Aquaron Acquisition Corp.(AQUNU) - 2024 Q4 - Annual Report

IPO and Financing - The company completed its IPO on October 6, 2022, raising gross proceeds of $50 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 $4.17 million[21]. - A total of$54,984,377 from the IPO and private placements has been deposited in a trust account for the benefit of public stockholders[150]. - The company received unsecured promissory notes totaling $849,626 from the Sponsor to support transaction costs and working capital[25]. - The company has received loans totaling$449,780 from the Sponsor during 2023 to cover transaction costs related to the business combination[183]. 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 Bestpath Merger Agreement was terminated on July 12, 2024, to allow for a new business combination agreement following a reorganization[39]. - 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 has structured the business combination with Huture to acquire 100$1.0 billion prior to the closing of the Mergers[42]. Compliance and Regulatory Issues - The company faced non-compliance with Nasdaq Listing Rules, including a failure to maintain at least 300 public holders and a minimum market value of listing securities of $35 million[30][35]. - The Nasdaq notified the company of its delisting determination on March 6, 2025, due to non-compliance with listing rules[36]. - The company intends to seek waivers from third parties regarding claims to the trust account to limit potential liabilities[88]. - The company plans to seek a waiver from Nasdaq regarding its delisting, but there is no assurance that it will be granted[110]. - The company must comply with the Sarbanes-Oxley Act regarding internal control audits for the fiscal year ending December 31, 2024[101]. 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 and income tax expense of$347,586[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]. - As of December 31, 2024, the company had cash of $7,830 and a working capital deficit of$2,886,242, indicating liquidity challenges[183]. - The company has incurred significant expenses related to being a public entity and anticipates further costs associated with the search for a business combination[177]. - The company has recorded an excise tax liability of $546,877 for fiscal year 2024 and$259,438 for fiscal year 2023 due to stock redemptions[161]. Redemption and Liquidation - An aggregate of 2,124,738 shares with a redemption value of approximately $23.18 million were tendered for redemption during the annual stockholder meeting[27]. - Public stockholders may 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$11.62 per share based on the trust account balance as of March 31, 2025[61]. - Public stockholders will receive a pro rata portion of the trust account upon redemption, which may be less than approximately $10.15 per share due to potential claims from creditors[89]. - The company will cease all operations and redeem 100% of outstanding public shares if a business combination is not completed by May 6, 2025[83]. Internal Controls and Governance - Management has identified deficiencies in internal control over financial reporting, concluding that disclosure controls and procedures were not effective as of December 31, 2024[202]. - The company identified a material weakness in internal controls over financial reporting as of December 31, 2023, related to the classification of Investment held in Trust Account and Deferred underwriting fee payable accounts[208]. - Management has taken remediation measures and concluded that the material weakness has been remediated as of December 31, 2024[208]. - The independent registered public accounting firm did not provide an attestation report due to the company's status as an emerging growth company[207]. - The company acknowledges that its disclosure controls and procedures can only provide reasonable, not absolute, assurance against errors and fraud[204]. Management and Strategy - The management team includes experienced professionals, such as CEO Ms. Yi Zhou and CFO Mr. Qingze Zhao, with backgrounds in consultancy and corporate strategy[63]. - The company intends to utilize cash from the IPO and private placements for its initial business combination, without designating proceeds for specific purposes[65]. - Target business candidates are expected to be sourced from various unaffiliated financial community members, including investment bankers and venture capital funds[66]. - The company has the flexibility to identify and select prospective acquisition candidates, with a target business having a fair market value of at least 80% of the trust account balance[69]. - The company has a diverse board of directors with extensive experience in finance, consulting, and management[213][214][215][216][217].