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[134]. - 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[135][138]. - 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 operating assets and liabilities[137]. Working Capital and Financial Position - As of March 31, 2024, the company had a working capital deficit of $2,782,776 and $1,008 in restricted cash available for current tax liabilities[136]. - The company has incurred significant costs in pursuit of acquisition plans and may not have sufficient funds to operate prior to the business combination[139]. - The merger agreement may be terminated if not consummated by October 11, 2024, raising concerns about the company's ability to continue as a going concern[132][140]. Acquisition and Business Combination - The company has identified an acquisition target and executed a merger agreement with Cycurion, with plans to close the business combination by December 31, 2024[127][128]. - The company may need to obtain additional financing to complete the business combination or due to potential redemptions of public shares[139]. - The company has entered into a promissory note with Cycurion for $200,000, which has been amended to increase the principal amount to $554,269[147]. - 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[133]. 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[148]. - 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[149]. - The Company terminated the Forward Purchase Agreement on January 22, 2024[150]. - 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[152]. 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[151]. Accounting Standards and Disclosures - The Company adopted ASU 2016-13 on January 1, 2023, which did not materially impact its financial statements[153]. - ASU No. 2023-09, effective after December 15, 2024, will require additional disclosures in income tax rate reconciliation and disaggregation of income taxes paid[154]. - There have been no material changes to the quantitative and qualitative disclosures about market risk since the 2023 Annual Report[156].
Western Acquisition Ventures Corp.(WAVSU) - 2024 Q1 - Quarterly Report