Berto Acquisition (TACO) risk factors, FY2025 10-K

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

1. 01If we seek shareholder approval of our initial business combination, our initial shareholders and management team have agreed to vote in favor of such initial business combination, regardless of how our public shareholders vote
2. 02Your only opportunity to effect your investment decision regarding a potential business combination may be limited to the exercise of your right to redeem your shares from us for cash
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, and may substantially dilute your investment in us
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. 06We may not be able to complete our initial business combination within the completion window, in which case we would redeem our public shares
7. 07We may decide not to extend the term we have to consummate our initial business combination, in which case we would redeem our public shares
8. 08If we seek shareholder approval of our initial business combination, our sponsor, initial shareholders, directors, officers, advisors or their affiliates may elect to purchase public shares or warrants from public shareholders, which may reduce the public “float” of our securities
9. 09If 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
10. 10You will not be entitled to protections normally afforded to investors of other blank check companies subject to Rule 419 of the Securities Act
11. 11If we are unable to complete our initial business combination, our public shareholders may receive only their pro rata portion of the funds in the trust account that are available for distribution to public shareholders
12. 12If 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
13. 13Our 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
14. 14Changes in laws or regulations or in how such laws or regulations are interpreted or applied, 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
15. 15Our shareholders may be held liable for claims by third parties against us to the extent of distributions received by them upon redemption of their shares
16. 16We 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
17. 17Because we are neither limited to evaluating a target business in a particular industry sector nor have we selected 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
18. 18Evolving regulatory requirements and increasing public and private scrutiny may adversely affect our search for potential opportunities in the AI industry with which to complete our initial business combination
19. 19We 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
20. 20The post-business combination company may issue shares to investors in connection with our initial business combination at a price which is less than $10.00 or the prevailing market price of our shares at that time, which could dilute the interests of our existing shareholders and add costs
21. 21We 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
22. 22We 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
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 our initial business combination with which a substantial majority of our shareholders do not agree
24. 24Certain agreements related to the IPO may be amended without shareholder approval
25. 25We 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
26. 26Upon closing of the IPO, our initial shareholders owned 20% of our issued and outstanding ordinary shares. Accordingly, they may exert a substantial influence on actions requiring a shareholder vote, potentially in a manner that you do not support, including amendments to our articles
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
29. 29We 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
30. 30Our initial business combination and our structure thereafter may not be tax-efficient to our shareholders and warrant holders. As a result of our business combination, our tax obligations may be more complex, burdensome and uncertain

Risks Relating to the Post-Business Combination Company

1. 31We may have a limited ability to assess the management of a prospective target business and, as a result, may effect our initial business combination with a target business whose management may not have the skills, qualifications or abilities to manage a public company
2. 32The 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
3. 33Our 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

Risks Relating to Acquiring and Operating a Business in Foreign Countries

1. 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
2. 35If 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
3. 36Many 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
4. 37Delay 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
5. 38After 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
6. 39Exchange rate fluctuations and currency policies may cause a target business’ ability to succeed in the international markets to be diminished
7. 40We may reincorporate in or transfer by way of continuation to another jurisdiction in connection with our initial business combination, and the laws of such jurisdiction may govern some or all of our future material agreements and we may not be able to enforce our legal rights

Risks Relating to Our Management Team

1. 41We may not have sufficient funds to satisfy indemnification claims of our directors and officers
2. 42Past performance by our management team and their affiliates may not be indicative of future performance of an investment in us
3. 43We may seek business combination opportunities in industries or sectors that may be outside of our management’s areas of expertise
4. 44We 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
5. 45Our 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
6. 46Our officers and directors presently have, and any of them in the future may have additional, fiduciary or contractual obligations to other entities, including blank check companies, and, accordingly, may have conflicts of interest in determining to which entity a particular business opportunity should be presented
7. 47Our officers, directors, security-holders and their respective affiliates may have competitive pecuniary interests that conflict with our interests
8. 48We 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

Risks Relating to Our Securities

1. 49You 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 warrants, potentially at a loss
2. 50Nasdaq 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. 51Because our sponsor, sponsor affiliates and a consultant each acquired the founder shares at a nominal price (approximately $0.003 per share), our public shareholders incurred an immediate and material dilution upon the closing of the IPO
4. 52Investment of initial shareholders per share(3) $ 0.47
5. 53(3) The total investment of the initial shareholders, including the sponsor, sponsor affiliates and the consultant, in the equity of the company, inclusive of the purchase of founder shares totaling $25,000 and the sponsor’s $3,500,000 investment in the private placement warrants, is $3,525,000
6. 54You will not be permitted to exercise your warrants unless we register and qualify the underlying ordinary shares or certain exemptions are available
7. 55You may only be able to exercise your public warrants on a “cashless basis” under certain circumstances, and if you do so, you will receive fewer ordinary shares from such exercise than if you were to exercise such warrants for cash
8. 56The grant of registration rights to our initial shareholders and holders of our private placement warrants and underwriter warrants 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 ordinary shares
9. 57We may issue additional ordinary shares or preference shares to complete our initial business combination or under an employee incentive plan after completion of our initial business combination. Any such issuances would dilute the interest of our shareholders and likely present other risks
10. 58A provision of our warrant agreement may make it more difficult for us to consummate an initial business combination
11. 59We may redeem your unexpired public warrants prior to their exercise at a time that is disadvantageous to you, thereby making your warrants worthless
12. 60Our warrants may have an adverse effect on the market price of our ordinary shares and make it more difficult to effectuate our initial business combination
13. 61Because each Unit contains one-half of one warrant and only a whole warrant may be exercised, the Units may be worth less than Units of other SPACs
14. 62We 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
15. 63We 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
16. 64Past 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
17. 65Cyber incidents or attacks directed at us could result in information theft, data corruption, operational disruption and/or financial loss
18. 66We may be a passive foreign investment company, or PFIC, which could result in adverse United States federal income tax consequences to U.S. investors
19. 67We may reincorporate in another jurisdiction, which may result in taxes imposed on shareholders or warrant holders
20. 68The 1% U.S. federal excise tax on stock buybacks could be imposed on redemptions of our stock if we were to become a “covered corporation” in the future