Inflection Point Acquisition Corp. V (IPEX) risk factors, FY2025 10-K

Risks Relating to Our Business and the Initial Business Combination

1. 01Our Public Shareholders’ only opportunity to affect the investment decision regarding a potential business combination may be limited to the exercise of their right to redeem their Public Shares from us for cash
2. 02If we seek shareholder approval of our initial business combination, as we expect to do in connection with the Proposed Business Combination, the Sponsors and Representatives have agreed to vote in favor of the Proposed Business Combination, regardless of how our Public Shareholders vote
3. 03The ability of our Public Shareholders to redeem their Public 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 Public Shares and the amount of deferred underwriting compensation may not allow us to complete the most desirable business combination or optimize our capital structure
5. 05The 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
6. 06Our search for a business combination, and any target business with which we ultimately consummate a business combination, may be materially adversely affected by events that are outside of our control, such as increased geopolitical unrest, pandemic outbreaks and volatility in the debt and equity markets
7. 07If we do not complete the Proposed Business Combination, we may not be able to consummate our initial business combination within the completion window, in which case we would cease all operations except for the purpose of winding up and we would redeem our Public Shares and liquidate
8. 08We may decide not to extend the term we have to consummate our initial business combination, in which case we would redeem our Public Shares, and the Public Rights may be worthless
9. 09In addition, if such purchases are made, the public “float” of our securities may be reduced and the number of beneficial holders of our securities may be reduced, which may make it difficult to maintain or obtain the quotation, listing or trading of our securities on a national securities exchange
10. 10If 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 submitting or tendering its shares, such shares may not be redeemed
11. 11You will not be entitled to protections normally afforded to investors of other blank check companies subject to Rule 419 of the Securities Act
12. 12If the net proceeds of the IPO and simultaneous private placement not being held in the Trust Account are insufficient to allow us to operate until the completion an initial business combination, we will depend on loans from the New Sponsor or management team to complete the business combination
13. 13If 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
14. 14Our directors may decide not to enforce the indemnification obligations of the New Sponsor, resulting in a reduction in the amount of funds in the Trust Account available for distribution to the Public Shareholders
15. 15We may not have sufficient funds to satisfy indemnification claims of our Sponsors, directors and officers
16. 16Our shareholders may be held liable for claims by third parties against the Company to the extent of distributions received by them upon redemption of their shares
17. 17Changes in laws or regulations, or a failure to comply with any laws and regulations, may adversely affect our business, including our ability to negotiate and complete our initial business combination, and results of operations, including the Proposed Business Combination
18. 18We may not hold an annual general meeting until after the consummation of our initial business combination, which could delay the opportunity for our shareholders to appoint directors
19. 19We may seek business combination opportunities in industries or sectors that may be outside of our management’s areas of expertise
20. 20We 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
21. 21We may engage in a business combination with one or more target businesses that have relationships with entities that may be affiliated with our Sponsors, officers, directors or existing holders which may raise potential conflicts of interest
22. 22We may issue notes or other debt securities, or otherwise incur substantial debt to complete an initial business combination, which may adversely affect our leverage and financial condition and thus negatively impact the value of our shareholders’ investment in us
23. 23We 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
24. 24We may attempt to complete our initial business combination with a private company about which little information is available, which may result in a business combination with a company that is not as profitable as we suspected, if at all
25. 25We do not have a specified maximum redemption threshold. The absence of such a redemption threshold may make it possible for us to complete our initial business combination with which a substantial majority of our shareholders do not agree
26. 26We 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
27. 27Because 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
28. 28Compliance obligations under the Sarbanes-Oxley Act may make it more difficult for us to effectuate our initial business combination, require substantial financial and management resources, and increase the time and costs of completing an initial business combination

Risks Relating to the Post-Business Combination Company

1. 29The officers and directors of an acquisition candidate may resign upon completion of our initial business combination. The loss of a business combination target’s key personnel could negatively impact the operations and profitability of our post-combination business
2. 30Our 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. 31We may seek business combination opportunities with a high degree of complexity that require significant operational improvements, which could delay or prevent us from achieving our desired results
4. 32Our initial business combination and our structure thereafter may not be tax-efficient to our shareholders and rights holders. As a result of our business combination, our tax obligations may be more complex, burdensome and/or uncertain

Risks Relating to Acquiring and Operating a Business in Foreign Countries

1. 33We may reincorporate in another jurisdiction, which may result in taxes imposed on our shareholders
2. 34If we effect our initial business combination with a company located outside of the United States, we would be subject to a variety of additional risks that may adversely affect us
3. 35Exchange rate fluctuations and currency policies may cause a target business’ ability to succeed in the international markets to be diminished
4. 36If we acquire a non-U.S. target, our results of operations may be negatively impacted because of the costs and difficulties inherent in managing cross-border business operations
5. 37If social unrest, acts of terrorism, regime changes, changes in laws and regulations, political upheaval or policy changes or enactments occur in a country in which we may operate after we effect our initial business combination, it may result in a negative impact on our business
6. 38Many countries 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
7. 39Rules and regulations in many countries are often ambiguous or open to differing interpretation by responsible individuals and agencies at the municipal, state, regional and federal levels. The attitudes and actions of such individuals and agencies are often difficult to predict and inconsistent
8. 40An investment in our securities may result in uncertain U.S. federal income tax consequences
9. 41Because 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
10. 42If our management following our initial business combination is unfamiliar with U.S. securities laws, they may have to expend time and resources becoming familiar with such laws, which could lead to various regulatory issues

Risks Related to Our Sponsors and Management Team

1. 43We are dependent upon our officers and directors and their loss, or a reduction in the amount of time they can dedicate to our initial business combination, could adversely affect our ability to operate
2. 44Our officers and directors will 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. 45Our officers, directors, security holders and their respective affiliates may have competitive pecuniary interests that conflict with our interests
4. 46Members of our management team and affiliated companies may have been, and may in the future be, involved in civil disputes or governmental investigations unrelated to our business
5. 47Our A&R Letter Agreement with our Sponsors, officers, directors and advisors may be amended without shareholder approval

Risks Related to Our Securities

1. 48You will not have any rights or interests in funds from the Trust Account, except under certain limited circumstances. Therefore, to liquidate your investment, you may be forced to sell your Public Shares or Public Rights, potentially at a loss
2. 49If we are unable to consummate the Proposed Business Combination or another initial business combination by the date required in our Articles, the Public Shareholders may be forced to wait beyond such date before redemption from our Trust Account
3. 50Nasdaq may delist the Class A Ordinary Shares from trading on its exchange, which could limit investors’ ability to make transactions in our securities and subject us to additional trading restrictions
4. 51The grant of registration rights to our Sponsors and Representatives 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 securities
5. 52Our rights 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
6. 53Because each Unit contains one Right to receive one-fifth (1/5) of one Class A Ordinary Share upon the consummation of our initial business combination, and only whole shares will be issued in exchange for rights, the Units may be worth less than units of other special purpose acquisition companies
7. 54We may amend the terms of the Rights in a manner that may be adverse to holders of Rights with the approval by the holders of at least a majority of the then issued and outstanding Rights
8. 55However, under Cayman Islands law, our directors may only exercise the Rights and powers granted to them under our Articles for a proper purpose and for what they believe in good faith to be in the best interests of our company

General Risk Factors

1. 56We are a blank check company with no operating history and no revenues, and you have no basis on which to evaluate our ability to achieve our business objective
2. 57Past performance by our management team, our advisors and their respective affiliates, including investments and transactions in which they have participated and businesses with which they have been associated, may not be indicative of future performance of an investment in the Company
3. 58We are an exempted company incorporated under the laws of the Cayman Islands. As a result, it may be difficult for investors to effect service of process within the United States upon our directors or officers, or enforce judgments obtained in the United States courts against our directors or officers
4. 59If our initial business combination involves a company organized under the laws of the United States (or any subdivision thereof), a U.S. federal excise tax could be imposed on us in connection with any redemptions of our Class A Ordinary Shares after or in connection with such initial business combination
5. 60We may be a passive foreign investment company, or “PFIC,” which could result in adverse U.S. federal income tax consequences to U.S. investors
6. 61After our initial business combination, it is possible that a majority of our directors and officers will live outside the United States 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
7. 62Provisions in our Articles 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
8. 63Cyber incidents or attacks directed at us could result in information theft, data corruption, operational disruption and/or financial loss
9. 64Our Articles provide that the courts of the Cayman Islands will be the exclusive forums for certain disputes between us and our shareholders, which could limit our shareholders’ ability to obtain a favorable judicial forum for complaints against us or our directors, officers or employees
10. 65Recent increases in inflation in the United States and elsewhere could make it more difficult for us to complete our initial business combination