Financial Performance - For the three months ended March 31, 2024, the company reported a net income of $408,380, which included a $665,116 change in fair value of the forward purchase agreement, offset by $256,736 in expenses[143]. - For the three months ended March 31, 2023, the company had a net loss of $171,611, with net cash used in operating activities amounting to $393,175[144][147]. - The company incurred net cash used in operating activities of $107,643 for the three months ended March 31, 2024, primarily due to changes in fair value and operating assets and liabilities[146]. Working Capital and Financing - As of March 31, 2024, the company had a working capital deficit of $2,782,776 and $1,008 in restricted cash available for tax liabilities[145]. - The company may need to obtain additional financing to complete the business combination or to redeem a significant number of public shares[148]. - The company has borrowed $300,000 under a promissory note with Cycurion, with an interest rate of 5% per annum, and has accrued approximately $7,972 in interest as of March 31, 2024[156]. Business Combination and Acquisition - The company has identified an acquisition target and executed a merger agreement with Cycurion, intending to close the business combination by December 31, 2024[136][137]. - The merger agreement may be terminated if the merger is not consummated by October 11, 2024, or if certain proposals fail to receive the requisite vote for approval[141]. - The company has engaged A.G.P. as an advisor for the business combination, with a fee arrangement amended to include the distribution of 250,000 shares of common stock instead of cash[155]. - The company has not generated any operating revenues to date and does not expect to do so until after the completion of the business combination[142]. Forward Purchase Agreement - The Company entered into a Forward Share Purchase Agreement (FPA) on January 10, 2023, allowing Alpha to sell up to 300,000 shares at the Redemption Price after the Business Combination closes[157]. - The FPA stipulates that Alpha can accelerate the Put Date to six or nine months post-BC Closing under certain conditions, including if the VWAP Price falls below $3.00 per share for 20 trading days[158]. - The Company terminated the Forward Purchase Agreement on January 22, 2024[159]. - The Company accounts for the FPA as a liability at fair value, subject to re-measurement at each reporting period, with changes recognized in the statements of operations[161]. Employment and Compensation - An employment agreement was established with James P. McCormick on December 27, 2023, with total annual compensation of $125,000, comprising $40,000 in cash and $85,000 in stock payment[160]. Accounting Standards and Disclosures - The Company adopted ASU 2016-13 on January 1, 2023, which did not materially impact its financial statements[162]. - ASU No. 2023-09 will require additional disclosures in income tax rate reconciliation, effective for annual periods beginning after December 15, 2024[163]. - The Company does not anticipate that other recently issued accounting pronouncements will materially affect its financial statements[164]. - There have been no material changes to the quantitative and qualitative disclosures about market risk since the 2023 Annual Report[166].
Western Acquisition Ventures(WAVS) - 2024 Q1 - Quarterly Report