10-K: Live Oak V Details Teamshares Merger, Cites Going Concern

Live Oak Acquisition Corp. V's annual report details its planned merger with Teamshares Inc. while disclosing a net loss and substantial doubt about its ability to continue as a going concern.

Summary

• Live Oak Acquisition Corp. V (LOKVU, LOKV, LOKVW) is a blank check company formed on November 27, 2024, for the purpose of effecting a Business Combination.
• The company consummated its Initial Public Offering (IPO) on March 3, 2025, raising $230,000,000 from 23,000,000 Units at $10.00 per Unit, including the full exercise of the over-allotment option.
• Simultaneously with the IPO, 4,500,000 Private Placement Warrants were sold to the Sponsor at $1.00 per warrant, generating $4,500,000.
• A total of $231,150,000 was placed in the Trust Account following the IPO and Private Placement.
• On November 14, 2025, the company entered into a definitive merger agreement with Teamshares Inc., a tech-enabled acquirer of high-quality businesses, with consolidated revenue over $400 million.
• The merger consideration for Teamshares security holders will be $525,000,000 in newly issued common stock (valued at $10.00 per share) plus any converted Interim Period Financing.
• Teamshares security holders also have the potential to receive up to 6,000,000 additional Earnout Shares contingent on the company's common stock reaching price targets of $12.00, $15.00, and $20.00 per share within five years post-closing.
• Initial PIPE Investors committed $126.0 million by purchasing 13,695,652 shares of common stock at $9.20 per share.
• The company reported a net loss of $16,495,381 for the year ended December 31, 2025, primarily due to operating costs and an initial loss on PIPE Subscription Agreements liability, partially offset by interest income from the Trust Account.
• Management has identified material weaknesses in internal control over financial reporting as of December 31, 2025, related to the evaluation and accounting treatment of PIPE Subscription Agreements.
• The company faces substantial doubt about its ability to continue as a going concern due to its limited liquidity and the deadline to complete a Business Combination by March 3, 2027.

Sentiment

Score: 3

Explanation: StockSavvy.ai views this filing with caution. While the definitive merger agreement with Teamshares is a positive step for a SPAC, the disclosed net loss, material weaknesses in internal controls, and substantial doubt about going concern status present significant red flags and financial instability.

Positives

• A definitive merger agreement has been executed with Teamshares Inc., a tech-enabled acquirer of high-quality businesses with over $400 million in consolidated revenue, providing a clear path to a Business Combination.
• The target company, Teamshares, operates across more than 40 industries and 30 states, indicating a diversified business model.
• The merger includes an earnout structure of up to 6,000,000 additional shares for Teamshares security holders, contingent on share price targets of $12.00, $15.00, and $20.00, aligning incentives for future performance.
• Initial PIPE Investors have committed $126.0 million, demonstrating investor confidence in the proposed Business Combination.
• The company's Trust Account held $239,042,295 as of December 31, 2025, including $7,892,295 in interest income, providing substantial funds for the Business Combination and redemptions.
• The company's management team has extensive prior SPAC experience, including two successful Business Combinations with substantial committed capital (Danimer Scientific and Navitas Semiconductor).

Negatives

• The company reported a significant net loss of $16,495,381 for the year ended December 31, 2025.
• Management has identified material weaknesses in internal control over financial reporting as of December 31, 2025, specifically concerning the evaluation and accounting treatment of PIPE Subscription Agreements.
• There is substantial doubt about the company's ability to continue as a going concern due to its current lack of liquidity to sustain operations and the mandatory liquidation deadline of March 3, 2027, if a Business Combination is not completed.
• The company incurred an initial loss on PIPE Subscription Agreements liability of $15,582,052 for the year ended December 31, 2025.
• The company has generated no operating revenues to date and does not expect to until after consummating its initial Business Combination.
• The deferred underwriting discount and advisory fee each amount to $6,900,000, payable upon completion of the Business Combination, which will reduce available cash.

Risks

• Inability to complete the initial Business Combination, including the Teamshares Business Combination, within the Combination Period, leading to liquidation and redemption of Public Shares.
• Potential inability to obtain additional financing to complete the initial Business Combination or fund the operations and growth of Teamshares, which could compel restructuring or abandonment of the combination.
• Issuance of Ordinary Shares at a price less than the prevailing market price in connection with the initial Business Combination, potentially diluting Public Shareholders.
• Increased competition for attractive target businesses due to a growing number of SPACs, potentially increasing acquisition costs or making it difficult to find a target.
• Resources could be wasted on researching Business Combination targets that are not completed, adversely affecting subsequent attempts.
• Fluctuations in inflation and interest rates could make it more difficult to consummate an initial Business Combination.
• Geopolitical conditions and armed conflicts (e.g., Ukraine-Russia, Middle East) could materially adversely affect the search for a target or the performance of a post-Business Combination company.
• Changes in laws or regulations, or failure to comply, may adversely affect the business and ability to complete the Business Combination.
• Adverse developments in the financial services industry could impact the company's business, financial condition, or Business Combination prospects.
• Cyber incidents or attacks could result in information theft, data corruption, operational disruption, financial loss, and impact the ability to consummate a Business Combination.
• Risk of being deemed an investment company under the Investment Company Act, leading to burdensome compliance requirements and restricted activities.
• The Sponsor and Management Team's agreement to vote in favor of the initial Business Combination, regardless of Public Shareholder votes, could lead to a combination not supported by a majority of Public Shareholders.
• The ability of Public Shareholders to redeem a large number of shares and the payment of the Deferred Fee may hinder the completion of the most desirable Business Combination or optimize the capital structure, and may materially dilute Public Shareholders' investment.
• The requirement to complete the Business Combination within the Combination Period may give potential target businesses leverage in negotiations and limit due diligence time.
• If the company does not extend the Combination Period, it would liquidate, and Warrants would expire worthless.
• Purchases of Public Shares or Warrants by the Sponsor, directors, officers, or affiliates may influence a vote on a proposed Business Combination and reduce the public float.
• Public Shareholders may lose the ability to redeem all shares in excess of 15% of Class A Ordinary Shares if a shareholder or group holds more than this threshold without prior consent.
• The nominal purchase price paid by the Sponsor for Founder Shares may result in significant dilution to the implied value of Public Shares upon Business Combination completion.
• As a Cayman Islands exempted company, shareholders may face difficulties in protecting their interests, and their ability to protect rights through U.S. Federal courts may be limited.
• The company may be a passive foreign investment company, which could result in adverse U.S. federal income tax consequences to U.S. shareholders.
• Material weaknesses in internal control over financial reporting could lead to inaccurate financial reporting and adversely affect investor confidence.
• The officers and directors of an acquisition candidate may resign upon completion of the initial Business Combination, negatively impacting operations and profitability.
• The initial Business Combination and subsequent structure may not be tax-efficient for shareholders and Warrant holders.

Future Outlook

The company intends to complete its initial Business Combination with Teamshares Inc. by March 3, 2027. This involves a domestication to Delaware, a two-step merger, and the issuance of common stock and potential earnout shares to Teamshares security holders. The company will also file a registration statement for the resale of PIPE shares and shares under an equity incentive plan. Management plans to address the identified material weaknesses in internal controls and aims to raise additional capital if needed to fund operations and the Business Combination.

Management Comments

• "We have based these forward-looking statements on our Management's current expectations and projections about future events, as well as assumptions made by, and information currently available to our Management, but actual results may differ materially due to various factors."
• "Management has determined that our possible need for additional financing to enable us negotiate and complete our initial Business Combination, as well as the deadline by which we may be required to liquidate our Trust Account, raise substantial doubt about our ability to continue as a going concern through approximately one year from the date the consolidated financial statements included elsewhere in this Report were issued."
• "Management plans to consummate an initial Business Combination prior to the end of the Combination Period."
• "We believe our efforts will enhance our controls relating to accounting for complex financial transactions, but we can offer no assurance that our controls will not require additional review and modification in the future as industry accounting practice may evolve over time."

Industry Context

StockSavvy.ai notes that Live Oak Acquisition Corp. V operates within the highly competitive SPAC market, which has seen increased volume and competition for attractive targets. The company's strategy to leverage its management team's extensive experience in sourcing and executing transactions, particularly in financial services, real estate, energy, industrial, and business/consumer services, is a common approach for SPACs. The target, Teamshares, represents a growing trend of tech-enabled holding companies acquiring small to medium-sized businesses, integrating them with a platform, and promoting employee ownership. This model aims to provide a permanent home for businesses and potentially generate stable, diversified revenue streams, contrasting with traditional private equity models focused on shorter hold periods. The disclosure of 'going concern' issues and internal control weaknesses highlights the inherent risks and scrutiny faced by SPACs, especially as regulatory environments evolve.

Comparison to Industry Standards

• Live Oak Acquisition Corp. V's management team has a track record with four prior SPACs, two of which successfully completed business combinations: Live Oak Acquisition Corp. (LOAK) merged with Danimer Scientific Inc., delivering over $400 million in gross proceeds (though Danimer later filed for bankruptcy in March 2025), and Live Oak Acquisition Corp. II (LOKB) merged with Navitas Semiconductor (NASDAQ: NVTS), delivering over $320 million in gross proceeds. This compares favorably to many SPACs that fail to complete a combination.
• However, two other prior SPACs, Live Oak Mobility Acquisition Corp. (LOKM) and Live Oak Crestview Climate Acquisition Corp. (LOCC), elected to liquidate and return capital to shareholders in March 2023 and November 2023, respectively. This indicates a mixed success rate, which is not uncommon in the SPAC industry but highlights the inherent risks.
• The proposed merger with Teamshares, valued at $525 million in stock consideration, falls within the company's stated target enterprise value range of $500 million to $2 billion, aligning with its acquisition criteria.
• The PIPE investment of $126 million at $9.20 per share is below the IPO price of $10.00 per unit, which is a common occurrence in SPAC transactions, especially in a challenging market, but can be viewed as a discount for new investors compared to public shareholders.
• The redemption price of approximately $10.39 per Public Share as of December 31, 2025, is above the initial $10.00 IPO price, indicating some interest accretion in the Trust Account, which is standard for SPACs that invest trust funds.

Management Changes

Corporate Governance

Legal Proceedings

• To the knowledge of management, there is no material litigation currently pending or contemplated against the company, its subsidiaries, officers, or directors in their capacity as such, or against any of its property.

Related Party Transactions

• The Sponsor made a capital contribution of $25,000 for 5,750,000 Founder Shares on December 20, 2024.
• The company sold 4,500,000 Private Placement Warrants to the Sponsor at $1.00 per warrant, generating $4,500,000.
• The company reimburses LOMP, an affiliate of the Sponsor, $17,500 per month for office space, utilities, and secretarial/administrative support, totaling $175,000 for the year ended December 31, 2025.
• The Sponsor loaned the company up to $300,000 under an IPO Promissory Note, which was fully repaid on March 3, 2025.
• The Sponsor or its affiliates may loan the company Working Capital Loans (up to $1,500,000 convertible into warrants at $1.00 per warrant) to fund working capital deficiencies or transaction costs, with no such loans outstanding as of December 31, 2025.
• The company covered certain expenses on behalf of its Sponsor, resulting in $713 due from Sponsor as of December 31, 2025.
• The Sponsor, officers, and directors have waived redemption rights for Founder Shares and certain Public Shares, and rights to liquidating distributions from the Trust Account for Founder Shares if a Business Combination is not completed.

Stakeholder Impact

• **Shareholders:** Public Shareholders face potential dilution from the issuance of new shares in the Business Combination and from the conversion of Founder Shares. They also face the risk of losing investment if the Business Combination is not completed and Warrants expire worthless. The 15% redemption limitation without prior consent could reduce their influence. The substantial doubt about going concern and material weaknesses in internal controls could negatively impact share price and investor confidence.
• **Employees (of Teamshares post-merger):** The merger aims to help employees earn company stock, potentially increasing engagement and aligning incentives. The Incentive Plan will provide equity and equity-based awards to eligible service providers.
• **Management Team:** The management team and Sponsor have significant financial incentives tied to the completion of the Business Combination, including the value of Founder Shares and Private Placement Warrants, which could create conflicts of interest. Their compensation and roles post-merger are subject to future determination.
• **Creditors:** In the event of liquidation, creditors' claims could have priority over Public Shareholders' claims, potentially reducing the per-share redemption amount. The Sponsor has agreed to indemnify the company against certain third-party claims to protect the Trust Account, but its ability to satisfy these obligations is not assured.
• **Underwriters:** Entitled to a deferred underwriting discount of $6,900,000 and an advisory fee of $6,900,000 upon completion of the Business Combination, creating an incentive for the transaction to close.

Next Steps

• The company will continue its domestication process from the Cayman Islands to Delaware prior to the closing of the Teamshares Business Combination.
• Merger Sub I will merge with Teamshares, with Teamshares surviving as a wholly-owned subsidiary, followed by a second merger into Merger Sub II.
• The company will seek shareholder approval for the Teamshares Merger Agreement, the Business Combination, domestication, new organizational documents, name change to Teamshares, Inc., adoption of an Incentive Plan, appointment of the post-Closing board of directors, and approval of the Letter Agreement Amendment.
• Teamshares will deliver PCAOB-audited financial statements for fiscal years ended December 31, 2023, and December 31, 2024, within 30 days of the Teamshares Merger Agreement date.
• The company will use commercially reasonable efforts to file a post-effective amendment to the IPO Registration Statement or a new registration statement covering Class A Ordinary Shares issuable upon Warrant exercise within 20 business days after closing the Business Combination, aiming for effectiveness within 60 business days.
• The company will file a registration statement on Form S-8 (or other applicable form) for shares issuable under the Incentive Plan within five business days following the expiration of the 60-day period after filing current Form 10 information reflecting its non-shell company status.
• The company will continue to implement measures to remediate identified material weaknesses in internal control over financial reporting.

Key Dates

Recommendation

While the definitive merger agreement with Teamshares Inc. provides a clear path forward for this SPAC, the disclosed material weaknesses in internal controls and the 'substantial doubt about going concern' are significant concerns. The PIPE investment and the target's business model offer some upside potential, but the financial and operational risks are considerable. A 'hold' recommendation is appropriate for existing investors who may wish to see if the merger closes and the company addresses its internal control issues, but new investment is not advised given the high level of uncertainty and risk.

Keywords

SPAC, Live Oak Acquisition Corp. V, Teamshares Inc., Merger Agreement, 10-K Filing, SEC Filing, Business Combination, Special Purpose Acquisition Company, Financial Report, Corporate Governance, Risk Factors, PIPE Investment, Warrants, Class A Ordinary Shares, Trust Account, Going Concern, Internal Controls, Earnout Shares, Nasdaq Listing