Yorkville Acquisition (MCGA) risk factors, FY2025 10-K

Risks Related to the Business and Strategy of the Combined Company

1. 01Cronos tokens are not currently used in an operating business, which makes it difficult to evaluate the Combined Company’s business and future prospects, and the Combined Company may not be able to achieve or maintain profitability in any given period
2. 02The Combined Company may not be able to successfully execute its business strategies
3. 03The occurrence of any of these factors could adversely affect our CRO acquisition strategy
4. 04The Combined Company’s operating results, revenues and expenses may significantly fluctuate, including due to the highly volatile nature of CRO, which could have an adverse effect on the market price of the Combined Company’s Class A Common Stock
5. 05As a result of these factors, it is difficult for us to forecast growth trends accurately and the Combined Company’s business and future prospects are difficult to evaluate, particularly in the short term
6. 06The Combined Company’s CRO acquisition strategy exposes it to various risks associated with CRO
7. 07The Combined Company’s CRO holdings will be less liquid than its cash and cash equivalents and may not be able to serve as a source of liquidity for the Combined Company
8. 08CRO may be subject to dilution
9. 09If the Combined Company is unable to compete successfully, or if competing successfully requires it to take costly actions in response to the actions of the Combined Company’s competitors, its business, operating results and financial condition could be adversely affected
10. 10The Combined Company may suffer losses due to abrupt and erratic market movements
11. 11The emergence or growth of other digital assets, including those with significant private or public sector backing, including by governments, consortiums or financial institutions, could have a negative impact on the price of CRO and adversely affect the Combined Company’s business
12. 12proof-of-work mining like the Bitcoin network, a proof-of-stake model such as Ethereum or emerging variations of the foregoing consensus mechanisms
13. 13The Combined Company will rely on Crypto.com, which will have an indirect controlling interest in the Combined Company, for certain administrative and operational services
14. 14The Cronos network and its native digital asset, CRO is a relatively new technological innovation with a limited operating history
15. 15Digital assets may have concentrated ownership and large sales or distributions by holders of such digital assets, or any ability to participate in or otherwise influence a digital asset’s underlying network, could have an adverse effect on the market price of such digital asset
16. 16Changes in the governance of a digital asset network may not receive sufficient support from users and validators, which may negatively affect that digital asset network’s ability to grow and respond to challenges
17. 17CRO is created and transmitted through the operations of the Cronos POS chain, a decentralized network of computers running software built on the Cosmos SDK. If the Cronos network is disrupted or encounters any unanticipated difficulties, the value of CRO could be negatively impacted
18. 18Congestion or delay in the Cronos network may delay purchases or sales of CRO by the Combined Company
19. 19Validators may suffer losses due to staking, which could make the Cronos network less attractive
20. 20A disruption of the Internet may affect Cronos network operations, which may adversely affect the CRO industry and an investment in the Combined Company
21. 21Any future attacks that impact the ability to transfer CRO could have a material adverse effect on the price of CRO and the value of an investment in the Combined Company’s Class A Common Stock
22. 22Due to the nature of private keys, transactions involving CRO are irrevocable and stolen or incorrectly transferred CRO may be irretrievable. As a result, any incorrectly executed CRO transactions could adversely affect an investment in the Combined Company
23. 23The Combined Company’s limited insurance protection exposes it and its shareholders to the risk of loss of its CRO for which no person is liable
24. 24Accounting standards will cause the carrying value of the Combined Company’s CRO holdings as prepared in accordance with U.S. GAAP to be reported at a significant discount relative to the market value of CRO, which could materially adversely affect its financial position, operations and prospects
25. 25CRO and other forms of digital assets are relatively novel and have been the source of much regulatory uncertainty, resulting in differing definitional outcomes without a single unifying statement, which subjects them to significant uncertainty that could adversely impact their price
26. 26Regulatory changes classifying CRO as a “security” could lead to the Combined Company’s classification as an “investment company” under the Investment Company Act and could adversely affect the market price of CRO and the market price of shares of the Combined Company’s Class A Common Stock
27. 27Mutual funds, ETFs and their directors and management are subject to extensive regulation as “investment companies” and “investment advisers” under U.S. federal and state law; this regulation is intended for the benefit and protection of investors
28. 28The Combined Company’s compliance and risk management methods might not be effective and may result in outcomes that could adversely affect the Combined Company’s reputation, operating results and financial condition
29. 29The primary digital asset to be held by the Combined Company will be CRO
30. 30and Bitcoin cash between affiliated accounts in order to create the appearance of substantial trading activity and thereby influence the price of such assets
31. 31The price of CRO on available spot markets may be exposed to wash trading
32. 32The price of CRO on available spot markets may be exposed to front-running
33. 33If the digital asset award or transaction fees for recording transactions on the Cronos network are not sufficiently high to incentivize validators may demand high transaction fees, which could negatively impact the value of CRO and the value of the Combined Company’s Class A Common Stock
34. 34CRO is susceptible to various types of malicious attacks, including a “33%” attack or a “>66%” attack, and such an attack, even temporarily, could adversely impact the price of CRO and the value of shares of the Combined Company’s Class A Common Stock
35. 35If any of these exploitations or attacks occur, it could result in a loss of public confidence in CRO and a decline in the value of CRO and, as a result, adversely impact the Combined Company’s Class A Common Stock
36. 36Any name change and any associated rebranding initiative of CRO may not be favorably received by the digital asset community, which could negatively impact the value of CRO and the value of the Combined Company’s Class A Common Stock

Risks Related to Being a Public Company

1. 37The market price of the Combined Company’s Class A Common Stock may be volatile and decline materially as a result of volatility in CRO or the digital asset markets generally, or for other reasons
2. 38The Combined Company’s ability to timely raise capital in the future may be limited, or may be unavailable on acceptable terms, if at all. The Combined Company’s failure to raise capital when needed could harm its business, operating results and financial condition
3. 39The issuance of additional shares or convertible securities by the Combined Company could make it difficult for another company to acquire the Combined Company, may dilute the ownership of the Combined Company shareholders and could adversely affect the price of the Combined Company’s Class A Common Stock
4. 40After the consummation of the Business Combination and subject to certain exceptions, the Combined Company’s Class A Common Stock held or acquired by the Sponsor, the Sellers and certain other parties will be locked-up and subject to transfer restrictions, as described below, subject to certain exceptions
5. 41The Combined Company will incur significant costs post-Business Combination as a result of being a public company, including additional legal, accounting, insurance and other expenses, as well as costs associated with public company reporting requirements
6. 42The Combined Company’s management team is expected to have limited experience managing and operating a U.S. public company
7. 43If the Combined Company is unable to maintain an effective system of internal controls and compliances, its business and reputation could be adversely affected
8. 44The Combined Company will be an “emerging growth company.” The reduced public company reporting requirements applicable to emerging growth companies may make the Combined Company’s Class A Common Stock less attractive to investors
9. 45If securities or industry analysts do not publish research or reports about the Combined Company’s business or publish negative reports, the market price of the Combined Company’s Class A Common Stock could decline
10. 46The proposed bylaws for the Combined Company include an exclusive forum provision, which could limit a shareholder’s ability to obtain a favorable judicial forum for disputes with the Combined Company or its directors, officers or other employees

Risks Related to Ownership of the Combined Company Common Stock

1. 47Following the Business Combination
2. 48Crypto.com Sub, through its voting control of the Combined Company, is in a position to control actions that require shareholder approval and may make decisions that are adverse to other shareholders
3. 491 Update with correct defined term once drafted
4. 50Securities of companies formed through business combinations involving SPACs such as the Combined Company may experience a material decline in price relative to the share price of the SPACs prior to such transaction
5. 51Volatility in the Combined Company’s share price could subject the Combined Company to securities class action litigation
6. 52Since the completion of our Initial Public Offering, there has been a precipitous drop in the market values of companies formed through business combinations involving SPACs. Accordingly, securities of companies such as the Combined Company may be more volatile than other securities and may involve special risks
7. 53Reports published by analysts, including projections in those reports that differ from the Combined Company’s actual results, could adversely affect the price and trading volume of the Combined Company’s Common Stock
8. 54The Combined Company may or may not pay cash dividends in the foreseeable future
9. 55The Combined Company expects to qualify as a controlled company under applicable securities exchange rules and expects to avail itself of applicable exemptions from the corporate governance requirements thereof

Risks Related to Taxation

1. 56Unrealized fair value gains on the Combined Company’s CRO holdings could cause it to become subject to the corporate alternative minimum tax under the Inflation Reduction Act of 2022
2. 57Due to the new and evolving nature of digital currencies and the absence of comprehensive guidance with respect to digital currencies, many significant aspects of the U.S. federal income tax treatment of digital currency are uncertain
3. 58connection with redemptions pursuant to the Business Combination

Risks Related to the Business Combination and the Combined Company

1. 59Nasdaq may not list the Combined Company’s Class A Common Stock following the closing of the Business Combination, which could limit investors’ ability to trade those securities and subject them to additional trading restrictions
2. 60Legal proceedings related to the proposed Business Combination, the outcomes of which are uncertain, could delay or prevent completion of the transaction and result in significant costs
3. 61Subsequent to the consummation of the Business Combination, the Combined Company may be required to take write downs or write offs, restructuring and impairment or other charges that could negatively affect its financial condition, results of operations and share price
4. 62We will incur significant transaction and transition costs in connection with the Business Combination
5. 63Future resales of the Combined Company’s securities may cause the market price of such securities to decline, even if the Combined Company’s business is performing well
6. 64The Combined Company may issue additional shares or other equity securities without your approval, which would dilute your ownership interest and may depress the market price of the Combined Company’s Class A Common Stock
7. 65customers and negative media coverage, may result in significant decreases in the price of Combined Company’s Class A Common Stock
8. 66An active market for the Combined Company’s securities may not develop, which would adversely affect the liquidity and price of Combined Company’s securities
9. 67The Proposed Organizational Documents will provide that the Combined Company will indemnify its directors and officers, in each case to the fullest extent permitted by Florida law
10. 68The Combined Company will be deemed to be an “emerging growth company” and, as a result of the reduced disclosure and governance requirements applicable to emerging growth companies, the Combined Company’s Class A Common Stock may be less attractive to investors
11. 69Anti-takeover provisions contained in the Combined Company’s Proposed Articles of Incorporation and Proposed Bylaws, as well as provisions of Florida law, could impair a takeover attempt

Risks Related to the Combined Company Being a Public Company

1. 70The price of the Combined Company’s Class A Common Stock may fluctuate significantly following the Business Combination and you could lose all or part of your investment as a result
2. 71The Combined Company will incur increased costs as a result of operating as a public company, and the Combined Company’s management will be required to devote substantial time to new compliance initiatives and corporate governance practices
3. 72The Combined Company may issue additional shares of the Combined Company’s Common Stock or other equity securities without your approval, which would dilute your ownership interests and may depress the market price of your shares
4. 73The Combined Company’s business and operations could be negatively affected if it becomes subject to any securities litigation or shareholder activism, which could cause the Combined Company to incur significant expense, hinder execution of business and growth strategy and impact its stock price

Risks Related to the Company’s Business and the Business Combination

1. 74Our Sponsor, officers and directors have agreed to vote in favor of the Business Combination, regardless of how the Public Shareholders vote
2. 75At the closing of the Business Combination, the trading price per share value of Combined Company’s Class A Common Stock may be less than the per share value of the Trust Account
3. 76Warrants will become exercisable for the Combined Company’s Class A Common Stock, which would increase the number of shares eligible for future resale in the public market and result in dilution to our shareholders
4. 77Because the market price of the Company’s Class A Common Stock will fluctuate the Company cannot be sure of the value of the consideration they will receive in the Business Combination
5. 78The consummation of the Business Combination is subject to a number of conditions and if those conditions are not satisfied or waived, the Business Combination Agreement may be terminated in accordance with its terms and the Business Combination may not be completed
6. 79We may waive one or more of the conditions to the Business Combination
7. 80The Company’s Public Shareholders will not have any rights or interests in funds from the Trust Account, except under certain limited circumstances. To liquidate their investment, therefore, The Company’s Public Shareholders may be forced to sell their Public Shares or Public Warrants, potentially at a loss
8. 81The Company has agreed to indemnify its officers and directors to the fullest extent permitted by law
9. 82The Sponsor and the Company’s officers and directors have potential conflicts of interest in recommending that shareholders vote in favor of approval of the Business Combination Proposal and approval of the other proposals described in this proxy statement/prospectus
10. 83These interests may influence the Company’s directors in making their recommendation that you vote in favor of the Business Combination Proposal, and the transactions contemplated thereby. These interests were considered by the Company’s Board when it approved the Business Combination
11. 84The Company may redeem your unexpired Public Warrants prior to their exercise at a time that is disadvantageous to you, thereby making your Public Warrants worthless
12. 85The Proposed Organizational Documents include mandatory arbitration provisions, which follow different procedures than in-court litigation and may be more restrictive to shareholders asserting claims than in-court litigation
13. 86If 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 the Business Combination
14. 87each of which may make it difficult for us to complete the Business Combination

Risks Related to Redemptions

1. 88If a shareholder fails to receive notice of the Company’s offer to redeem the Public Shares in connection with the Business Combination, or fails to comply with the procedures for tendering its shares, such shares may not be redeemed
2. 89The Company does not have a specified maximum redemption threshold. The absence of such a redemption threshold may make it possible for the Company to complete the Business Combination with which a substantial majority of the Company’s shareholders do not agree
3. 90If we are unable to consummate our initial business combination, Public Shareholders may be forced to wait until after the Deadline Date before redemption from the Trust Account
4. 91If a shareholder or a “group” of shareholders are deemed to hold in excess of 15% of the Company’s issued and outstanding Class A Ordinary Shares, such shareholder or group will lose the ability to redeem all such shares in excess of 15% of the Company’s issued and outstanding Class A Ordinary Shares
5. 92If third parties bring claims against the Company, the proceeds held in the Trust Account could be reduced and the per- share redemption amount received by shareholders may be less than $10.05 per share
6. 93The Company’s directors may decide not to enforce the indemnification obligations of the Sponsor, resulting in a reduction in the amount of funds in the Trust Account available for distribution to the Public Shareholders
7. 94Our 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
8. 95There is no guarantee that a shareholder’s decision whether to redeem their Class A Ordinary Shares for a pro rata portion of the Trust Account will put the shareholder in a better future economic position
9. 96There is substantial doubt about our ability to continue as a “going concern” and therefore we may need to raise additional capital which could be convertible into securities upon the closing of our initial business combination