Western Acquisition Ventures Corp.(WAVSU) - 2021 Q4 - Annual Report

Part I Business Western Acquisition Ventures Corp. is a blank check company formed to effect a business combination, targeting sectors like infrastructure, health, and fintech, leveraging management's expertise - The company is a blank check company formed on April 28, 2021, to effect an initial business combination. It may pursue a target in any industry but intends to focus on sectors where its management has expertise, including infrastructure, health, fintech, SaaS, and hospitality[17][18][26] IPO Details | Detail | Value / Date | | :--- | :--- | | IPO Closing Date | January 14, 2022 | | Units Sold in IPO | 11,500,000 | | Price Per Unit | $10.00 | | Gross Proceeds from IPO | $115,000,000 | | Private Placement Units | 376,000 units at $10.00 each | | Gross Proceeds from Private Placement | $3,760,000 | | Amount in Trust Account (as of March 21, 2022) | $116,061,360.52 | - The company has 12 months from its IPO closing (until January 13, 2023) to complete a business combination. This period can be extended up to two times, each by 3 months (for a total of 18 months), by depositing $1,150,000 into the trust account for each extension[21] - The management team is led by CEO Stephen Christoffersen and CFO William Lischak, who collectively have over fifty years of industry and investment experience. The board includes experienced directors Ade Okunubi, Ali Jahangiri, Robin L. Smith, and Adam K. Stern[28] Risk Factors The company faces significant risks as a SPAC, including failure to complete a business combination, conflicts of interest, and potential shareholder dilution - The company is a SPAC with no operating history and must complete an initial business combination within 12 to 18 months of its IPO closing. Failure to do so will result in liquidation and disbursement of trust funds to shareholders, rendering warrants worthless[79][91] - Management and the Sponsor have conflicts of interest. Their founder shares and private placement units will be worthless if a business combination is not completed, creating a strong incentive to finalize a deal, which may not be in the best interest of public stockholders[162][169] - The nominal price paid by the Sponsor for founder shares (~$0.0087 per share) could lead to substantial profit for insiders even if the acquired business declines in value, creating significant dilution for public investors who paid $10.00 per unit[174][176] - The company is an "emerging growth company" under the JOBS Act, which allows for reduced disclosure requirements and delayed adoption of new accounting standards, potentially making its financial statements not comparable to other public companies[73][226] - The auditor's report expresses substantial doubt about the company's ability to continue as a "going concern" due to the risk of mandatory liquidation if a business combination is not completed within the required timeframe[228] Unresolved Staff Comments The company reports no unresolved staff comments from the SEC - Not applicable[246] Properties The company leases executive offices in New York, NY, which are considered adequate for current operations - The company leases its executive offices in New York, NY for administrative purposes[247] Legal Proceedings The company is not currently a party to any material legal proceedings - The company is not currently a party to any material litigation or other legal proceedings[248] Mine Safety Disclosures This item is not applicable to the company - Not Applicable[249] Part II Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities The company's units trade on NASDAQ, with common stock and warrants expected to trade separately, and no dividends are planned prior to a business combination - The company's units trade on NASDAQ under "WAVSU". The common stock and warrants are expected to trade separately on or about April 11, 2022, under symbols "WAVS" and "WAVSW", respectively[251] - As of March 21, 2022, there were 14,751,000 shares of common stock issued and outstanding[252] - The company has not paid any cash dividends and does not intend to do so prior to completing an initial business combination[253] - Simultaneously with the IPO, the Sponsor purchased 376,000 Private Placement Units at $10.00 per unit for gross proceeds of $3,760,000[257] Selected Financial Data This item is not applicable as the company qualifies as a smaller reporting company - Not applicable to smaller reporting companies[262] Management's Discussion and Analysis of Financial Condition and Results of Operations As a pre-operational blank check company, it incurred a net loss and faces substantial doubt about its going concern ability due to the business combination deadline - The company has not engaged in any operations or generated any revenue. Its activities from inception (April 28, 2021) through December 31, 2021, were organizational and IPO-related[268] Financial Metric (as of Dec 31, 2021) | Financial Metric | Value (as of Dec 31, 2021) | | :--- | :--- | | Net Loss | $11,371 | | Cash | $3,913 | | Working Capital Deficit | $309,487 | - Management has determined that there is substantial doubt about the Company's ability to continue as a going concern if a business combination is not completed by the deadline (January 13, 2023, or up to 18 months if extended)[273][406] Quantitative and Qualitative Disclosures About Market Risk The company is not subject to material market or interest rate risk, with trust account funds invested in short-term U.S. government obligations - The company is not subject to any material market or interest rate risk. Proceeds from the IPO held in the trust account are invested in short-term U.S. government treasury bills or money market funds, minimizing interest rate risk[282] Financial Statements and Supplementary Data This item references the company's audited financial statements and supplementary data included in the report - This item refers to the financial statements included on pages F-1 through F-17 of the report[283] Changes in and Disagreements with Accountants on Accounting and Financial Disclosure The company reports no disagreements with its accountants on accounting principles, financial disclosure, or auditing scope - None[284] Controls and Procedures Management concluded disclosure controls and procedures were effective as of December 31, 2021, with no material changes to internal controls reported - As of December 31, 2021, the company's disclosure controls and procedures were deemed effective by management[285] - The annual report does not include a management assessment on internal control over financial reporting, as allowed for newly public companies[287] Other Information The company reports no other information - None[289] Part III Directors, Executive Officers and Corporate Governance This section details the company's leadership, board structure, and potential conflicts of interest stemming from officers' and directors' other affiliations Directors and Executive Officers | Name | Position | | :--- | :--- | | Stephen Christoffersen | Chief Executive Officer and Director | | William Lischak | Chief Financial Officer and Director | | Ade Okunubi | Director | | Ali Jahangiri | Director | | Robin L. Smith | Director | | Adam K. Stern | Director | - The Board has established an Audit Committee, a Nominating Committee, and a Compensation Committee, each with a charter and composed of independent directors[299] - Potential conflicts of interest are disclosed, noting that officers and directors are not required to commit their full time to the company's affairs and may have pre-existing fiduciary duties to other entities[307][309] - The company has adopted a code of ethics applicable to all directors, officers, and employees[326] Executive Compensation No executive officers have received cash compensation, but out-of-pocket expenses incurred on behalf of the company are eligible for reimbursement - No executive officer has received any cash compensation for services rendered. No compensation of any kind will be paid to initial stockholders, directors, or their affiliates prior to or for services to effectuate a business combination[328] - Individuals will be reimbursed for out-of-pocket expenses incurred in connection with company activities, such as identifying potential target businesses[328][329] Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters This section details the beneficial ownership of the company's common stock, with the Sponsor as the largest beneficial owner Beneficial Ownership of Common Stock | Name of Beneficial Owner | Approximate Percentage of Outstanding Common Stock | | :--- | :--- | | Western Acquisition Ventures Sponsor LLC | 16.95% | | A.G.P./Alliance Global Partners | 5.08% | | William Lischak (Director) | 16.95% | | Feis Equities LLC | 5.55% | | Alpha Captal Anstalt | 6.22% | | All directors and executive officers as a group (six individuals) | 12.53% | - The initial stockholders beneficially owned approximately 20% of the issued and outstanding shares of common stock immediately following the IPO[320] Certain Relationships and Related Transactions, and Director Independence This section describes related-party transactions, including the sale of Founder Shares and promissory notes, and identifies independent directors - The Sponsor acquired Founder Shares for an aggregate price of $25,000. These shares are subject to a lock-up period until one year after the initial business combination, with certain early release provisions[330][331] - The Sponsor provided a promissory note of up to $300,000 for IPO-related expenses. The outstanding balance of $80,000 as of December 31, 2021, was repaid in full on January 14, 2022[332] - The company's officers and directors may provide Working Capital Loans to finance transaction costs. These loans would be repaid upon a business combination or could be convertible into units at $10.00 per unit[333] - The board has determined that Ade Okunubi, Ali Jahangiri, Robin L. Smith, and Adam K. Stern are independent directors[345] Principal Accountant Fees and Services The company's principal accountant, Marcum LLP, was paid approximately $36,050 for audit fees for the period ended December 31, 2021 Principal Accountant Fees | Fee Category | Amount (for period ended Dec 31, 2021) | | :--- | :--- | | Audit Fees | ~$36,050 | | Audit-Related Fees | $0 | | Tax Fees | $0 | | All Other Fees | $0 | Part IV Exhibits and Financial Statement Schedules This section lists the financial statements and all exhibits filed as part of the Form 10-K, including key corporate and IPO-related documents - This item lists all exhibits filed with the report, including the Amended and Restated Certificate of Incorporation (Ex. 3.1), Warrant Agreement (Ex. 4.1), Investment Management Trust Agreement (Ex. 10.3), and Underwriting Agreement (Ex. 10.12)[356][359][360] Financial Statements Report of Independent Registered Public Accounting Firm The auditor's report expresses substantial doubt about the company's ability to continue as a going concern due to the mandatory liquidation provision - The auditor's report contains an explanatory paragraph regarding "Going Concern," raising substantial doubt about the Company's ability to continue due to the mandatory liquidation requirement if a business combination is not completed by January 13, 2023[371] Financial Statements Data The financial statements cover the period from inception to December 31, 2021, detailing assets, liabilities, net loss, and trust account funding post-IPO Balance Sheet (as of Dec 31, 2021) | Balance Sheet (as of Dec 31, 2021) | Amount ($) | | :--- | :--- | | Assets | | | Cash | 3,913 | | Deferred offering costs | 323,116 | | Total Assets | 327,029 | | Liabilities & Equity | | | Total current liabilities | 313,400 | | Total stockholders' equity | 13,629 | | Total Liabilities and Stockholders' Equity | 327,029 | Statement of Operations (Inception to Dec 31, 2021) | Statement of Operations (Inception to Dec 31, 2021) | Amount ($) | | :--- | :--- | | General and administrative expense | 8,971 | | Franchise tax | 2,400 | | Net Loss | (11,371) | - The company's IPO on January 14, 2022, resulted in $116,150,000 ($10.10 per Unit) being placed in a trust account[393] - The company must complete a business combination with a fair market value of at least 80% of the assets held in the Trust Account at the time of the agreement[395]