ZyVersa Therapeutics(US:ZVSA)2022-05-12 22:28Financial Performance - The company reported a net loss of $720,006 for the three-month period ended March 31, 2022, primarily due to formation and operating costs of $801,048, partially offset by a change in fair value of derivative liability of $76,588 [106]. - The diluted net loss per common share is the same as the basic net loss per common share, as there were no dilutive securities as of March 31, 2022, and December 31, 2021 [125]. - There is substantial doubt about the company's ability to continue as a going concern within one year after the issuance of the financial statements [117]. Initial Public Offering (IPO) - The initial public offering (IPO) generated gross proceeds of $75,000,000 from the sale of 7,500,000 units, with each unit priced at $10.00 [107]. - An additional $2,698,306 was generated from the underwriters' partial exercise of the over-allotment option, resulting in a total of $75,750,000 placed in the trust account [109]. Use of Funds - The company intends to use substantially all funds in the trust account to complete its initial business combination, with remaining proceeds used for working capital and growth strategies [110]. - The company has approximately $1,250,000 of proceeds held outside the trust account available for identifying and evaluating target businesses [111]. - The company expects to incur approximately $425,000 for legal, accounting, due diligence, and other expenses related to structuring and negotiating business combinations [113]. Redemption and Securities - The initial stockholders have agreed to waive their redemption rights in connection with the business combination and related amendments, allowing for a potential extension of up to 18 months from the IPO closing [121]. - The company has a total of $78,448,306 and $75,750,000 in Class A common stock subject to possible redemption as of March 31, 2022, and December 31, 2021, respectively, classified as temporary equity [127]. - The company has a redemption value of $776,716 ($0.10 per unit) for each three-month extension related to the business combination [121]. Financial Obligations and Liabilities - The company has no long-term debt obligations, capital lease obligations, or long-term liabilities [118]. - The estimated annual franchise tax obligations are $200,000, which may be paid from funds held outside the trust account or from interest earned on the trust account [110]. - The company may need to seek additional financing to complete its initial business combination if the costs exceed current estimates [115]. Compliance and Accounting - The company is required to register certain securities for sale under the Securities Act, with initial stockholders entitled to make up to three demands for registration [122]. - The company has not identified any critical accounting policies or estimates that could materially differ from actual results [123]. - The company evaluates its financial instruments to determine if they are derivatives, with changes in fair value reported in the statements of operations [126]. - The over-allotment option is classified as a liability and is indexed on the contingently redeemable shares [126]. - The company complies with FASB ASC Topic 260 for earnings per share calculations, sharing income and losses pro rata between Class A and Class B common stock [124]. - As a smaller reporting company, the company is not required to make disclosures about market risk [129].