IPO and Financial Overview - The company completed its initial public offering on December 13, 2021, raising gross proceeds of $115,000,000 from the sale of 11,500,000 units at $10.00 per unit[25]. - A total of $117,300,000 was placed in the trust account, which includes $112,700,000 from the IPO and $4,600,000 from the private placement warrants[27]. - The initial public offering generated gross proceeds of $115,000,000 from the sale of 11,500,000 units at $10.00 per unit[194]. - Transaction costs for the initial public offering amounted to $6,822,078, which included $2,300,000 in underwriting discounts[196]. - As of December 31, 2022, the company had cash of $436,972 held outside the trust account, intended for evaluating target businesses and related expenses[200]. - As of December 31, 2022, the company held marketable securities in the trust account valued at $118,992,274, including approximately $1,691,913 in interest income and unrealized gains[199]. - For the year ended December 31, 2022, the company reported a net income of $567,541, primarily from earnings on marketable securities held in the trust account amounting to $1,312,150[189]. Business Strategy and Target Sectors - The company is focused on acquiring businesses in the health, nutrition, fitness, wellness, and beauty sectors, which represent a $4.5 trillion global wellness market[41]. - The company seeks to acquire businesses with an enterprise value between $250 million and $1 billion that demonstrate high growth and favorable profitability characteristics[49]. - The company plans to leverage bolt-on acquisitions to drive future growth and capitalize on consolidation trends in the wellness sector[48]. - The company aims to facilitate growth through expansion in product offerings, channels, and geographic reach, utilizing its extensive industry relationships[47]. - The management team has developed extensive relationships globally, which provides a competitive advantage in identifying profitable growth opportunities in the health, wellness, and beauty sectors[62]. Business Combination and Financial Structure - The Refreshing Business Combination is valued at an aggregate of $160,000,000, subject to adjustments for net working capital and closing debt[31]. - The company intends to structure its initial business combination so that the post-business combination entity will own or acquire 100% of the equity interests or assets of the target business[65]. - The fair market value of the target business, Refreshing, was determined to be substantially in excess of 80% of the funds in the trust account, satisfying the 80% test[67]. - The company is pursuing an initial business combination with a target business that has an aggregate fair market value of at least 80% of the net assets held in the trust account[63]. - The company intends to use cash from its initial public offering and private placement warrants to fund its initial business combination, which may involve equity or debt financing[80]. - The company may need additional financing to complete its initial business combination if the required cash exceeds the available funds in the trust account[84]. Management and Operational Risks - The management team has over 150 years of combined experience in relevant sectors, emphasizing strong consumer brand awareness and growth potential[42]. - The management team has no prior experience in operating blank check companies or SPACs, which may affect the execution of business combinations[55]. - The company may incur losses from costs related to the identification and evaluation of prospective target businesses that do not result in completed transactions[69]. - The company expects to incur significant costs related to identifying a target business and conducting due diligence prior to the initial business combination[201]. - The company has encountered intense competition from other entities with similar business objectives, which may limit its ability to acquire larger target businesses[150]. Shareholder Rights and Redemption - The company requires 4,312,501, or 37.5%, of the 11,500,000 public shares sold in the initial public offering to be voted in favor of the initial business combination[116]. - Redemption rights are limited to 15% of the shares sold in the initial public offering without prior consent from the company[120]. - A public shareholder can redeem shares at a per-share price equal to the aggregate amount in the trust account divided by the number of outstanding public shares[108]. - The company will not redeem public shares if the business combination does not close[110]. - If the initial business combination is not approved, public shareholders who elected to redeem their shares will not be entitled to redeem for the pro rata share of the trust account[129]. Regulatory and Reporting Obligations - The company is classified as an "emerging growth company," allowing it to take advantage of certain exemptions from various reporting requirements[73]. - The company is also a "smaller reporting company," which permits reduced disclosure obligations, including providing only two years of audited financial statements[78]. - The company is subject to reporting obligations under the Exchange Act, including filing annual, quarterly, and current reports with the SEC[152]. - The company has filed a registration statement on Form 8-A with the SEC, registering its securities under Section 12 of the Exchange Act[157]. Internal Controls and Financial Reporting - The company has not maintained effective internal control over financial reporting as of December 31, 2022, due to identified material weaknesses[220]. - The material weakness is related to errors in the classification of investing activities in the statement of cash flows, specifically misclassification of dividends earned and reinvested[221]. - The Chief Financial Officer plans to implement additional post-closing review procedures to address the material weakness, including reviewing earnings classification and confirming amounts with the trustee[222]. - There have been no changes to the internal control over financial reporting during the most recent quarter that materially affected the controls[223].
Integrated Wellness Acquisition p(WEL) - 2022 Q4 - Annual Report