What changed in this filing

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Item 2. Management’s Discussion and Analysis

2024-12-09 compared with 2024-09-30 · 48 added, 19 removed, 116 unchanged (37% of the section changed)

27 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 October 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 and six months ended June 30, 2024 were organizational activities and the search for a prospective Business Combination.

Our only activities for the three and nine months ended September 30, 2024 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, 2024, we had a net loss of $703,701 This consisted of $127,224 of Expense related to Non-Redemption Agreement and $576,477 in professional fees, general and administrative expenses and franchise taxes.

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

For the three months ended September 30, 2024, we had a net loss of $375,004 This consisted of professional fees, general and administrative expenses and franchise taxes.

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 six months ended June 30, 2024, we had a net loss of $295,321.

For the nine months ended September 30, 2024, we had a net loss of $670,325.

This consisted of $1,208,217 in professional fees, general and administrative expenses, income tax expense and franchise taxes, $127,224 of Expense related to Non-Redemption Agreement offset by $665,116 of change in fair value of the forward purchase agreement.

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

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.

Liquidity and Capital Resources

As of June 30, 2024, we had $14,876 in restricted cash available exclusively for payment of current tax liabilities.

As of June 30, 2024, we had a working capital deficit of $3,289,361.

As of September 30, 2024, we had $45,150 in restricted cash available exclusively for payment of current tax liabilities.

As of September 30, 2024, we had a working capital deficit of $3,664,323.

The Company’s liquidity is 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.

1 unchanged sentence

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

For the six months ended June 30, 2024, net cash used in operating activities was $420,868, which is primarily due to a net loss of $295,321, change in fair value of forward purchase agreement of $665,116, expense related to the Issuance of non-redemption agreements of $127,224 and changes in operating assets and liabilities of $412,345.

Net cash provided by investing activities was $693,462 which was due to the withdrawal from the Trust Account in connection with redemption of $620,638 and withdrawal from Trust Account to pay franchise and income taxes of $72,824.

Net cash used in financing activities was $266,369 which was due to the payment made for the redemption of shares of $620,638 offset by proceeds from loan payable of $354,269.

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 nine months ended September 30, 2024, net cash used in operating activities was $511,636, which is primarily due to a net loss of $670,325, change in fair value of forward purchase agreement of $665,116, expense related to the Issuance of non-redemption agreements of $127,224 and changes in operating assets and liabilities of $696,581.

Net cash provided by investing activities was $508,502 which was due to the withdrawal from the Trust Account in connection with redemption of $620,636 and withdrawal from Trust Account to pay franchise and income taxes of $72,866, partially offset by $185,000 cash paid in connection with Cycurion promissory note.

Net provided by financing activities was $39,633 which was due to the payment made for the redemption of shares of $620,636 offset by proceeds from loan payable of $354,269, proceeds from sponsor promissory note of $230,000 and proceeds from sponsor advance of $76,000.

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 provided by financing activities was $114,129,594 which was due to the payment made for the redemption of shares of $114,329,594 offset by proceeds from loan payable of $200,000.

We have incurred, and expect to continue to incur, significant costs in pursuit of our acquisition plans.

26 unchanged sentences

Business Combination Marketing Agreement

The Company has engaged A.G.P.

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 entered into a business combination marketing agreement on January 11, 2022 with A.G.P.

(the “Business Combination Marketing Agreement”) whereby A.G.P.

is to act 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 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.

The Business Combination Marketing Agreement will be terminated upon entry into the Advisory Agreement (described below).

Service Provider Agreements

The Company plans to enter into advisory agreements with certain of its service providers to fund its obligations in shares of common stock instead of cash.

Advisory Agreement with A.G.P.

The Company plans to enter into an advisory agreement with A.G.P.

(the “Advisory Agreement”), pursuant to which the Company shall pay A.G.P.

a total transaction fee equal to $2,500,000 (the “Transaction Fee”) upon the closing of the Business Combination.

The Transaction Fee will be payable in the form of preferred shares of the Combined Company that are convertible into 500,000 shares of the Combined Company’s common stock (such preferred shares or the common into which they convert, the “Transaction Fee Shares”), for a price per share of common stock equal to $5.00.

A portion of the Transaction Fee Shares shall be subject to forfeiture back to the Company once A.G.P.

converts and sells Transaction Fee Shares generating sales proceeds (excluding commissions) of $2,500,000.

The Transaction Fee Shares shall be subject to a lock-up ending on the earlier of (i) the date on which 75% of the outstanding Series B Preferred Stock is converted into shares of the Combined Company’s common stock and (ii) three months from the Closing date (the “Lock-Up Termination Date”).

After the Lock-Up Termination Date, A.G.P.

may convert the Transaction Fee Shares and sell them subject to a leak-out provision that limits A.G.P.’s sales of Transaction Fee Shares on any given date to 10% of the cumulative trading volume of the common stock for such date (including pre-market, market and post-market trading) as reported by Bloomberg, LP.

This restriction shall remain in effect beginning on the Lock-Up Termination Date and ending on the date on which 100% of the Series B Preferred Stock outstanding as of the closing is converted into shares of the Combined Company’s common stock.

Upon the execution of the Advisory Agreement, that certain Business Combination Marketing Agreement, dated January 11, 2022, between the Company and A.G.P.

in which the Company and Cycurion shall cause the Combined Company to issue to A.G.P.

250,000 shares of common stock of the Combined Company in full satisfaction of the fees, shall be terminated and such shares of common stock extinguished in their entirety.

Other Service Providers .

In addition, the Company entered into revised arrangements with certain of its service providers, under which the Company agrees to pay approximately $1.25 million of its obligations in shares of the Combined Company’s common stock, which will be issued at a price per share equal to $5.00, or total of 250,000 shares of the Combined Company;

provided that once a given service provide has completed sales of its shares that generate sales proceeds (excluding commissions) equal to the amount owing to that service provider, its remaining shares shall be returned to the Combined Company .

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.

2 unchanged sentences

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 Equiniti Trust Company, nor any of the Company’s directors, officers, and any affiliate.

As of June 30, 2024, the Company has borrowed $554,269 and accrued approximately $14,900 in interest.

As of September 30, 2024, the Company has borrowed $554,269 and accrued approximately $21,906 in interest.

As of December 31, 2023, the Company has borrowed $200,000 and accrued approximately $4,222 in interest.

2 unchanged sentences

On May 3, 2024, the Company and Cycurion amended the Promissory Note to increase its principal amount to $554,269.

On July 2, 2024 the Company and Cycurion amended the Promissory Note to extend the maturity date of this note to the earlier of the consummation of the Business Combination or October 11, 2024.

On July 2, 2024 the Company and Cycurion amended the Promissory Note to extend the maturity date of this note to the earlier of the consummation of the Business Combination or January 11, 2025.

On October 9, 2024, the Company and Cycurion amended the Promissory Note to extend the maturity date of this note to the earlier of the consummation of the Business Combination or January 11, 2025.

Forward Purchase Agreement

32 unchanged sentences

The Company’s management does not believe that any other recently issued, but not yet effective, accounting pronouncements, if currently adopted, would have a material effect on the Company’s unaudited consolidated condensed financial statements.

Change in Auditor

On July 10, 2024, the Company dismissed its previous independent accounting firm, Marcum LLP (“Marcum”), and engaged WWC, P.C.

(“WWC”) as its independent auditor.

Before the engagement of WWC, the Company did not consult with WWC regarding the application of accounting principles to a specific completed or proposed transaction or regarding the type of audit opinion that might be rendered by WWC on the Company’s financial statements, and WWC did not provide any written or oral advice that was an important factor considered by WWC in reaching a decision as to any such accounting, auditing or financial reporting issue, and the Company did not consult with WWC regarding any of the matters or events set forth in Item 304(a)(2)(ii) of Regulation S-K.

Marcum’s reports on the Company’s financial statements for the fiscal years ended December 31, 2023 and December 31, 2022, as previously publicly disclosed, contained no adverse opinions or disclaimers of opinions and were not qualified or modified as to uncertainty, audit scope, or accounting principles (which contains an explanatory paragraph concerning Western’s ability to continue as a going concern, as described in Note 1 to the financial statements).

During the fiscal years ended December 31, 2023 and December 31, 2022, and the subsequent period through July 10, 2024, there were (i) no “disagreements” (as that term is defined in Item 304(a)(1)(iv) of Regulation S-K and the related instructions) between the Company and Marcum on any matter of accounting principles or practices, financial statement disclosure or auditing scope or procedure, which disagreements, if not resolved to the satisfaction of Marcum, would have caused Marcum to make reference to the subject matter of the disagreement in Marcum’s reports on the Company’s consolidated financial statements for such years, and (ii) no “reportable events” (as that term is defined in Item 304(a)(1)(v) of Regulation S-K).

The Company provided Marcum with a copy of the foregoing disclosure before its filing with the SEC and requested that Marcum furnish the Company with a letter addressed to the SEC stating whether it agrees with the above statements and, if it does not agree, the respects in which it does not agree.

A copy of the letter from Marcum dated July 12, 2024 is filed as Exhibit 16.1 to the Form 8-K filed with the SEC on July 15, 2024.

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

1 unchanged sentence

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