What changed in this filing

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Item 2. Management’s Discussion and Analysis

2023-11-14 compared with 2023-08-21 · 33 added, 25 removed, 110 unchanged (35% of the section changed)

17 unchanged sentences

On November 21, 2022, the Company., WAV Merger Sub, Inc., a Delaware corporation and a wholly-owned subsidiary of Registrant (“Merger Sub”), which will be formed at, or prior to, closing, Cycurion, Inc., a corporation organized under the laws of Ontario (“Cycurion”), and Emmit McHenry as Cycurion stockholders’ representation (the “Stockholders’ Representative”), entered into an Agreement and Plan of Merger (“Merger Agreement”) pursuant to which, among other things, Cycurion will be merged with the Merger Sub (the “Merger,” and together with the other transactions related thereto, the “Proposed Transactions”), with Cycurion surviving the Merger as a wholly-owned subsidiary of Registrant (the “Surviving Corporation”).

In October 2023, the Company agreed to amend the Merger Agreement principally to reflect the issuance by Cycurion of additional securities after the date of the Merger Agreement and to extend the termination date of the Merger Agreement from July 11, 2023 to December 31, 2023.

There is no guarantee that a merger will take place.

2 unchanged sentences

Stockholder Support Agreement

Contemporaneously with the execution of the Merger Agreement, certain officers and directors of the Company delivered Support Agreements, pursuant to which, among other things, the Company stockholders agreed to vote in favor of the Merger and the transactions contemplated by the Merger Agreement.

contemplated by the Merger Agreement.

In addition, the Company agreed to use its best efforts to obtain additional Support Agreements from certain of its stockholders.

2 unchanged sentences

Pursuant to the Registration Rights Agreement, the Combined Company will be required to file a registration statement covering the resale of registrable securities held by the stockholder’s party thereto.

The Merger Agreement may be terminated at any time prior to the consummation of the Merger by mutual written consent of Cycurion, as applicable, and Company and in certain other limited circumstances, including if the Merger has not been consummated by January 11, 2024.

Either the Company or Cycurion may also terminate the Merger Agreement if certain Proposals fail to receive the requisite vote for approval and other conditions, as defined in the Merger Agreement are not met.

2 unchanged sentences

We have neither engaged in any operations nor generated any operating revenues to date.

Our only activities for the three months ended June 30, 2023 were organizational activities and the search for a prospective Business Combination.

Our only activities for the three months ended September 30, 2023 were organizational activities and the search for a prospective Business Combination.

We do not expect to generate any operating revenues until after the completion of our Business Combination at the earliest.

1 unchanged sentence

We incur expenses as a result of being a public company (for legal, financial reporting, accounting and auditing compliance), as well as for due diligence expenses in connection with searching for, and completing, a Business Combination.

For the three months ended June 30, 2023, we had a net loss of $332,537.

For the three months ended September 30, 2023, we had a net loss of $253,633.

This consisted of $256,970 in professional fees, general and administrative expenses, income tax expense and franchise taxes and $48,576 of interest income on marketable securities in the Trust Account and $45,239 of change in fair value of the forward purchase agreement.

For the three months ended June 30, 2022, we had a net loss of $722,400.

This consisted of $881,761 in professional fees, general and administrative expenses, and franchise taxes and $159,361 of interest income on marketable securities in the Trust Account.

For the six months ended June 30, 2023, we had a net loss of $504,148.

For the three months ended September 30, 2022, we had a net income of $237,150.

This consisted of $279,148 in professional fees, general and administrative expenses, franchise taxes and income tax expense and $516,298 of interest income on marketable securities in the Trust Account.

For the nine months ended September 30, 2023, we had a net loss of $757,781.

This consisted of $876,968 in professional fees, general and administrative expenses, income tax expense and franchise taxes and $331,690 of interest income on marketable securities in the Trust Account and $212,503 of change in fair value of the forward purchase agreement.

For the six months ended June 30, 2022, we had a net loss of $1,312,809.

This consisted of $1,412,448 in professional fees, general and administrative expenses, and franchise taxes and $99,639 of net gain on marketable securities in the Trust Account.

For the nine months ended September 30, 2022, we had a net loss of $1,075,657.

This consisted of $1,691,594 in professional fees, general and administrative expenses, income tax expense and franchise taxes and $615,937 of net gain on marketable securities in the Trust Account.

Liquidity and Capital Resources

As of June 30, 2023, we had $258,551 in cash held outside of the Trust Account.

As of June 30, 2023, we had a working capital deficit of $2,191,908.

The Company’s liquidity needs may need to be satisfied through the proceeds from loans or additional investments from its Sponsor, shareholders, officers, directors, or third parties held outside of the Trust Account.

As of September 30, 2023, we had $302,582 in cash held outside of the Trust Account.

As of September 30, 2023, we had a working capital deficit of $2,870,709.

The Company’s liquidity needs to be satisfied through the proceeds from loans or additional investments from its Sponsor, shareholders, officers, directors, or third parties held outside of the Trust Account.

The Company’s officers, directors, and Sponsor may, but are not obligated to, loan the Company funds, from time to time or at any time, in whatever amount they deem reasonable in their sole discretion, to meet the Company’s working capital needs.

Accordingly, the Company may not be able to obtain additional financing.

For the six months ended June 30, 2023, net cash used in operating activities was $490,930, which is primarily due to a net loss of $504,148, change in fair value of forward purchase agreement of $167,264, interest income on marketable securities of $283,114, and changes in operating assets and liabilities of $129,068.

Net cash provided by investing activities was $109,376,586, which was due to the withdrawal from the Trust Account to pay redeeming shareholders of $109,436,586 offset by $60,000 deposited into the Trust Account.

Net cash used in financing activities was $109,436,586 which was due to the payment made for the redemption of shares.

For the six months ended June 30, 2022, net cash used in operating activities was $984,354, which is primarily due to a net loss of $1,312,809, changes in working capital of $428,094 and interest income on marketable securities of $99,639.

Net cash used in investing

activities was $116,150,000, which was due to the proceeds of the IPO deposited into the Trust Account.

For the nine months ended September 30, 2023, net cash used in operating activities was $646,799, which is primarily due to a net loss of $757,781, change in fair value of forward purchase agreement of $212,503, interest income on marketable securities of $331,690, and changes in operating assets and liabilities of $230,169.

Net cash provided by investing activities was $114,269,494 which was due to the withdrawal from the Trust Account to pay redeeming shareholders of $114,329,594 and $60,100 deposited into the Trust Account.

Net cash used in financing activities was $114,129,594 which was due to the payment made for the redemption of shares of $114,329,594 and $200,000 in loan proceeds received from Cycurion.

For the nine months ended September 30, 2022, net cash used in operating activities was $1,127,104, which is primarily due to a net loss of $1,075,657, changes in working capital of $564,490 and gain on marketable securities of $615,937.

Net cash used in investing activities was $116,150,000, which was due to the proceeds of the IPO deposited into the trust account.

Net cash provided by financing activities was $117,749,000 which was primarily due to the IPO proceeds and the proceeds from private placement.

28 unchanged sentences

as an advisor in connection with a Business Combination to assist the Company in holding meetings with its stockholders to discuss the potential Business Combination and the target business’ attributes, introduce the Company to potential investors that are interested in purchasing the Company’s securities in connection with a Business Combination, assist the Company in obtaining stockholders’ approval for a Business Combination, and assist the Company with its press releases and public filings in connection with a Business Combination.

The Company will pay A.G.P.

The Company was to pay A.G.P.

a fee for such marketing services upon the consummation of a Business Combination in an amount equal to 4.5% of the gross proceeds of the IPO, or $5,175,000 in the aggregate (exclusive of any applicable finders’ fees that might become payable).

In connection with the Business Combination contemplated with Cycurion, A.G.P., and the Company amended the fee arrangement whereby rather than the cash fee described above, the Company will distribute 250,000 shares of common stock.

On July 27, 2023, the Company entered into a promissory note with Cycurion for $200,000, pursuant to which the Company can borrow up to an aggregate principal amount of $200,000.

The Promissory Note, with an interest rate of 5% per annum is payable upon the sooner of the consummation of the Business Combination with Cycurion, or January 11, 2024.

As of September 30, 2023, the Company has borrowed $200,000 and accrued approximately $1,694 in interest.

No amounts were borrowed as of December 31, 2022.

If the Company defaults on the loan, or the business combination does not occur, the Company will owe all principal and accrued interest thereto to Cycurion.

Cycurion may not seek recourse against any money held in the Trust Account established pursuant the Borrower’s investment management trust agreement, dated as of January 11, 2022, as amended, by and between the Company and American Stock Transfer & Trust Company, nor any of the Company’s directors, officers, and any affiliate.

Forward Purchase Agreement

5 unchanged sentences

For purposes of this Agreement, the “VWAP Price” per Share shall be determined for any trading day or any specified trading period using the Rule 10b-18 volume weighted average price per share of Common Stock as reported via a Bloomberg Terminal.

The FPA also provides that WAV shall reimburse Alpha for all reasonable and necessary brokerage commissions incurred in connection with the Alpha’s acquisition of Shares, in an amount not to exceed $0.05 per Share and $0.02 per disposition of each Share (see Note 6).

The FPA also provides that WAV shall reimburse Alpha for all reasonable and

necessary brokerage commissions incurred in connection with the Alpha’s acquisition of Shares, in an amount not to exceed $0.05 per Share and $0.02 per disposition of each Share (see Note 6 to the financial statements).

Critical Accounting Policies

3 unchanged sentences

Net loss per share is computed by dividing net income or loss by the weighted average number of shares of common stock outstanding during the period, excluding shares of common stock subject to forfeiture by the Sponsor.

The 11,876,000 potential shares of common stock for outstanding Public Warrants and Private Placement Warrants to purchase the Company’s stock were excluded from diluted earnings per share for the periods ended June 30, 2023 and 2022 because they are contingently exercisable, and the contingencies have not yet been met.

Therefore, as of June 30, 2023 and 2022, the Company did not have any dilutive securities or other contracts that

could, potentially, be exercised or converted into shares of common stock and then share in the earnings of the Company.

The 11,876,000 potential shares of common stock for outstanding Public Warrants and Private Placement Warrants to purchase the Company’s stock were excluded from diluted earnings per share for the periods ended September 30, 2023 and 2022 because they are contingently exercisable, and the contingencies have not yet been met.

Therefore, as of September 30, 2023 and 2022, the Company did not have any dilutive securities or other contracts that could, potentially, be exercised or converted into shares of common stock and then share in the earnings of the Company.

As a result, diluted income or loss per share is the same as basic loss per share for the periods presented.

5 unchanged sentences

Derivative liabilities - Forward Purchase Agreement

The Company accounts for its Forward Purchase Agreement (“FPA”) (see Note 6) in accordance with the guidance contained in ASC 815-40, “Derivatives and Hedging”, under which the FPA does not meet the criteria for equity treatment and must be recorded as a liability.

The Company accounts for its Forward Purchase Agreement (“FPA”) (see Note 6 to the financial statements) in accordance with the guidance contained in ASC 815-40, “Derivatives and Hedging”, under which the FPA does not meet the criteria for equity treatment and must be recorded as a liability.

Accordingly, the Company classified the FPA as a liability at its fair value and adjusts the FPA to fair value at each reporting period.

11 unchanged sentences

Measurement of Credit Losses on Financial Instruments (“ASU 2016-13”).

This update requires financial assets measured at amortized cost basis to be presented at the net amount expected to be collected.

This update requires financial assets measured at amortized

cost basis to be presented at the net amount expected to be collected.

The measurement of expected credit losses is based on relevant information about past events, including historical experience, current conditions, and reasonable and supportable forecasts that affect the collectibility of the reported amount.

7 unchanged sentences

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