Financial Position and Capital Requirements - The company has approximately $386,306 available outside the Trust Account as of March 27, 2023, to fund working capital requirements [106]. - The balance of the Trust Account was approximately $7.9 million as of March 27, 2023, which may affect the per-share redemption amount for stockholders [117]. - If the balance of the Trust Account falls below $116,150,000 due to negative interest rates, the per-share redemption amount may be less than $10.10 [117]. - The company may need to seek additional loans from its Sponsor to fund operations and complete the initial business combination [106]. - The company may need to seek additional financing to complete its initial business combination, and failure to secure such financing could lead to abandonment of the transaction [181]. - As of December 31, 2022, the company had $809,481 in its operating bank accounts and a working capital surplus of $248,249 [197]. Redemption and Stockholder Rights - If the initial business combination is not completed, public stockholders may receive approximately $10.10 per share upon liquidation of the Trust Account [105]. - Stockholders holding more than 15% of shares will lose the ability to redeem shares beyond that percentage during the initial business combination [107]. - Claims by third parties could reduce the per-share redemption amount below $10.10 for stockholders [109]. - Public stockholders wishing to redeem shares must comply with specific requirements, which may complicate the redemption process [175]. - If the proposed initial business combination is not approved, redeeming stockholders may be unable to sell their securities until their shares are returned [176]. - The absence of a specified maximum redemption threshold may allow the company to complete a business combination even if a majority of stockholders disagree [188]. Business Combination and Operational Risks - The company must complete its initial business combination by July 11, 2023, or return the funds held in the Trust Account to public stockholders [122]. - The company may not be able to complete its initial business combination if the target business does not meet its general criteria and guidelines [127]. - The company does not plan to buy unrelated businesses or assets, focusing instead on completing its initial business combination and operating the post-transaction business [119]. - The company expects intense competition from established entities in acquiring target businesses, which may limit its ability to complete attractive business combinations [178]. - The company may face burdensome compliance requirements if deemed an investment company under the Investment Company Act, which could hinder the completion of its initial business combination [118]. - The company faces substantial doubt about its ability to continue as a going concern if it cannot complete a business combination, as indicated by its independent registered public accounting firm's report [197]. Tax and Regulatory Considerations - Stockholders may need to satisfy tax liabilities resulting from the initial business combination with cash from their own funds, as no cash distributions are intended [135]. - The company may face significant income, withholding, and other tax obligations in multiple jurisdictions if it completes an initial business combination with a target company operating outside the United States [136]. - The company has no clear guidance on the U.S. federal income tax consequences related to its securities, urging investors to consult tax advisors [199]. - The company may incur additional costs if the exclusive forum provision is found inapplicable or unenforceable, potentially affecting its financial condition [202]. Management and Governance - The company has agreed to indemnify its officers and directors, but this may discourage stockholders from pursuing legal action against them [111]. - The company may not have sufficient funds to satisfy indemnification claims of its directors and officers, potentially affecting stockholder interests [111]. - The financial interests of the Sponsor and management may influence their motivation in selecting a target for the initial business combination [144]. - Key personnel may negotiate employment or consulting agreements that could create conflicts of interest in determining the most advantageous initial business combination [137]. - The company may face regulatory issues if new management is unfamiliar with U.S. securities laws after the initial business combination [141]. Share Issuance and Dilution - The company may issue up to 50,000,000 shares of common stock and 1,000,000 shares of preferred stock, which could significantly dilute existing shareholders' equity [151]. - The company may issue shares in private placement transactions at a price of $10.00 per share, potentially below the market price at that time [156]. - The company has an additional 10,729,779 shares of common stock available for issuance following the redemption described in its January 12, 2023 Current Report [151]. - The potential issuance of a substantial number of additional shares upon exercise of warrants could make the company a less attractive vehicle for initial business combinations [170]. - The company may amend the terms of the warrants with the approval of a majority of the outstanding warrants, which could adversely affect holders [162]. Legal and Compliance Issues - The company does not intend to comply with certain Delaware General Corporation Law procedures, which may increase stockholder liability [115]. - The company’s amended and restated certificate of incorporation designates the Court of Chancery of the State of Delaware as the exclusive forum for certain disputes, which may limit stockholders' ability to pursue claims in other jurisdictions [200]. - The company cannot assure that its securities will continue to be listed on NASDAQ, which could limit trading ability and subject it to additional restrictions [185]. - Compliance with the Sarbanes-Oxley Act may increase the time and costs associated with completing an acquisition [187]. - Amendments to the company's governing instruments may be sought to facilitate the completion of the initial business combination, potentially without stockholder support [192].
Western Acquisition Ventures(WAVS) - 2022 Q4 - Annual Report