Financial Position and Trust Account - The company has approximately $800,727 available outside the trust account as of March 23, 2022, to fund working capital requirements[109]. - The trust account holds net proceeds of $116,150,000, equating to $10.10 per unit, which may be reduced due to negative interest rates[123]. - As of March 22, 2022, the balance of the trust account was $116,061,360.52, indicating a slight decrease from the initial amount[123]. - Total funds in trust available for initial business combination amount to $109,325,000[177]. - The company has approximately $116,150,000 in net proceeds from the IPO and private placement to complete its initial business combination[141]. - The company may need to reserve part of the trust account for possible redemption payments, which could limit its ability to execute the most attractive initial business combination[206]. Redemption and Liquidation Risks - If the initial business combination is not completed, public stockholders may receive approximately $10.10 per share upon liquidation of the trust account[108]. - If the initial business combination is not completed within 12 months (or up to 18 months if extended), public stockholders may receive their pro-rata share of the trust account, potentially less than $10.10 per share[130]. - The company intends to redeem public shares as soon as possible if the initial business combination is not completed within the specified timeframe[120]. - If bankruptcy occurs, stockholders may face claims that could reduce the amount received from the trust account[118]. - There is a risk that third-party claims could reduce the proceeds held in the trust account, potentially leading to a per-share redemption amount of less than $10.10[112]. - If the initial business combination is not completed, founder shares and Private Placement Units will be worthless, impacting the financial interests of directors and officers[162]. Business Combination and Target Selection - The company is required to complete its initial business combination with a target business or assets valued at least 80% of the trust account's value[137]. - The company has not yet selected a specific target business, making it difficult for investors to evaluate potential risks and merits[133]. - The company may only be able to complete one initial business combination, leading to a lack of diversification and potential negative impacts on operations and profitability[141]. - The company anticipates acquiring 100% of the equity interests or assets of the target business, but may end up with less than majority control post-combination[171]. - The management team may not be familiar with U.S. securities laws, potentially leading to regulatory issues post-combination[153]. - The financial interests of the Sponsor and directors may influence the selection of target businesses for the initial business combination[169]. Regulatory and Compliance Challenges - The company may face challenges in complying with the Investment Company Act, which could impose burdensome requirements and hinder the completion of the initial business combination[125]. - If deemed an investment company, the company may face additional regulatory burdens and expenses that could impact its operations[125]. - Compliance with the Sarbanes-Oxley Act may increase the time and costs associated with completing an acquisition[219]. - The company has not opted out of the extended transition period for new accounting standards, which may complicate financial statement comparisons with other public companies[227]. Shareholder Interests and Dilution - Initial stockholders collectively own approximately 20% of the issued and outstanding shares after the IPO, with founder shares purchased at approximately $0.0087 per share[169]. - Public stockholders experienced immediate and substantial dilution of approximately 94.9% or $9.49 per share from the initial offering price of $10.00 per share[175]. - The nominal purchase price of $25,000 for founder shares may lead to significant dilution of public shares upon consummation of the initial business combination[176]. - Issuing additional shares may significantly dilute the equity interest of existing investors[185]. - The existence of registration rights for initial stockholders may complicate the completion of the initial business combination and adversely affect the market price of common stock[202]. Management and Operational Risks - The company may face write-downs or impairment charges post-business combination, which could negatively impact market perception and security holder value[111]. - Indemnification obligations to officers and directors may discourage stockholders from bringing lawsuits, potentially affecting the company's financial position[116]. - The company may need to reconstitute the management team post-transaction, which could delay acquisition processes[155]. - Conflicts of interest may arise among officers and directors due to affiliations with similar business entities[159]. - The company may face conflicts of interest due to the involvement of its officers and directors in other businesses and potential litigation[164]. Market and Competitive Environment - The company may face intense competition from established entities with greater resources, which could limit its ability to acquire sizable target businesses[209]. - Changes in the market for directors and officers liability insurance could increase costs and complicate the negotiation of initial business combinations[156]. - The company cannot guarantee continued listing on NASDAQ, which could limit transaction capabilities and impose additional trading restrictions[217]. - There is a risk that an active trading market for the company's securities may not be sustained, affecting liquidity and price[215]. International Considerations - If the company completes a business combination with a foreign entity, it may face additional risks including legal enforcement challenges and political instability[236]. - The company’s ability to succeed in international markets may be diminished by currency policies and fluctuations, impacting its financial results[243]. - The company may incur additional costs if disputes arise in jurisdictions outside of Delaware, which could adversely affect its financial condition[233].
Western Acquisition Ventures(WAVS) - 2021 Q4 - Annual Report