences and the perceived value or prospects of bitcoin;
+Added: ● competition from other digital assets that exhibit better speed, security, scalability, or energy efficiency, that feature other more favored characteristics, that are backed by governments, including the U.S.
+Added: government, or reserves of fiat currencies, or that represent ownership or security interests in physical assets;
+Added: ● a decrease in the price of other digital assets, including stablecoins, or the crash or unavailability of stablecoins that are used as a medium of exchange for bitcoin purchase and sale transactions, such as the crash of the stablecoin Terra USD in 2022, to the extent the decrease in the price of such other digital assets or the unavailability of such stablecoins may cause a decrease in the price of bitcoin or adversely affect investor confidence in digital assets generally;
+Added: ● the identification of Satoshi Nakamoto, the pseudonymous person or persons who developed bitcoin, or the transfer of substantial amounts of bitcoin from bitcoin wallets attributed to Mr.
+Added: ● developments relating to the bitcoin protocol, including (i) changes to the bitcoin protocol that impact its security, speed, scalability, usability, or value, such as changes to the cryptographic security protocol underpinning the bitcoin blockchain, changes to the maximum number of bitcoin outstanding, changes to the mutability of transactions, changes relating to the size of blockchain blocks, and similar changes, (ii) failures to make upgrades to the bitcoin protocol to adapt to security, technological, legal or other challenges, and (iii) changes to the bitcoin protocol that introduce software bugs, security risks or other elements that adversely affect bitcoin;
+Added: ● disruptions, failures, unavailability, or interruptions in services of trading venues for bitcoin, such as, for example, the announcement by the digital asset exchange FTX Trading that it would freeze withdrawals and transfers from its accounts and subsequent filing for bankruptcy protection and the SEC enforcement action brought against Binance Holdings Ltd., which initially sought to freeze all of its assets during the pendency of the enforcement action and has since resulted in Binance discontinuing all fiat deposits and withdrawals in the United States;
+Added: ● the filing for bankruptcy protection by, liquidation of, or market concerns about the financial viability of digital asset custodians, trading venues, lending platforms, investment funds, or other digital asset industry participants, such as the filing for bankruptcy protection by digital asset trading venues FTX Trading and BlockFi and digital asset lending platforms Celsius Network and Voyager Digital Holdings in 2022, the ordered liquidation of the digital asset investment fund Three Arrows Capital in 2022, the announced liquidation of Silvergate Bank in 2023, the government-mandated closure and sale of Signature Bank in 2023, the placement of Prime Trust, LLC into receivership following a cease-and-desist order issued by the Nevada Department of Business and Industry in 2023, and the exit of Binance from the U.S.
+Added: market as part of its settlement with the Department of Justice and other federal regulatory agencies;
+Added: ● regulatory, legislative, enforcement and judicial actions that adversely affect the price, ownership, transferability, trading volumes, legality or public perception of bitcoin, or that adversely affect the operations of or otherwise prevent digital asset custodians, trading venues, lending platforms or other digital assets industry participants from operating in a manner that allows them to continue to deliver services to the digital assets industry;
+Added: ● further reductions in mining rewards of bitcoin, including due to block reward halving events, which are events that occur after a specific period of time (the most recent of which occurred in April 2024) that reduce the block reward earned by “miners” who validate bitcoin transactions, or increases in the costs associated with bitcoin mining, including increases in electricity costs and hardware and software used in mining, or new or enhanced regulation or taxation of bitcoin mining, which could further increase the costs associated with bitcoin mining, any of which may cause a decline in support for the bitcoin network;
+Added: ● transaction congestion and fees associated with processing transactions on the bitcoin network;
+Added: ● macroeconomic changes, such as changes in the level of interest rates and inflation, fiscal and monetary policies of governments, trade restrictions and fiat currency devaluations;
+Added: ● developments in mathematics or technology, including in digital computing, algebraic geometry and quantum computing, that could result in the cryptography used by the bitcoin blockchain becoming insecure or ineffective;
+Added: ● changes in national and international economic and political conditions, including, without limitation, federal government policies, trade tariffs and trade disputes and the adverse impacts attributable to global conflicts, including those between Russia and Ukraine and in the Middle East.
+Added: Bitcoin and other digital assets are novel assets, and are subject to significant legal, commercial, regulatory and technical uncertainty.
+Added: Bitcoin and other digital assets are relatively novel and are subject to significant uncertainty, which could adversely impact their price.
+Added: The application of state and federal securities laws and other laws and regulations to digital assets is unclear in certain respects, and it is possible that regulators in the United States or foreign countries may interpret or apply existing laws and regulations in a manner that adversely affects the price of bitcoin or the ability of individuals or institutions such as us to own or transfer bitcoin.
+Added: federal government, states, regulatory agencies and foreign countries may also enact new laws and regulations, or pursue regulatory, legislative, enforcement or judicial actions, that could materially impact the price of bitcoin or the ability of individuals or institutions such as us to own or transfer bitcoin.
+Added: For example, within the past several years:
+Added: ● in September 2025, Nasdaq reportedly announced new informal interpretations of its rules that require certain Nasdaq-listed companies to obtain shareholder approval before engaging in certain transactions, such as private placements for the purpose of acquiring digital assets or accepting in-kind contributions of digital assets in exchange for equity;
+Added: ● in July 2025, President Trump signed into law the Guiding and Establishing National Innovation for US Stablecoins Act (“GENIUS Act”), establishing a legislative framework for the regulation of payment stablecoins and marking the first federal legislation for the regulation of digital assets in the U.S.;
+Added: ● in July 2025, the U.S.
+Added: House of Representatives passed the Digital Asset Market Clarity Act of 2025 (“CLARITY Act”), a comprehensive digital asset market structure and regulation bill.
+Added: The CLARITY Act, and other digital asset market structure and regulation bills, remain under consideration and continue to evolve in the U.S.
+Added: ● in January 2025, President Trump signed an executive order instructing a working group comprised of representatives from key federal agencies to evaluate measures that can be taken to provide regulatory clarity and certainty built on technology-neutral regulations for individuals and firms involved in digital assets, including through well-defined jurisdictional regulatory boundaries and on July 30, 2025, such working group published a report on strengthening American leadership in digital financial technology, which recommended several regulatory and legislative proposals to advance President Trump’s January 2025 executive order;
+Added: ● in January 2025, the SEC announced the formation of a “Crypto Task Force,” which will seek to provide clarity on the application of the federal securities laws to the crypto asset market and to recommend policy measures with respect to digital asset security status, registration and listing of digital asset-based investment vehicles, and digital asset custody, lending and staking;
+Added: ● in June 2023, the SEC filed complaints against Binance Holdings Ltd.
+Added: and Coinbase, Inc., and their respective affiliated entities, relating to, among other claims, that each party was operating as an unregistered securities exchange, broker, dealer, and clearing agency;
+Added: but has since dismissed its action against Binance Holdings Ltd.
+Added: and dismissed its enforcement action against Coinbase, Inc.;
+Added: ● in November 2023, the SEC filed a complaint against Payward Inc.
+Added: and Payward Ventures Inc., together known as Kraken, alleging, among other claims, that Kraken’s crypto trading platform was operating as an unregistered securities exchange, broker, dealer, and clearing agency;
+Added: ● the European Union adopted Markets in Crypto Assets Regulation (“MiCA”), a comprehensive digital asset regulatory framework for the issuance and use of digital assets, like bitcoin;
+Added: ● in June 2023, the United Kingdom adopted and implemented the Financial Services and Markets Act 2023 (“FSMA 2023”), which regulates market activities in “cryptoassets;”
+Added: ● in November 2023, Binance Holdings Ltd.
+Added: and its then chief executive officer reached a settlement with the U.S.
+Added: Department of Justice, CFTC, the U.S.
+Added: Department of Treasury’s Office of Foreign Asset Control, and the Financial Crimes Enforcement Network to resolve a multi-year investigation by the agencies and a civil suit brought by the CFTC, pursuant to which Binance Holdings Ltd.
+Added: agreed to, among other things, pay $4.3 billion in penalties across the four agencies and to discontinue its operations in the United States;
+Added: ● in China, the People’s Bank of China and the National Development and Reform Commission have outlawed cryptocurrency mining and declared all cryptocurrency transactions illegal within the country.
+Added: While the complaint against Coinbase, Inc.
+Added: was dismissed in February 2025, the complaint against Payward Inc.
+Added: and Payward Ventures Inc.
+Added: was dismissed with prejudice in March 2025, and the complaint against Binance Holdings Ltd.
+Added: was dismissed with prejudice in May 2025, the SEC or other regulatory agencies may initiate similar actions in the future, which could materially impact the price of bitcoin and our ability to own or transfer bitcoin.
+Added: It is not possible to predict whether, or when, new laws will be enacted that change the legal framework governing digital assets or provide additional authorities to the SEC or other regulators, or whether, or when, any other federal, state or foreign legislative bodies will take any similar actions.
+Added: It is also not possible to predict the nature of any such additional laws or authorities, how additional legislation or regulatory oversight might impact the ability of digital asset markets to function, the willingness of financial and other institutions to continue to provide services to the digital assets industry, or how any new laws or regulations, or changes to existing laws or regulations, might impact the value of digital assets generally and bitcoin specifically.
+Added: The consequences of any new law or regulation relating to digital assets and digital asset activities could adversely affect the market price of bitcoin, as well as our ability to hold or transact in bitcoin, and in turn adversely affect the market price of our Common Stock.
+Added: Moreover, the risks of engaging in a bitcoin treasury strategy are relatively novel and have created, and could continue to create, complications due to the lack of experience that third parties have with companies engaging in such a strategy, such as increased costs of director and officer liability insurance or the potential inability to obtain such coverage on acceptable terms in the future.
+Added: The growth of the digital assets industry in general, and the use and acceptance of bitcoin in particular, may also impact the price of bitcoin and is subject to a high degree of uncertainty.
+Added: The pace of worldwide growth in the adoption and use of bitcoin may depend, for instance, on public familiarity with digital assets, ease of buying, accessing or gaining exposure to bitcoin, institutional demand for bitcoin as an investment asset, the participation of traditional financial institutions in the digital assets industry, consumer demand for bitcoin as a store of value or means of payment, and the availability and popularity of alternatives to bitcoin.
+Added: Even if growth in bitcoin adoption occurs in the near or medium-term, there is no assurance that bitcoin usage will continue to grow over the long-term.
+Added: Because bitcoin has no physical existence beyond the record of transactions on the bitcoin blockchain, a variety of technical factors related to the bitcoin blockchain could also impact the price of bitcoin.
+Added: For example, malicious attacks by miners, inadequate mining fees to incentivize validating of bitcoin transactions, hard “forks” of the bitcoin blockchain into multiple blockchains, and advances in digital computing, algebraic geometry, and quantum computing could undercut the integrity of the bitcoin blockchain and negatively affect the price of bitcoin.
+Added: The liquidity of bitcoin may also be reduced and damage to the public perception of bitcoin may occur, if financial institutions were to deny or limit banking services to businesses that hold bitcoin, provide bitcoin-related services or accept bitcoin as payment, which could also decrease the price of bitcoin.
+Added: Actions by U.S.
+Added: banking regulators, such as the issuance in February 2023 by Federal banking agencies of the “Interagency Liquidity Risk Statement,” which cautioned banks on contagion risks posed by providing services to digital assets customers, and similar actions, have in the past resulted in or contributed to reductions in access to banking services for bitcoin-related customers and service providers, or the willingness of traditional financial institution to participate in markets for digital assets.
+Added: The liquidity of bitcoin may also be impacted to the extent that changes in applicable laws and regulatory requirements negatively impact the ability of exchanges and trading venues to provide services for bitcoin and other digital assets.
+Added: Our historical financial statements do not reflect the potential variability in earnings that we may experience in the future relating to our bitcoin holdings.
+Added: Our historical financial statements do not fully reflect the potential variability in earnings that we may experience in the future from holding or selling significant amounts of bitcoin.
+Added: The price of bitcoin has historically been subject to dramatic price fluctuations and is highly volatile.
+Added: In December 2023, the FASB issued ASU No.
+Added: 2023-08, which we adopted as of January 1, 2025.
+Added: We determine and record the fair value of our digital assets in accordance with ASC Topic 820, Fair Value Measurement, based on quoted prices on the active exchange(s) that we have determined are the principal market for such assets (Level I inputs).
+Added: We determine the cost basis of our digital assets using the cost at the time of acquisition of each unit received.
+Added: Realized and unrealized gains and losses are now recorded to Net loss (gain) on digital assets in our consolidated statement of operations.
+Added: For periods prior to January 1, 2025, impairment losses were recognized within net loss (gain) on digital assets in our consolidated statements of operations in the period in which the impairment was identified.
+Added: Also for periods prior to January 1, 2025, gains were not recorded until realized upon sale(s), at which point they were presented net of any impairment losses for the same digital assets held.
+Added: In determining the gain to be recognized upon sale, we calculated the difference between the sales price and carrying value of the digital assets sold immediately prior to sale.
+Added: See “ Note 3” to the accompanying consolidated financial statements included herein for further discussion.
+Added: Because we intend to purchase additional bitcoin in future periods and increase our overall holdings of bitcoin, we expect that the proportion of our total assets represented by our bitcoin holdings will increase in the future, and we expect ASU No.
+Added: 2023-08 to significantly affect the carrying value of our bitcoin on our balance sheet.
+Added: As a result, and in particular with respect to the quarterly periods and full fiscal year with respect to which ASU No.
+Added: 2023-08 will apply, and for all future periods, volatility in our earnings may be significantly more than what we experienced in prior periods.
+Added: We expect our bitcoin holdings to significantly impact our financial results and the market price of our Common Stock.
+Added: We expect our bitcoin holdings to significantly affect our financial results and if we increase our overall holdings of bitcoin in the future as we are expected to do, they will have an even greater impact on our financial results and the market price of our Common Stock.
+Added: A significant decrease in the market value of our bitcoin holdings could adversely affect our ability to satisfy our financial obligations.
+Added: As of December 31, 2025, we had an accumulated deficit of approximately $241.5 million.
+Added: During the year ended December 31, 2025, we incurred a net loss of approximately $170.5 million and used cash in operating activities of approximately $83.3 million.
+Added: Management is working to increase revenues through the growth of Angel Guild memberships, our pipeline of theatrical releases through 2026 and additional streaming agreements.
+Added: Management believes it will be able to continue to fund operating capital shortfalls for the next year through the issuance of debt and Common Stock.
+Added: Our ability to obtain equity or debt financing may in turn depend on, among other factors, the value of our bitcoin holdings, investor sentiment and the general public perception of bitcoin, our strategy and our value proposition.
+Added: Accordingly, a significant decline in the market value of our bitcoin holdings or a negative shift in these other factors may create liquidity and credit risks, as such a decline or such shifts may adversely impact our ability to secure sufficient equity or debt
+Added: financing to satisfy our financial obligations.
+Added: These risks could materialize at times when bitcoin is trading below its carrying value on our most recent balance sheet or our cost basis.
+Added: If we are unable to secure equity or debt financing in a timely manner, on favorable terms, or at all, we may be required to sell bitcoin to satisfy our financial obligations, and we may be required to make such sales at prices below our cost basis or that are otherwise unfavorable.
+Added: Any such sale of bitcoin may have a material adverse effect on our operating results and financial condition, and could impair our ability to secure additional equity or debt financing in the future.
+Added: Our inability to secure additional equity or debt financing in a timely manner, on favorable terms or at all, or to sell our bitcoin in amounts and at prices sufficient to satisfy our financial obligations could cause us to default under such obligations.
+Added: Any default on our current or future indebtedness may have a material adverse effect on our financial condition.
+Added: We face risks relating to the custody of our bitcoin, including the loss or destruction of private keys required to access our bitcoin and cyberattacks or other data loss relating to our bitcoin.
+Added: We hold our bitcoin with regulated custodians that have duties to safeguard our private keys.
+Added: Our custodial services contracts do not restrict our ability to reallocate our bitcoin among our custodians, and our bitcoin holdings may be concentrated with a single custodian from time to time.
+Added: If there is a decrease in the availability of digital asset custodians that we believe can safely custody our bitcoin, for example, due to regulatory developments or enforcement actions that cause custodians to discontinue or limit their services in the United States, we may need to enter into agreements that are less favorable than our current agreements or take other measures to custody our bitcoin, and our ability to seek a greater degree of diversification in the use of custodial services would be materially adversely affected.
+Added: As of December 31, 2025, the insurance that covers losses of our bitcoin holdings would cover the entire value of our bitcoin holdings in an isolated loss scenario where only our bitcoin holdings were affected.
+Added: However, should the loss be more widespread, it is possible that only a small portion of our bitcoin holdings would ultimately be insured.
+Added: There can also be no guarantee that such insurance will be maintained as part of the custodial services we have or that such coverage will cover losses with respect to our bitcoin.
+Added: Moreover, our use of custodians exposes us to the risk that the bitcoin our custodians hold on our behalf could be subject to insolvency proceedings and we could be treated as a general unsecured creditor of the custodian, inhibiting our ability to exercise ownership rights with respect to such bitcoin.
+Added: Any loss associated with such insolvency proceedings is unlikely to be covered by any insurance coverage we maintain related to our bitcoin.
+Added: Bitcoin is controllable only by the possessor of both the unique public key and private key(s) relating to the local or online digital wallet in which the bitcoin is held.
+Added: While the Bitcoin blockchain ledger requires a public key relating to a digital wallet to be published when used in a transaction, private keys must be safeguarded and kept private in order to prevent a third party from accessing the bitcoin held in such wallet.
+Added: To the extent the private key(s) for a digital wallet are lost, destroyed or otherwise compromised and no backup of the private key(s) is accessible, neither we nor our custodians will be able to access the bitcoin held in the related digital wallet.
+Added: Furthermore, we cannot provide assurance that our digital wallets, nor the digital wallets of our custodians held on our behalf, will not be compromised as a result of a cyberattack.
+Added: The bitcoin and blockchain ledger, as well as other digital assets and blockchain technologies, have been, and may in the future be, subject to security breaches, cyberattacks or other malicious activities.
+Added: The emergence or growth of other digital assets, including those with significant private or public sector backing, could have a negative impact on the price of bitcoin and adversely affect our business.
+Added: The emergence or growth of digital assets other than bitcoin may have a material adverse effect on our financial condition.
+Added: As of December 31, 2025, bitcoin was the largest digital asset by market capitalization.
+Added: However, there are numerous alternative digital assets and many entities, including consortiums and financial institutions, are researching and investing resources into private or permissioned blockchain platforms or digital assets that do not use proof-of-work mining like the Bitcoin network.
+Added: For example, in late 2022, the Ethereum network transitioned to a “proof-of-stake” mechanism for validating transactions that requires significantly less computing power than proof-of-work mining.
+Added: The Ethereum network has completed another major upgrade since then and may undertake additional upgrades in the future.
+Added: If the mechanisms for validating transactions in Ethereum and other alternative digital assets are perceived as superior to proof-of-work mining, those digital assets could gain market share relative to bitcoin.
+Added: Other alternative digital assets that compete with bitcoin in certain ways include “stablecoins,” which are designed to maintain a constant price because of, for instance, their issuers’ promise to hold high-quality liquid assets (such as U.S.
+Added: dollar deposits and short-term U.S.
+Added: treasury securities) equal to the total value of stablecoins in circulation.
+Added: Stablecoins have grown rapidly as an alternative to bitcoin and other digital assets as a medium of exchange and store of value, particularly on digital asset trading platforms.
+Added: Additionally, central banks in some countries have started to introduce digital forms of legal tender.
+Added: For example, China’s CBDC project was made available to consumers in January 2022, and governments including the United States, the United Kingdom, the European Union and Israel have been discussing the potential creation of new CBDCs.
+Added: Whether or not they incorporate blockchain or similar
+Added: technology, CBDCs, as legal tender in the issuing jurisdiction, could also compete with, or replace, bitcoin and other digital assets as a medium of exchange or store of value.
+Added: As a result, the emergence or growth of these or other digital assets could cause the market price of bitcoin to decrease, which could have a material adverse effect on our business, prospects, financial condition and operating results.
+Added: Our bitcoin treasury strategy could subject us to enhanced regulatory oversight.
+Added: There has been increasing focus on the extent to which digital assets can be used to launder the proceeds of illegal activities, fund criminal or terrorist activities, or circumvent sanctions regimes, including those sanctions imposed in response to the ongoing conflict between Russia and Ukraine.
+Added: We are committed to acquiring bitcoin exclusively through entities that are subject to, and compliant with, know your customer and anti-money laundering regulations and related compliance rules in the United States.
+Added: If we are found to have purchased any of our bitcoin from bad actors that have used bitcoin to launder money or persons subject to sanctions, we may be subject to regulatory proceedings and any further transactions or dealings in bitcoin by us may be restricted or prohibited.
+Added: We may incur indebtedness or enter into financial instruments in the future that may be collateralized by our bitcoin holdings.
+Added: We may also consider pursuing strategies to create income streams or otherwise generate funds using our bitcoin holdings.
+Added: These types of bitcoin-related transactions are the subject of enhanced regulatory oversight.
+Added: These and any other bitcoin-related transactions we may enter into, beyond simply acquiring and holding bitcoin, may subject us to additional regulatory compliance requirements and scrutiny, including under federal and state money services regulations, money transmitter licensing requirements and various commodity and securities laws and regulations.
+Added: The laws and regulations applicable to bitcoin and digital assets are evolving and subject to interpretation and change.
+Added: Governments around the world have reacted differently to digital assets;
+Added: certain governments have deemed them illegal, and others have allowed their use and trade without restriction, while in some jurisdictions, such as the United States, digital assets are subject to overlapping, uncertain and evolving regulatory requirements.
+Added: Increased enforcement activity and changes in the regulatory environment, including changing interpretations and the implementation of new or varying regulatory requirements by the government or any new legislation affecting bitcoin, as well as enforcement actions involving or impacting our trading venues, counterparties and custodians, may impose significant costs or significantly limit our ability to hold and transact in bitcoin.
+Added: In addition, private actors that are wary of bitcoin or the regulatory concerns associated with bitcoin may in the future take further actions that may have an adverse effect on our business or the market price of our Common Stock.
+Added: Due to the unregulated nature and lack of transparency surrounding the operations of many bitcoin trading venues, bitcoin trading venues may experience greater fraud, security failures or regulatory or operational problems than trading venues for more established asset classes, which may result in a loss of confidence in bitcoin trading venues and adversely affect the value of our bitcoin.
+Added: Bitcoin trading venues are relatively new and, in many cases, unregulated.
+Added: Furthermore, there are many bitcoin trading venues which do not provide the public with significant information regarding their ownership structure, management teams, corporate practices and regulatory compliance.
+Added: As a result, the marketplace may lose confidence in bitcoin trading venues, including prominent exchanges that handle a significant volume of bitcoin trading and/or are subject to regulatory oversight, in the event one or more bitcoin trading venues cease or pause for a prolonged period the trading of bitcoin or other digital assets, or experience fraud, significant volumes of withdrawal, security failures or operational problems.
+Added: In 2019 there were reports claiming that 80.0% - 95.0% of bitcoin trading volume on trading venues was false or non-economic in nature, with specific focus on unregulated exchanges located outside of the United States.
+Added: The SEC also alleged as part of its June 5, 2023, complaint against Binance Holdings Ltd.
+Added: that Binance committed strategic and targeted “wash trading” through its affiliates to artificially inflate the volume of certain digital assets traded on its exchange.
+Added: The SEC has also brought recent actions against individuals and digital asset market participants alleging that such persons artificially increased trading volumes in certain digital assets through wash trades, or repeated buying and selling of the same assets in fictitious transactions to manipulate their underlying trading price.
+Added: Such reports and allegations may indicate that the bitcoin market is significantly smaller than expected and that the United States makes up a significantly larger percentage of the bitcoin market than is commonly understood.
+Added: Any actual or perceived wash trading in the bitcoin market, and any other fraudulent or manipulative acts and practices, could adversely affect the value of our bitcoin.
+Added: Negative perception, a lack of stability in the broader bitcoin markets and the closure, temporary shutdown or operational disruption of bitcoin trading venues, lending institutions, institutional investors, institutional miners, custodians or other major participants in the bitcoin ecosystem, due to fraud, business failure, cybersecurity events, government-mandated regulation, bankruptcy or for any other reason, may result in a decline in confidence in bitcoin and the broader bitcoin ecosystem and greater volatility in the price of bitcoin.
+Added: For example, in 2022, each of Celsius Network, Voyager Digital, Three Arrows Capital, FTX, and BlockFi filed for bankruptcy, following which the market prices of bitcoin and other digital assets significantly declined.
+Added: In addition, in June 2023, the SEC announced enforcement actions against Coinbase, Inc.
+Added: and Binance Holdings Ltd., two providers of large trading venues for digital assets, which similarly was followed by a decrease in the market price of bitcoin and other digital assets.
+Added: These were followed in November 2023, by an SEC enforcement action against Payward Inc.
+Added: and Payward Ventures Inc., together known as Kraken, another large trading venue for digital assets.
+Added: While the complaint against Coinbase, Inc.
+Added: was dismissed in February 2025, the complaint against Payward Inc.
+Added: and Payward Ventures Inc.
+Added: was dismissed with prejudice in March 2025, and the complaint against Binance Holdings Ltd.
+Added: was dismissed with prejudice in May 2025, the SEC or other regulatory agencies may initiate similar actions in the future.
+Added: Since we expect the price of our Common Stock will be significantly affected by the value of our bitcoin holdings, the failure of a major participant in the bitcoin ecosystem could have a material adverse effect on the market price of our Common Stock.
Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.