Perception Capital Corp. III

Item 1A. Risk Factors

As of the date of this Report there have been no material changes to the risk factors disclosed in the Companys Annual Report on Form 10-K filed with the SEC on April 16, 2024, other than as discussed below:

The Second Extension Amendment contravenes Nasdaq rules and, as a result, may lead Nasdaq to suspend trading in our securities or lead our securities to be delisted from Nasdaq. If our securities are delisted from Nasdaq, our Class A ordinary shares would be deemed a penny stock and we may become subject to the requirements of Rule 419 to which we are not currently subject.

Our Class A ordinary shares, units and public warrants are listed on Nasdaq. Nasdaq IM-5101-2 requires that a special purpose acquisition company complete one or more business combinations within 36 months of the effectiveness of its registration statement for its initial public offering, which, in the case of PC3, was July 23, 2024 (the Nasdaq Deadline). On June 28, 2024, our shareholders approved the Second Extension Amendment which allows us to extend the termination date to up April 23, 2025, or such earlier date as may be determined by our board of directors to be in the best interests of the Company, which is beyond the Nasdaq Deadline. As a result, the Second Extension Amendment does not comply with Nasdaq rules. On July 23, 2024, we received a notice from the staff of the Listing Qualifications Department of The Nasdaq Stock Market LLC indicating that, unless we timely requested a hearing before the Panel, our securities would be subject to suspension and delisting from Nasdaq at the opening of business on August 1, 2024, due to our non-compliance with Nasdaq IM-5101-2. We timely requested a hearing before the Panel. The hearing request resulted in a stay of any suspension or delisting action pending the hearing, which is scheduled forwas held on August 29, 2024. There can be no assuranceOn September 17, 2024, we received a letter from Nasdaq indicating that the Panel will granted our request for an extensception, or that we  to Nasdaqs listing rules to allow us to complete our business combination with RBio on or before December 2, 2024. We will not be able to regaincomplete our business compliance with Nasdaq IM-5101-2bination on or before December 2, 2024.

In addition, we are subject to compliance with Nasdaqs continued listing requirements in order to maintain the listing of our securities on Nasdaq. Such continued listing requirements for our Class A ordinary shares include, among other things, the requirement to maintain at least 300 public holders.

We expect that if our Class A ordinary shares fail to meet Nasdaqs continued listing requirements, our units and public warrants will also fail to meet Nasdaqs continued listing requirements for those securities. If our securities do not meet Nasdaqs continued listing requirements, Nasdaq maywill delist our securities from trading on its exchange. If our securities are delisted from Nasdaq, our Class A ordinary shares cwould become subject to the regulations of the SEC relating to the market for penny stocks. Under Rule 419 of the Securities Act, the term blank check company means a company that (i) is a development stage company that has no specific business plan or purpose or has indicated that its business plan is to engage in a merger or acquisition with an unidentified company or companies, or other entity or person; and (ii) is issuing penny stock, as defined in Rule 3a51-1 under the Exchange Act. Under Rule 3a51-1, the term penny stock means any equity security, unless it fits within certain enumerated exclusions including being listed on a national securities exchange, such as Nasdaq (Rule 3a51-1(a)(2)) (the Exchange Rule). We currently rely on the Exchange Rule to not be deemed a penny stock issuer (and consequently a blank check company under Rule 419). If we are deemed a blank check company as defined under Rule 419, we maywill become subject to additional restrictions on the trading of our securities. Among those restrictions is that brokers trading in the securities of a blank check company under Rule 419 adhere to more stringent rules, including being subject to the depository requirements of Rule 419.

The penny stock rules are burdensome and may reduce the trading activity for our Class A ordinary shares. If our Class A ordinary shares are subject to the penny stock rules, the holders of such Class A ordinary shares may find it more difficult to sell their shares.

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If Nasdaq delists any of our securities from trading on its exchange and we are not able to list such securities on another national securities exchange, we expect such securities cwould be quoted on an over-the-counter market. If this were to occur, we and our shareholders could face significant material adverse consequences, including:

The National Securities Markets Improvement Act of 1996, which is a federal statute, prevents or preempts the states from regulating the sale of certain securities, which are referred to as covered securities. Since our Class A ordinary shares, units and public warrants are listed on Nasdaq, such securities qualify as covered securities under such statute. Although the states are preempted from regulating the sale of covered securities, the federal statute does allow the states to investigate companies if there is a suspicion of fraud, and, if there is a finding of fraudulent activity, then the states can regulate or bar the sale of covered securities in a particular case. While we are not aware of a state having used these powers to prohibit or restrict the sale of securities issued by blank check companies, other than the State of Idaho, certain state securities regulators view blank check companies unfavorably and might use these powers, or threaten to use these powers, to hinder the sale of securities of blank check companies in their states. Further, if our Class A ordinary shares, units and public warrants were no longer listed on Nasdaq, these securities would not qualify as covered securities under such statute and we would be subject to regulation in each state in which we offers our securities.