XBP Global Holdings, Inc. 10-K

Item 1A. Risk Factors. As a smaller reporting company, we are not required to include risk factors in this Report. However, below is a partial list of material risks, uncertainties and other factors that could have a material effect on the Company and its operations: ● We are a blank check company with no revenue or basis to evaluate our ability to select a suitable business target. ● We may not be able to select an appropriate target business or businesses and complete our initial business combination in the prescribed time frame, including the XBP Europe Business Combination. ● Our expectations around the performance of a prospective target business or businesses, such as XBP Europe, may not be realized. ● We may not be successful in retaining or recruiting required officers, key employees or directors following our initial business combination. ● Our officers and directors may have difficulties allocating their time between the Company and other businesses and may potentially have conflicts of interest with our business or in approving our initial business combination. ● If we do not consummate the XBP Europe Business Combination, we may not be able to obtain additional financing to complete our initial business combination or reduce the number of stockholders requesting redemption. ● If we do not consummate the XBP Europe Business Combination, we may issue our shares to investors in connection with our initial business combination at a price that is less than the prevailing market price of our shares at that time. ● You may not be given the opportunity to choose the initial business target or to vote on the initial business combination. ● Our warrants and the FPS are being accounted for as a liability and are being recorded at fair value upon issuance with changes in fair value each period reported in earnings, which may have an adverse effect on the market price of our securities. ● Trust account funds may not be protected against third party claims or bankruptcy. ● An active market for our public securities’ may not develop and you will have limited liquidity and trading. ● Our financial performance following a business combination may be negatively affected by their lack an established record of revenue, cash flows and experienced management. ● Members of our management team and board of directors have significant experience as founders, board members, officers, executives or employees of other companies. Certain of those persons have been, may be, or may become, involved in litigation, investigations or other proceedings, including related to those companies or otherwise. The defense or prosecution of these matters could be time-consuming and could divert our management’s attention, and may have an adverse effect on us, which may impede our ability to consummate an initial business combination. ● If we do not consummate the XBP Europe Business Combination, there may be more competition to find an attractive target for an initial business combination, which could increase the costs associated with completing our initial business combination and may result in our inability to find a suitable target. 21 ● 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. ● 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 operations and profitability. ● We have engaged CF&Co. as a financial advisor in connection with the XBP Europe Business Combination but CF&Co. has agreed not to receive an advisory fee for such services other than to receive reimbursement of actual expenses incurred and to be indemnified against certain liabilities arising out of its engagement. We have also engaged CF&Co. pursuant to the BCMA and CF&Co. has agreed to waive the Marketing Fee in connection with the XBP Europe Business Combination. In the event we do not consummate the XBP Europe Business Combination, we may engage CF&Co. or one of its affiliates to provide additional services to us, which may include acting as a financial advisor in connection with an initial business combination or as placement agent in connection with a related financing transaction. If an initial business combination other than the XBP Europe Business Combination is consummated, CF&Co. would be entitled to receive the Marketing Fee that will be released from the trust account only upon completion of such an initial business combination. These financial incentives may cause CF&Co. to have potential conflicts of interest in rendering any such additional services to us. ● We may attempt to complete our initial business combination with a private company (or a subsidiary of a public company, such as XBP Europe) 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. ● Since our initial stockholders will lose their entire investment in us if our initial business combination is not completed (other than with respect to any public shares they may acquire during or after our initial public offering), and because the sponsor and our officers and directors may profit substantially even under circumstances in which our public stockholders would experience losses in connection with their investment, a conflict of interest may arise in determining whether a particular business combination target is appropriate for our initial business combination. ● Changes in laws or regulations or how such laws or regulations are interpreted or applied, or a failure to comply with any laws or regulations, may adversely affect our business, including our ability to negotiate and complete our initial business combination, and results of operations. ● The value of the founder shares following completion of our initial business combination is likely to be substantially higher than the nominal price paid for them, even if the trading price of our common stock at such time is substantially less than $10.00 per share. ● Resources could be wasted in researching acquisitions that are not completed (including the XBP Europe Business Combination), which could materially adversely affect subsequent attempts to locate and acquire or merge with another business. If we have not completed our initial business combination by the end of the Combination Period, our public stockholders may receive only approximately $10.53 per share, or less than such amount in certain circumstances, on the liquidation of our trust account and our warrants will expire worthless. ● A 1% U.S. federal excise tax may be imposed on us in connection with our redemptions of shares in connection with the XBP Europe Business Combination or other stockholder vote pursuant to which stockholders would have a right to submit their shares for redemption. ● The SEC has recently issued proposed rules relating to certain activities of SPACs (the “SPAC Rule Proposals”). Certain of the procedures that we, a potential business combination target, or others may determine to undertake in connection with such proposals may increase our costs and the time needed to complete the XBP Europe Business Combination and may make it more difficult to complete the XBP Europe Business Combination. The need for compliance with the SPAC Rule Proposals may cause us to liquidate the funds in the trust account or liquidate the Company at an earlier time than we might otherwise choose. ● If we are deemed to be an investment company for purposes of the Investment Company Act, we would be required to institute burdensome compliance requirements and our activities would be severely restricted. As a result, in such circumstances, unless we are able to modify our activities so that we would not be deemed an investment company, we may abandon our efforts to complete the XBP Europe Business Combination and instead liquidate the Company. ● To mitigate the risk that we might be deemed to be an investment company for purposes of the Investment Company Act, on March 16, 2023 we instructed the trustee to liquidate the investments held in the trust account and instead to hold the funds in the trust account in an interest bearing demand deposit account until the earlier of the consummation of our initial business combination or our liquidation. As a result, following the liquidation of investments in the trust account, we will likely receive less interest on the funds held in the trust account than we were previously earning, such that our public stockholders would receive less upon any redemption or liquidation of the Company than what they would have received had the investments not been liquidated. 22 ● Our ability to identify a target and to consummate an initial business combination, including the XBP Europe Business Combination, may be adversely affected by economic uncertainty and volatility in the financial markets, including as a result of the military conflict in Ukraine. ● There is substantial doubt about our ability to continue as a “going concern”. Adverse developments affecting the financial services industry, including events or concerns involving liquidity, defaults or non-performance by financial institutions, could adversely affect our business, financial condition or results of operations, or our prospects. The funds in our operating account and our trust account are held in banks or other financial institutions, with our trust account assets currently held in a demand deposit account at Citibank, N.A. Our cash held in non-interest bearing and interest-bearing accounts would exceed any applicable Federal Deposit Insurance Corporation (“FDIC”) insurance limits. Should events, including limited liquidity, defaults, non-performance or other adverse developments occur with respect to the banks or other financial institutions that hold our funds, or that affect financial institutions or the financial services industry generally, or concerns or rumors about any events of these kinds or other similar risks, the value of the assets in our trust account could be impaired, which could have a material impact on our operating results, liquidity, financial condition and prospects. For example, on March 10, 2023, the FDIC announced that Silicon Valley Bank had been closed by the California Department of Financial Protection and Innovation. Although we did not have any funds in Silicon Valley Bank or other institutions that have been closed, we cannot guarantee that the banks or other financial institutions that hold our funds will not experience similar issues. For the complete list of risks relating to our operations, see the section titled “Risk Factors” contained in (i) the Registration Statement, (ii) the Annual Report on Form 10-K for the year ended December 31, 2021, as filed with the SEC on March 31, 2022, (iii) the Quarterly Reports on Form 10-Q for the quarters ended March 31, 2022, June 30, 2022 and September 30, 2022, as filed with the SEC on May 13, 2022, August 15, 2022 and November 14, 2022, respectively, (iv) the definitive proxy statements on Schedule 14A filed by the Company on August 31, 2021 and February 14, 2023, respectively and (v) the XBP Europe Proxy Statement. Any of these factors could result in a significant or material adverse effect on our results of operations or financial condition. Additional risks could arise that may also affect our business or ability to consummate an initial business combination. We may disclose changes to such risk factors or disclose additional risk factors from time to time in our future filings with the SEC. Item 1B. Unresolved Staff Comments. Not applicable.