Financial Performance - For the three months ended June 30, 2024, the company reported a net loss of $703,701, which included $127,224 related to Non-Redemption Agreement and $576,477 in professional fees and administrative expenses [137]. - For the six months ended June 30, 2024, the company had a net loss of $295,321, consisting of $833,213 in professional fees and administrative expenses, offset by a $665,116 change in fair value of the forward purchase agreement [139]. - The company incurred net cash used in operating activities of $420,868 for the six months ended June 30, 2024, primarily due to a net loss and changes in operating assets and liabilities [142]. - Management has raised substantial doubt about the company's ability to continue as a going concern for twelve months from the issuance of the financial statements if the business combination is not completed [145]. Working Capital and Financing - As of June 30, 2024, the company had a working capital deficit of $3,289,361 and $14,876 in restricted cash available for tax liabilities [141]. - The company may need to obtain additional financing to complete the business combination or to meet obligations related to public share redemptions [144]. - The Company entered into a promissory note with Cycurion for $200,000 at a 5% annual interest rate, with a maturity date extended to October 11, 2024 [152]. - As of June 30, 2024, the Company has borrowed $554,269 and accrued approximately $14,900 in interest [152]. 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 [130][131]. - The merger agreement may be terminated if not consummated by October 11, 2024, or if certain proposals fail to receive the requisite vote for approval [135]. - The company has engaged A.G.P. as an advisor for the business combination, with a fee arrangement of 4.5% of the gross proceeds of the IPO, amounting to $5,175,000, or distribution of 250,000 shares of common stock [151]. - 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 [136]. Regulatory and Accounting Changes - The Company adopted ASU 2016-13 on January 1, 2023, which did not have a material impact on its financial statements [157]. - ASU No. 2023-09 will require additional disclosures in income tax rate reconciliation, effective after December 15, 2024 [158]. - The Company has not identified any material changes to market risk disclosures since the 2023 Annual Report [160]. Employment Agreements - An employment agreement was established with James P. McCormick, totaling $125,000 in annual compensation, including $40,000 in cash and $85,000 in stock payment [155]. Forward Purchase Agreement - The Forward Purchase Agreement was terminated on January 22, 2024 [154].
Western Acquisition Ventures Corp.(WAVSU) - 2024 Q2 - Quarterly Report