Introduction
Inception Growth Acquisition
Limited is a blank check company formed for the purpose of effecting a merger, share exchange, asset acquisition, share purchase, reorganization
or similar business combination with one or more businesses or entities, which we refer to as our initial business combination.
On September 12, 2023, we
entered into that certain Business Combination Agreement with IGTA Merger Sub Limited, a British Virgin Islands company and our wholly
owned subsidiary, AgileAlgo Holdings Ltd., a British Virgin Islands company (“AgileAlgo”), and certain shareholders of AgileAlgo
(the “Signing Sellers”, who together own approximately 88.3% of AgileAlgo’s issued and outstanding shares), and which
agreement may also be thereafter executed by each of the other shareholders of AgileAlgo (such shareholders who become party to such agreement,
the “Joining Sellers”, and together with the Signing Sellers, the “Sellers”) in one or more joinder agreements
thereto (such Business Combination Agreement together with any such joinder agreements, as they may be amended from time to time, the
“Business Combination Agreement”), which provides for a business combination between us and AgileAlgo.
On each of June 20, 2024
and December 16, 2024, the parties to the Business Combination Agreement amended the Business Combination Agreement to extend the outside
date required for the Closing to occur until March 31, 2025 (with either party being able to terminate the Business Combination Agreement
for passage of such date) and to clarify a condition to Closing regarding PubCo being required to list PubCo Ordinary Shares on Nasdaq.
On March 27, 2025, the parties
to the Business Combination Agreement entered into an Amendment No. 3 to the Business Combination Agreement (the “Amendment No.
3”). The Amendment No. 3 serves to amend the Business Combination Agreement to extend the Outside Closing Date (as defined in the
Business Combination Agreement) to May 31, 2025. The Amendment No. 3 further amends the Business Combination Agreement that the Company
may terminate the Business Combination Agreement by giving notice to IGTA if the common stock of IGTA has become delisted from Nasdaq
and either the Parent Common Stock is, or the Purchaser Ordinary Shares are, not relisted on Nasdaq or the New York Stock Exchange on
or prior to the Outside Closing Date. The Amendment No. 3 further provides for IGTA’s consent to and related waivers regarding certain
transfers and issuances of Company ordinary shares as required by Section 7.1 of the Business Combination Agreement.
On May 6, 2025, the parties
to the Business Combination Agreement entered into an Amendment No. 4 to the Business Combination Agreement (the “Amendment No.
4”), which serves to amend the Business Combination Agreement to extend the Outside Closing Date to July 31, 2025. The Amendment
No. 4 further provides for IGTA’s consent to and related waivers regarding certain transfers and issuances of Company ordinary shares
as required by Section 7.1 of the Business Combination Agreement.
On July 31, 2025, the parties
to the Business Combination Agreement entered into an Amendment No. 5 to the Business Combination Agreement (the “Amendment No.
5”), which serves to amend the Business Combination Agreement to extend the Outside Closing Date to October 14, 2025. The Amendment
No. 5 further amends the Earnout Period do as to begin on October 1, 2025 and conclude at the end of the third fiscal quarter thereafter
(i.e., June 30, 2026).
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On August 7, 2025, the parties
to the Business Combination Agreement entered into Amendment No. 6 to the Business Combination Agreement (the “Amendment No. 6”),
which serves to amend the Business Combination Agreement to amend the Earnout Period so as to begin on April 1, 2026 and conclude at the
end of the third fiscal quarter thereafter (i.e., December 31, 2026).
Initial Public Offering
On December 13, 2021,
we consummated our initial public offering (“IPO”) of 9,000,000 units (the “Units”), each Unit consisting of
one share of common stock of the Company, par value $0.0001 per share (the “Common Stock”), one-half of one redeemable
warrant (the “Public Warrant”), each whole Warrant entitling the holder thereof to purchase one share of common stock
for $11.50 per share, and one right (the “Right”) to receive one-tenth (1/10) of a share of common stock upon
consummation of an initial business combination. The Units were sold at a price of $10.00 per Unit, generating aggregate gross
proceeds to the Company of $90,000,000. On December 9, 2021, the underwriters of the IPO fully exercised their over-allotment
option, and the closing and sale of an additional 1,350,000 Units (the “Over-Allotment Units”) occurred on December 13,
2021. The issuance by the Company of the Over-Allotment Units at a price of $10.00 per Unit resulted in total gross proceeds of
$13,500,000.
Simultaneously with the closing
of the IPO and the sale of the over-allotment units on December 13, 2021, the Company consummated the private placement (“Private
Placement”) with the Sponsor of 4,721,250 warrants (the “Private Warrants”) at a price of $1.00 per Private Warrant,
generating total proceeds of $4,721,250. These Private Warrants were issued pursuant to an exemption from registration under the Securities
Act of 1933, as amended pursuant to Section 4(2) of the securities Act.
The Private Warrants are
identical to the Public Warrants except that the Private Warrants will be non-redeemable and the shares of common stock issuable upon
exercise thereof are entitled to registration rights pursuant to the Registration Rights Agreement, in each case so long as they continue
to be held by the Sponsor or their permitted transferees. Additionally, our Sponsor has agreed not to transfer, assign, or sell any of
the Private Warrants or underlying securities (except in limited circumstances, as described in the Registration Statement) until 30 days
after the Company completes its initial business combination.
As of December 13, 2021,
a total of $104,535,351 of the net proceeds from the IPO (including the over-allotment) and the Private Placement were deposited in a
Trust Account established for the benefit of the Company’s public stockholders. The proceeds held in the Trust Account may be invested
by the trustee only in U.S. government treasury bills with a maturity of 180 days or less or in money market funds investing solely in
U.S. government treasury obligations and meeting certain conditions under Rule 2a-7 under the Investment Company Act. On January 21, 2022,
our shares of common stock, warrants and rights underlying the Public Units sold in our IPO began to trade separately on a voluntary basis.
Since our IPO, our sole business
activity has been identifying and evaluating suitable acquisition transaction candidates. The outbreak of the COVID-19 coronavirus has
resulted in a widespread health crisis that has adversely affected the economies and financial markets worldwide, and potential target
companies may defer or end discussions for a potential business combination with us whether or not COVID-19 affects their business operations.
The extent to which COVID-19 impacts our search for a business combination will depend on future developments, which are highly uncertain
and cannot be predicted, including new information which may emerge concerning the severity of COVID-19 and the actions to contain COVID-19
or treat its impact, among others. We may be unable to complete a business combination if continued concerns relating to COVID-19 restrict
travel, limit the ability to have meetings with potential investors or the target company’s personnel, vendors and services providers
are unavailable to negotiate and consummate a transaction in a timely manner.
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Moreover, United States and
global markets are experiencing volatility and disruption following the geopolitical instability resulting from the ongoing Russia-Ukraine
conflict and the recent escalation of conflict in the Middle East and Southwest Asia. In response to the ongoing Russia-Ukraine conflict,
the North Atlantic Treaty Organization (“NATO”) deployed additional military forces to eastern Europe, and the United States,
the United Kingdom, the European Union and other countries have announced various sanctions and restrictive actions against Russia, Belarus
and related individuals and entities, including the removal of certain financial institutions from the Society for Worldwide Interbank
Financial Telecommunication (SWIFT) payment system. Certain countries, including the United States, have also provided and may continue
to provide military aid or other assistance to Ukraine and to Israel, or have undertaken or will undertake military strikes in Southwest
Asia, increasing geopolitical tensions among a number of nations. The invasion of Ukraine by Russia and the escalation of conflict in
the Middle East and Southwest Asia and the resulting measures that have been taken, and could be taken in the future, by NATO, the United
States, the United Kingdom, the European Union, Israel and its neighboring states and other countries have created global security concerns
that could have a lasting impact on regional and global economies. Although the length and impact of the ongoing conflicts are highly
unpredictable, they could lead to market disruptions, including significant volatility in commodity prices, credit and capital markets,
as well as supply chain interruptions and increased cyber-attacks against U.S. companies. Additionally, any resulting sanctions could
adversely affect the global economy and financial markets and lead to instability and lack of liquidity in capital markets.
Any of the abovementioned
factors, or any other negative impact on the global economy, capital markets or other geopolitical conditions resulting from the Russian
invasion of Ukraine, the escalation of conflict in the Middle East and Southwest Asia and subsequent sanctions or related actions, may
lead to increased volume and price volatility for publicly traded securities or could adversely affect our search for an initial business
combination by adversely affecting the operations or financial condition of potential target companies, any of which could make it more
difficult for us to consummate an initial business combination on acceptable commercial terms, or at all. The extent and duration of the
ongoing conflicts, resulting sanctions and any related market disruptions are impossible to predict, but could be substantial, particularly
if current or new sanctions continue for an extended period of time or if geopolitical tensions result in expanded military operations
on a global scale. If these disruptions or other matters of global concern continue for an extensive period of time, our ability to consummate
an initial business combination may be materially adversely affected.
As disclosed in our prospectus
in relation to the IPO, we originally had 15 months after the consummation of the IPO to consummate an initial business combination and
may extend such period to a total of 21 months after the consummation of the IPO by depositing certain sum into its Trust Account. As
approved by our stockholders at the annual meeting of Stockholders held on March 13, 2023, we entered into an amendment to the investment
management trust agreement, dated December 8, 2021 (the “Trust Agreement”), on March 13, 2023 with Continental Stock Transfer&
Trust Company, giving us the right to extend the time to complete a business combination for a period of six months from March 13, 2023
to September 13, 2023 without having to make any payment to the Trust Account. Subsequently on September 8, 2023 at a special meeting
of stockholders, our stockholders approved an amendment of our certificate of incorporation and a further amendment to the Trust Agreement,
such that we have the right to extend the date by which we have to consummate a business combination by nine times for an additional one
(1) month each time from September 13, 2023 to June 13, 2024 by depositing into the Trust Account the lesser of (i) $100,000 and (ii)
an aggregate amount equal to $0.04 multiplied by the number of Public Share that has not been redeemed for each one-month extension. On
each of September 8, 2023, October 5, 2023, November 1, 2023, November 29, 2023, January 4, 2024, February 5, 2024, February 27, 2024,
April 3, 2024 and May 6, 2024, we deposited $100,000 into our Trust Account in order to extend the amount of time we have available to
complete a business combination.
Subsequently on June 4, 2024
at the annual meeting of stockholders, Inception Growth’s stockholders approved an amendment of Inception Growth’s certificate
of incorporation and a further amendment to the Trust Agreement, such that Inception Growth has the right to extend the date by which
it has to consummate a business combination by six times for an additional one (1) month each time from June 13, 2024 to December 13,
2024 by depositing into the Trust Account the lesser of (i) $50,000 and (ii) an aggregate amount equal to $0.04 multiplied by the number
of Public Share that has not been redeemed for each one-month extension. On each of June 6, 2024, July 8, 2024, August 1, 2024, September
5, 2024, October 2, 2024 and November 12, 2024, Inception Growth deposited $50,000 into Inception Growth’s Trust Account in order
to extend the amount of time it has available to complete a business combination.
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On December 6, 2024, at a
special meeting of stockholders, Inception Growth’s stockholders approved an amendment of Inception Growth’s certificate of
incorporation and a further amendment to the Trust Agreement, which would give Inception Growth the right to extend the date by which
it has to consummate a business combination by six times for an additional one (1) month each time from December 13, 2024 to June 13,
2025 by depositing into the Trust Account an aggregate amount that equals to $0.04 multiplied by the number of Public Shares that have
not been redeemed for each one-month extension. On each of December 12, 2024, January 9, 2025, February 12, 2025 and March 12, 2025, Inception
Growth deposited a monthly deposit of $11,199 into Inception Growth’s Trust Account in order to extend the amount of time it has
available to complete a business combination by one month. Currently, we have until April 13, 2025 (which may be extended by similar monthly
deposits until June 13, 2025) to complete a business combination.
On each of December 12, 2024,
January 9, 2025, February 12, 2025, March 12, 2025, April 10, 2025 and May 12, 2025, the Company deposited a monthly deposit of $11,199
into the Trust Account in order to extend the amount of time it has available to complete a business combination.
On June 5, 2025, the Company
held its annual meeting, which was devoted to, among other proposals, proposals to extend the date by which the Company has to consummate
a business combination by four times for an additional one month each time from June 13, 2025 to October 13, 2025 by depositing into the
trust account an aggregate amount equal to $0.075 multiplied by the number of common stock issued in the Company’s IPO that has
not been redeemed for each one-month extension.
On each of June 10, 2025,
July 7, 2025, August 11, 2025 and September 10, 2025, the Company deposited $13,249.65 into the Trust Account in order to extend the amount
of time it has available to complete a business combination to October 13, 2025.
On October 9, 2025, at a
special meeting of stockholders (the “2025 Special Meeting”), the Company’s stockholders approved an amendment of the
Company’s certificate of incorporation and a further amendment to the Trust Agreement, which would give the Company the right to
extend the date by which it has to consummate a business combination by four times for an additional one (1) month each time from October
13, 2025 to February 13, 2026 by depositing into the Trust Account an aggregate amount that equals to $0.075 multiplied by the number
of Public Shares that have not been redeemed for each one-month extension.
On each of October 9, 2025,
November 10, 2025, December 9, 2025 and January 12, 2026, the Company deposited $13,242.15 into the Trust Account in order to extend the
amount of time it has available to complete a business combination to February 13, 2026.
On January 20, 2026, at a
special meeting of stockholders (the “2026 Special Meeting”), the Company’s stockholders approved an amendment of the
Company’s certificate of incorporation and a further amendment to the Trust Agreement, which would give the Company the right to
extend the date by which it has to consummate a business combination by six times for an additional one (1) month each time from February
13, 2026 to August 13, 2026 by depositing into the Trust Account an aggregate amount that equals to $0.075 multiplied by the number of
Public Shares that have not been redeemed for each one-month extension.
On each of February 12, 2026, March 13, 2026 and April 13, 2026, the
Company deposited $12,203 into the Trust Account in order to extend the amount of time it has available to complete a business combination
to May 13, 2026. Currently, the Company has until May 13, 2026 to complete a business combination.
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We received a notice, dated
December 10, 2024 (the “Nasdaq Notice”) from Nasdaq, stating that Inception Growth did not comply with Nasdaq Interpretive
Material IM-5101-2, according to which a special purpose acquisition company must complete one or more business combinations within 36
months of the effectiveness of its IPO registration statement. Since Inception Growth did not complete its initial business combination
by December 8, 2024, the Nasdaq Notice provided that trading of Inception Growth’s securities on Nasdaq would be suspended at the
opening of business on December 17, 2024 (the “Trading Suspension”), and a Form 25-NSE would be filed with the SEC, which
would remove Inception Growth’s securities from listing on The Nasdaq Stock Market. Following the Trading Suspension, as discussed
above, Inception Growth’s securities commenced trading on the OTC Markets at the opening of business on December 17, 2024, under
the same trading symbols, respectively, that each of those securities traded on Nasdaq. See “Nasdaq Rule 5815 was amended effective
October 7, 2024 to provide for the immediate suspension and delisting for failure to meet the 36-month requirement in Nasdaq Rule IM 5101-2(b)
to complete a business combination, and Inception Growth’s securities were suspended from trading on Nasdaq and delisted at the
opening of business on December 17, 2024.”
As of December 17, 2024,
the IGTA Units, IGTA Shares, IGTA Warrants and IGTA Rights commenced trading on the OTC Markets under the symbols “IGTAU,”
“IGTA,” “IGTAW” and “IGTAR,” respectively. Until December 17, 2024, each of these securities were
traded on the Nasdaq Capital Market (where they had been trading under these same symbols shown above) until the Trading Suspension (as
defined below). On December 17, 2024, Inception Growth’s securities commenced trading under their above referenced symbols on the
OTC Markets.
Industries Overview
Our objectives are to generate
compelling attractive returns and to enhance value through top line growth and hands-on operational improvement for our potential
target companies. We believe our management team’s personnel, network and relationships combined with their unique and diversified
experiences in investing, operating and transforming businesses will uniquely position our team to identify and execute attractive business
combination opportunities. Our efforts to identify a prospective target business will not be limited to a particular industry or geographic
location, except that we shall not undertake our initial business combination with any entity with its principal business operations in
China (including Hong Kong and Macau). We plan to target companies that compete in the following industries in the United States
and/or Asia (excluding China):
● Technology, media and telecom (TMT): all types of high technologies, media platforms and networks, applications, systems, and the software and hardware infrastructure and research & development that enable the interoperability of these technologies;
● Sports & Entertainment: all types of innovative technologies relating to sports league franchises and properties, Esports and other sports related entertainment media;
● Non-gambling games: all types and genres of games, whether digital or non-digital and whether to be played on mobile, tablet, computer or otherwise, and the playing of which does not involve gambling of money or other stakes.
We believe each of these
markets has considerable growth potential. For example:
TMT
While Covid-19 has negatively
affected the global economy in 2020, its impact on the TMT sector has been both positive and negative, based on PwC CEE analysis as of
June 2020. Positive effects include the acceleration of trends such as digital transformation, over-the-top (i.e. a means of providing
television and film content over the internet at the request and to suit the requirements of the individual consumer) video usage, and
even new telehealth applications. According to this analysis, the total global TMT expenditure has grown at a pace substantially above
the rate of inflation in the past few years and this growth rate is projected to continue this year.
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The TMT industry is a multifaceted
industry comprised of networks, wireless communications, entertainment media and content generation as well as other consumer technologies.
Within the TMT industry, the media sector is witnessing high growth. The Media Global Market Report by The Business Research Company in
December 2020 stated that the global media market reached a value of nearly $1,713.0 billion in 2020 and is expected to grow
rapidly to $2,670.0 billion in 2025. Given the technological advancement, we see a huge growth opportunity for the media industry.
The pandemic has encouraged people to spend more time at home. As a result, physically distanced-friendly activities have become
extremely popular including streaming services.
As for the telecom sector,
it is going through a major development with 5G rollout. According to a March 2020 report by the GSM Association, an industry organization
that represents the interests of mobile network operators worldwide, forecasts that 5G technologies will add $2.2 trillion to the global
economy particularly for manufacturing and financial services industries, both of which are key sectors in the United States. The
report also states that by 2025, 20% of communication connections worldwide will incorporate 5G networks with a strong presence in Asia,
North America and Europe. We believe the 5G technologies will play an important role in supporting economic growth in those regions.
Sports & Entertainment
According to a May 2021
market report by the Business Research Company, despite Covid-19, the Sports industry was worth approximately $388.3 billion in 2020.
We expect that industry to continue to grow as a result of emergence of e-sports, rising sponsorships, and increase in internet accessible
devices. Companies are finding new ways to fuel year-round fan-engagement and new revenue streams.
We believe one of the biggest
sources of alternative revenue for sports organizations will be sports analytics. We expect data-driven platforms and artificial
intelligence to play a huge part in helping organizations to better understand consumer behaviors in the coming years. By monitoring and
tracking off-fields sports data such as digital and customer engagement, and marketing data, organizations will understand the needs
of their target market and improve the customer experience and find new sources of revenue. Big data will also provide insights into player
metrics and team performance. An analysis performed by KBV Research in 2019 predicts that the Global Sports Analytics Market size is expected
to reach $4.3 billion by 2025.
Another segment of the industry
that is witnessing phenomenal growth is Esports, also known as “electronic sports”. Esports is a form of sport competition
using video games. This segment not only includes traditional sports-related games for professional players to join teams to compete
for cash prizes but also for individual players to get involved in streaming entertainment to engage with fans. Whilst it was previously
a subset within the Sports industry, it is now a billion-dollar industry of its own. The Esports market is on track to surpass $1.0 billion
in revenue and hit $1.8 billion by 2022, per 2019 Newzoo figures cited by Statista. The total viewership is expected to grow
at a 9% CAGR from 454 million in 2019 to 646 million in 2023, which puts the audience on a pace to double over six years. The
ecosystem is strong, supported by many technology platforms, services, analytic platforms, and substantial investor capital. In addition,
the number of brand sponsorship in the Esports market has grown significantly with nearly 53% of the brands being non-Esports related.
Brands recognize that the key to connect with the younger generation audience is through Esports.
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Non-Gambling Gaming
The global gaming market
was valued at $173.70 billion in 2020 and is expected to reach $314.40 billion by 2026, according to Mordor Intelligence. The
gaming market is segmented by game type (console, tablet, smartphone, browser PC, and downloaded PC) and consistent with our business
strategy. Our team expects to identify high quality companies in this market.
With improving internet infrastructure,
increasing smartphone penetration rate and large numbers of software and hardware developers, we anticipate that Asia Pacific will hold
the largest market share in the gaming industry. We expect that technologies such as 5G will help fuel the growth of the Asia Pacific
gaming market by providing faster internet access for cloud gaming. According to Statista, the Japanese and Korean gaming markets are
expected to grow rapidly. Statista forecasted that the Japanese video gaming market will reach over $14 billion by 2026 (Japanese
video gaming market report published in January 2021), and finally the South Korea’s gaming industry will reach over $15 billion
by 2022 (South Korea gaming industry report published in March 2021). We believe these statistics are indicators of the huge potential
in Asia. Just like the Asia Pacific region, the gaming industry in the United States is experiencing healthy growth. We believe this
growth can be attributed to several factors including technological advancements that are enhancing gaming experiences for customers.
Consumer spending on video games is projected to reach $13.4 billion in the combined November and December 2020 holiday period,
reaching a record high in the United States market, according to the 2020 Gamer Segmentation Report by the NPD Group, an American
market research company. This was 24% higher than the previous year. Based on the NPD Group’s 2020 Gamer Segmentation Report, the
United States had 244 million video game players as of 2020, which is 30 million more players than in 2018.
The surge in the number of
players proves the growing demand and bright prospect for the gaming sector in Asia and the United States. Given the favorable industry
outlook, we believe there will be many attractive investment opportunities to acquire a potential growth company in the gaming industry.
Our Competitive Advantages
We intend to capitalize on
our below competitive advantages to find a suitable target company:
1. Experienced Management Team
We have a strong portfolio
of leaders on our team. Both our Chief Executive Officer and Chief Financial Officer have years of experience successfully managing and
running a variety of corporations in Asia and the United States.
Our Chief Executive Officer,
Mr. Cheuk Hang Chow, has almost a decade of C-suite leadership and business development experience in several industries including technology,
media and entertainment. From January 2022 to November 2022, Mr. Chow was the CEO of MetaOne Limited, a non-fungible token (NFT) asset
management platform based in Asia. Prior to that, from August 2015 to December 2021, he served as CEO to China Creative Digital Entertainment
Limited (formerly HMV Digital China Group), an investment holding company principally engaged in media and entertainment businesses in
East Asia. Concurrently, from December 2016 to September 2021, Mr. Chow was also Chief Financial Officer (CFO) and Executive Director
to China Food and Beverage Group Limited (HKG:8272), an investment holding company principally engaged in operating restaurant businesses
in Hong Kong. Apart from these roles, he has also served as an independent non-executive director to game developer and service provider
company ME2ZEN Limited (950190.KQ) from February 2019 to January 2021, and to China Food and Beverage Group Limited (HKG:8272) from December
2016 to December 2021. From September 2010 to December 2013, Mr. Chow worked as a finance manager in AV Concept Holdings Limited, a leading
marketing and distribution company for semiconductors and electronic components, and before that, from February 2009 to September 2010,
he was with financial and public relations consultancy Wonderful Sky Financial Group (01260.HK) as an Investor Relations associate. We
can capitalize on Mr. Chow’s previous experiences in advising and expanding startups to help guide and prepare the target for the
business combination.
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Mr. Felix Yun Pun Wong,
our Chief Financial Officer, is a seasoned chief financial officer. In fact, he has served as chief financial officer for four other companies.
He has proven himself to be an adaptable and strong leader as he served as a top executive at a wide range of companies, from media to
private equity to technology in both mainland China and Hong Kong and served as the chief financial officer of Tottenham Acquisition
I Limited on NASDAQ. We believe Mr. Wong’s experiences will be valuable throughout the entire SPAC IPO process and in selecting
target companies for acquisition.
Our management team has been
actively involved in operating, advising, expanding and generating high returns for many companies. Their executive leadership, operational
oversight, strategic management will boost investor confidence in the team’s ability to complete a successful business combination.
As a result, we believe our management team is well-positioned to take advantage of growing acquisition opportunities in the TMT,
sports & entertainment and gaming (non-gambling) industry.
2. Strong Board of Directors
We have recruited an accomplished
and well-recognized group of leaders to be our board of directors. Our board of directors comes from a plethora of industries where
they serve as vice presidents, advisors, directors, presidents, vice chairman for public companies, private companies and venture capital
firms in Asia and the United States.
Mr. Michael Lawrence
Coyne, one of our directors, has 8 years of extensive capitals markets, business development, and deal origination experience. Since January
2023, Mr. Coyne has been serving as a Principal and Head of Capital Markets in the financial advisory firm Benjamin Securities. From February
2018 to January 2023, Mr. Coyne was a partner and Head of Capital Markets at Ingalls & Snyder, LLC, an investment advisory firm. From
August 2015 to February 2018, Mr. Coyne served as Vice President and Head of Equity Syndicate of Capital Integration Systems LLC, an online
financial services platform based in New York. Prior to that, in March 2015, he began his career in financial services at the Blackstone
Group, as a private wealth management intern. Concurrently, from February 2012 to July 2019, Mr. Coyne served as 1st Lieutenant, executive
Officer, task force officer-in-charge and platoon leader and operations officer of the Army National Guard and the U.S. Army. Mr. Coyne
passed the Financial Industry Regulatory Authority (FINRA) Series 7, 63, 24, 79 examination and obtained a Securities Industry Essentials
(SIE) license in September 2, 2015; January 25, 2016; September 24, 2018; August 22, 2018 and October 1, 2018, respectively. His skills
in managing businesses in large public corporations, financial planning and strategic management will be a great asset for the target
company.
Ms. Yan Xu has over 9 years
of experience working in the Chinese gaming market and in a variety of industries in the Japanese market. She has also worked closely
with top executives in PRC companies. Since February 2014, Ms. Xu has served as the head of the Japanese division for Whiz Partners Asia
Ltd where she worked closely with Japanese companies to help identify potential Chinese partners to expand their business operations.
She has also been the vice president of the China Hero Fund project, one of the first funds created to support game developers in China
since 2016. Prior to this role, she worked as the assistant to the chief executive officer for Blue Ridge China, where she was responsible
for post-investment tracking. Between 2008 to 2011, she worked at SinoCom Software Group Ltd. as secretary to the Third Division and Team
Leader of the Translation Department. Ms. Xu also spent three years working at Neusoft Group Co. Ltd as secretary of business software
division and team leader of translation department. Her experience and skills in the Chinese and Japanese markets will be a great asset
for the target company.
Mr. Albert Chang has
served in multiple executive positions including vice president for Insight Soul Partners, a leading venture capital firm and as vice
president of investments for Kenetic Capital responsible for managing a portfolio of over $100 million venture investments. He has
also previously served at Pacific Century Group, a leading Asian family office, managing venture investments and corporate finance. Prior
to Pacific Century, he managed mergers and acquisitions at PCCW Group, a leading regional TMT company. His capital markets experience
and strategic management and implementation will be an added value as we identify a potential target and complete a business combination.
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Our team has extensive experiences
in identifying, selecting, screening, acquiring and managing companies. We believe these are the skill sets that are essential for a successful
management team. With our board of directors’ deep understanding and experience of all aspects in the TMT, sports & entertainment
and gaming (non-gambling) industry, we could effectively position our investment strategy, evaluation of potential acquisition candidates
and complete our initial business combination.
3. Strong and Extensive Network to Source a Suitable Target Company
We believe our team’s
operating and transaction experience and relationships with companies will provide us with many potential business combination targets.
Over the course of their careers, they have served in a variety of capacities, allowing them to expand their network in both Asia and
the United States. In addition, many of them are currently board directors and non-executive directors of other public companies.
These contacts and sources include those in government, private and public companies, private equity and venture capital funds, investment
bankers, attorneys and accountants. For example, our CEO, Mr. Cheuk Hang Chow, was the chief executive officer of an NFT asset management
platform and an investment holding company principally engaged in media and entertainment businesses in East Asia. His roles in these
companies provides access to a massive network of tech executives, founders and investors. We can leverage his connections to identify
multiple potential targets. Our independent director, Mr. Michael Lawrence Coyne, has 8 years of extensive capitals markets, business
development, and deal origination experience while Ms. Yan Xu, also our independent director, has over 9 years of experience working in
the Chinese gaming market and in a variety of industries in the Japanese market. We believe the extensive network our directors have in
the TMT, sports & entertainment and gaming (non-gambling) industry will give us a competitive advantage when exploring potential
business combination opportunities.
4. Strong M&A Expertise and de-SPAC Experience
In addition to supporting
us in the areas of investment strategy and improving the company’s processes, our team also has experience in M&A and raising
funds. Our team consists of seasoned professionals with significant M&A, capital markets, finance and private equity experience across
a wide variety of industries and market conditions and have proven track records of producing high returns for investors. In addition,
we have a unique advantage as Mr. Felix Wong, our Chief Financial Officer, has track record in successfully completing the initial
business combinations of SPACs (“de-SPAC”). He was previously the CFO of Tottenham Acquisition I Limited, which successfully
merged with Clene Nanomedicine Inc (NASDAQ: CLNN) in December 2020. After merging, the stock price reached a peak of $16.3 per share,
resulting in more than 60% return (as compared to the $10 IPO price of Tottenham Acquisition I Limited) for investors. His previous experience
in selecting a SPAC and managing a successful merger will be extremely valuable in ensuring the success of our initial business combination.
5. Advantages of being a Publicly Listed Company
We believe we are offering
a unique opportunity for companies that want to grow and enter into the international markets. Our structure will make us an attractive
business partner. As a publicly listed company, our business partners will have access to the capital markets for greater financing and
be able to expand their existing customer base. Furthermore, SPACs also offer an alternate route to the traditional IPO that is less costly
and can accelerate a company’s market entry. Even smaller companies with large growth prospects have the opportunity to be selected.
In addition, the risk of failure to raise capital is much lower since the money is raised prior to selecting the target. Although there
are some risks to a certain extent, we believe the benefits of partnering with a SPAC and going public outweigh the costs. We are also
confident that the track record of our management team and board of directors will bring in many attractive options. Our management team
and board consist of industry veterans like Mr. Cheuk Hang Chow, Mr. Felix Wong, Mr. Michael Lawrence Coyne, Mr. Albert
Chang and Ms. Yan Xu. Together, we expect that they will bring to the table a pool of expertise that will be attractive to target companies
seeking for public listing in the United States.
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Acquisition Criteria
We intend to focus on the
target company with a size measured between $500 million – $1 billion. Other than this, we also intend to look for target
company who possesses the following core values:
● Strong management team: we are looking for a strong group of individuals who have a strong track record of creating value. We will also take time to assess their leadership capabilities and their ability to grow the company.
● Strong portfolio of investors: we will seek for a company that has well-known and trusted investors, hedge funds and private equity firms supporting them. This is an indication of investors’ confidence in the company’s potential to grow.
● Potential to have recurring revenue: we are looking for companies that are currently generating or will generate significant cash flow through existing products, new product development, increased efficiency and reduced costs.
● Benefits from being publicly traded: we intend to acquire a company that will effectively utilize their public profile to get access to capital, expand their customer base, improve their investor portfolio to grow their company.
● Appropriate valuations and upside potential: we will conduct rigorous due diligence and apply valuation-metrics to create the most reasonable and appropriate valuation for the company. We are seeking to acquire a company that will have a strong upside potential to increase their valuation.
● Strategic management and long-term planning: we intend to acquire companies who are strategically planning for the future and are continually assessing and ensuring that their work is aligned with their strategic goals. Long-term planning allows companies to have sustainable operations in the long run and ensures that they can deliver on their promises to the investors.
● Innovative-led approach and risk management: we believe that balancing risk and encouraging creative insights will drive a company’s growth and that differentiated ideas bring new categories into the market to address growing customer needs. Therefore, we are seeking for a company that prioritizes innovation and is able to recognize which ideas to support and scale.
Our Acquisition Process
Our Sponsor believes that
conducting comprehensive due diligence on prospective investments is particularly important within the technology industry. In evaluating
a prospective initial business combination, we expect to conduct a thorough diligence review that will encompass, among other things,
meetings with incumbent management and employees, document reviews, inspection of facilities, financial analyses and technology reviews,
as well as a review of other information that will be made available to us.
We are not prohibited from
pursuing an initial business combination with a company that is affiliated with our Sponsor, our officers, or our directors, subject to
certain approvals and consents. In the event we seek to complete our initial business combination with a company that is affiliated with
our Sponsor, officers or directors, we, or a committee of independent directors, will obtain an opinion from an independent investment
banking firm that is a member of FINRA or an independent accounting firm that our initial business combination is fair to us from a financial
point of view.
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Members of our management
team may directly or indirectly own our securities following the IPO, and accordingly, they may have a conflict of interest in determining
whether a particular target business is an appropriate business with which to effectuate our initial business combination. Further, each
of our officers and directors may have a conflict of interest with respect to evaluating a particular business combination if the retention
or resignation of any such officers and directors was included by a target business as a condition to any agreement with respect to our
initial business combination.
We currently do not have
any specific targets for an initial business combination selected. None of our officers and directors, nor has anyone on their behalf
contacted or had any discussions with possible target businesses in which they directly or indirectly proposed or encouraged a potential
target to consider a possible combination with us.
As described in “Proposed
Business — Sourcing of Potential Business Combination Targets” and “Management — Conflicts of Interest,”
each of our officers and directors presently has, and any of them in the future may have additional, fiduciary, contractual or other obligations
or duties to one or more other entities pursuant to which such officer or director is or will be required to present a business combination
opportunity to such entities. Our amended and restated certificate of incorporation provides that we renounce our interest in any corporate
opportunity offered to any director or officer unless (i) such opportunity is expressly offered to such person solely in his or her
capacity as a director or officer of our company, (ii) such opportunity is one we are legally and contractually permitted to undertake
and would otherwise be reasonable for us to pursue and (iii) the director or officer is permitted to refer the opportunity to us
without violating another legal obligation. Accordingly, if any of our officers or directors becomes aware of a business combination opportunity
which is suitable for one or more entities to which he or she has fiduciary, contractual or other obligations or duties, he or she will
honor these obligations and duties to present such business combination opportunity to such entities first, and only present it to us
if such entities reject the opportunity and he or she determines to present the opportunity to us. We do not believe, however, that the
fiduciary, contractual or other obligations or duties of our officers or directors will materially affect our ability to complete our
initial business combination.
Initial Business Combination
Nasdaq rules require that
we must complete one or more business combinations having an aggregate fair market value of at least 80% of the value of the assets held
in the Trust Account (excluding the deferred underwriting commissions and taxes payable on the interest earned on the Trust Account) at
the time of our signing a definitive agreement in connection with our initial business combination. Our board of directors will make the
determination as to the fair market value of our initial business combination. If our board of directors is not able to independently
determine the fair market value of our initial business combination, we will obtain an opinion from an independent investment banking
firm that is a member of FINRA or an independent accounting firm with respect to the satisfaction of such criteria. While we consider
it unlikely that our board of directors will not be able to make an independent determination of the fair market value of our initial
business combination, it may be unable to do so if it is less familiar or experienced with the business of a particular target or if there
is a significant amount of uncertainty as to the value of a target’s assets or prospects. We anticipate structuring our initial
business combination either (i) in such a way so that the post-transaction company in which our public stockholders own shares
will own or acquire 100% of the equity interests or assets of the target business or businesses, or (ii) in such a way so that the
post-transaction company owns or acquires less than 100% of such interests or assets of the target business in order to meet certain
objectives of the target management team or stockholders, or for other reasons. However, we will only complete an initial business combination
if the post-transaction company owns or acquires 50% or more of the outstanding voting securities of the target or otherwise acquires
a controlling interest in the target sufficient for it not to be required to register as an investment company under the Investment Company
Act of 1940, as amended, or the “Investment Company Act”. Even if the post-transaction company owns or acquires 50% or
more of the voting securities of the target, our stockholders prior to the initial business combination may collectively own a minority
interest in the post-transaction company, depending on valuations ascribed to the target and us in the initial business combination.
For example, we could pursue a transaction in which we issue a substantial number of new shares in exchange for all of the outstanding
capital stock of a target. In this case, we would acquire a 100% controlling interest in the target. However, as a result of the issuance
of a substantial number of new shares, our stockholders immediately prior to our initial business combination could own less than a majority
of our outstanding shares subsequent to our initial business combination. If less than 100% of the equity interests or assets of a target
business or businesses are owned or acquired by the post-transaction company, the portion of such business or businesses that is
owned or acquired is what will be taken into account for purposes of Nasdaq’s 80% of net assets test. If the initial business combination
involves more than one target business, the 80% of net assets test will be based on the aggregate value of all of the transactions and
we will treat the target businesses together as the initial business combination for purposes of a tender offer or for seeking stockholder
approval, as applicable.
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Our Business Combination Process
In evaluating prospective
business combinations, we expect to conduct a thorough due diligence review process that will encompass, among other things, a review
of historical and projected financial and operating data, meetings with management and their advisors (if applicable), on-site inspection
of facilities and assets, discussion with customers and suppliers, legal reviews and other reviews as we deem appropriate.
We are not prohibited from
pursuing our initial business combination with a company that is affiliated with our sponsor, officers or directors. In the event we seek
to complete our initial business combination with a company that is affiliated with our sponsor, officers or directors, we, or a committee
of independent directors, will obtain an opinion from an independent investment banking firm that is a member of FINRA or an independent
accounting firm that our initial business combination is fair to our Company from a financial point of view.
Each of our officers and
directors presently has, and any of them in the future may have additional, fiduciary or contractual obligations to other entities pursuant
to which such officer or director is or will be required to present a business combination opportunity. Accordingly, if any of our officers
or directors becomes aware of a business combination opportunity which is suitable for an entity to which he or she has then-current fiduciary
or contractual obligations to present the opportunity to such entity, he or she will honor his or her fiduciary or contractual obligations
to present such opportunity to such entity. We believe, however, that the fiduciary duties or contractual obligations of our officers
or directors will not materially affect our ability to complete our initial business combination. Our amended and restated certificate
of incorporation provides that we renounce our interest in any corporate opportunity offered to any director or officer unless such opportunity
is expressly offered to such person solely in his or her capacity as a director or officer of our company and such opportunity is one
we are legally and contractually permitted to undertake and would otherwise be reasonable for us to pursue, and to the extent the director
or officer is permitted to refer that opportunity to us without violating another legal obligation.
Status as a Public Company
We believe our structure
will make us an attractive business combination partner to target businesses. As a public company, we offer a target business an alternative
to the traditional initial public offering through a merger or other business combination with us. Following an initial business combination,
we believe the target business would have greater access to capital and additional means of creating management incentives that are better
aligned with stockholders’ interests than it would as a private company. A target business can further benefit by augmenting its
profile among potential new customers and vendors and aid in attracting talented employees. In a business combination transaction with
us, the owners of the target business may, for example, exchange their shares of stock in the target business for our shares of common
stock (or shares of a new holding company) or for a combination of our shares of common stock and cash, allowing us to tailor the consideration
to the specific needs of the sellers.
Although there are various
costs and obligations associated with being a public company, we believe target businesses will find this method a more expeditious and
cost-effective method to becoming a public company than the typical initial public offering. The typical initial public offering
process takes a significantly longer period of time than the typical business combination transaction process, and there are significant
expenses in the initial public offering process, including underwriting discounts and commissions, marketing and road show efforts that
may not be present to the same extent in connection with an initial business combination with us.
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Furthermore, once a proposed
initial business combination is completed, the target business will have effectively become public, whereas an initial public offering
is always subject to the underwriters’ ability to complete the offering, as well as general market conditions, which could delay
or prevent the offering from occurring or could have negative valuation consequences. Following an initial business combination, we believe
the target business would then have greater access to capital and an additional means of providing management incentives consistent with
stockholders’ interests and the ability to use its shares as currency for acquisitions. Being a public company can offer further
benefits by augmenting a company’s profile among potential new customers and vendors and aid in attracting talented employees.
While we believe that our
structure and our management team’s backgrounds will make us an attractive business partner, some potential target businesses may
view our status as a blank check company, such as our lack of an operating history and our ability to seek stockholder approval of any
proposed initial business combination, negatively.
We are an “emerging
growth company,” as defined in Section 2(a) of the Securities Act, as modified by the JOBS Act. As such, we are eligible to
take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not “emerging
growth companies” including, but not limited to, not being required to comply with the independent registered public accounting
firm attestation requirements of Section 404 of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation
in our periodic reports and proxy statements, and exemptions from the requirements of holding a non-binding advisory vote on executive
compensation and stockholder approval of any golden parachute payments not previously approved. If some investors find our securities
less attractive as a result, there may be a less active trading market for our securities and the prices of our securities may be more
volatile.
In addition, Section 107
of the JOBS Act also provides that an “emerging growth company” can take advantage of the extended transition period provided
in Section 7(a)(2)(B) of the Securities Act for complying with new or revised accounting standards. In other words, an “emerging
growth company” can delay the adoption of certain accounting standards until those standards would otherwise apply to private companies.
We intend to take advantage of the benefits of this extended transition period.
We will remain an emerging
growth company until the earlier of (1) the last day of the fiscal year (a) following the fifth anniversary of the completion
of the IPO, (b) in which we have total annual gross revenue of at least $1.07 billion, or (c) in which we are deemed to
be a large accelerated filer, which means the market value of our common stock that is held by non-affiliates exceeds $700 million
as of the prior June 30th, and (2) the date on which we have issued more than $1.0 billion in non-convertible debt
securities during the prior three-year period.
We may not be able to complete an initial business
combination with a U.S. target company since such initial business combination may be subject to U.S. foreign investment regulations
and review by a U.S. government entity such as the Committee on Foreign Investment in the United States (CFIUS), or ultimately
prohibited.
Certain companies requiring
federal-issued licenses in the United States, such as broadcasters and airlines, may be subject to rules or regulations that
limit foreign ownership. In addition, CFIUS is an interagency committee authorized to review certain transactions involving foreign investment
in the United States by foreign persons in order to determine the effect of such transactions on the national security of the United States.
Our Sponsor, Soul Venture Partners LLC, is controlled by Mr. Cheuk Hang Chow, a non-U.S. person and a Hong Kong national.
Our Sponsor currently owns 42.7% of our outstanding shares. We are therefore likely considered a “foreign person” under the
regulations administered by CFIUS and will continue to be considered as such in the future for so long as our Sponsor has the ability
to exercise control over us for purposes of CFIUS’s regulations. Therefore, we could be subject to foreign ownership restrictions
and/or CFIUS review if our proposed business combination is between us and a U.S. target company engaged in a regulated industry
or which may affect national security. The scope of CFIUS review was expanded by the Foreign Investment Risk Review Modernization Act of 2018
(“FIRRMA”), to include certain non-passive, non-controlling investments in sensitive U.S. businesses and certain
acquisitions of real estate even with no underlying U.S. business. FIRRMA, and subsequent implementing regulations that are now in
force, also subject certain categories of investments to mandatory filings. If our potential initial business combination with a U.S. target
company falls within CFIUS’s jurisdiction, we may determine that we are required to make a mandatory filing or that we will submit
a voluntary notice to CFIUS, or to proceed with the initial business combination without notifying CFIUS and risk CFIUS intervention,
before or after closing the initial business combination. CFIUS may decide to block or delay our initial business combination, impose
conditions to mitigate national security concerns with respect to such initial business combination or order us to divest all or a portion
of a U.S. business of the combined company if we had proceeded without first obtaining CFIUS clearance. The foreign ownership limitations,
and the potential impact of CFIUS, may limit the attractiveness of a transaction with us or prevent us from pursuing certain initial business
combination opportunities that we believe would otherwise be beneficial to us and our shareholders. As a result, the pool of potential
targets with which we could complete an initial business combination may be limited and we may be adversely affected in terms of competing
with other special purpose acquisition companies which do not have similar foreign ownership issues.
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Moreover, the process of
government review, whether by the CFIUS or otherwise, could be lengthy and we have limited time to complete our initial business combination.
If we cannot complete our initial business combination by August 13, 2026 (assuming full extension of the time to complete a business
combination) because the review process drags on beyond such timeframe or because our initial business combination is ultimately prohibited
by CFIUS or another U.S. government entity, we may be required to liquidate. If we liquidate, our public shareholders may only receive
$13.1 per share (based on $2,129,825 balance in our trust account as of March 17, 2026), and our warrants and rights will expire worthless.
This will also cause you to lose the investment opportunity in a target company and the chance of realizing future gains on your investment
through any price appreciation in the combined company.
Risks related to Potential Application of the
Investment Company Act
As of the date hereof, substantially
all of the assets held in the Trust Account are held in money market funds, which primarily invest in U.S. Treasury Bills. There
is uncertainty under the Investment Company Act of 1940 (the “Investment Company Act”) whether special purpose acquisition
companies, or “SPACs,” could become subject to regulation under the Investment Company Act. The longer that the funds in the
Trust Account are held in 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 a claim could be made that we have been operating
as an unregistered investment company. Accordingly, we may determine, in our discretion, to liquidate the securities held in the Trust
Account at any time and instead hold all funds in the Trust Account in a bank deposit account in order to mitigate the risks of falling
within the definition of “investment company” under the Investment Company Act.
If we are deemed to be an
investment company and subject to compliance with and regulation under the Investment Company Act, we would be subject to additional regulatory
burdens and expenses for which we have not allotted funds and for which we would not have sufficient time to comply with prior to the
expiration of its time to complete a business combination. As a result, if we were deemed to be an investment company, we would expect
to abandon its efforts to complete an initial business combination and instead to liquidate and dissolve. If we are required to liquidate
and dissolve, our investors would lose the opportunity to invest in a target company and would not be able to realize the benefits of
owning shares in the post-business combination company, including the potential appreciation of our share price following such a
transaction. In addition, in the event of our liquidation and dissolution, our warrants and rights would expire worthless.
Nasdaq Rule 5815 was amended effective October
7, 2024 to provide for the immediate suspension and delisting for failure to meet the 36-month requirement in Nasdaq Rule IM 5101-2(b)
to complete a business combination, and Inception Growth’s securities were suspended from trading on Nasdaq and delisted at the
opening of business on December 17, 2024.
The IGTA Units, IGTA Shares,
public IGTA Warrants and public IGTA Rights were listed on Nasdaq as of the closing of its IPO. Nasdaq IM-5101-2 requires that Inception
Growth, a special purpose acquisition company, complete one or more business combinations within 36 months of the effectiveness of its
initial public offering registration statement, which, in the case of Inception Growth, was December 8, 2024. Inception Growth was unable
to complete an initial business combination by December 8, 2024, and on December 6, 2024, at a special meeting of stockholders, Inception
Growth’s stockholders approved an amendment of Inception Growth’s certificate of incorporation and a further amendment to
the Trust Agreement, which gave Inception Growth the right to extend the date by which it has to consummate a business combination by
six times for an additional one (1) month each time from December 13, 2024 to June 13, 2025. Such extension, however, violated Nasdaq
IM-5101-2. Effective on October 7, 2024, Nasdaq Rule 5815 was amended to provide for the immediate suspension and delisting upon issuance
of a delisting determination letter to an issuer for failure to meet the requirements of Nasdaq IM5101-02.
Inception Growth received
a notice, dated December 10, 2024 (the “Nasdaq Notice”) from Nasdaq, stating that Inception Growth did not comply with Nasdaq
Interpretive Material IM-5101-2, and that its securities were subject to delisting. Inception Growth’s registration statement, filed
in connection with the IPO, became effective on December 8, 2021. Pursuant to IM-5101-2, Inception Growth, a special purpose acquisition
company, must complete one or more business combinations within 36 months of the effectiveness of its IPO registration statement. Since
Inception Growth did not complete its initial business combination by December 8, 2024, it did not comply with IM-5101-2, and its securities
were subject to delisting. Unless Inception Growth requested a timely appeal of this determination by Nasdaq, trading of its securities
on Nasdaq would be suspended at the opening of business on December 17, 2024, and a Form 25-NSE will be filed with the SEC, which would
remove Inception Growth’s securities from listing on The Nasdaq Stock Market.
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Inception Growth did not
appeal against Nasdaq’s determination to delist its securities and accordingly, the Company’s securities were suspended from
trading on Nasdaq at the opening of business on December 17, 2024. However, Inception Growth’s securities commenced trading on the
OTC Markets at the opening of business on December 17, 2024, under their prior Nasdaq trading symbols; and it is expected that Inception
Growth’s securities will continue to trade under their current symbols on the OTC Markets.
Pursuant to the Business
Combination Agreement, as amended, the Business Combination Agreement may be terminated by either party if PubCo does not receive approval
for the listing of the PubCo Ordinary Shares and PubCo Warrants on Nasdaq on or before March 31, 2025.
If (i) Inception Growth is
not able to list its securities on another national securities exchange, (ii) the parties to the Business Combination Agreement waive
applicable listing conditions as a condition to the Closing, and (iii) the Business Combination closes and stockholders receive unlisted
shares, then Inception Growth expects that PubCo’s securities will be quoted on an over-the-counter market. If this were to occur,
the Combined Company could face significant material adverse consequences, including:
● a limited availability of market quotations for PubCo’s securities;
● reduced demand and overall liquidity for PubCo’s securities;
● a determination that PubCo Ordinary Shares are a “penny stock” which will require brokers trading in PubCo Ordinary Shares to adhere to more stringent rules and possibly result in a reduced level of trading activity in the secondary trading market for PubCo’s securities;
● a limited amount of news and analyst coverage;
● a decreased ability to issue additional securities or obtain additional financing in the future; and
● PubCo may be deemed a less attractive merger partner for a target company or business.
Additionally, the fact that
the Inception Growth’s securities are not listed on Nasdaq may present certain challenges to listing the post Business Combination
combined company’s securities on Nasdaq, such as the post Business Combination combined company’s ability to meet the listing
requirements for Nasdaq, including the minimum per share bid price and the market value of unrestricted publicly held shares.
PubCo will seek to list the
PubCo Ordinary Shares and the PubCo warrants on Nasdaq in connection with the closing of the Business Combination. Inception Growth cannot
assure you that the PubCo Ordinary Shares and PubCo Warrants will be approved for listing on Nasdaq.
As a result of the suspension
of Inception Growth’s securities from Nasdaq at the opening of business on December 17, 2024, Inception Growth’s common stock
could become subject to the regulations of the SEC relating to the market for “penny stocks.” The “penny stock”
rules are burdensome and may reduce the trading activity for shares of Inception Growth’s common stock. For example, brokers trading
in shares of Inception Growth’s common stock would be required to deliver a standardized risk disclosure document, which specifies
information about penny stocks and the nature and significance of risks of the penny stock market. The broker dealer also must provide
the customer with bid and offer quotations for the penny stock, the compensation of the broker dealer and any salesperson in the transaction,
and monthly account statements indicating the market value of each penny stock held in the customer’s account. In addition, the
penny stock rules require that, prior to effecting a transaction in a penny stock not otherwise exempt from those rules, the broker dealer
must make a special written determination that the penny stock is a suitable investment for the purchaser and receive the purchaser’s
written agreement to the transaction. If Inception Growth’s common stock is a “penny stock,” these disclosure requirements
may have the effect of reducing the trading activity in the secondary market for Inception Growth’s common stock. If the shares
of Inception Growth’s common stock are subject to the “penny stock” rules, the holders of such shares of Inception Growth’s
common stock may find it more difficult to sell their shares.
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The National Securities Markets
Improvement Act of 1996, which is a federal statute, prevents or preempts the states from regulating the sale of certain securities, which
are referred to as “covered securities.” Since Inception Growth’s common stock, public warrants and public rights are
listed on Nasdaq, such securities qualify as covered securities under such statute. Although the states are preempted from regulating
the sale of covered securities, the federal statute does allow the states to investigate companies if there is a suspicion of fraud, and,
if there is a finding of fraudulent activity, then the states can regulate or bar the sale of covered securities in a particular case.
While we are not aware of a state having used these powers to prohibit or restrict the sale of securities issued by blank check companies,
certain state securities regulators view blank check companies unfavorably and might use these powers, or threaten to use these powers,
to hinder the sale of securities of blank check companies in their states. Further, if Inception Growth’s common stock, public warrants
and public rights were no longer listed on Nasdaq, these securities would not qualify as covered securities under such statute and Inception
Growth would be subject to regulation in each state in which it offers its securities, including regulations in connection with Inception
Growth’s initial business combination, which may make it more difficult and costly to complete a business combination. In addition,
Inception Growth’s securityholders could be prohibited from trading in its securities absent registration in the state where such
securityholder lives. To date Inception Growth has not registered its securities in any state, and does not currently plan to do so. This
may make it difficult or impossible for Inception Growth’s securityholders to trade in its securities.
Financial Position
With funds available for
an initial business combination initially in the amount of $88,650,000 assuming no redemptions before non-reimbursable fees and expenses
associated with our initial business combination and after payment of $2,250,000 of deferred underwriting fees (or $102,285,000 after
payment of up to $2,250,000 of deferred underwriting fees if the underwriters’ over-allotment option is exercised in full)
and $1,100,000 in offering costs, we offer a target business a variety of options such as creating a liquidity event for its owners, providing
capital for the potential growth and expansion of its operations or strengthening its balance sheet by reducing its debt or leverage ratio.
Because we are able to complete our initial business combination using our cash, debt or equity securities, or a combination of the foregoing,
we have the flexibility to use the most efficient combination that will allow us to tailor the consideration to be paid to the target
business to fit its needs and desires. However, we have not taken any steps to secure third party financing and there can be no assurance
it will be available to us.
Effecting Our Initial Business Combination
We are not presently engaged
in, and we will not engage in, any operations for an indefinite period of time following the IPO. We intend to effectuate our initial
business combination using cash from the proceeds of the IPO and the private placement of the private placement warrants, the proceeds
of the sale of our shares in connection with our initial business combination (pursuant to backstop agreements we may enter into following
the consummation of the IPO or otherwise), shares issued to the owners of the target, debt issued to bank or other lenders or the owners
of the target, or a combination of the foregoing. We may seek to complete our initial business combination with a company or business
that may be financially unstable or in its early stages of development or growth, which would subject us to the numerous risks inherent
in such companies and businesses.
If our initial business combination
is paid for using equity or debt securities, or not all of the funds released from the Trust Account are used for payment of the consideration
in connection with our initial business combination or used for redemptions of our common stock, we may apply the balance of the cash
released to us from the Trust Account for general corporate purposes, including for maintenance or expansion of operations of the post-transaction company,
the payment of principal or interest due on indebtedness incurred in completing our initial business combination, to fund the purchase
of other companies or for working capital.
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We may seek to raise additional
funds through a private offering of debt or equity securities in connection with the completion of our initial business combination, and
we may effectuate our initial business combination using the proceeds of such offering rather than using the amounts held in the Trust
Account. In addition, we intend to target businesses larger than we could acquire with the net proceeds of the IPO and the sale of the
private placement warrants, and may as a result be required to seek additional financing to complete such proposed initial business combination.
Subject to compliance with applicable securities laws, we would expect to complete such financing only simultaneously with the completion
of our initial business combination. In the case of an initial business combination funded with assets other than the Trust Account assets,
our proxy materials or tender offer documents disclosing the initial business combination would disclose the terms of the financing and,
only if required by law, we would seek stockholder approval of such financing. There are no prohibitions on our ability to raise funds
privately or through loans in connection with our initial business combination. At this time, we are not a party to any arrangement or
understanding with any third party with respect to raising any additional funds through the sale of securities or otherwise.
Sources of Target Businesses
We anticipate that target
business candidates will be brought to our attention from various unaffiliated sources, including investment bankers and investment professionals.
Target businesses may be brought to our attention by such unaffiliated sources as a result of being solicited by us by calls or mailings.
These sources may also introduce us to target businesses in which they think we may be interested on an unsolicited basis, since many
of these sources will have read the prospectus relating to the IPO and know what types of businesses we are targeting. Our officers and
directors, as well as our Sponsor and their affiliates, may also bring to our attention target business candidates that they become aware
of through their business contacts as a result of formal or informal inquiries or discussions they may have, as well as attending trade
shows or conventions. In addition, we expect to receive a number of proprietary deal flow opportunities that would not otherwise necessarily
be available to us as a result of the business relationships of our officers and directors and our Sponsor and their respective industry
and business contacts as well as their affiliates. While we do not presently anticipate engaging the services of professional firms or
other individuals that specialize in business acquisitions on any formal basis, we may engage these firms or other individuals in the
future, in which event we may pay a finder’s fee, consulting fee, advisory fee or other compensation to be determined in an arm’s
length negotiation based on the terms of the transaction. We will engage a finder only to the extent our management determines that the
use of a finder may bring opportunities to us that may not otherwise be available to us or if finders approach us on an unsolicited basis
with a potential transaction that our management determines is in our best interest to pursue. Payment of finder’s fees is customarily
tied to completion of a transaction; in which case any such fee will be paid out of the funds held in the Trust Account. In no event,
however, will our Sponsor or any of our existing officers or directors, or any entity with which our Sponsor or officers are affiliated,
be paid any finder’s fee, reimbursement, consulting fee, monies in respect of any payment of a loan or other compensation by the
company prior to, or in connection with any services rendered for any services they render in order to effectuate, the completion of our
initial business combination (regardless of the type of transaction that it is). None of our Sponsor, executive officers or directors,
or any of their respective affiliates, will be allowed to receive any compensation, finder’s fees or consulting fees from a prospective
business combination target in connection with a contemplated initial business combination. We have agreed to pay an affiliate of our
Sponsor a total of $10,000 per month for office space, utilities and secretarial and administrative support and to reimburse our Sponsor
for any out-of-pocket expenses related to identifying, investigating and completing an initial business combination. Some of our
officers and directors may enter into employment or consulting agreements with the post-transaction company following our initial
business combination. The presence or absence of any such fees or arrangements will not be used as a criterion in our selection process
of an initial business combination candidate.
17
We are not prohibited from
pursuing an initial business combination with a company that is affiliated with our Sponsor, executive officers or directors, or making
the acquisition through a joint venture or other form of shared ownership with our Sponsor, executive officers or directors. In the event
we seek to complete an initial business combination with a target that is affiliated with our Sponsor, executive officers or directors,
we, or a committee of independent directors, would obtain an opinion from an independent investment banking firm hat is a member of FINRA
or a qualified independent accounting firm that such an initial business combination is fair to our company from a financial point of
view. We are not required to obtain such an opinion in any other context.
As more fully discussed in