AI Infrastructure Acquisition (AIIA) risk factors, FY2025 10-K

Risks Relating to our Search for, and Consummation of or Inability to Consummate, a Business Combination

1. 01Our public shareholders may not be afforded an opportunity to vote on our proposed business combination, which means we may complete our initial business combination even though a majority of our public shareholders do not support such a combination
2. 02Your only opportunity to affect the investment decision regarding a potential business combination will be limited to the exercise of your right to redeem your shares from us for cash, unless we seek shareholder approval of the business combination
3. 03The ability of our public shareholders to redeem their shares for cash may make our financial condition unattractive to potential business combination targets, which may make it difficult for us to enter into a business combination with a target
4. 04The ability of our public shareholders to exercise redemption rights with respect to a large number of our shares may not allow us to complete the most desirable business combination or optimize our capital structure
5. 05If a shareholder fails to receive notice of our offer to redeem our Public Shares in connection with our initial business combination, or fails to comply with the procedures for tendering its shares, such shares may not be redeemed
6. 06You will not be entitled to protections normally afforded to investors of many other blank check companies
7. 07If third parties bring claims against us, the proceeds held in the trust account could be reduced and the per-share redemption amount received by shareholders may be less than $10.00 per share
8. 08Our 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 shareholders
9. 09If 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
10. 10each of which may make it difficult for us to complete our initial business combination
11. 11The longer that the funds in the trust account are held in short-term U.S. government securities or in money market funds invested exclusively in such securities, the greater the risk that we may be considered an unregistered investment company, in which case we may be required to liquidate
12. 12Changes in laws or regulations, or a failure to comply with any laws and regulations, may adversely affect our business, investments, including our ability to negotiate and complete our initial business combination, and results of operations
13. 13Because we are not limited to a particular industry or any specific target businesses with which to pursue our initial business combination, you will be unable to ascertain the merits or risks of any particular target business’s operations
14. 14We may seek acquisition opportunities in industries or sectors that may be outside of our management’s areas of expertise
15. 15We may seek acquisition opportunities with a financially unstable business or an entity lacking an established record of revenue or earnings
16. 16We 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, directors or existing holders which may raise potential conflicts of interest
17. 17Affiliates of our sponsor may be involved in other blank check companies like ours and may direct potential targets to those companies rather than to us
18. 18Since our sponsor, officers and directors will lose their entire investment in us if our initial business combination is not completed, a conflict of interest may arise in determining whether a particular business combination target is appropriate for our initial business combination
19. 19The 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 ordinary shares at such time is substantially less than $10.00 per share
20. 20We may issue notes or other debt securities, or otherwise incur substantial debt, to complete a business combination, which may adversely affect our leverage and financial condition and thus negatively impact the value of our shareholders’ investment in us
21. 21Of the net proceeds from our initial public offering and the sale of the Private Placement Units, $138,000,000 will be available upon the completion our business combination and pay related fees and expenses, assuming no redemption
22. 22We 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
23. 23We do not have a specified maximum redemption threshold. The absence of such a redemption threshold may make it possible for us to complete a business combination with which a substantial majority of our shareholders have redeemed their Class A ordinary shares
24. 24We 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
25. 25Our sponsor controls the election of our Board until consummation of our initial business combination and holds a substantial interest in us. As a result, it will elect all of our directors and may exert a substantial influence on actions requiring shareholder vote, potentially in a manner that you do not support
26. 26Because we must furnish our shareholders with target business financial statements, we may lose the ability to complete an otherwise advantageous initial business combination with some prospective target businesses
27. 27Compliance 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 acquisition
28. 28After a business combination, it is possible that a majority of our directors and officers and all of our assets will be located outside the United States; therefore, investors may not be able to enforce federal securities laws or their other legal rights
29. 29If we effect a business combination with a company located outside of the United States, the laws applicable to such company will likely govern all of our material agreements and we may not be able to enforce our legal rights
30. 30If relations between the United States and foreign governments deteriorate, it could cause potential target businesses or their goods and services to become less attractive
31. 31The ability of our public shareholders to exercise redemption rights with respect to a large number of our 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 shares
32. 32Currency policies may harm a target business’ ability to succeed in the international markets
33. 33If we are unable to consummate our initial business combination within the business combination period, our public shareholders may be forced to wait beyond such business combination period before redemption from our trust account
34. 34We may not hold an annual meeting of shareholders until after the consummation of our initial business combination. Our public shareholders will not have the right to elect directors prior to the consummation of our initial business combination
35. 35If our initial business combination involves a company organized under the laws of a state of the United States, it is possible a 1% U.S. federal excise tax will be imposed on us in connection with redemptions of our Class A ordinary shares after or in connection with such initial business combination
36. 36As a Cayman Islands company, the Excise Tax is currently not expected to apply to redemptions of our ordinary shares (absent any regulations or other additional guidance that may be issued in the future)

Risks Relating to the Post-Business Combination Company

1. 37Accordingly, any shareholders who choose to remain shareholders following the business combination could suffer a reduction in the value of their shares. Such shareholders are unlikely to have a remedy for such reduction in value
2. 38Our management may not be able to maintain control of a target business after our initial business combination. We cannot provide assurance that, upon loss of control of a target business, new management will possess the skills, qualifications or abilities necessary to profitably operate such business
3. 39We may reincorporate in another jurisdiction in connection with our initial business combination and such reincorporation may result in taxes imposed on shareholders
4. 40We 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

Risks Relating to our Sponsor, Management and Director Team

1. 41We are dependent upon our officers and directors and their departure could adversely affect our ability to operate
2. 42Our officers and directors allocate their time to other businesses thereby causing conflicts of interest in their determination as to how much time to devote to our affairs. This conflict of interest could have a negative impact on our ability to complete our initial business combination
3. 43Our officers, directors, security holders and their respective affiliates may have competitive pecuniary interests that conflict with our interests
4. 44We may not have sufficient funds to satisfy indemnification claims of our directors and executive officers
5. 45Our insiders, officers, directors and their affiliates may be owed reimbursement for out-of-pocket expenses which may cause them to have conflicts of interest in determining whether a particular business combination is most advantageous
6. 46The ownership interest of our sponsor may change, and our sponsor may divest its ownership interest in us before identifying a business combination, which could deprive us of key personnel and advisors

Risks Relating to our Securities

1. 47You will not have any rights or interests in funds from the trust account, except under certain limited circumstances. To liquidate your investment, therefore, you may be forced to sell your Public Shares or rights, potentially at a loss
2. 48NYSE may delist our securities from trading on its exchange, which could limit investors’ ability to make transactions in our securities and subject us to additional trading restrictions
3. 49Provisions in our amended and restated memorandum and articles of association may inhibit a takeover of us, which could limit the price investors might be willing to pay in the future for our Class A ordinary shares and could entrench management
4. 50Since only holders of our founder shares have the right to vote on the appointment and removal of directors, the NYSE may consider us to be a “controlled company” within the meaning of the NYSE rules and, as a result, we may qualify for exemptions from certain corporate governance requirements
5. 51The grant of registration rights to our sponsor and holders of our Private Placement Units 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 ordinary shares
6. 52We may issue our shares to investors in connection with our initial business combination at a price which is less than the prevailing market price of our shares at that time
7. 53Changes 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
8. 54We may amend the terms of the rights in a way that may be adverse to holders with the approval by the holders of a majority of the then outstanding rights
9. 55U.S. federal income tax reform could adversely affect us and holders of our units
10. 56Our rights and founder shares may have an adverse effect on the market price of our Class A ordinary shares and make it more difficult to effectuate our initial business combination
11. 57If our management following our initial business combination is unfamiliar with United States securities laws, they may have to expend time and resources becoming familiar with such laws, which could lead to various regulatory issues
12. 58Risks Associated with Acquiring and Operating a Business Outside of the U.S
13. 59Because of the costs and difficulties inherent in managing cross-border business operations after we acquire it, our results of operations may be negatively impacted following a business combination
14. 60Many countries, and especially those in emerging markets, have difficult and unpredictable legal systems and underdeveloped laws and regulations that are unclear and subject to corruption and inexperience, which may adversely impact our results of operations and financial condition
15. 61Delay with respect to the enforcement of particular rules and regulations, including those relating to customs, tax, environmental and labor, could cause serious disruption to operations abroad and negatively impact our results
16. 62Exchange rate fluctuations and currency policies may cause a target business’ ability to succeed in the international markets to be diminished
17. 63Because foreign law could govern almost all of our material agreements, we may not be able to enforce our rights within such jurisdiction or elsewhere, which could result in a significant loss of business, business opportunities or capital
18. 64Corporate governance standards in foreign countries may not be as strict or developed as in the U.S. and such weakness may hide issues and operational practices that are detrimental to a target business
19. 65Because a foreign judiciary may determine the scope and enforcement of almost all of our material agreements under the law of such foreign jurisdiction, we may be unable to enforce our rights inside and outside of such jurisdiction
20. 66A slowdown in economic growth in the markets that our business target operates in may adversely affect our business, financial condition, results of operations, the value of its equity shares and the trading price of our shares following our business combination
21. 67Regional hostilities, 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 equity shares and trading price of our shares
22. 68The occurrence of natural disasters may adversely affect our business, financial condition and results of operations following our business combination
23. 69Any downgrade of credit ratings of the country in which the company we acquire business may adversely affect our ability to raise debt financing following our business combination
24. 70Returns on investment in foreign companies may be decreased by withholding and other taxes

Risks Relating to Our Corporate Structure

1. 71Because we are incorporated under the laws of the Cayman Islands, you may face difficulties in protecting your interests, and your ability to protect your rights through the U.S. Federal courts may be limited
2. 72We are a company with limited operating history and no revenues, and you have no basis on which to evaluate our ability to achieve our business objective
3. 73Past performance by our management team and their respective affiliates may not be indicative of future performance of an investment in us
4. 74Cyber incidents or attacks directed at us could result in information theft, data corruption, operational disruption and/or financial loss