Item 1. Business
ITEM 1. BUSINESS
Introduction
We are a blank check company
incorporated in the BVI on June 18, 2021, under the original name of Central Acquisition Limited as a BVI business company with limited
liability (meaning that our public shareholders have no liability, as shareholders of our company, for the liabilities of our company
over and above the amount paid for their shares). We were formed for the purpose of effecting a merger, share exchange, asset acquisition,
share purchase, recapitalization, reorganization or similar business combination with one or more businesses or entities, which we refer
to throughout this annual report as our “initial business combination.” On June 18, 2021, we issued 1,000 ordinary shares
to Central Group Limited, a company beneficially owned by Mr. Jason Wong. On September 8, 2021, we changed our name to Keen Vision Acquisition
Corporation. On September 30, 2021, Central Group Limited transferred the 1,000 ordinary shares to KVC Sponsor LLC. Any liabilities, debts,
commitments and/or obligations relating to the period prior to the acquisition of the Company by KVC Sponsor LLC has been undertaken and
shall be borne by Mr. Jason Wong.
Our efforts to identify a
prospective target business is not limited to a particular industry or geographic region.
Our sponsor is KVC Sponsor
LLC, founded by Keen Vision Capital (BVI) Limited (“KVC”), a single-family office firm solely involved in PE investments founded
by Mr. Kenneth Wong, and Mr. Jason Wong, who has been dealing in private equity for several decades. We refer to Mr. Kenneth Wong and
Mr. Jason Wong as our founders.
Our founders bring together
a combined total of over 55 years of well-rounded experience in the areas of entrepreneurship, corporate operations, buy-side investments
(PE investments and exits, de-SPACs), and sell-side corporate finance (fundraisings, listings, and mergers and acquisitions), all of which
is integral to a successful special purpose acquisition company (SPAC). We believe that, with the combination of these professional skill
sets, coupled with our founders’ global network resources, we will be able to accelerate our target’s timetable in becoming
one of its industry’s leading players, optimizing development, and generating appealing risk-adjusted returns for our investors.
Mr. Kenneth Wong founded KVC
as a single-family office in 2011, investing in non-listed business entities around the world with the potential of being listed on an
international stock exchange within a period of 24 to 30 months, which in turn allows KVC to exit its investments within the following
six to twelve months. Some of KVC’s investee companies have grown to be among the top players in their industries, and some achieved
among the largest initial public offerings within their respective categories.
Although we expect we may
benefit from our affiliation with KVC, KVC does not have any legal or contractual obligation to seek on our behalf or present to us investment
opportunities that might be suitable for our business. We may in the future engage KVC as a financial advisor for our business combination
or other transactions for which it would be entitled to compensation.
Mr. Jason Wong is the founder
and CEO of Norwich Investment Limited, an investment holding company that is also the sponsor of Tottenham Acquisition I Limited (Nasdaq:
TOTA), a $46 million SPAC that successfully merged with Clene Nanomedicine Inc. (Nasdaq: CLNN), a biopharmaceutical company, valued at
$542.5 million in December 2020, with approximately $31.9 million of the IPO funds remaining in the trust account at the closing of the
merger. As of July 6, 2023, the market capitalization of CLNN was approximately $64.3 million. He is also the sole director and CEO of
Ace Global Investment Limited, which is the sponsor of Ace Global Business Acquisition Limited, a $46 million SPAC listed on Nasdaq (Nasdaq:
ACBA), which announced its merger with LE Worldwide Limited, a smart greenhouse solutions provider with a pre-money enterprise value of
approximately $150 million, in December 2022; and the sole manager of Soul Venture Partners, LLC, which is the sponsor of Inception Growth
Acquisition Limited, a $103.5 million SPAC listed on Nasdaq (Nasdaq: IGTA). Mr. Jason Wong also served as an independent director of DT
Asia Investment Limited, a $69 million SPAC previously listed on Nasdaq, which consummated its business combination in July 2016 with
China Lending Group (“CLG”), valued at $193.2 million at the closing of its merger. CLG was subsequently renamed Roan Holdings
Group Co., Ltd. (OTC Pink Sheets: RAHGF), and as of July 6, 2023 (approximately six years after the consummation of the business combination),
the market capitalization of RAHGF was approximately $0.33 million as a result of change of regulatory regime in the PRC regarding the
peer-to-peer lending industry and CLG’s subsequent transition of its business from peer-to-peer lending business to financial management,
assessment and consulting services, debt collecting services, and financial guarantee services. From his decades of experience in PE investments
in Asia, Mr. Jason Wong has a strong track record of successful de-SPAC transactions.
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We believe our management
team has genuine global reach and resources that will enable our target to expand its geographical footprint, thereby increasing profit
potentials as well as optimizing its performance as a publicly listed entity in the market.
We believe our management
team’s personnel, network and relationships combined with their entrepreneurial vision, unique and diversified experiences in investing,
operating and transforming businesses will uniquely position them to identify and execute attractive business combination opportunities.
Our efforts to identify a prospective target business is not limited to any particular industry or geographic region, although we intend
to capitalize on the management team’s global network and focus our search of target businesses on the following areas:
Biotechnology: any technology
involving the use of living systems and/or organisms to develop or make products. This includes, and is not limited to, biotechnology
for medical, pharmaceutical, and health preservation applications, agricultural processes and food production, environmental applications,
and industrial processes.
Consumer goods: everyday necessities
including durable and nondurable goods bought by the average consumer.
Agriculture: activities related
to growing crops or raising livestock. This includes, and is not limited to, producing agricultural commodities, producing agricultural
fertilizers and chemicals, manufacturing equipment, and processing or distributing agricultural products.
All potential target companies
will be evaluated based on sustainability and ESG imperatives, in order to enhance value creation, to mitigate potential risks and to
identify sustainable growth opportunities for the target company.
We believe each of the foregoing
sectors has considerable growth potential and contains a rich universe of potential target companies ready to present solutions to a global
market.
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Initial Public Offering and Private Placement
On July 27, 2023, the Company
consummated its initial public offering (the “IPO” or “Initial Public Offering”) of 14,950,000 Units, which includes
the full exercise of the over-allotment option granted to the underwriters. Each Unit consists of one ordinary share (“Ordinary
Share”) and one redeemable warrant (“Warrant”). The Units were sold at an offering price of $10.00 per Unit, generating
gross proceeds of $149,500,000.
Simultaneously with the closing
of the IPO, the Company consummated the Private Placement with KVC Sponsor LLC (the “Sponsor”) of 678,575 units (the “Private
Units”) at a price of $1.00 per Private Unit, generating total proceeds of $6,785,750. The Private Units are identical to the Units
sold in the IPO. The Sponsor agreed not to transfer, assign or sell any of the Private Units or underlying securities (except in limited
circumstances, as described in the Registration Statement) until the completion of the Company’s initial business combination. The
holder of the Private Units was granted certain demand and piggyback registration rights in connection with the purchase of the Private
Units.
On July 27, 2023, a total
of $151,368,750 of the net proceeds from the IPO and the Private Placement were deposited in a Trust Account established for the benefit
of the Company’s public shareholders.
The Private Units were issued
pursuant to Section 4(a)(2) of the Securities Act of 1933, as amended, as the transaction did not involve a public offering.
Business Strategy
Our business strategy is to
leverage our management team’s expertise, networks and operational experience to identify and complete our initial business combination
with a growth-focused, leading company in biotech, consumer goods, or agriculture, evaluated based on ESG imperatives. We will seek a
company with characteristics that will complement and benefit from our management team’s skills to deliver shareholder value.
Our sponsors, management team
and directors have a complementary combination of experience and skills that will greatly enhance the likelihood for success in consummating
our initial business combination, including:
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extensive global networks with management teams of public and private companies, investment bankers, PE sponsors, other public investors, entrepreneurs, industry investors, auditors, legal offices and companies;
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decades of experience in the biotech, agriculture, consumer goods, and related sectors as well as familiarity with business practices around the world, especially in the Americas and in Asia;
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track record of serial entrepreneurship and growth acceleration;
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expertise in a wide range of functions, including operations, legal and compliance, corporate governance, business strategy, corporate finance and investor relationship;
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transactional experience including sourcing investments, restructuring capabilities, pre-IPO investments, conducting rigorous due diligence, executing transactions, implementing business plans and de-SPAC; and
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strong cross-border M&A and exit experience.
In addition, our team has
spent decades working in companies and institutions worldwide that are the top in their respective fields. Their insider knowledge and
know-how in their respective industries will be an additional bonus for us.
We intend to focus on companies
that we believe have strong growth capacity. We are looking for a target with expertise compatible with our management team’s expertise,
and when combined they will be able to accelerate the target company’s growth and enhance their performance in the public markets.
After the IPO, our team has worked on looking for potential opportunities via their networks. We understand that a selective, yet efficient
business combination process is critical in enhancing the investment return for our investors. With the extensive experience of our board
members, we believe we are well positioned to achieve a successful de-SPAC in a timely manner. Our selection process will be very rigorous,
and we will spend most of our efforts in conducting due diligence to ensure that we identify acquisition opportunities that will lead
to sustainable stockholder value creation.
Business Combination with Medera
We entered into a Merger Agreement
with Medera (as defined below), dated as of September 3, 2024 (as it may be amended from time to time, the “Merger Agreement”),
which provides for a business combination (the “Business Combination”) between Keen Vision and Medera Inc. (“Medera”),
an exempted company incorporated under the laws of the Cayman Islands with limited liability. Pursuant to the Merger Agreement, the Business
Combination will be effected in two steps: (i) subject to the approval and adoption of the Merger Agreement by the shareholders of Keen
Vision, Keen Vision will merge with and into KVAC (Cayman) Limited, an exempted company incorporated under the laws of the Cayman Islands
with limited liability and a direct wholly-owned subsidiary of Keen Vision (such company before the Business Combination is referred to
as “NewCo” and upon and following the Acquisition Merger is hereinafter sometimes referred to as “PubCo”), with
NewCo remaining as the surviving publicly traded entity (the “Reincorporation Merger”); (ii) promptly after the Reincorporation
Merger, KVAC MS (Cayman) Limited (“Merger Sub”), an exempted company incorporated under the laws of the Cayman Islands with
limited liability and a direct wholly-owned subsidiary of NewCo, will be merged with and into Medera, with Medera remaining as the surviving
entity, resulting in Medera being a wholly-owned subsidiary of PubCo (the “Acquisition Merger”). The aggregate consideration
for the Acquisition Merger (the “Merger Consideration”) is $622,560,000, subject to certain adjustments as described in the
Merger Agreement (which adjustments are described in greater detail further below), payable to the Medera Shareholders (as defined below)
in the form of newly issued PubCo Ordinary Shares (as defined below) valued at $10.00 per share. The calculation of the Merger Consideration,
taking into account the adjustments described in the Merger Agreement and based on the pro forma financial information, would result in
the aggregate issuance to the Medera Shareholders at the Closing, of 62,578,505 PubCo Ordinary Shares (the “Closing Payment Shares”).
As part of the transaction, NewCo will change its name to “Medera Inc.” and Medera will change its name to “Medera Global
Inc.”
Acquisition Criteria
Our selection process will
leverage our management team’s broad network of contacts and relationships with various unaffiliated sources including government
bodies, scientific organizations, corporate board members, investment bankers, investment professionals at PE firms, owners of private
businesses, consultants, accounting and legal firms and so on to provide us with a strong pipeline of potential acquisition leads.
Consistent with our strategy,
we have identified the following general criteria and guidelines which we believe are important in evaluating prospective target businesses:
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Significant operations in biotech, consumer goods or agriculture, supported with strong ESG imperatives. We intend to leverage our management team’s unique expertise and network to source a potential target. Based on our management team’s experience and strong network across the globe in these sectors, we believe it will be advantageous to focus on investment opportunities in these areas.
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Industry leadership with high growth potential. We intend to seek a target that has a leading presence across a sector or has prominent technology or product competencies, with the potential to disrupt market incumbents. We will primarily seek to acquire a target company with a total enterprise value not exceeding $1 billion.
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A clear current and/or future nexus with any global and/or major markets. Regardless of where they may be headquartered, we intend to find a target company that has a strategy for any global and/or any major markets and will benefit from being Nasdaq-listed.
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Current and potential capacity for revenue and earnings growth. We expect to target companies that have the potential for significant revenue and earnings growth through a combination of improved production capacity, increased operational efficiencies, cost reduction, and synergistic follow-on acquisitions, which could result in operating leverage for stronger revenue and earnings growth in the future.
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Resilient business model. We intend to select a target that has flexible operating models to respond quickly to sudden changes in the market. In these disruptive times, we believe companies must address sustainability concerns so that they can stay afloat and continue to grow even when unexpected challenges occur.
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Experienced and motivated management team. We will seek target businesses with a management team that shows dedication, strategic vision and whose interests and goals are aligned with investors and our management team. We intend to seek and acquire a capable team that has a broad network, is seasoned, and with long-term commitment.
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Potential benefit from operating improvement. Consistent with our acquisition strategy, our management team intends to focus on creating shareholder value by improving the efficiency of the company’s operations while implementing strategies to scale revenue organically and/or through follow-on acquisitions.
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Potential benefit from capital markets access. We will assess the public market readiness of the company. We intend to acquire a target company that will benefit from being a Nasdaq-listed company and as a result effectively utilize the access to an additional form of capital, enhanced corporate governance and improved public profile.
These criteria are not intended
to be exhaustive. Any evaluation relating to the merits of a particular initial business combination may be based, to the extent relevant,
on these general guidelines as well as other considerations, factors and criteria that our management may deem relevant. While we do not
currently expect to consider a business outside the aforementioned criteria and guidelines for our initial business combination, we are
not prohibited from doing so. In the event that we decide to enter into our initial business combination with a target business that does
not meet the above criteria and guidelines, we will disclose that the target business does not meet the above criteria and guidelines
in our shareholder communications related to our initial business combination, which, as discussed in this annual report, would be in
the form of tender offer documents or proxy solicitation materials that we would file with the SEC.
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Effecting a Business Combination
General
We intend to utilize cash
derived from the proceeds of the IPO and the private placement of private units, our share capital, debt or a combination of these in
effecting a business combination. Although substantially all net proceeds of the IPO and the private placement of private units are intended
to be applied generally toward effecting a business combination as described in this annual report, the proceeds are not otherwise being
designated for any more specific purposes. Accordingly, investors in IPO are investing without first having an opportunity to evaluate
the specific merits or risks of any one or more business combinations. A business combination may involve the acquisition of, or merger
with, a company which does not need substantial additional capital, but which desires to establish a public trading market for its shares,
while avoiding what it may deem to be adverse consequences of undertaking a public offering itself. These include time delays, significant
expense, loss of voting control and compliance with various U.S. Federal and state securities laws. Alternatively, we may seek to
consummate a business combination with a company that may be in its early stages of development or growth. While we may seek to effect
simultaneous business combinations with more than one target business, we will probably have the ability, as a result of our limited resources,
to effect only a single business combination.
Sources of Target Businesses
We anticipate that target
business candidates will be brought to our attention from various unaffiliated sources, including investment bankers, venture capital
funds, PE funds, leveraged buyout funds, management buyout funds and other members of the financial community. Target businesses may be
brought to our attention by such unaffiliated sources as a result of being solicited by us through calls or mailings. These sources may
also introduce us to target businesses they think we may be interested in on an unsolicited basis, since many of these sources will have
read the prospectus and know what types of businesses we are targeting. Our officers and directors, as well as their respective affiliates,
may also bring to our attention target business candidates that they become aware of through their business contacts as a result of formal
or informal inquiries or discussions they may have, as well as attending trade shows or conventions. While we do not presently anticipate
engaging the services of professional firms or other individuals that specialize in business acquisitions on any formal basis, we may
engage these firms or other individuals in the future, in which event we may pay a finder’s fee, consulting fee or other compensation
to be determined in an arm’s length negotiation based on the terms of the transaction. In no event, however, will any of our existing
officers, directors, special advisors or initial shareholders, or any entity with which they are affiliated, be paid any finder’s
fee, consulting fee or other compensation prior to, or for any services they render in order to effectuate the consummation of a business
combination (regardless of the type of transaction). If we decide to enter into a business combination with a target business that is
affiliated with our officers, directors or initial shareholders, we will do so only if we have obtained an opinion from an independent
investment banking firm that the business combination is fair to our unaffiliated shareholders from a financial point of view; however,
as of the date of this annual report, there is no affiliated entity that we consider a target.
Selection of a Target Business and Structuring
of a Business Combination
Subject to the limitations
that a target business have a fair market value of at least 80% of the balance in the trust account (excluding any deferred underwriting
discounts and commissions and taxes payable on the income earned on the trust account) at the time of the execution of a definitive agreement
for our initial business combination, as described below in more detail, our management will have virtually unrestricted flexibility in
identifying and selecting a prospective target business. We have not established any other specific attributes or criteria (financial
or otherwise) for prospective target businesses. In evaluating a prospective target business, our management may consider a variety of
factors, including one or more of the following:
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financial condition and results of operation;
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growth potential;
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experience and skill of management and availability of additional personnel;
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capital requirements;
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competitive position;
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barriers to entry;
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stage of development of its products, processes or services;
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degree of current or potential market acceptance of the products, processes or services;
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proprietary features and degree of intellectual property or other protection for its products, processes or services;
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regulatory environment of the industry; and
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costs associated with effecting the business combination.
We believe such factors will
be important in evaluating prospective target businesses, regardless of the location or industry in which such target business operates.
However, this list is not intended to be exhaustive. Furthermore, we may decide to enter into a business combination with a target business
that does not meet these criteria and guidelines.
Any evaluation relating to
the merits of a particular business combination will be based, to the extent relevant, on the above factors as well as other considerations
deemed relevant by our management in effecting a business combination consistent with our business objective. In evaluating a prospective
target business, we will conduct an extensive due diligence review which will encompass, among other things, meetings with incumbent management
and inspection of facilities, as well as review of financial and other information which is made available to us. This due diligence review
will be conducted either by our management or by unaffiliated third parties we may engage, although we have no current intention to engage
any such third parties.
The time and costs required
to select and evaluate a target business and to structure and complete the business combination cannot presently be ascertained with any
degree of certainty. Any costs incurred with respect to the identification and evaluation of a prospective target business with which
a business combination is not ultimately completed will result in a loss to us and reduce the amount of capital available to otherwise
complete a business combination.
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Fair Market Value of Target Business
Pursuant to Nasdaq listing
rules, the target business or businesses that we acquire must collectively have a fair market value equal to at least 80% of the balance
of the funds in the trust account (excluding any deferred underwriting discounts and commissions and taxes payable on the income earned
on the trust account) at the time of the execution of a definitive agreement for our initial business combination, although we may acquire
a target business whose fair market value significantly exceeds 80% of the trust account balance. We currently anticipate structuring
a business combination to acquire 100% of the equity interests or assets of the target business or businesses. We may, however, structure
a business combination where we merge directly with the target business or where we acquire less than 100% of such interests or assets
of the target business in order to meet certain objectives of the target management team or shareholders or for other reasons, 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 sufficient for it not to be required to register as an investment
company under the Investment Company Act. Even if the post-transaction company owns or acquires 50% or more of the voting securities of
the target, our shareholders prior to the business combination may collectively own a minority interest in the post-transaction company,
depending on valuations ascribed to the target and us in the business combination transaction. For example, we could pursue a transaction
in which we issue a substantial number of new shares in exchange for all outstanding capital of a target. In this case, we could acquire
a 100% controlling interest in the target. However, as a result of the issuance of a substantial number of new shares, our shareholders
immediately prior to our initial business combination could own less than a majority of our issued and outstanding shares subsequent to
our initial business combination. If less than 100% of the equity interests or assets of a target business or businesses are owned or
acquired by the post-transaction company, only the portion of such business or businesses that is owned or acquired is what will be valued
for purposes of the 80% of net assets test, assuming that we obtain and maintain a listing for our securities on Nasdaq. In order to consummate
such an acquisition, we may issue a significant amount of our debt or equity securities to the sellers of such businesses and/or seek
to raise additional funds through a private offering of debt or equity securities. Since we have no specific business combination under
consideration, we have not entered into any such fund-raising arrangement and have no current intention of doing so. The fair market value
of the target will be determined by our board of directors based upon one or more standards generally accepted by the financial community
(such as actual and potential sales, earnings, cash flow and/or book value). If our board is not able to independently determine that
the target business has a sufficient fair market value, we will obtain an opinion from an unaffiliated, independent investment banking
firm, or another independent entity that commonly renders valuation opinions on the type of target business we are seeking to acquire,
with respect to the satisfaction of such criteria. We will not be required to obtain an opinion from an independent investment banking
firm, or another independent entity that commonly renders valuation opinions on the type of target business we are seeking to acquire,
as to the fair market value if our board of directors independently determines that the target business complies with the 80% threshold.
We will not be required to
comply with the 80% fair market value requirement if we are delisted from Nasdaq. If Nasdaq delists our securities from trading on its
exchange after the IPO, we would not be required to satisfy the fair market value requirement described above and could complete a business
combination with a target business having a fair market value substantially below 80% of the balance in the trust account.
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Lack of Business Diversification
Our business combination must
be with a target business or businesses that collectively satisfy the minimum valuation standard at the time of such acquisition, as discussed
above, although this process may entail the simultaneous acquisitions of several operating businesses at the same time. Therefore, at
least initially, the prospects for our success may be entirely dependent upon the future performance of a single business. Unlike other
entities which may have the resources to complete several business combinations of entities operating in multiple industries or multiple
areas of a single industry, it is probable that we will not have the resources to diversify our operations or benefit from the possible
spreading of risks or offsetting of losses. By consummating a business combination with only a single entity, our lack of diversification
may:
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subject us to numerous economic, competitive and regulatory developments, any or all of which may have a substantial adverse impact upon the particular industry in which we may operate subsequent to a business combination, and
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result in our dependency upon the performance of a single operating business or the development or market acceptance of a single or limited number of products, processes or services.
If we determine to simultaneously
acquire several businesses and such businesses 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 acquisitions, which may make it more difficult for us,
and delay our ability, to complete the business combination. With multiple acquisitions, 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.
Limited Ability to Evaluate the Target Business’
Management
Although we intend to scrutinize
the management of a prospective target business when evaluating the desirability of effecting a business combination, we cannot assure
you that our assessment of the target business’ management will prove to be correct. In addition, we cannot assure you that the
future management will have the necessary skills, qualifications or abilities to manage a public company. Furthermore, the future role
of our officers and directors, if any, in the target business following a business combination cannot presently be stated with any certainty.
While it is possible that some of our key personnel will remain associated in senior management or advisory positions with us following
a business combination, it is unlikely that they will devote their full-time efforts to our affairs subsequent to a business combination.
Moreover, they would only be able to remain with the company after the consummation of a business combination if they are able to negotiate
employment or consulting agreements in connection with the business combination. Such negotiations would take place simultaneously with
the negotiation of the business combination and could provide for them to receive compensation in the form of cash payments and/or our
securities for services they would render to the company after the consummation of the business combination. While the personal and financial
interests of our key personnel may influence their motivation in identifying and selecting a target business, their ability to remain
with the company after the consummation of a business combination will not be the determining factor in our decision as to whether or
not we will proceed with any potential business combination. Additionally, our officers and directors may not have significant experience
or knowledge relating to the operations of the particular target business.
Following a business combination,
we may seek to recruit additional managers to supplement the incumbent management of the target business. We cannot assure you that we
will have the ability to recruit additional managers, or that any such additional managers we do recruit will have the requisite skills,
knowledge or experience necessary to enhance the incumbent management.
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Shareholders May Not Have the Ability to
Approve an Initial Business Combination
In connection with any proposed
business combination, we will either (1) seek shareholder approval of our initial business combination at a meeting called for such
purpose at which public shareholders may seek to convert their public shares, regardless of whether they vote for or against the proposed
business combination or abstain from voting, into their pro rata share of the aggregate amount then on deposit in the trust account
(net of taxes payable) or (2) provide our public shareholders with the opportunity to sell their public shares to us by means of
a tender offer (and thereby avoid the need for a shareholder vote) for an amount equal to their pro rata share of the aggregate
amount then on deposit in the trust account (net of taxes payable), in each case subject to the limitations described herein. Notwithstanding
the foregoing, our initial shareholders have agreed, pursuant to written letter agreements with us, not to convert any public shares held
by them into their pro rata share of the aggregate amount then on deposit in the trust account. If we determine to engage in a
tender offer, such tender offer will be structured so that each shareholder may tender any or all of his, her or its public shares rather
than some pro rata portion of his, her or its shares. The decision as to whether we will seek shareholder approval of a proposed
business combination or will allow shareholders to sell their shares to us in a tender offer will be made by us based on a variety of
factors such as the timing of the transaction, or whether the terms of the transaction would otherwise require us to seek shareholder
approval. If we so choose and we are legally permitted to do so, we have the flexibility to avoid a shareholder vote and allow our shareholders
to sell their shares pursuant to Rule 13e-4 and Regulation 14E of the Exchange Act which regulate issuer tender offers.
In that case, we will file tender offer documents with the SEC which will contain substantially the same financial and other information
about the initial business combination as is required under the SEC’s proxy rules. We will consummate our initial business combination
only if we have net tangible assets of at least $5,000,001 upon such consummation and, solely if we seek shareholder approval, a majority
of the issued and outstanding ordinary shares voted are voted in favor of the business combination or otherwise we are exempt from the
provisions of Rule 419 promulgated under the Securities Act.
We chose our net tangible
asset threshold of $5,000,001 to ensure that we would avoid being subject to Rule 419 promulgated under the Securities Act or otherwise
we are exempt from the provisions of Rule 419 promulgated under the Securities Act; however, if we seek to consummate an initial
business combination with a target business that imposes any type of working capital closing condition or requires us to have a minimum
amount of funds available from the trust account upon consummation of such initial business combination, our net tangible asset threshold
may limit our ability to consummate such initial business combination (as we may be required to have a lesser number of shares converted
or sold to us) and may force us to seek third party financing which may not be available on terms acceptable to us or at all. As a result,
we may not be able to consummate such initial business combination and we may not be able to locate another suitable target within the
applicable time period, if at all. Public shareholders may therefore have to wait 15 months after we have signed the letter of intent
on March 22, 2024, (or up to 21 months if we extend such period as described in more detail in this annual report) from the closing
of the IPO in order to be able to receive a pro rata share of the trust account.
Our initial shareholders and
our officers and directors have agreed (1) to vote any ordinary shares owned by them in favor of any proposed business combination,
(2) not to convert any ordinary shares in connection with a shareholder vote to approve a proposed initial business combination,
and (3) not sell any ordinary shares in any tender in connection with a proposed initial business combination. As a result, if we
do not need public shareholders to vote in favor of the transaction in order to have such transaction approved.
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If we hold a meeting to approve
a proposed business combination and a significant number of shareholders vote, or indicate an intention to vote, against such proposed
business combination, our officers, directors, initial shareholders or their affiliates could make such purchases in the open market or
in private transactions in order to influence the vote. Notwithstanding the foregoing, our officers, directors, initial shareholders and
their affiliates will not make purchases of ordinary shares if the purchases would violate Section 9(a)(2) or Rule 10b-5
of the Exchange Act, which are rules designed to stop potential manipulation of a company’s stock.
Ability to Extend Time to Complete Business
Combination
We had 15 months from July
27, 2023, the closing of the IPO, to consummate our initial business combination after we signed the letter of intent on March 22, 2024.
On October 25, 2024, we held an annual meeting of shareholders. our shareholders approved the proposal to amend our amended and restated
memorandum and articles of association to extend the date by which we have to consummate a business combination three times for nine additional
months each time from October 27, 2024 to July 27, 2025 by depositing into the Trust Account $200,000 for all remaining public shares
(the “Extension Payment”) for each one-month extension. As of the date of this annual report, we further extended the time
to consummate our initial business combination to March 27, 2025.
Pursuant to the terms of our
amended and restated memorandum and articles of association and the trust agreement entered into between us and our Trust Agent on the
date of this annual report, in order to extend period within which we have to consummate the business combination, our insiders or their
affiliates or designees, upon five days advance notice prior to the applicable deadline, must deposit into the trust account for
each one month extension $200,000, on or prior to the date of the applicable deadline. The insiders will receive a non-interest bearing,
unsecured promissory note equal to the amount of any such deposit that will not be repaid in the event that we are unable to close a business
combination unless there are funds available outside the trust account to do so. Such notes would either be paid upon consummation of
our initial business combination, or, at the lender’s discretion, converted upon consummation of our business combination into additional
private units at a price of $10.00 per unit. Our shareholders have approved the issuance of the private units upon conversion of such
notes, to the extent the holder wishes to so convert such notes at the time of the consummation of our initial business combination. We
intend to issue a press release the day after the applicable deadline announcing whether or not the funds had been timely deposited.
Our insiders and their affiliates or designees are not obligated to fund the trust account to extend the time for us to complete our initial
business combination. To the extent that some, but not all, of our insiders, decide to extend the period of time to consummate our initial
business combination, such insiders (or their affiliates or designees) may deposit the entire amount required. Any notes issued pursuant
to these loans would be in addition to any notes issued pursuant to working capital loans made to us. As of the date of this annual report,
we have issued a total of 5 promissory notes in the aggregate amount of $1,000,000 to our sponsor.
If we do not complete a business
combination within the business combination period, we will, as promptly as possible but not more than ten business days thereafter,
redeem 100% of our outstanding public shares for a pro rata portion of the funds held in the trust account, including a pro rata portion
of any interest earned on the funds held in the trust account and not necessary to pay our taxes, then seek to liquidate and dissolve.
However, we may not be able to distribute such amounts as a result of claims of creditors which may take priority over the claims of our
public shareholders. In the event of our liquidation and subsequent dissolution, the public warrants will expire and will be worthless.
11
Redemption/Tender Rights
At any meeting called to approve
an initial business combination, public shareholders may seek to redeem their public shares, regardless of whether they vote for or against
the proposed business combination or abstain from voting, into their pro rata share of the aggregate amount then on deposit in
the trust account, less any taxes then due but not yet paid. Notwithstanding the foregoing, our initial shareholders have agreed, pursuant
to written letter agreements with us, not to redeem any public shares held by them into their pro rata share of the aggregate amount
then on deposit in the trust account. The redemption rights will be effected under our amended and restated memorandum and articles of
association and BVI law as redemptions. If we hold a meeting to approve an initial business combination, a holder will always have the
ability to vote against a proposed business combination and not seek conversion of his shares.
Alternatively, if we engage
in a tender offer, each public shareholder will be provided the opportunity to sell his public shares to us in such tender offer. The
tender offer rules require us to hold the tender offer open for at least 20 business days. Accordingly, this is the minimum amount
of time we would need to provide holders to determine whether they want to sell their public shares to us in the tender offer or remain
an investor in our company.
Our initial shareholders,
officers and directors will not have redemption rights with respect to any ordinary shares owned by them, directly or indirectly, whether
acquired prior to the IPO or purchased by them in the IPO or in the aftermarket.
We may also require public
shareholders, whether they are a record holder or hold their shares in “street name,” to either tender their certificates
(if any) to our transfer agent or to deliver their shares to the transfer agent electronically using Depository Trust Company’s
DWAC (Deposit/Withdrawal At Custodian) System, at the holder’s option, at any time at or prior to the vote on the business combination.
Once the shares are converted by the holder, and effectively redeemed by us under BVI law, the transfer agent will then update our Register
of Members to reflect all conversions. The proxy solicitation materials that we will furnish to shareholders in connection with the vote
for any proposed business combination will indicate whether we are requiring shareholders to satisfy such delivery requirements. Accordingly,
a shareholder will have from the time our proxy statement is mailed through the vote on the business combination to deliver his shares
if he wishes to seek to exercise his redemption rights. Under our amended and restated memorandum and articles of association, we are
required to provide at least 10 days’ advance notice of any shareholder meeting, which would be the minimum amount of time
a shareholder would have to determine whether to exercise redemption rights. As a result, if we require public shareholders who wish to
convert their ordinary shares into the right to receive a pro rata portion of the funds in the trust account to comply with the
foregoing delivery requirements, holders may not have sufficient time to receive the notice and deliver their shares for conversion. Accordingly,
investors may not be able to exercise their redemption rights and may be forced to retain our securities when they otherwise would not
want to.
12
There is a nominal cost associated
with this tendering process and the act of certificating the shares or delivering them through the DWAC System. The transfer agent will
typically charge the tendering broker $45, and it would be up to the broker whether or not to pass this cost on to the converting holder.
However, this fee would be incurred regardless of whether or not we require holders seeking to exercise redemption rights. The need to
deliver shares is a requirement of exercising redemption rights regardless of the timing of when such delivery must be effectuated. However,
in the event we require shareholders seeking to exercise redemption rights to deliver their shares prior to the consummation of the proposed
business combination and the proposed business combination is not consummated, this may result in an increased cost to shareholders.
Any request to convert or
tender such shares once made, may be withdrawn at any time up to the vote on the proposed business combination or expiration of the tender
offer. Furthermore, if a holder of a public share delivered his certificate in connection with an election of their conversion or tender
and subsequently decides prior to the vote on the business combination or the expiration of the tender offer not to elect to exercise
such rights, he may simply request that the transfer agent return the certificate (physically or electronically).
If the initial business combination
is not approved or completed for any reason, then our public shareholders who elected to exercise their conversion or tender rights would
not be entitled to convert their shares for the applicable pro rata share of the trust account. In such case, we will promptly
return any shares delivered by public holders.
13
The amount in the trust account
will be treated as funds distributable under the Companies Act provided that immediately following the date on which the proposed distribution
is proposed to be made, we are able to pay our debts as they fall due in the ordinary course of business. If we are forced to liquidate
the trust account, we anticipate that we would distribute to our public shareholders the amount in the trust account calculated as of
the date that is two days prior to the distribution date (including any accrued interest net of taxes payable). Prior to such distribution,
we would be required to assess all claims that may be potentially brought against us by our creditors for amounts they are actually owed
and make provision for such amounts, as creditors take priority over our public shareholders with respect to amounts that are owed to
them. We cannot assure you that we will properly assess all claims that may be potentially brought against us. As such, our shareholders
could potentially be liable for any claims of creditors to the extent of distributions received by them as an unlawful payment in the
event we enter an insolvent liquidation. Furthermore, while we will seek to have all vendors and service providers (which would include
any third parties we engaged to assist us in any way in connection with our search for a target business) and prospective target businesses
execute agreements with us waiving any right, title, interest or claim of any kind they may have in or to any monies held in the trust
account, there is no guarantee that they will execute such agreements. Nor is there any guarantee that, even if such entities execute
such agreements with us, they will not seek recourse against the trust account or that a court would conclude that such agreements are
legally enforceable.
Each of our initial shareholders
and our officers and directors have agreed to waive its rights to participate in any liquidation of our trust account or other assets
with respect to the insider shares and private units and to vote their insider shares, private shares in favor of any dissolution and
plan of distribution which we submit to a vote of shareholders. There will be no distribution from the trust account with respect to our
warrants, which will expire worthless.
If we are unable to complete
an initial business combination and expend all net proceeds of the IPO, other than the proceeds deposited in the trust account, and without
taking into account interest, if any, earned on the trust account, the initial per-share redemption price from the trust account would
be $10.125.
The proceeds deposited in
the trust account could, however, become subject to the claims of our creditors which would be prior to the claims of our public shareholders.
Although we will seek to have all vendors, including lenders for money borrowed, prospective target businesses or other entities we engage
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 shareholders, there is no guarantee that they will execute such agreements or even if they execute such agreements
that they would 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 an advantage with a claim against our assets, including the funds held in the trust account. If any third party refused to execute
an agreement waiving such claims to the monies held in the trust account, we would perform an analysis of the alternatives available to
us if we chose not to engage such third party and evaluate if such engagement would be in the best interest of our shareholders if such
third party refused to waive such claims. Examples of possible instances where we may engage a third party that refused to execute a waiver
include the engagement of a third-party consultant whose particular expertise or skills are believed by management to be significantly
superior to those of other consultants that would agree to execute a waiver or in cases where management is unable to find a provider
of required services willing to provide the waiver. In any event, our management would perform an analysis of the alternatives available
to it and would only enter into an agreement with a third party that did not execute a waiver if management believed that such third party’s
engagement would be significantly more beneficial to us than any alternative. 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.
14
KVC Sponsor LLC has agreed
that, if we liquidate the trust account prior to the consummation of a business combination, it will be liable to pay debts and obligations
to target businesses or vendors or other entities that are owed money by us for services rendered or contracted for or products sold to
us in excess of the net proceeds of the Initial Public Offering not held in the trust account, but only to the extent necessary to ensure
that such debts or obligations do not reduce the amounts in the trust account and only if such parties have not executed a waiver agreement.
However, we cannot assure you that it will be able to satisfy those obligations if it is required to do so. Accordingly, the actual per-share
redemption price could be less than $10.125 due to claims of creditors. Additionally, if we are forced to file a bankruptcy case or an
involuntary bankruptcy case is filed against us which 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 shareholders. To the extent any bankruptcy claims deplete the trust account, we cannot assure you we will be able to return to our
public shareholders at least $10.125 per share.
Potential acquisition of a China-based company
Statements and regulatory actions by the Chinese
government
Our efforts to identify a
prospective target business is not limited to a particular industry or geographic location and we may acquire a company based in, or with
the majority of its operations in, any country, including China. If we choose to acquire a China-based company, we may be subject to risks
associated with conducting business in China, including being subject to various risks related to PRC laws and regulations, which are
sometimes vague and uncertain. To the extent that the Chinese government intervenes or influences our operations post-business combination
at any time or exerts more control over offerings conducted overseas by, and foreign investment in, China-based issuers, the operations
of the post-combination entity and/or the value of our securities may be materially affected. Additionally, any governmental and regulatory
interference could significantly limit or completely hinder our ability to offer or continue to offer securities to investors and cause
the value of such securities to significantly decline or be worthless. However, we will not undertake our initial business combination
with any PRC entity with a variable interest entity, or VIE, structure.
Limitations imposed by the Chinese government
on overseas listing and share issuances (post-business combination)
If we choose to complete our
business combination with a China-based company, we may be required to obtain approval from Chinese authorities, including CSRC or CAC,
to continue to list on U.S. exchanges or issue securities to foreign investors post business combination.
Post-business combination,
we could be subject to regulations by various political and regulatory entities, including various local and municipal agencies and government
sub-divisions, and these regulations may be interpreted and applied inconsistently by different agencies or authorities.
If approval is required in
the future and were denied permission from Chinese authorities to list on U.S. exchanges, we will not be able to continue listing
on U.S. exchanges, which would materially affect the interest of the investors. It is uncertain when and whether the post-combination
entity will be required to obtain permission from the PRC government to continue to list on U.S. exchanges in the future, and even
when such permission is obtained, whether it will be denied or rescinded. Although we are currently not required to obtain permission
from any of the PRC central or local government and have not received any denial to list on a U.S. exchange, our operations may be
adversely affected in the future, directly or indirectly, by existing or future laws and regulations relating to our target’s business
or industry.
15
If after completion of a business
combination with a China-based company, it is determined that permission for our continued listing should have been received, or if received,
is later rescinded, we may incur increased costs necessary to obtain such permission or to comply with existing and newly adopted laws
and regulations or penalties for any failure to comply, and such compliance or any associated inquiries or investigations or any other
government actions may:
●
delay or impede our development;
●
result in negative publicity or increase the company’s operating costs;
●
require significant management time and attention; and
●
subject the post-combination entity to remedies, administrative penalties and even criminal liabilities that may harm our business, including fines assessed for our current or historical operations, or demands or orders that we modify or even cease our business practices.
Further, the promulgation
of new laws or regulations, or the new interpretation of existing laws and regulations, in each case that restrict or otherwise may unfavorably
impact the ability or way the post-combination entity may conduct its business and could require it to change certain aspects of its business
to ensure compliance, which could decrease demand for its products or services, reduce revenues, increase costs, require us to obtain
more licenses, permits, approvals or certificates, or subject it to additional liabilities. As such, the post-combination entity’s
operations could be adversely affected, directly or indirectly, by existing or future PRC laws and regulations relating to its business
or industry, which could result in a material adverse change in the value of our securities, potentially rendering it worthless. As a
result, both you and we face uncertainty about future actions by the PRC government that could significantly affect our ability to offer
or continue to offer securities to investors and cause the value of our securities to significantly decline or be worthless.
For a more detailed discussion
of the uncertainties relating to business combination with a China-based company, see “Risk Factors — Risks Relating
to Acquiring a Company with Operations in China.”
16
Enforceability of Civil Liability
We are a company incorporated
under the laws of the BVI and therefore, located and administered from outside of the United States. The proceeds we received from
the IPO are held in U.S. Dollars and deposited in a trust account in the United States maintained by Continental Stock Transfer
& Trust Company, as trustee. The trust account is governed by an Investment Management Trust Agreement between us and Continental
Stock Transfer & Trust Company.
Our corporate affairs will
be governed by our amended and restated memorandum and articles of association, the Companies Act (as the same may be supplemented or
amended from time to time) or the common law of the BVI. The rights of shareholders to act against the directors, actions by minority
shareholders and the fiduciary responsibilities of our directors to us under BVI law are to a large extent governed by the Companies Act
and common law of the BVI. The common law of the BVI is derived in part from comparatively limited judicial precedent in the BVI
as well as from English common law, and whilst the decisions of the English courts are of persuasive authority, they are not binding on
a court in the BVI. The rights of our shareholders and the fiduciary responsibilities of our directors under BVI laws are different
from statutes or judicial precedent in some jurisdictions in the United States. In particular, the BVI has a less developed body
of securities laws as compared to the United States, and some states, such as Delaware, have more fully developed and judicially
interpreted bodies of corporate law. In addition, while statutory provisions do exist in BVI law for derivative actions to be brought
in certain circumstances, shareholders in the BVI companies may not have stood to initiate a shareholder derivative action in a federal
court of the United States. The circumstances in which any such action may be brought, and the procedures and defenses that may be
available in respect to any such action, may result in the rights of shareholders of a BVI company being more limited than those of shareholders
of a company organized in the United States Accordingly, shareholders may have fewer alternatives available to them if they believe
that corporate wrongdoing has occurred.
Under BVI law, the directors
owe fiduciary duties at both common law and under statute, including a statutory duty to act honestly, in good faith and with a view to
what the directors believe are our best interests. When exercising powers or performing duties as a director, the director is required
to exercise the care, diligence and skill that a reasonable director would exercise in the circumstances taking into account, without
limitation, the nature of the company, the nature of the decision and the position of the director and the nature of the responsibilities
undertaken by him. In exercising the powers of a director, the directors must exercise their powers for a proper purpose and shall not
act or agree to the company acting in a manner that contravenes our amended and restated memorandum and articles of association or the
Companies Act.
In certain limited circumstances,
a shareholder has the right to seek various remedies against the company in the event the directors are in breach of their duties under
the Companies Act. Pursuant to Section 184B of the Companies Act, if a company or director of a company engages in, proposes to engage
in or has engaged in, conduct that contravenes the provisions of the Companies Act or the memorandum or articles of association of the
company, the courts of the BVI may, on application of a shareholder or director of the company, make an order directing the company or
director to comply with, or restraining the company or director from engaging in conduct that contravenes the Companies Act or the memorandum
or articles. Furthermore, pursuant to section 184I(1) of the Companies Act a shareholder of a company who considers that the affairs
of the company have been, are being or likely to be, conducted in a manner that is, or any acts of the company have been, or are likely
to be oppressive, unfairly discriminatory, or unfairly prejudicial to him in that capacity, may apply to the courts of the BVI for an
order which, inter alia, can require the company or any other person to pay compensation to the shareholders.
17
If we are deemed insolvent
for the purposes of the Insolvency Act (i.e., (1) it fails to comply with the requirements of a statutory demand that has not been
set aside under section 157 of the Insolvency Act; (2) the execution or other process issued on a judgment, decree or order of a
BVI Court in favor of a creditor of the company is returned wholly or partly unsatisfied; or (3) either the value of the company’s
liabilities exceeds its assets, or the company is unable to pay its debts as they fall due), there are very limited circumstances where
prior payments made to shareholders or other parties may be deemed to be a “voidable transaction” for the purposes of the
Insolvency Act. A voidable transaction would include, for these purposes, payments made as “unfair preferences” or “transactions
at an undervalue.” A liquidator appointed over an insolvent company who considers that a particular transaction or payment is a
voidable transaction under the Insolvency Act could apply to the BVI Courts for an order setting aside that payment or transaction in
whole or in part.
We have been advised by our
BVI legal counsel that the courts of the BVI are unlikely:
●
to recognize or enforce against us judgments of courts of the United States based on certain civil liability provisions of U.S. securities laws where that liability is in respect of penalties, taxes, fines or similar fiscal or revenue obligations of the company; and
●
to impose liabilities against us, in original actions brought in the BVI, based on certain civil liability provisions of U.S. securities laws that are penal in nature.
The courts of the BVI will
not necessarily enter judgments in original actions brought in those courts predicated on U.S. federal or state securities laws.
Additionally, we have been advised by BVI Counsel that there is no statutory enforcement in the BVI of judgments obtained in the United States;
however, the courts of the BVI will in certain circumstances recognize such a foreign judgment and treat it as a cause of action in itself
which may be sued upon as a debt at common law so that no retrial of the issues would be necessary provided that: (1) the U.S. court
issuing the judgment had jurisdiction in the matter and the company either submitted to such jurisdiction or was resident or carrying
on business within such jurisdiction and was duly served with process; (2) the U.S. judgment is final and for a liquidated sum;
(3) the judgment given by the U.S. court was not in respect of penalties, taxes, fines or similar fiscal or revenue obligations
of the company; (4) in obtaining judgment, there was no fraud on the part of the person in whose favor judgment was given or on the
part of the court; (5) recognition or enforcement of the judgment would not be contrary to public policy in the BVI; and (6) the
proceedings pursuant to which judgment was obtained were not contrary to natural justice.
In appropriate circumstances,
a BVI Court may give effect in the BVI to other kinds of final foreign judgments such as declaratory orders, orders for performance of
contracts and injunctions.
In addition, many of our directors
and officers are nationals or residents of Canada, mainland China, Hong Kong, Singapore, the United Kingdom and all or a substantial
portion of their assets are located in the aforementioned locations.
As of the date of this annual
report, four of our directors (Mr. Kenneth Wong, Mr. Peter Ding, William Chu and Prof. Albert Yu) and one of our officers (Mr. Kenneth
Wong, our Chairman and CEO) are residing in Hong Kong. Further, it is uncertain whether any officers and directors of the post-combination
entity will be located inside the United States. As a result, it may be difficult, or in some cases impossible, for investors in the United
States to enforce their legal rights, to effect service of process upon those officers and directors located outside the United States,
or to enforce judgments of U.S. courts seeking to impose civil liabilities and criminal penalties on them under United States securities
laws. In particular, the PRC does not have treaties providing for the reciprocal recognition and enforcement of judgments of courts with
the United States and many other countries and regions. Therefore, recognition and enforcement in the PRC of judgements of U.S. courts
in relation to any matter not subject to a binding arbitration provision may be difficult or impossible.
18
A judgment of a court in the
United States predicated upon U.S. federal or state securities laws may be enforced in Hong Kong at common law by bringing an action in
a Hong Kong court on that judgment for the amount due thereunder, and then seeking summary judgment on the strength of the foreign judgment,
provided that the foreign judgment, among other things, is (1) for a debt or a definite sum of money (not being taxes or similar charges
to a foreign government taxing authority or a fine or other penalty) and (2) final and conclusive on the merits of the claim, but not
otherwise. Such a judgment may not, in any event, be so enforced in Hong Kong if (a) it was obtained by fraud; (b) the proceedings in
which the judgment was obtained were opposed to natural justice; (c) its enforcement or recognition would be contrary to the public policy
of Hong Kong; (d) the court of the United States was not jurisdictionally competent; or (e) the judgment was in conflict with a prior
Hong Kong judgment.
Hong Kong has no arrangement
for the reciprocal enforcement of judgments with the United States. As a result, there is uncertainty as to the enforceability in Hong
Kong, in original actions or in actions for enforcement, of judgments of United States courts of civil liabilities predicated solely upon
the federal securities laws of the United States or the securities laws of any State or territory within the United States.
As a result of all the above,
public shareholders may have more difficulty in protecting their interests in the face of actions taken by management, members of the
board of directors or controlling shareholders than they would as public shareholders of a U.S. company.
Management Operating and Investment Experience
We believe that our executive
officers possess the experience, skills and contacts necessary to source, evaluate, and execute an attractive business combination. See
the section titled “Management” for complete information on the experience of our officers and directors. Notwithstanding
the foregoing, our officers and directors are not required to commit their full time to our affairs and will allocate their time to other
businesses. We presently expect each of our employees to devote such amount of time as they reasonably believe is necessary to our business.
The past successes of our executive officers and directors do not guarantee that we will successfully consummate an initial business combination.
As more fully discussed in
“Conflicts of Interest,” if any of our officers or directors becomes aware of a business combination opportunity that falls
within the line of business of any entity to which he has pre-existing fiduciary or contractual obligations, he may be required to present
such business combination opportunity to such entity, subject to his or her fiduciary duties under British Virgin Islands law, prior to
presenting such business combination opportunity to us. Most of our officers and directors currently have certain pre-existing fiduciary
duties or contractual obligations.
Emerging Growth Company Status and Other Information
We are an emerging growth
company as defined in Section 2(a) of the Securities Act, as modified by the Jumpstart Our Business Startups Act of 2012
(which we refer to herein as the JOBS Act). As such, we are eligible to 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 of 2002, or 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 non-binding advisory vote on executive compensation and shareholder approval of any golden parachute payments
not previously approved. If some investors find our securities less attractive as a result, there may be a less active trading market
for our securities and the prices of our securities may be more volatile.
19
In addition, Section 107
of the JOBS Act also provides that an emerging growth company can take advantage of the extended transition period provided in Section 7(a)(2)(B) of
the Securities Act for complying with new or revised accounting standards. In other words, an emerging growth company can delay the adoption
of certain accounting standards until those standards would otherwise apply to private companies. We intend to take advantage of the benefits
of this extended transition period.
We will remain an emerging
growth company until the earlier of (1) the last day of the fiscal year (a) following the fifth anniversary of the completion
of the Initial Public Offering, (b) in which we have total annual gross revenue of at least $1.235 billion, or (c) in which
we are deemed to be a large accelerated filer, which means the market value of our ordinary shares that are held by non-affiliates exceeds
$700 million as of the prior June 30, and (2) the date on which we have issued more than $1 billion in non-convertible
debt during the prior three year period.
Competition
In identifying, evaluating
and selecting a target business, we may encounter intense competition from other entities having a business objective similar to ours.
Many of these entities are well established and have extensive experience identifying and effecting business combinations directly or
through affiliates. Many of these competitors possess greater technical, human and other resources than us and our financial resources
will be relatively limited when contrasted with those of many of these competitors. While we believe there may be numerous potential target
businesses that we could acquire with the net proceeds of the Initial Public Offering, our ability to compete in acquiring certain sizable
target businesses may be limited by our available financial resources.
The following also may not
be viewed favorably by certain target businesses:
●
our obligation to seek shareholder approval of a business combination or obtain the necessary financial information to be sent to shareholders in connection with such business combination may delay or prevent the completion of a transaction;
●
our obligation to redeem public shares held by our public shareholders may reduce the resources available to us for a business combination;
●
Nasdaq may require us to file a new listing application and meet its initial listing requirements to maintain the listing of our securities following a business combination;
●
our outstanding warrants and the potential future dilution they represent;
●
our obligation to pay the deferred underwriting discounts and commissions to the underwriters upon consummation of our initial business combination;
●
our obligation to either repay or issue units upon conversion of up to $1,000,000 of working capital loans that may be made to us by our initial shareholders, officers, directors or their affiliates;
●
our obligation to register the resale of the insider shares, as well as the private units (and underlying securities) and any securities issued to our initial shareholders, officers, directors or their affiliates upon conversion of working capital loans; and
●
the impact on the target business’ assets as a result of unknown liabilities under the securities laws or otherwise depending on developments involving us prior to the consummation of a business combination.
20
Any of these factors may place
us at a competitive disadvantage in successfully negotiating a business combination. Our management believes, however, that our status
as a public entity and potential access to the U.S. public equity markets may give us a competitive advantage over privately-held entities
having a similar business objective as ours in acquiring a target business with significant growth potential on favorable terms.
If we succeed in effecting
a business combination, there will be, in all likelihood, intense competition from competitors of the target business. We cannot assure
you that, subsequent to a business combination, we will have the resources or ability to compete effectively.
Employees
We currently have two officers,
namely Mr. Kenneth Wong, our CEO, and Mr. Alex Davidkhanian, our CFO. They are not obligated to devote any specific number of hours to
our matters and intend to devote only as much time as they deem necessary to our affairs. The amount of time they will devote in any time
period will vary based on whether a target business has been selected for the business combination and the stage of the business combination
process the company is in. Accordingly, once management locates a suitable target business to acquire, they will spend more time investigating
such target business and negotiating and processing the business combination (and consequently spend more time to our affairs) than they
would prior to locating a suitable target business. We presently expect our executive officers to devote such amount of time as they reasonably
believe is necessary to our business (which could range from only a few hours a week while we are trying to locate a potential target
business to a majority of their time as we move into serious negotiations with a target business for a business combination). We do not
intend to have any full-time employees prior to the consummation of a business combination.
ITEM 1A. RISK FACTORS
As a smaller reporting company,
we are not required to make disclosures under this Item.