Finnovate Acquisition Corp. has reported a net loss of $215,486 for the fiscal year ending December 31, 2024, a significant decline from a net income of $2,494,909 in the previous year. The loss primarily stemmed from $1,622,093 in formation and administrative expenses, which were partially offset by $1,406,607 in interest earned from the Trust Account. The company has not generated any operating revenues to date, as it remains focused on completing its initial business combination, specifically with Scage International Limited.
The company has undergone several strategic changes during the reporting period. Notably, on May 8, 2023, Finnovate completed the Sunorange Investment, which involved a change in management. Calvin Kung was appointed as the new CEO, replacing David Gershon, and Wang Chiu (Tommy) Wong took over as CFO. This investment also led to the conversion of Class B Ordinary Shares into Class A Ordinary Shares, increasing the total Class A shares outstanding to 9,085,831. Additionally, the company has extended its business combination deadline multiple times, with the latest extension pushing the deadline to November 8, 2025.
Operationally, Finnovate has faced challenges, including a significant number of shareholder redemptions. At the May 2023 extraordinary general meeting, shareholders redeemed approximately 12,626,668 Class A Ordinary Shares for a total of about $132.6 million. This trend continued with further redemptions in subsequent meetings, including 1,383,214 shares redeemed in November 2024 for approximately $16.16 million. As of December 31, 2024, the company had $10,208,877 in its Trust Account, which is intended to facilitate the business combination.
Looking ahead, Finnovate's management has expressed uncertainty regarding its ability to complete the business combination within the extended timeframe. The company has acknowledged substantial doubt about its ability to continue as a going concern if it fails to consummate the business combination by the new deadline. The management team is actively working to enhance internal controls and procedures to address identified weaknesses in financial reporting, which could impact future operations and investor confidence.
In summary, Finnovate Acquisition Corp. is navigating a challenging landscape as it seeks to finalize its business combination with Scage. The company has experienced significant financial losses, management changes, and shareholder redemptions, all of which underscore the complexities of its current operational status and future prospects.
About Finnovate Acquisition Corp.
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