TAVIA Acquisition Corp. Reports Financial Results for the Quarter Ended March 31, 2025
Tavia Acquisition Corp. (TAVIA) filed its quarterly report for the period ended March 31, 2025, reporting a net loss of $1.4 million for the three months ended March 31, 2025. As of March 31, 2025, the company had cash and cash equivalents of $14.4 million and total assets of $15.4 million. The company’s condensed balance sheet as of March 31, 2025, and December 31, 2024, shows a significant increase in cash and cash equivalents, primarily due to the issuance of 15,920,833 ordinary shares in connection with the initial public offering. The company’s management’s discussion and analysis of financial condition and results of operations highlights the company’s focus on identifying and acquiring a target business, and notes that the company has not yet generated any revenue.
Overview
Acme Acquisition Corp. is a blank check company incorporated in the Cayman Islands on March 7, 2024. The company was formed for the purpose of effecting a merger, share exchange, asset acquisition, share purchase, reorganization, or similar business combination with one or more businesses. Acme Acquisition Corp. plans to use cash from its initial public offering (IPO) and private placement, as well as debt, to complete its business combination.
The company expects to incur significant costs in pursuing its acquisition plans, but cannot assure that its plans to complete a business combination will be successful.
Results of Operations
Acme Acquisition Corp. has not engaged in any operations or generated any operating revenues to date. Its only activities from March 7, 2024 (inception) through March 31, 2025 were organizational activities and those necessary to prepare for the IPO. The company does not expect to generate any operating revenues until after the completion of its initial business combination.
For the three months ended March 31, 2025, the company had net income of $974,311, which consisted of $1,215,702 in interest earned on marketable securities held in the trust account, offset by $241,391 in general and administrative costs.
For the period from March 7, 2024 (inception) through March 31, 2024, the company had a net loss of $40,541, which consisted of general and administrative costs.
Liquidity and Capital Resources
On December 5, 2024, Acme Acquisition Corp. consummated its IPO of 10,000,000 units at $10.00 per unit, generating gross proceeds of $100,000,000. Simultaneously, the company sold 350,000 private placement units at $10.00 per unit in a private placement, generating an additional $3,500,000.
After the IPO, $100,500,000 ($10.05 per unit) from the net proceeds was placed in a trust account. The company incurred $3,305,995 in IPO-related costs, including a $2,300,000 cash underwriting fee and $1,305,995 in other offering costs.
On December 9, 2024, the underwriters exercised the over-allotment option in full, purchasing an additional 1,500,000 units at $10.00 per unit, generating $15,000,000 in gross proceeds. Simultaneously, the company sold an additional 37,500 private placement units at $10.00 per unit, generating $375,000.
After the over-allotment, a total of 11,500,000 units were issued in the IPO and over-allotment at an aggregate offering price of $115,000,000. An aggregate of $115,575,000 ($10.05 per unit) from the net proceeds was placed in the trust account.
As of March 31, 2025, the company had $117,142,639 in marketable securities held in the trust account (including $1,567,639 in interest income). The company intends to use substantially all of the funds held in the trust account to complete its business combination.
As of March 31, 2025, the company had $655,630 in cash and a working capital deficit of $72,805. The company intends to use the funds held outside the trust account primarily to identify and evaluate target businesses, perform due diligence, and complete a business combination.
The company’s sponsor or an affiliate may loan it funds as needed to cover working capital deficiencies or transaction costs. If a business combination is completed, the company may repay such loans from the proceeds of the trust account. If a business combination does not close, the company may use a portion of the working capital outside the trust account to repay the loans, but no proceeds from the trust account would be used for this purpose.
The company believes it will have sufficient funds to meet its expenditures for at least the next 12 months. However, if its estimates of the costs of identifying a target, due diligence, and negotiating a business combination are less than the actual amounts needed, the company may need to obtain additional financing to complete its business combination.
Off-Balance Sheet Financing Arrangements
Acme Acquisition Corp. has no off-balance sheet financing arrangements as of March 31, 2025. The company has not entered into any off-balance sheet transactions, established any special purpose entities, or made any commitments or guarantees of other entities’ debt.
Contractual Obligations
The company’s only significant contractual obligation is an agreement to pay $10,000 per month for certain utilities and administrative support services until the earlier of the completion of a business combination or the company’s liquidation.
The underwriters of the IPO are entitled to a cash underwriting discount of $0.20 per unit, or $2,300,000 in the aggregate, which was paid at the closing of the IPO.
The company has also engaged EarlyBirdCapital, Inc. as an advisor in connection with its business combination. EarlyBirdCapital will receive a cash fee equal to 3.5% of the gross proceeds of the IPO upon the consummation of the initial business combination. Additionally, EarlyBirdCapital will receive a 1.0% cash fee of the total consideration payable in the initial business combination if it introduces the company to the target business.
Critical Accounting Policies
The company has identified the following critical accounting policies:
Ordinary Shares Subject to Redemption: The company accounts for its ordinary shares subject to possible conversion in accordance with the guidance in Accounting Standards Codification (ASC) Topic 480. Ordinary shares subject to mandatory redemption are classified as a liability instrument and measured at fair value. Conditionally redeemable ordinary shares are classified as temporary equity.
Net Income Per Ordinary Share: Net income per ordinary share is computed by dividing net income by the weighted average number of ordinary shares outstanding during the period. Accretion associated with the redeemable ordinary shares is excluded from earnings per share as the redemption value approximates fair value.
The company’s management does not believe that any other recently issued, but not yet effective, accounting standards would have a material effect on the financial statements if currently adopted.
