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Integrated Rail and Resources Acquisition (IRRX) - 2024 Q4 - Annual Report
IRRXIntegrated Rail and Resources Acquisition (IRRX)2025-03-24 21:10

IPO and Financial Proceeds - The Company raised gross proceeds of 230millionfromitsIPObyselling23millionSPACUnitsat230 million from its IPO by selling 23 million SPAC Units at 10.00 each, including the underwriters' over-allotment option[21]. - The company incurred 4,600,000inupfrontunderwritingdiscountsandcommissionsrelatedtotheIPO[70].BusinessCombinationandOperations−AsofDecember31,2024,theCompanyhadnotcommencedoperationsandwasfocusedonidentifyingatargetcompanyforitsinitialBusinessCombination[24].−TheCompanyhasadeadlinetocompleteitsinitialBusinessCombinationextendedtoMay15,2025,followingamendmentstotheMergerAgreement[30].−TheCompanyhastheoptiontoextendthedeadlineforcompletingtheBusinessCombinationonamonthlybasis,uptoeighttimes[33].−ThemergeragreementwithTSHCompanywasexecutedonAugust12,2024,followingmonthsofanalysisandnegotiations[45].−ThereareongoingdiscussionsregardingtheexecutionandtimingoftheBusinessCombinationwithTSHCompany[46].−TheproposedBusinessCombinationwasapprovedbytheSPACBoardonAugust12,2024,andispendingstockholderapprovalsandcustomaryclosingconditions[94].−TheMergerAgreementmaybeterminatediftheEffectiveTimedoesnotoccurpriortoMay15,2025[106].ShareholderActionsandRedemptions−TheCompanyredeemed9,155,918sharesat4,600,000 in upfront underwriting discounts and commissions related to the IPO[70]. Business Combination and Operations - As of December 31, 2024, the Company had not commenced operations and was focused on identifying a target company for its initial Business Combination[24]. - The Company has a deadline to complete its initial Business Combination extended to May 15, 2025, following amendments to the Merger Agreement[30]. - The Company has the option to extend the deadline for completing the Business Combination on a monthly basis, up to eight times[33]. - The merger agreement with TSH Company was executed on August 12, 2024, following months of analysis and negotiations[45]. - There are ongoing discussions regarding the execution and timing of the Business Combination with TSH Company[46]. - The proposed Business Combination was approved by the SPAC Board on August 12, 2024, and is pending stockholder approvals and customary closing conditions[94]. - The Merger Agreement may be terminated if the Effective Time does not occur prior to May 15, 2025[106]. Shareholder Actions and Redemptions - The Company redeemed 9,155,918 shares at 10.32 per share, totaling 94,489,075,duringtheFirstExtensionAmendmentProposal[35].−Stockholdersredeemedatotalof7,354,836sharesforapproximately94,489,075, during the First Extension Amendment Proposal[35]. - Stockholders redeemed a total of 7,354,836 shares for approximately 79,652,874 (about 10.83pershare)duringtheextensionvoteinAugust2023[81].−Stockholdersredeemed1,665,727sharesforapproximately10.83 per share) during the extension vote in August 2023[81]. - Stockholders redeemed 1,665,727 shares for approximately 19,470,737 (about 11.69pershare)duringtheNovember2024ExtensionMeeting[85].−InitialstockholdershaveagreedtowaivetheirredemptionrightsconcerninganyFounderSharesandPublicSharesinconnectionwiththeinitialBusinessCombination[199].FinancialPositionandPerformance−FortheyearendedDecember31,2024,thecompanyreportedanetlossof11.69 per share) during the November 2024 Extension Meeting[85]. - Initial stockholders have agreed to waive their redemption rights concerning any Founder Shares and Public Shares in connection with the initial Business Combination[199]. Financial Position and Performance - For the year ended December 31, 2024, the company reported a net loss of 4,822,902, primarily due to operating costs of 3,054,750andchangesinfairvalueofwarrantliabilitiesamountingto3,054,750 and changes in fair value of warrant liabilities amounting to 2,090,000[129]. - As of December 31, 2024, the company had cash of 39,938andaworkingcapitaldeficitof39,938 and a working capital deficit of 13,347,972, indicating liquidity challenges[131]. - Cash used in operating activities for the year ended December 31, 2024, was 2,544,827,withnetlossimpactedbychangesinfairvalueofwarrantliabilitiesandinterestincome[132].−FortheyearendedDecember31,2023,thecompanyachievedanetincomeof2,544,827, with net loss impacted by changes in fair value of warrant liabilities and interest income[132]. - For the year ended December 31, 2023, the company achieved a net income of 3,543,111, supported by interest and income earned on cash and investments in the Trust Account of 5,117,247[130].−ThefairvalueofinvestmentsheldintheTrustAccountwas5,117,247[130]. - The fair value of investments held in the Trust Account was 3,237,676 as of December 31, 2024, a decrease from 72,731,536attheendof2023[138].TrustAccountandExtensions−TheCompanyplanstoprovidePublicStockholderswiththeopportunitytoredeemtheirsharesforaprorataportionoftheTrustAccount,initiallyanticipatedat72,731,536 at the end of 2023[138]. Trust Account and Extensions - The Company plans to provide Public Stockholders with the opportunity to redeem their shares for a pro rata portion of the Trust Account, initially anticipated at 10.10 per share[23]. - SPAC has deposited a total of 7,993,225intotheTrustAccounttoextendtheDeadlineDateforbusinesscombinationfromNovember15,2024,toMarch15,2025[39].−TheCompanyhasdepositedanaggregateof7,993,225 into the Trust Account to extend the Deadline Date for business combination from November 15, 2024, to March 15, 2025[39]. - The Company has deposited an aggregate of 7,993,225 into the Trust Account to extend the period for consummating a Business Combination to May 15, 2025, including 4,853,225fortheyearendedDecember31,2023[86].GovernanceandManagement−Thecompanyisclassifiedasan"emerginggrowthcompany"anda"smallerreportingcompany,"allowingittotakeadvantageofreduceddisclosureobligations[48][51].−ThecompanyhastwoexecutiveofficerswhoarenotrequiredtocommitspecifichourstothebusinessuntiltheinitialBusinessCombinationiscompleted[52].−ThecompanyhasestablishedaNominatingandCorporateGovernanceCommitteetoassistincompliancewithproxystatementandannualreportdisclosurerequirements[190].−ThecompanyhasestablishedaCompensationCommittee,withallmembersbeingindependentdirectors[184].−TheCompensationCommitteeisresponsibleforreviewingandapprovingthecompensationoftheChiefExecutiveOfficerandotherofficersonanannualbasis[186].InternalControlsandAudit−AsofDecember31,2024,thecompany′sdisclosurecontrolsandproceduresweredeemedineffectiveduetoinadequatecontrolsaroundthecalculationofamountsdueandpaymentoffundsfromtheTrustAccounttoredeemingshareholders[159].−Thecompany′sinternalcontroloverfinancialreportingwasalsoassessedasineffectiveasofDecember31,2024[162].−Therewerenochangesininternalcontroloverfinancialreportingduringthemostrecentfiscalyearthatmateriallyaffectedtheinternalcontrol[163].−TheAuditCommitteeheld4meetingsin2024,whiletheCompensationCommitteeheld1meeting[177].RelatedPartyTransactions−Thecompanyhasanunsecuredpromissorynotewithaborrowinglimitof4,853,225 for the year ended December 31, 2023[86]. Governance and Management - The company is classified as an "emerging growth company" and a "smaller reporting company," allowing it to take advantage of reduced disclosure obligations[48][51]. - The company has two executive officers who are not required to commit specific hours to the business until the initial Business Combination is completed[52]. - The company has established a Nominating and Corporate Governance Committee to assist in compliance with proxy statement and annual report disclosure requirements[190]. - The company has established a Compensation Committee, with all members being independent directors[184]. - The Compensation Committee is responsible for reviewing and approving the compensation of the Chief Executive Officer and other officers on an annual basis[186]. Internal Controls and Audit - As of December 31, 2024, the company's disclosure controls and procedures were deemed ineffective due to inadequate controls around the calculation of amounts due and payment of funds from the Trust Account to redeeming shareholders[159]. - The company's internal control over financial reporting was also assessed as ineffective as of December 31, 2024[162]. - There were no changes in internal control over financial reporting during the most recent fiscal year that materially affected the internal control[163]. - The Audit Committee held 4 meetings in 2024, while the Compensation Committee held 1 meeting[177]. Related Party Transactions - The company has an unsecured promissory note with a borrowing limit of 8,400,000 from the Sponsor to fund costs related to the extension of the initial Business Combination deadline[216]. - The company reported 390,710asNotePayable—RelatedPartyforpromissorynotestoTridentasofDecember31,2024[218].−Advancesfromrelatedpartiesamountedto390,710 as Note Payable — Related Party for promissory notes to Trident as of December 31, 2024[218]. - Advances from related parties amounted to 5,393,225 as of December 31, 2024, and are non-interest bearing[220]. Miscellaneous - The Shell Commitment Agreement with Shell Trading (US) Company is set for an initial term of 10 years, starting from the expected In-Service Date of December 31, 2028[41]. - The Facility is expected to process approximately 15,000 barrels of crude feedstocks per day, achieving a Nameplate Capacity of 500,000 barrels in a 60-day timeframe[122]. - The company has incurred significant costs in pursuit of acquisition plans and may need to raise additional funds to meet operational expenditures[142].