What changed in this filing

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Item 2. Management’s Discussion and Analysis

2024-05-15 compared with 2023-11-13 · 34 added, 31 removed, 78 unchanged (45% of the section changed)

30 unchanged sentences

government treasury obligations.

On June 9, 2023, the Company’s stockholders approved a proposal to amend the Company’s amended and restated certificate of incorporation (the “Extension Amendment Proposal”) to extend the time that the Company has to consummate its initial Business Combination (the “Extension”) from June 14, 2023 to September 14, 2023 (the “Extended Date”) and to allow the board of directors of the Company, without another stockholder vote, to elect to further extend the date to consummate an initial Business Combination after the Extended Date up to six times, by an additional month each time, up to March 14, 2024, providing the Company a 21-month period (or up to 27-month period) from the closing of the IPO to consummate its initial Business Combination.

On September 11, 2023, the board of directors of the Company approved the extension of the date by which the Company must consummate an initial Business Combination from September 14, 2023 to October 14, 2023 (the “First Extension”).

The First Extension is the first of six one-month extensions permitted under the Company’s Amended and Restated Certificate of Incorporation.

On October 11, 2023, the board of directors of the Company approved the further extension of the date by which the Company must consummate an initial Business Combination from October 14, 2023 to November 14, 2023 (the “Second Extension”).

The Second Extension is the second of six one-month extension permitted under the Company’s Amended and Restated Certificate of Incorporation.

As of September 30, 2023, we had not yet commenced any operations.

All activity from inception through September 30, 2023 relates to our formation, our IPO and our pursuit of a target company with which to effect our initial Business Combination.

On June 9, 2023, the Company’s stockholders approved a proposal to amend the Company’s amended and restated certificate of incorporation to extend the time that the Company has to consummate its initial business combination from June 14, 2023 to September 14, 2023 and to allow the board of directors of the Company, without another stockholder vote, to elect to further extend the date to consummate an initial business combination after September 14, 2023 up to six times, by an additional month each time, up to March 14, 2024, providing the Company a 21-month period (or up to 27-month period) from the closing of the IPO to consummate its initial business combination.

In connection with the Special Meeting, the holders of 18,849,935 shares of Class A common stock properly exercised their right to redeem their shares for cash, resulting in 4,150,065 shares of Class A common stock issued and outstanding and subject to possible redemption.

Accordingly, at December 31, 2023 and 2022, there were 8,350,065 and 23,000,000 shares of Class A common stock issued and outstanding, including 4,150,065 and 23,000,000 shares of Class A common stock subject to possible redemption, respectively.

In advance of the Special Meeting, on May 25, 2023, the Company entered into non-redemption agreements with unaffiliated third parties in exchange for each such party agreeing not to redeem public shares held by them in connection with such meeting.

In exchange for the foregoing commitments not to redeem public shares, the Sponsor agreed to transfer to such third parties an aggregate of up to 1,499,996 founder shares.

In addition, in advance of the Special Meeting and the entry into the non-redemption agreements, on May 25, 2023, pursuant to the terms of our charter, the Sponsor converted 4,200,000 founder shares held by it on a one-for-one basis into Public Shares.

As of March 31, 2024, the board of directors of the Company approved six monthly extensions from September 14, 2023 to March 14, 2024.

In connection with each of the six monthly extensions, the Sponsor transferred 166,666 shares of the Company’s Class B common stock held by the Sponsor to unaffiliated third parties in accordance with those certain voting and non-redemption agreements previously entered into between the Sponsor and such third parties.

In addition, on March 14, 2024, the Company’s stockholders approved a proposal to amend the Company’s amended and restated certificate of incorporation to further extend the time that the Company has to consummate its initial business combination from March 14, 2024 to December 14, 2024.

In connection with the vote to extend the time that the Company has to consummate its initial business combination from March 14, 2024 to December 14, 2024, the holders of 2,986,952 shares of Class A common stock properly exercised their right to redeem their shares for an aggregate redemption amount of $32,214,591, resulting in 1,163,113 shares of Class A common stock issued and outstanding and subject to possible redemption.

As of March 31, 2024, we had not yet commenced any operations.

All activity from inception through March 31, 2024 relates to our formation, our IPO and our pursuit of a target company with which to effect our initial business combination.

The Company has selected December 31 as its fiscal year end.

Results of Operations and Known Trends or Future Events

Our entire activity from inception through September 30, 2023 relates solely to our formation, our IPO and, since the closing of our IPO, a search for a Business Combination candidate.

Our entire activity from inception through March 31, 2024 relates solely to our formation, our IPO and, since the closing of our IPO, a search for a Business Combination candidate.

We have not generated any operating revenues to date, and we will not generate any operating revenues until after completion of our initial Business Combination.

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We have incurred and expect to continue to incur increased expenses as a result of being a public company (for legal, financial reporting, accounting and auditing compliance), as well as for due diligence expenses.

For the three months ended September 30, 2023, we had net loss of $10,518, which consisted of $731,196 dividend income on marketable securities held in the Trust Account, offset by a loss of $325,000 on the change in fair value of the warrant liability, a $135,986 financing expense related to the excess fair value of Class B common stock transferred by the Sponsor, provision for income tax of $142,965, $56,330 in legal and accounting expenses, $50,411 of franchise tax expense, $7,845 of administrative expenses, $21,250 of listing fees, and $1,927 of bank fees.

For nine months ended September 30, 2023, we had net income of $2,831,194, which consisted of $6,120,704 dividend income on marketable securities held in the Trust Account, offset by a loss of $725,950 on the change in fair value of the warrant liability, $522,948 of financing expenses related to the excess fair value of Class B common stock transferred by the Sponsor, provision for income tax of $1,253,934, $211,771 in legal and accounting expenses, $149,589 of franchise tax expense, $227,594 of insurance expense, $128,248 of administrative expenses, $63,750 of listing fees, and $5,726 of bank fees.

For the three months ended September 30, 2022, we had net income of $1,306,458, which consisted of a $593,000 gain on the change in fair value of warrant liabilities and $1,065,967 of dividend income on marketable securities held in the Trust Account, offset by $82,705 in legal and accounting expenses, $50,411 of franchise tax expense, $129,063 of insurance expense, $63,750 of listing fees, $25,895 of administrative expenses, and $685 bank fees.

For the nine months ended September 30, 2022, we had net income of $15,047,487, which consisted of a $14,872,000 gain on the change in fair value of warrant liabilities and $1,399,231 of dividend income on marketable securities held in the Trust Account, offset by $429,833 in legal and accounting expenses, $153,874 of franchise tax expense, $387,189 of insurance expense, $153,874 of listing fees, $101,395 of administrative expenses, and $1,864 bank fees expenses.

For the three months ended March 31, 2024, we had net income of $261,607, which consisted of $559,907 dividend income on marketable securities held in the Trust Account and a $447,950 gain on the change in fair value of warrant liability and offset by a non-redemption agreement expense of $274,973 related to the excess fair value of Class B common stock transferred by the Sponsor, provision for income tax of $64,703, $60,546 in legal and accounting expenses, $75,874 of franchise tax expense, $151,749 of administrative expenses (of which $45,000 are due to related party), $95,151 of insurance expense, $21,250 of listing fees, and $2,004 of bank fees.

For the three months ended March 31, 2023, we had net income of $1,184,465, which consisted of $2,525,300 dividend income on marketable securities held in the Trust Account and offset by a $542,100 loss on the change in fair value of warrant liability, provision for income tax of $519,957, $76,671 in legal and accounting expenses, $49,315 of franchise tax expense, $22,092 of administrative expenses (of which $0 are due to related party), $129,063 of insurance expense, and $1,637 of bank fees.

Liquidity and Capital Resources

As of September 30, 2023 and December 31, 2022, we had cash of $2,351,814 and $50,858, respectively, and working capital deficit of $2,459,358 and $929,527, respectively.

As of September 30, 2023, net cash provided by operating activities was $5,745,670.

Net income of $2,831,194 was increased by a $725,950 loss on the fair value of the warrant liability, $522,948 of non-cash financing expense related to the transfer of Class B shares by the Sponsor, and a $1,853,840 increase in changes in operating assets and liabilities, offset by a decrease for $188,262 of accrued dividends on marketable securities held in the Trust Account.

As of September 30, 2022, net cash used in operating activities was $1,053,342.

Net income of $15,047,487 was decreased by a $14,872,000 gain on the fair value of the warrant liability, $435,286 of accrued dividends on marketable securities held in the Trust Account, and a $793,543 decrease in changes in operating assets and liabilities.

As of September 30, 2023, net cash provided by investing activities was $194,049,943, comprised of purchases of marketable securities held in the Trust Account of $5,932,443, offset by proceeds from marketable securities held in the Trust Account of $199,982,386.

As of September 30, 2022, net cash used in investing activities was $963,945 comprised of purchases of marketable securities held in the Trust Account.

As of September 30, 2023, net cash used in financing activities was $197,494,657, comprised of payments for stockholder redemptions of $197,694,657 and offset by a $200,000 cash capital contribution from the Sponsor.

As of September 30, 2022, net cash provided by financing activities was $240,131, comprised of $156,550 of payments made by the Sponsor on behalf of the Company and receipt of $83,581 repayment for due from related party balance.

We expect to use our working capital primarily for legal and accounting fees related to our regulatory reporting requirements, fees for office space, utilities, and secretarial and administrative services, continued listing fees on the New York Stock Exchange (“NYSE”), and for expenses in connection with identifying and evaluating target businesses, performing business due diligence on prospective target businesses, travelling to and from the offices or similar locations of prospective target businesses or their representatives or owners, reviewing corporate documents and material agreements of prospective target businesses and structuring, negotiating and completing a Business Combination.

As of March 31, 2024 and December 31, 2023, we had cash of $523,168 and $2,171,553, respectively, and working capital deficit of $2,877,121 and $2,808,465, respectively.

As of March 31, 2024, net cash used in by operating activities was $1,989,167.

Net income of $261,607 was increased by a non-redemption agreement expense of $274,973 related to the transfer of Class B shares by the Sponsor, and decreased by a $447,950 gain on the change in fair value of warrant liability, $175,923 of accrued dividends on marketable securities held in the Trust Account, and $1,901,874 decrease in changes in operating assets and liabilities.

As of March 31, 2023, net cash provided by operating activities was $1,578,970.

Net income of $1,184,465 was increased by a $542,100 gain on the fair value of the warrant liability and a $764,598 increase in changes in operating assets and liabilities, and decreased by $912,193 of accrued dividends on marketable securities held in the Trust Account,

As of March 31, 2024, we had marketable securities held in the Trust Account of $12,566,002, consisting of securities held in a money market fund that invests in U.S.

Treasury securities with a maturity of 185 days or less.

As of March 31, 2024, we had cash of $523,168 held outside the Trust Account.

We intend to use the funds held outside the Trust Account primarily to identify and evaluate target businesses, perform business due diligence on prospective target businesses, travel to and from the offices, plants or similar locations of prospective target businesses or their representatives or owners, review corporate documents and material agreements of prospective target businesses, and structure, negotiate and complete a business combination.

Our management does not expect that we will be able to fund our liquidity requirements in the next 12 months from our current working capital.

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However, neither our management team nor our Sponsor or their respective affiliates are obligated to provide capital contributions or loan us these funds, and, as such, there is no assurance that we will be able to obtain sufficient loans to fund any working capital deficiency.

For the three and nine months ended September 30, 2023, the Sponsor has provided $200,000 in cash through a capital contribution.

If we receive such loans, up to $1,500,000 of such loans may be convertible into warrants at a price of $1.00 per warrant at the option of the lender.

These warrants would be identical to the Private Placement Warrants.

These conditions raise substantial doubt about our ability to continue as a going concern for a period of time within 12 months from September 30, 2023.

For the three months ended March 31, 2024, the Sponsor has provided $235,647 in cash through a capital contribution and no amounts through loans.

These conditions raise substantial doubt about our ability to continue as a going concern for a period of time within 12 months from March 31, 2024.

Moreover, we may need to obtain additional financing either to complete our initial Business Combination or because we become obligated to redeem a significant number of our public shares upon completion of our initial Business Combination, in which case we may issue additional securities or incur debt in connection with such Business Combination.

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On June 9, 2023, the holders of 18,849,935 shares of Class A common stock properly exercised their right to redeem their shares in connection with the vote on the Extension Amendment Proposal for $197,694,657 in cash, resulting in 4,150,065 shares of Class A common stock issued and outstanding that are subject to possible redemption.

On March 14, 2024, the holders of 2,986,952 shares of Class A common stock properly exercised their right to redeem their shares in connection with the vote to exted the time the Company has to complete its initial Business Combination from March 14, 2024 to December 14, 2024 for $32,214,591 in cash, resulting in 1,163,113 shares of Class A common stock issued and outstanding that are subject to possible redemption.

Off-Balance Sheet Arrangements

We have no obligations, assets or liabilities, which would be considered off-balance sheet arrangements as of September 30, 2023 or December 31, 2022.

We have no obligations, assets or liabilities, which would be considered off-balance sheet arrangements as of March 31, 2024 or December 31, 2023.

We do not participate in transactions that create relationships with unconsolidated entities or financial partnerships, often referred to as variable interest entities, which would have been established for the purpose of facilitating off-balance sheet arrangements.

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Contractual Obligations

We do not have any long-term debt, capital lease obligations, operating lease obligations or long-term liabilities as of September 30, 2023 or December 31, 2022.

We do not have any long-term debt, capital lease obligations, operating lease obligations or long-term liabilities as of March 31, 2024 or December 31, 2023.

Pursuant to the underwriting agreement for our IPO, the underwriter of our IPO was entitled to a deferred fee of $0.35 per unit, or $8,050,000 in the aggregate, payable to the underwriter from the amounts held in the Trust Account solely in the event that we complete a Business Combination, subject to the terms of the underwriting agreement.

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In addition, the holders have certain “piggy-back” registration rights with respect to registration statements filed subsequent to the Company’s consummation of a Business Combination and rights to require the Company to register for resale such securities pursuant to Rule 415 under the Securities Act of 1933, as amended (the “Securities Act”).

However, the registration rights agreement provides that the Company is not required

to effect or permit any registration or cause any registration statement to become effective until termination of the applicable lock-up period with respect to such securities.

However, the registration rights agreement provides that the Company is not required to effect or permit any registration or cause any registration statement to become effective until termination of the applicable lock-up period with respect to such securities.

The Company will bear the expenses incurred in connection with the filing of any such registration statements.

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In exchange for the foregoing commitments, the Sponsor has agreed to transfer to such third parties an aggregate of up to 1,499,996 shares of Class B common stock held by the Sponsor, with 500,000 of such shares to be transferred to such third parties promptly upon consummation of the Extension, and an additional 166,666 shares to be transferred to such third parties monthly beginning on September 14, 2023 and up to, and including, February 14, 2024, if the board of directors of the Company elects to further extend the deadline to consummate an initial Business Combination at or prior to such date, in each case, if such third parties continue to hold such Non-Redeemed Shares through the Special Meeting.

As of March 31, 2024, the Company had extended the deadline to complete the business combination six times, to March 14, 2024, resulting in a total of 1,499,996 shares of Class B common stock being transferred to such third parties.

The Company accounted for the Non-Redemption Agreements in accordance with Staff Accounting Bulletin Topic 5T (“SAB Topic 5T”).

The Company considered the Sponsor’s transfer of Class B common stock to the unaffiliated third parties in exchange for the Non-Redemption Agreements as a capital contribution by the Sponsor, and recognized the excess fair value of the transferred Class B common stock as a financing expense on the condensed statements of operations for the three and nine months ended September 30, 2023.

The Company determined the excess fair value of the 500,000 Class B shares transferred to such third parties upon the consummation of the Extension to be $386,961 and the 166,666 Class B shares transferred in connection with the First Extension to be $135,986.

The Company considered the Sponsor’s transfer of Class B common stock to the unaffiliated third parties in exchange for the Non-Redemption Agreements as a capital contribution by the Sponsor, and recognized the excess fair value of the transferred Class B common stock as a non-redemption agreement expense on the condensed statements of operations for the three months ended March 31, 2024.

The Company determined the excess fair value of the 1,499,996 Class B shares transferred to such third parties to be $1,209,879.

Critical Accounting Estimates

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Actual results could materially differ from those estimates.

We have not identified any critical accounting estimates as of September 30, 2023.

We have not identified any critical accounting estimates as of March 31, 2024.

Recent Accounting Pronouncements

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 2. Management’s Discussion and Analysis