S-1/A: Twelve Seas III Files S-1/A for $150M SPAC IPO

Twelve Seas Investment Company III, a blank check company, filed an S-1/A for a $150 million IPO to seek a business combination, primarily targeting non-U.S. companies in natural resources.

Summary

• Twelve Seas Investment Company III is a Cayman Islands exempted blank check company formed on August 14, 2024, with the purpose of effecting a business combination with one or more businesses.
• The company intends to raise $150,000,000 through an initial public offering of 15,000,000 units at $10.00 per unit, with an over-allotment option for an additional 2,250,000 units.
• Each unit consists of one Class A ordinary share and one Share Right, with each Share Right entitling the holder to receive one-tenth (1/10) of one Class A ordinary share upon consummation of an initial Business Combination.
• Simultaneously with the IPO, the sponsor, Twelve Seas Sponsor LLC, and Cohen & Company Capital Markets (CCM) will purchase an aggregate of 450,000 private placement units at $10.00 per unit, totaling $4,500,000.
• The company has a 24-month window from the closing of the IPO to consummate an initial business combination, or an earlier liquidation date as approved by the board.
• The primary focus for a business combination target will be global companies located outside the United States, with an emphasis on established profitable enterprises in oil and gas and other proven sectors, particularly in the Pan-Eurasian region and Africa.
• As of June 30, 2025, the company had cash of $2,718 and a working capital deficit of $245,103, and its independent auditor expressed substantial doubt about its ability to continue as a going concern.

Sentiment

Score: 3

Explanation: The sentiment is low due to the 'going concern' warning, significant dilution for public shareholders, and a history of underperforming or liquidating prior SPACs associated with the management team. While the management has experience, the financial health and past outcomes present considerable risks.

Positives

• The management team possesses extensive cross-border investment experience, particularly in the Pan-Eurasian region, which is expected to aid in identifying attractive foreign companies.
• The company's strategy to focus on non-U.S. opportunities is seen as a competitive advantage, leveraging the benefits of a U.S. public listing for international companies.
• Management has a track record with prior SPACs, including one successful business combination (Twelve Seas I with Brooge Holdings).
• The company offers a target business an alternative to a traditional IPO, potentially providing more certainty over valuation and timing, and structural flexibility.
• The target business criteria include companies with equity values between $200 million and $2 billion, compelling reasons for a U.S. listing, strong public comparables, robust financial reporting, and potential for strong earnings/cash flow growth.

Negatives

• Public shareholders will incur immediate and substantial dilution of approximately 99.20% (or $9.92 per share) due to the nominal price paid by the sponsor for founder shares ($0.004 per share).
• The company's independent registered public accounting firm's report contains an explanatory paragraph expressing substantial doubt about its ability to continue as a going concern.
• Significant conflicts of interest exist due to the sponsor and management team's financial incentives, as they may make a substantial profit even if the acquisition target declines in value for public shareholders.
• Management's prior SPAC experiences include several liquidations (Twelve Seas Investment Company II, Quadro Acquisition One Corp., Global Blockchain Acquisition Corp., Ruslan Acquisition Corp.) and one combined company (TLG Acquisition One Corp. with Electriq Power) that filed for Chapter 7 bankruptcy.
• The ability of public shareholders to redeem shares for cash may make the company's financial condition unattractive to potential business combination targets, potentially limiting desirable deals.
• The deferred underwriting commissions, based on funds remaining after redemptions, may incentivize underwriters to favor transactions with lower redemption rates, potentially conflicting with public shareholder interests.

Risks

• The company is a blank check company with no operating history or revenues, providing no basis to evaluate its ability to achieve its business objective.
• Public shareholders may not be afforded an opportunity to vote on the proposed initial business combination, and even if a vote is held, founder share holders' votes may lead to approval despite public shareholder dissent.
• The only opportunity for public shareholders to effect their investment decision regarding a potential business combination may be limited to exercising redemption rights for cash.
• The requirement to complete an initial business combination within the 24-month completion window may give target businesses leverage in negotiations and limit due diligence time.
• Changes in laws or regulations, particularly the SEC's SPAC Rules, may increase costs and time needed to complete a business combination, or lead to the company being deemed an investment company.
• Geopolitical conditions, including armed conflicts and sanctions, could materially adversely affect the search for a target or the performance of a post-business combination company.
• If the company is unable to complete an initial business combination, public shareholders may receive less than $10.00 per share upon liquidation, and Share Rights will expire worthless.
• Third parties may bring claims against the company, potentially reducing the funds in the trust account available for public shareholder redemptions.
• The company may reincorporate in another jurisdiction, which could result in uncertain U.S. federal income tax consequences for shareholders or Share Right holders.
• The market for directors and officers liability insurance for SPACs has become more difficult and expensive, potentially impacting the ability to attract and retain qualified personnel post-combination.
• Recent increases in inflation could make it more difficult to complete an initial business combination.

Future Outlook

The company intends to focus its search for an initial business combination on global companies located outside the United States, with an emphasis on established profitable enterprises in oil and gas and other proven sectors, particularly in the Pan-Eurasian region and Africa. It will also consider U.S. targets owned by non-U.S. shareholders. The company may seek additional financing through equity or convertible debt issuances or loans to complete a business combination or fund operations, which could result in significant dilution. The company has a 24-month completion window to consummate an initial business combination, with potential for shareholder-approved extensions.

Management Comments

• Management believes that the extensive cross-border investment experience of the management team will allow the company to identify attractive foreign companies suitable for an initial business combination.
• Management is confident that the team's global investment experience and understanding of business, cultural, and economic distinctions across diverse target geographies will enable them to identify strong merger candidates and successfully complete an initial business combination.
• Management believes that specializing in non-U.S. opportunities will provide a competitive advantage over other U.S.-listed SPACs.
• Management believes that the non-U.S. opportunity for a U.S.-listed SPAC will continue to broaden as SPACs gain even greater acceptance by potential targets and investors alike.
• Management intends to devote as much time as they deem necessary to the company's affairs until an initial business combination is completed, though they are not obligated to devote any specific number of hours.

Industry Context

The filing highlights a trend of increasing foreign-domiciled issuers on U.S. exchanges, with approximately 52% of IPOs since 2023 being from foreign entities, a 20-year high. SPACs are noted as an attractive alternative for foreign companies seeking a U.S. listing, with over 40% of the one hundred most recently completed SPAC mergers involving foreign targets as of December 31, 2024. The company aims to capitalize on this trend by focusing on the Pan-Eurasian region and Africa, differentiating itself through its management's international investment experience. However, the document also acknowledges that a number of target businesses have underperformed financially post-business combination, including some associated with the management team's prior SPACs.

Comparison to Industry Standards

• Twelve Seas I, a prior SPAC led by CEO Dimitri Elkin, completed a $1.0 billion business combination with Brooge Holdings (UAE oil storage company) in December 2019. However, 82.1% of public shares were redeemed, and Brooge Holdings (now Brooge Energy Ltd) traded at $2.90 per share as of September 11, 2025, indicating significant underperformance post-merger.
• Global Blockchain Acquisition Corp. (Nasdaq: GBBK), where CFO Jonathan Morris served, liquidated in April 2025 after 96% of public shares were redeemed following extension votes.
• TLG Acquisition One Corp. (TLG), where Jonathan Morris served as Chief Development Officer, completed a business combination with Electriq Power in August 2023, but 99.5% of its public shares were redeemed, and the combined company filed for Chapter 7 bankruptcy in May 2024.
• Quadro Acquisition One Corp., also involving Dimitri Elkin and Jonathan Morris, liquidated in May 2024.
• Ascendant Digital Acquisition Corp., where Bob Foresman served as a Director, completed a business combination with Beacon Street Group LLC (now MarketWise Inc.) in July 2021. 93.6% of public shares were redeemed, but MarketWise Inc. traded at $18.21 per share as of September 11, 2025, indicating a more positive outcome for remaining shareholders compared to other examples.
• The high redemption rates and negative outcomes for several prior SPACs associated with the management team suggest a performance below industry standards for successful SPAC mergers, which typically aim for lower redemptions and sustained post-merger value.

Management Changes

Corporate Governance

Legal Proceedings

• No material litigation, arbitration, or governmental proceeding is currently pending against the company or any members of its management team in their capacities as such.
• However, members of the management team and board of directors have been involved in litigation, investigations, or other proceedings in their past roles, including a shareholder class action lawsuit against Brooge Energy Limited (NASDAQ: BROG), a company from a prior SPAC led by the CEO.

Related Party Transactions

• The sponsor paid $25,000 for 5,692,500 founder shares (Class B ordinary shares) at a nominal price of approximately $0.004 per share, which will result in significant dilution for public shareholders.
• The sponsor and CCM will purchase 450,000 private placement units at $10.00 per unit for $4,500,000 simultaneously with the IPO.
• An affiliate of the sponsor, Twelve Seas Capital Inc., will be reimbursed $10,000 per month for office space, utilities, and administrative support.
• The sponsor has loaned the company up to $300,000 for offering-related and organizational expenses, which will be repaid from IPO proceeds.
• The sponsor or its affiliates or certain officers/directors may loan the company up to $1,500,000 for working capital, convertible into private placement units at $10.00 per unit at the lender's option.
• The sponsor, officers, and directors have agreed to waive redemption rights for their founder shares and private placement shares, and rights to liquidating distributions from the trust account if a business combination is not completed.
• Independent directors will receive an indirect interest in an aggregate of 250,000 founder shares through membership interests in the sponsor as compensation for their services.

Stakeholder Impact

• Shareholders face significant dilution from the sponsor's founder shares and potential future equity issuances.
• Public shareholders' investment is at high risk due to the blank check nature and the 'going concern' uncertainty.
• The sponsor and management team have financial incentives that may conflict with public shareholders' interests, potentially leading to a business combination that is less favorable for public investors.
• Employees (if hired post-IPO) and management may be impacted by the success or failure of the business combination, with management potentially negotiating employment or consulting agreements with a target business.
• Creditors of the company may have claims against the trust account, potentially reducing the amount available for public shareholder redemptions if the company liquidates without a business combination.

Next Steps

• The company intends to apply to have its units listed on The Nasdaq Global Market under the symbol TWLVU.
• The Class A ordinary shares and Share Rights comprising the units are expected to begin separate trading on the 52nd day following the date of the prospectus, or earlier if allowed by Cohen & Company Capital Markets.
• The company will file a Current Report on Form 8-K with the SEC promptly after the closing of the offering, including an audited balance sheet reflecting receipt of gross proceeds.
• The company will continue to search for and identify a suitable business combination target within 24 months from the closing of the IPO, or an earlier liquidation date as approved by the board.
• Management will conduct extensive due diligence on prospective target businesses, including meetings, document reviews, and interviews.

Key Dates

Keywords

SPAC, Blank Check Company, IPO, Business Combination, Acquisition, Merger, Cayman Islands, Class A Ordinary Shares, Share Rights, Private Placement Units, Dimitri Elkin, Jonathan Morris, Natural Resources, Pan-Eurasian Region, Dilution, Conflicts of Interest, SEC Filing