IPO and Financial Overview - The company completed its Initial Public Offering on February 18, 2022, raising gross proceeds of $115 million from the sale of 11,500,000 units at $10.00 per unit[27]. - A total of $117.3 million was deposited in a trust account for the benefit of public stockholders, net of underwriting commissions and offering expenses[29]. - The total gross proceeds from the Initial Public Offering were $115,000,000, with an additional $5,200,750 raised from private placement units[187][188]. - The company incurred transaction costs of $5,688,352 related to the Initial Public Offering, including $1,725,000 in cash underwriting fees[190]. - Offering costs associated with the Initial Public Offering totaled $513,352, which were charged to additional paid-in capital upon completion[210]. - The company has not paid any cash dividends to date and does not intend to do so prior to completing its initial business combination[78]. - The company has not commenced any operations and will not generate operating revenues until after the completion of its initial Business Combination[186]. Business Combination and Strategy - The company intends to focus on acquiring U.S. companies in the disruptive technology sector, particularly in AI and related innovations[25]. - The management team aims to leverage its experience to improve operational efficiency and drive revenue growth through acquisitions[34]. - The company has not yet selected a specific business combination target and has not initiated substantive discussions with any potential targets[40]. - The company may structure its initial business combination to acquire less than 100% of the target business, provided it owns or acquires at least 50% of the voting securities[47]. - The company has a limited time of 24 months to complete its initial business combination, extendable to 33 months[58]. - The company has until April 18, 2024, to complete a Business Combination, with a possible extension to November 18, 2024[193]. Financial Performance - For the year ended December 31, 2023, the company reported a net income of $2,911,502, driven by investment income of $4,809,102 and a gain on extinguishment of notes payable of $144,443[92]. - Cash used in operating activities for the year ended December 31, 2023, was $1,766,109, with net income affected by interest earned on investments held in the trust account[96]. - The company had cash of $17,578 and no cash equivalents as of December 31, 2023[95]. - The accumulated deficit increased to $(3,327,054) as of December 31, 2023, from $(3,229,704) as of December 31, 2022[177]. - The company reported a basic and diluted net income per share of $0.34 for redeemable shares and a loss of $0.16 for non-redeemable shares for the year ended December 31, 2023[216]. Market and Industry Insights - The global AI software market is projected to grow to approximately $126 billion by 2025, with a compound annual growth rate (CAGR) of about 21% from 2021 to 2025[32][33]. - Global investment in AI is expected to increase from approximately $50.1 billion in 2020 to over $110 billion by 2024[32]. - North America is anticipated to account for approximately 56% of the overall growth in the AI market[33]. Governance and Management - The board of directors consists of five members, with terms divided into three classes, each serving a three-year term[121]. - The current Chief Executive Officer, Ray Chen, has been in position since August 2023, bringing extensive experience from previous roles in various companies[114]. - The independent directors of the Company include Neil Bush, Jonathan McKeage, and Jeffrey Moseley, as determined by the board in accordance with Nasdaq listing standards[158]. - The board of directors has established an audit committee and a compensation committee, both comprised solely of independent directors[128][132]. Risks and Compliance - If the company fails to regain compliance with Nasdaq Listing Rule 5450(a)(2), it risks suspension or delisting of its securities[68]. - The company may face significant material adverse consequences if it is unable to list its securities on another national exchange after potential delisting from Nasdaq[70]. - The company has incurred and expects to incur significant costs associated with the business combination, which will reduce available cash for other corporate purposes[65]. - A new 1% U.S. federal excise tax on stock repurchases may apply to the company starting in 2023, posing a risk to future redemptions[67]. - The company has a working capital deficit that raises substantial doubt about its ability to continue as a going concern[196]. Internal Controls and Financial Reporting - As of December 31, 2023, the company identified a material weakness in its internal control over financial reporting[108]. - Management assessed that internal control over financial reporting was not effective as of December 31, 2023, due to issues related to financial reporting systems and accounting for accruals[110]. - The company plans to assess resource needs and roles within the accounting and financial reporting staff to address the identified material weakness[111]. - There were no changes in internal control over financial reporting during the most recent fiscal quarter that materially affected its effectiveness[112].
Futuretech II Acquisition Corp.(FTIIU) - 2023 Q4 - Annual Report