Business Combination and IPO - The company executed a Business Combination Agreement with Liminatus Pharma, LLC on November 30, 2022, intending to utilize cash from its IPO and private placement for the initial business combination[132]. - The IPO was completed on March 9, 2021, raising total gross proceeds of $276 million from the sale of 27,600,000 units at $10.00 per unit[132]. - The company extended the date to consummate a business combination to March 9, 2024, and subsequently to December 9, 2023, through various amendments[140][141]. - The company has not generated any revenues to date and will not do so until the completion of its initial business combination[150]. Financial Performance - As of March 31, 2024, the company reported a net loss of $858,231, which included $178,734 loss on the change in fair value of warrants and $721,754 of formation and offering costs[151]. - For the three months ended March 31, 2024, net cash used in operating activities was $903,722, primarily due to the net loss[154]. - The company had $201,537 in its operating bank account as of March 31, 2024, with negative working capital of approximately $5,438,233[153]. - The company incurred $700,000 in net cash provided by financing activities for the three months ended March 31, 2024, from a promissory note[157]. Going Concern and Management Doubts - Management has raised substantial doubt about the company's ability to continue as a going concern if a business combination is not completed by September 9, 2024[162]. Internal Controls and Remediation - The company identified a material weakness in internal controls related to complex financial instruments and timely tax return filings as of December 31, 2023[171]. - As of March 31, 2024, the company's disclosure controls and procedures were deemed not effective[170]. - The company has initiated remediation efforts, including improving the review process for complex securities and enhancing communication with third-party professionals[174]. - The company plans to hire consultants to assist in the preparation and filing of tax returns[174]. - There were no changes in internal control over financial reporting during the most recent fiscal quarter that materially affected internal controls[174]. - The company believes that its condensed financial statements fairly present its financial position despite the identified material weakness[172]. Fair Value Assessments - The fair value of the company's Private Placement Warrants is determined using a Monte Carlo simulation model, which includes inputs such as expected stock price volatility and risk-free interest rate[165]. - The fair value of the company's derivative liability is assessed using a probability weighted expected return model, with similar inputs as the warrants[166]. Accounting Standards and Reporting - Management does not expect recently issued accounting standards to have a material effect on financial statements[167]. - The company is classified as a smaller reporting company and is not required to provide extensive market risk disclosures[168].
Iris Acquisition p(IRAA) - 2024 Q1 - Quarterly Report