10-K: Roth CH Acquisition Co. Files 10-K, Announces Business Combination with SharonAI Inc.

Roth CH Acquisition Co. announces a business combination agreement with SharonAI Inc., a high-performance computing company, while also reporting financial results for the year ended December 31, 2024.

Summary

• Roth CH Acquisition Co., a blank check company, filed its annual report on Form 10-K for the year ended December 31, 2024.
• The company entered into a Business Combination Agreement with SharonAI Inc. on January 28, 2025, with an aggregate merger consideration of 560,835,633 shares of Common Stock of the Domesticated Parent.
• The Business Combination involves the Domestication Merger of Roth CH Acquisition Co. into Roth CH Holdings, Inc., followed by the Acquisition Merger of Roth CH Merger Sub, Inc. with SharonAI.
• As of March 27, 2025, there were 45,203,220 Class A ordinary shares and 75,000 Class B ordinary shares issued and outstanding.
• The company voluntarily delisted its securities from Nasdaq on April 25, 2024, and they are now quoted on the OTC Markets under the symbols USCTF and USTWF.
• For the year ended December 31, 2024, the company had net income of $119,065, which includes interest income and changes in the fair value of warrant liabilities, offset by operational costs.
• The company's independent registered public accounting firm issued an explanatory paragraph expressing substantial doubt about its ability to continue as a going concern.
• The company identified a material weakness in its internal control over financial reporting related to the accounting for complex financial instruments.
• The company is an emerging growth company and a smaller reporting company, which allows it to take advantage of certain reduced disclosure obligations.

Sentiment

Score: 4

Explanation: The document contains both positive and negative elements. The announcement of a business combination is generally positive, but the going concern warning and material weakness in internal controls are significant concerns. The overall sentiment is cautiously negative.

Positives

• The company entered into a Business Combination Agreement with SharonAI Inc.
• The company generated net income of $119,065 for the year ended December 31, 2024.
• The company is taking steps to remediate the material weakness in internal control over financial reporting.

Negatives

• The company's auditor expressed substantial doubt about its ability to continue as a going concern.
• A material weakness in internal control over financial reporting was identified.
• The company voluntarily delisted its securities from Nasdaq.

Risks

• The company may be unable to develop and maintain an effective system of internal control over financial reporting.
• The company may not have sufficient funds to satisfy indemnification claims of its directors and executive officers.
• The company may be a passive foreign investment company (PFIC), which could result in adverse U.S. federal income tax consequences to U.S. investors.
• The company is dependent on loans from its Sponsor or management team or other equity investments or debt to complete its initial Business Combination.
• The company may not be able to obtain additional financing to complete the Business Combination or any alternate business combination or to fund the operations and growth of a target business, which could compel it to restructure or abandon a particular business combination.

Future Outlook

The company intends to complete a business combination with SharonAI Inc., but its ability to continue as a going concern is dependent on securing additional financing.

Industry Context

The document reflects the typical lifecycle of a SPAC, from IPO to the pursuit of a business combination, and highlights the challenges and risks associated with this process, including regulatory compliance, financial reporting, and market volatility.

Comparison to Industry Standards

• The challenges faced by Roth CH Acquisition Co., such as the material weakness in internal controls and the auditor's going concern opinion, are not uncommon among SPACs, particularly those nearing their expiration date without a completed business combination.
• The redemption rates experienced by Roth CH Acquisition Co. during extension votes are within the range observed for other SPACs facing similar circumstances.
• The structure of the proposed business combination with SharonAI, involving a merger and domestication, is a standard approach used by SPACs to acquire target companies.
• Comparable companies include other SPACs that have sought to acquire businesses in the technology sector, such as Digital World Acquisition Corp. (DWAC) and CF Acquisition Corp. VI (CFVI), although their specific financial results and operational details may vary.

Management Changes

Related Party Transactions

• The Sponsor purchased 5,750,000 founder shares for $25,000.
• The Sponsor purchased 10,750,000 Private Placement Warrants for $10,750,000.
• The company paid an affiliate of the Former Sponsor $10,000 per month for office space, secretarial and administrative services.
• The Sponsor, executive officers and directors, or any of their respective affiliates will be reimbursed for any out-of-pocket expenses incurred in connection with activities on our behalf.
• The company entered into a promissory note with the Buyers for up to an aggregate of $1,000,000.
• The company entered into an agreement with a vendor to provide services and support in connection with finding and completing a successful business combination.

Stakeholder Impact

• Shareholders face uncertainty due to the company's going concern status and the potential for dilution.
• Warrant holders face the risk of their warrants expiring worthless if a business combination is not completed.
• Employees of the target business, SharonAI Inc., may experience changes in their roles and responsibilities following the acquisition.
• The company's creditors face the risk of non-payment if the company is unable to secure additional financing or complete a business combination.

Next Steps

• Complete the business combination with SharonAI Inc.
• Secure additional financing to fund operations and growth.
• Remediate the material weakness in internal control over financial reporting.

Key Dates

Keywords

business combination, sharonAI, acquisition, warrants, shares, roth CH, spac, financials, 10-K