Starry Sea Acquisition (SSEA) risk factors, FY2025 10-K

Other

1. 01We are a newly formed blank check company with no operating history and no revenues, and, accordingly, you will not have any basis on which to evaluate our ability to achieve our business objective
2. 02If we are unable to consummate a business combination, our public shareholders may be forced to wait more than 15 months before receiving liquidation distributions
3. 03The ability of a large number of our shareholders to exercise redemption rights may not allow us to consummate the most desirable business combination or optimize our capital structure
4. 04We may not be able to consummate an initial business combination within a specific period of time or, if such period is extended, within such extended period, in which case we would cease all operations except for the purpose of winding up and we would redeem our public shares and liquidate
5. 05Our ability to consummate an attractive business combination may be impacted by the market for Initial Public Offering s
6. 06We face competition in finding an attractive target for an initial business combination. This could increase the costs associated with completing our initial business combination and may result in our inability to find a suitable target
7. 07You will not be entitled to protections normally afforded to investors of blank check companies
8. 08We may issue additional ordinary or preferred shares or debt securities to complete a business combination, which would reduce the equity interest of our shareholders and likely cause a change in control of our ownership
9. 09We may be unable to obtain additional financing, if required, to complete a business combination or to fund the operations and growth of the target business, which could compel us to restructure or abandon a particular business combination
10. 10If third parties bring claims against us, the proceeds held in trust could be reduced and the per-share redemption price received by shareholders may be less than $10.00
11. 11Our shareholders may be held liable for claims by third parties against us to the extent of distributions received by them
12. 12If we deviate from the acquisition criteria or guidelines set forth in this Annual Report, investors in our Initial Public Offering may have rescission rights or may bring an action for damages against us or we could be subject to civil or criminal actions taken by governmental authorities
13. 13Holders of rights will not have redemption rights if we are unable to complete an initial business combination within the required time period
14. 14If a public holder fails to receive notice of our offer to redeem our ordinary 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
15. 15We 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
16. 16Since we have not yet selected a particular industry or target business with which to complete a business combination, we are unable to currently ascertain the merits or risks of the industry or business in which we may ultimately operate
17. 17Our officers and directors may not have significant experience or knowledge regarding the jurisdiction or industry of the target business we may seek to acquire
18. 18Our officers and directors will allocate their time to other businesses, thereby potentially limiting the amount of time they devote to our affairs. This conflict of interest could have a negative impact on our ability to consummate our initial business combination
19. 19Our officers and directors have pre-existing fiduciary and contractual obligations and accordingly, may have conflicts of interest in determining to which entity a particular business opportunity should be presented
20. 20Our officers’ and directors’ personal and financial interests may influence their motivation in determining whether a particular target business is appropriate for a business combination
21. 21Past performance by our management team and our sponsor may not be indicative of future performance of an investment in us
22. 22Our letter agreement with our sponsor, officers and directors may be amended without shareholder approval
23. 23Nasdaq 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
24. 24We may only be able to complete one business combination with the proceeds of our Initial Public Offering, which will cause us to be solely dependent on a single business with a limited number of products or services
25. 25This lack of diversification may subject us to numerous economic, competitive and regulatory developments, any or all of which may have a substantial adverse impact on the particular industry in which we may operate subsequent to a business combination
26. 26Our public shareholders’ ability to exercise their redemption rights or sell their public shares to us in a tender offer may not allow us to effectuate the most desirable business combination or optimize our capital structure
27. 27Our public shareholders may not be afforded an opportunity to vote on our proposed business combination, which means we may consummate our initial business combination even though a majority of our public shareholders do not support such a combination
28. 28Investors may not have sufficient time to comply with the delivery requirements for conversion
29. 29If we require public shareholders who wish to convert their public shares to comply with the delivery requirements for conversion, such converting shareholders may be unable to sell their securities when they wish to in the event that the proposed business combination is not approved
30. 30Other companies may have a competitive advantage and we may not be able to consummate an attractive business combination
31. 31Our initial shareholders control a substantial interest in us, and thus may influence certain actions requiring a shareholder vote, potentially in a manner that you do not support
32. 32The purchase price for the initial shares payable by our initial shareholders was $25,000, or approximately $0.017 per share. Accordingly, you will experience immediate and substantial dilution from the purchase of our ordinary shares
33. 33Our outstanding rights or the conversion of the promissory notes upon consummation of our business combination into private units may have an adverse effect on the market price of our ordinary shares and make it more difficult to effect a business combination
34. 34If our shareholders exercise their registration rights with respect to their securities, it may have an adverse effect on the market price of our ordinary shares and the existence of these rights may make it more difficult to effect a business combination
35. 35If we were 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 a business combination
36. 36We may not seek an opinion from an unaffiliated third party as to the fair market value of the target business we acquire
37. 37We may acquire a target business that is affiliated with our officers, directors, initial shareholders or their affiliates
38. 38The determination of the offering price of our units is more arbitrary than the pricing of securities for an operating company in a particular industry
39. 39There is currently no market for our securities and a market for our securities may not develop, which would adversely affect the liquidity and price of our securities
40. 40Because we are incorporated under the laws of the Cayman Islands, and most of our executive officers and directors are located outside the United States, you may face difficulties in protecting your interests, and your ability to protect your rights through the U.S. Federal or state courts may be limited
41. 41We have appointed Puglisi & Associates as our agent to receive service of process with respect to any action brought against us in the state or federal courts of the United States in connection with our Initial Public Offering under the securities laws of the United States
42. 42As a result of all of 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 United States company
43. 43If 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 ordinary shares after or in connection with such initial business combination
44. 44As an entity incorporated as a Cayman Islands exempted company, the 1% excise tax is not expected to apply to redemptions of our ordinary shares, absent any regulations and other additional guidance that may be issued in the future with retroactive effect
45. 45Compliance with the Sarbanes-Oxley Act will require substantial financial and management resources and may increase the time and costs of completing an acquisition
46. 46We are an “emerging growth company,” and the reduced disclosure requirements applicable to emerging growth companies may make our securities less attractive to investors
47. 47Our initial business combination and our structure thereafter may not be tax-efficient to holders of our ordinary shares and rights. As a result of our business combination, our tax obligations may be more complex, burdensome and uncertain
48. 48The management following a business combination may be unfamiliar with the laws and regulations applicable to a U.S. public company, which could lead to various regulatory issues
49. 49Our search for a business combination, and any target business with which we ultimately consummate a business combination, may be materially adversely affected by extraordinary events and the status of debt and equity markets
50. 50Your only opportunity to affect the investment decision regarding a potential business combination may be limited to the exercise of your right to redeem your shares from us for cash
51. 51The 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 our initial business combination with a target
52. 52If we seek shareholder approval of our initial business combination, all of our existing shareholders, including all of our officers and directors, have agreed to vote in favor of such initial business combination, regardless of how our public shareholders vote
53. 53If we seek shareholder approval of our business combination, our sponsor, directors, officers, advisors and their affiliates may elect to purchase shares from shareholders, in which case they may influence a vote in favor of a proposed business combination that you do not support
54. 54○ the number of company securities for which we received redemption requests pursuant to our redemption offer
55. 55Your only opportunity to affect the investment decision regarding a potential business combination may be limited to the exercise of your right to redeem your shares from us for cash, unless we seek shareholder approval of the initial business combination
56. 56You will not have any rights or interests in funds from the trust account, except under certain limited circumstances. Therefore, you may be forced to sell your public shares, potentially at a loss, to liquidate your investment
57. 57We may be limited to the funds held outside of the trust account to fund our search for target businesses, to pay our tax obligations and expenses, and to complete our initial business combination
58. 58If the net proceeds of our Initial Public Offering not being held in the trust account are insufficient to allow us to operate for at least the next 15 months, we may be unable to complete our initial business combination
59. 59Subsequent to the consummation of our initial business combination, we may be required to take write-downs or write-offs, restructuring and impairment or other charges
60. 60Our directors may decide not to enforce indemnification obligations against our sponsor, resulting in a reduction in the amount of funds in the trust account available for distribution to our public shareholders
61. 61Because we have not selected a particular business or specific geographic location 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’ operations
62. 62We may seek investment opportunities outside our management’s area of expertise and our management may not be able to adequately ascertain or assess all significant risks associated with the target company
63. 63Management’s flexibility in identifying and selecting a prospective acquisition candidate, along with our management’s financial interest in consummating our initial business combination, may cause management to enter into an acquisition agreement that is not in the best interest of our shareholders
64. 64Resources could be wasted in researching acquisitions that are not consummated
65. 65We may attempt to consummate our initial business combination with a private company about which little information is available
66. 66We may not be able to maintain control of a target business after our initial business combination
67. 67We may effect a business combination with a company located outside of the United States and, if we do so, we would be subject to a variety of additional risks that may negatively impact our business operations and financial results
68. 68Because of the costs and difficulties inherent in managing cross-border business operations, our results of operations may be negatively impacted
69. 69Political events in another country may significantly affect our business, assets or operations. Social unrest, acts of terrorism, regime changes, changes in laws and regulations, political upheaval, and policy changes or enactments could negatively impact our business in a particular country
70. 70Many 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
71. 71If 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
72. 72In addition, our directors and officers are nationals or residents of Malaysia, Hong Kong, the PRC and the United States, and most or a substantial portion of their assets are located in the aforementioned locations
73. 73If relations between the United States and foreign governments deteriorate, it could cause potential target businesses or their goods and services to become less attractive
74. 74If any dividend is declared in the future and paid in a foreign currency, you may be taxed on a larger amount in U.S. dollars
75. 75Currency policies may cause a target business’ ability to succeed in the international markets to be diminished
76. 76Many of the economies in Asia are experiencing substantial inflationary pressures, which may prompt the governments to take action to control the growth of the economy and inflation that could lead to a significant decrease in our profitability following our initial business combination
77. 77Many industries in Asia are subject to government regulations that limit or prohibit foreign investments in such industries, which may limit the potential number of acquisition candidates
78. 78If a country in Asia enacts regulations in industry segments that forbid or restrict foreign investment, our ability to consummate our initial business combination could be severely impaired
79. 79Corporate governance standards in Asia may not be as strict or developed as in the United States and such weakness may hide issues and operational practices that are detrimental to a target business
80. 80If we decide to consummate our initial business combination with a target business based in and primarily operating in China, the initial business combination may be subject to the Trial Measures
81. 81U.S. laws and regulations, including the HFCAA and AHFCAA, may impact the trading in our securities and restrict or eliminate our ability to complete a business combination with certain companies, particularly those acquisition candidates with substantial operations in mainland China or Hong Kong
82. 82Compliance with the PRC Antitrust law may limit our ability to effect our initial business combination
83. 83Regulations relating to the transfer of state-owned property rights in enterprises may increase the cost of our acquisitions and impose an additional administrative burden on us
84. 84Our initial business combination may be subject to national security review by the PRC government and we may have to spend additional resources and incur additional time to complete any such business combination or be prevented from pursuing certain investment opportunities
85. 85We do not believe the approval of the CSRC is required in connection with our Initial Public Offering; however, if required, we cannot predict whether we will be able to obtain such approval
86. 86There are uncertainties in the interpretation and enforcement of PRC laws and regulations that could limit the legal protections available to you and us
87. 87If our initial business combination target is a PRC company with operations in China, its business, prospects, financial condition and results of operations may be influenced to a significant degree by political, economic and social conditions in China generally and by continued economic growth in China as a whole
88. 88You may face difficulties in protecting your interests and exercising your rights as a shareholder if we were to conduct substantially all of our operations in China, and almost all of our officers and directors currently and will likely reside outside the U.S
89. 89Governmental control of currency conversion may affect the value of your investment
90. 90As a result, the PRC subsidiaries of the combined company will need to obtain SAFE approval to pay off their debt in a currency other than Renminbi owed to any entities outside China or to make other capital expenditure payments outside China in a currency other than Renminbi
91. 91We may consummate a business combination with a target business based in and primarily operating in China, after which the PRC subsidiaries of the combined company will be subject to restrictions on dividend payments
92. 92The M&A Rules and certain other PRC regulations establish complex procedures for certain acquisitions of Chinese companies by foreign investors, which could make it more difficult for us to pursue a business combination with a China-based business
93. 93Enhanced scrutiny over acquisition transactions by the PRC tax authorities may have a negative impact on potential acquisitions we may pursue in the future