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Aquaron Acquisition (AQU) - 2024 Q4 - Annual Report
AQUAquaron Acquisition (AQU)2025-04-16 01:14

IPO and Financial Proceeds - The company completed its IPO on October 6, 2022, raising gross proceeds of 50millionfromthesaleof5,000,000unitsat50 million from the sale of 5,000,000 units at 10.00 per unit[20]. - An additional 417,180 units were sold under the over-allotment option, generating gross proceeds of 4,171,800[21].−AsofMarch31,2025,thetrustaccountheld4,171,800[21]. - As of March 31, 2025, the trust account held 9,361,505.81, which is part of the net proceeds from the IPO and private placements[27]. - A total of 54,984,377ofnetproceedsfromtheIPOandprivateplacementsweredepositedinatrustaccountforpublicstockholders[150].−Thecompanyincurredtotalexpensesof54,984,377 of net proceeds from the IPO and private placements were deposited in a trust account for public stockholders[150]. - The company incurred total expenses of 812,577 in underwriting discounts and commissions and 835,549forotherIPO−relatedcosts[153].BusinessCombinationandMergers−ThecompanyextendeditsbusinesscombinationperiodtoMay6,2025,bydepositing835,549 for other IPO-related costs[153]. Business Combination and Mergers - The company extended its business combination period to May 6, 2025, by depositing 20,000 for each one-month extension[27]. - The company entered into a merger agreement with Bestpath on March 23, 2023, which was later terminated on July 12, 2024, due to a reorganization[39]. - The Mergers imply a current equity value of Huture at 1.0billionpriortotheclosingoftheMergers[42].−EachoutstandingPubCoOrdinarySharewillhaveavalueatthetimeoftheClosingof1.0 billion prior to the closing of the Mergers[42]. - Each outstanding PubCo Ordinary Share will have a value at the time of the Closing of 10.00[42]. - Holdco shareholders will receive up to 10,000,000 Earn-out Shares if PubCo's consolidated revenue reaches RMB60,000,000 for the fiscal year ended December 31, 2024, and RMB100,000,000 for the fiscal year ended December 31, 2025[45]. - The company has structured the business combination with Huture to acquire 100% of its equity interests, but may consider alternatives if necessary[71]. Compliance and Regulatory Issues - The company was notified by Nasdaq on February 28, 2024, for not meeting the Minimum Public Holders Rule, requiring a plan for compliance[30]. - On November 20, 2024, the company was notified of failing to maintain a minimum Market Value of Listing Securities of 35million[35].−ThecompanyreceivedadelistingnotificationfromNasdaqonMarch6,2025,duetonon−compliancewithlistingrules[173].−Followingthedelistingnotification,thecompanyoptednottorequestareviewandexpectstofileaForm25−NSEtoremoveitssecuritiesfromNasdaq[174].−ThecompanyintendstoseekawaiverfromNasdaqregardingitsdelisting,butthereisnoassurancethatthiswillbegranted[110].FinancialPerformance−ForthefiscalyearendedDecember31,2024,thecompanyreportedanetlossof35 million[35]. - The company received a delisting notification from Nasdaq on March 6, 2025, due to non-compliance with listing rules[173]. - Following the delisting notification, the company opted not to request a review and expects to file a Form 25-NSE to remove its securities from Nasdaq[174]. - The company intends to seek a waiver from Nasdaq regarding its delisting, but there is no assurance that this will be granted[110]. Financial Performance - For the fiscal year ended December 31, 2024, the company reported a net loss of 357,114, primarily due to general and administrative expenses of approximately 881,677[177].−ForthefiscalyearendedDecember31,2023,thecompanyachievedanetincomeof881,677[177]. - For the fiscal year ended December 31, 2023, the company achieved a net income of 997,917, with interest earned on investments held in the Trust Account amounting to approximately 1,980,430[178].−AsofDecember31,2024,thecompanyhadcashof1,980,430[178]. - As of December 31, 2024, the company had cash of 7,830 and a working capital deficit of 2,886,242[183].−Thecompanyhasrecordedanexcisetaxliabilityof2,886,242[183]. - The company has recorded an excise tax liability of 546,877 for fiscal year 2024 and 259,438forfiscalyear2023duetostockredemptions[161].ShareholderActionsandRedemption−Anaggregateof2,487,090shareswitharedemptionvalueofapproximately259,438 for fiscal year 2023 due to stock redemptions[161]. Shareholder Actions and Redemption - An aggregate of 2,487,090 shares with a redemption value of approximately 25,943,773 were tendered for redemption during the special meeting on June 28, 2023[26]. - Public stockholders may seek to redeem their shares for their pro rata share of the trust account, regardless of their vote on the proposed business combination[72]. - If the company liquidates, public stockholders may only receive up to 11.62persharebasedonthetrustaccountbalanceasofMarch31,2025[61].−FollowinganannualstockholdermeetingonApril30,2024,anadditional2,124,738sharesweretenderedforredemption,valuedat11.62 per share based on the trust account balance as of March 31, 2025[61]. - Following an annual stockholder meeting on April 30, 2024, an additional 2,124,738 shares were tendered for redemption, valued at 23,176,909 (or approximately $10.91 per share), reducing outstanding public shares to 805,352[120]. Management and Governance - The management team includes CEO Ms. Yi Zhou and CFO Mr. Qingze Zhao, with significant experience in consultancy and corporate strategy, respectively[63]. - The Chief Executive Officer, Yi Zhou, has extensive experience in consultancy and private equity, having co-founded Ease Consulting[214]. - The Chief Financial Officer, Qingze Zhao, has a strong background in asset management and quant-trading[215]. - The independent directors bring diverse expertise in healthcare, education consulting, and auditing to the board[216][217]. Internal Controls and Compliance - The company identified a material weakness in internal controls over financial reporting as of December 31, 2023, related to the classification of investments and deferred underwriting fees[208]. - Management has taken remediation measures and concluded that the material weakness has been remediated as of December 31, 2024[208]. - The company acknowledges that its disclosure controls and procedures cannot prevent all errors and instances of fraud[204]. - Management is responsible for establishing and maintaining adequate internal control over financial reporting in accordance with GAAP[205]. Future Outlook and Challenges - The company is contemplating mergers with Huture, primarily based in mainland China, and does not expect these mergers to result in "control" of a "U.S. business" by a "foreign person" under CFIUS regulations[62]. - The company may face challenges in completing a business combination due to foreign investment regulations and potential CFIUS review, which could limit the pool of potential targets[113][114]. - The company expects to incur significant professional costs to remain publicly traded and may need additional financing to complete its business combination[184]. - If the company cannot complete a business combination by May 6, 2025, it will cease operations and liquidate[185].