IPO and Financial Overview - The company completed its IPO on October 6, 2022, raising gross proceeds of $50 million from the sale of 5,000,000 Units at $10.00 per Unit[106]. - The company has not paid any cash dividends to date and does not intend to do so prior to completing an initial business combination[105]. - For the fiscal year ended December 31, 2023, the company reported a net income of $997,917, which includes an unrealized gain on investments of $141,556 and interest earned of $1,980,430[139]. - The company had a working capital deficit of $1,914,142 as of December 31, 2023, with only $339 in cash available[145]. - The company reported no revenue for the year ended December 31, 2023, raising substantial doubt about its ability to continue as a going concern[256]. - The company’s cash balance as of December 31, 2023, was $339, a significant decrease from $57,284 as of December 31, 2022, indicating a decline of approximately 99.4%[262]. - Total current liabilities increased significantly to $1,916,669 from $304,760 year-over-year[265]. - Total liabilities increased to $4,442,565 from $2,830,656 year-over-year[265]. - The accumulated deficit as of December 31, 2023, was $(4,295,522), compared to $159,672 in 2022[266]. - General and administrative expenses rose to $832,906 in 2023, up from $207,495 in 2022, indicating a significant increase in operational costs[268]. Mergers and Business Combination - The company entered into a merger agreement on March 23, 2023, with an implied equity value of Bestpath at $1.2 billion prior to the closing of the mergers[126]. - Following the mergers, each outstanding share of Common Stock will be exchanged for one PubCo Ordinary Share valued at $10.00 at the time of closing[126]. - The mergers will result in the issuance of up to 15,000,000 PubCo Ordinary Shares to Holdco's shareholders and an additional 15,000,000 shares under a share incentive plan[127]. - The company intends to focus on operating businesses in the new energy sector for its initial business combination[118]. - The company has until June 6, 2024, to complete its initial business combination, following extensions funded by Bestpath totaling $490,000[131][146]. - The company will cease all operations and redeem public shares if it fails to complete a business combination within the Combination Period, with the redemption price based on the amount in the Trust Account[291]. - The company has agreed to protect the amounts held in the Trust Account, ensuring that claims do not reduce the amount below $10.15 per Public Share[293]. Shareholder and Stock Information - As of December 31, 2023, there were 4,553,150 shares of Common Stock outstanding held by seven stockholders of record[104]. - Aquaron Investments LLC holds 1,578,060 shares, representing approximately 34.66% of the outstanding shares[210]. - RiverNorth Capital Management, LLC owns 400,000 shares, accounting for 8.79% of the outstanding shares[210]. - A total of 2,487,090 shares were tendered for redemption, amounting to approximately $25,943,773[286]. - A total of 2,124,738 shares were tendered for redemption, with a redemption value of approximately $23.5 million, equating to $11.04 per share[289]. - Insider shares are placed in escrow, with 50% not transferable until six months post-initial business combination or if stock price exceeds $12.50 for 20 trading days[214]. Financial Management and Compliance - The company incurred general and administrative expenses of $832,906 for the fiscal year ended December 31, 2023[139]. - The company has no long-term debt or off-balance sheet financing arrangements as of December 31, 2023[149][150]. - The company expects to incur significant professional costs to remain publicly traded and may need additional financing to complete its business combination[146]. - The independent auditor expressed an unmodified opinion on the financial statements, indicating they present fairly the financial position of the company[255]. - The company has identified material weaknesses in internal control over financial reporting, particularly in the classification of investments and deferred underwriting fees[162]. - Management's evaluation concluded that disclosure controls and procedures were not effective as of December 31, 2023, due to identified deficiencies[168]. - The company does not expect that its disclosure controls will prevent all errors and instances of fraud, acknowledging inherent limitations[166]. Audit and Governance - The Audit Committee held no formal meetings during 2023, relying on monthly reports and written approvals[184]. - The Compensation Committee did not meet during 2023, and no executive officer has received cash compensation for services rendered[188][206]. - The company has not entered into any employment agreements with its executive officers[205]. - The company has adopted a code of conduct and ethics applicable to its directors, officers, and employees[202]. - The board has established an audit, nominating, and compensation committee, with independent directors overseeing nominations[182]. Investment and Financial Instruments - The company adopted ASU 2020-06, classifying convertible promissory notes as debt on the balance sheet, with the conversion feature meeting the derivative scope exception[156]. - The company has a deferred income tax asset of $144,680 as of December 31, 2023, which was not present in the previous year[263]. - The company raised gross proceeds of $50,000,000 from its IPO and an additional $2,562,500 from private placements[278]. - The total gross proceeds from the issuance of 417,180 Units at $10.00 per Unit amounted to $4,171,800[220]. - Up to $600,000 of loans from insiders may be converted into private units at $10.00 per unit upon consummation of the business combination[216]. Financial Performance Trends - Total assets decreased to $32,107,474 from $55,700,859 as of December 31, 2022, representing a decline of approximately 42.5%[262][263]. - Current assets as of December 31, 2023, were $2,527, a significant decrease from $279,630 as of December 31, 2022, indicating a decline of approximately 99.1%[262]. - Investments held in Trust Account decreased to $31,960,267 as of December 31, 2023, down from $55,421,229 as of December 31, 2022, reflecting a reduction of about 42.3%[263]. - Basic and diluted net income per share for redeemable common stock was $0.87, down from $1.57 in the previous year[268]. - Basic and diluted net loss per share for non-redeemable common stock was $(1.62) in 2023, compared to $(1.24) in 2022[268]. - Cash provided by investing activities totaled $25,582,948 in 2023, a recovery from $(54,984,377) in 2022[272].
Aquaron Acquisition Corp.(AQUNU) - 2023 Q4 - Annual Report