Financial Performance - As of September 30, 2024, the company reported a net loss of $1,430,395, an increase from a net loss of $966,681 for the same period in 2023, primarily due to higher legal and professional fees [146]. - The company had a working capital deficit of $4,928,551 as of September 30, 2024, compared to a deficit of $2,717,064 as of December 31, 2023 [147]. - The company generated gross proceeds of $100,000,000 from its Initial Public Offering of 10,000,000 units at an offering price of $10.00 per unit [149]. - A total of $116,150,000 of the net proceeds from the Initial Public Offering and related sales were deposited in the Trust Account as of September 27, 2021 [154]. - The company has no long-term debt or significant liabilities, except for a monthly fee of $10,000 to the Sponsor for administrative support [171]. Business Operations - As of September 30, 2024, the company had not commenced core operations and generated non-operating income from interest and dividend income from the Initial Public Offering proceeds [126]. - The company entered into a Business Combination Agreement with Xtribe on May 9, 2024, and amended it on September 16, 2024 [139]. - The company has until December 17, 2024, to consummate its Initial Business Combination, which is 39 months from the closing of its Initial Public Offering [166]. - The company intends to use approximately $5.8 million held in the Trust Account to complete its Initial Business Combination [165]. Promissory Notes and Extensions - The company raised approximately $750,000 through a promissory note to extend the Termination Date from December 17, 2022, to January 17, 2023, with a redemption amount of approximately $98.0 million from 9,606,887 Public Shares [129][130]. - The company extended the Termination Date from June 17, 2023, to July 17, 2023, and issued a promissory note of $390,000, with an aggregate redemption amount of $6,721,795 from 627,684 Public Shares [132][133][134]. - On November 30, 2023, the company extended the Termination Date to January 17, 2024, and issued a promissory note of $330,000, with an aggregate redemption amount of approximately $1,322,518 from 122,306 Public Shares [135][136][137]. - The company extended the Termination Date from June 17, 2024, to July 17, 2024, and issued a promissory note of $180,000, with an aggregate redemption amount of approximately $7,367,204 from 650,790 Public Shares [140][141][142]. - The company issued a total of $1,000,000 in unsecured promissory notes to the Sponsor, with $709,200 drawn down as of September 30, 2024 [159]. - In connection with the November 2023 Extension Amendment, the company issued a Third Extension Note for $330,000, with the balance remaining as of September 30, 2024 [160]. - The company plans to seek stockholder approval to extend the Termination Date from December 17, 2024, to January 17, 2025, with a deposit of $30,000 into the Trust Account [167]. Compliance and Regulatory Issues - The company is in violation of Nasdaq Listing Rules IM-5101-2 due to failure to complete an Initial Business Combination by the September 14, 2024 deadline [189]. - The company has requested a hearing from Nasdaq regarding its delisting status, with no assurance of a favorable outcome [189]. - The company may face significant adverse consequences if delisted from Nasdaq, including decreased security prices and loss of market interest [189]. Internal Controls and Accounting - The company has determined that its disclosure controls and procedures were not effective due to material weaknesses in internal controls over financial reporting [178]. - The Company identified material weaknesses in its internal control over financial reporting, which may adversely affect investor confidence and business results [194]. - A material weakness was identified related to incorrectly filing income taxes in Delaware, leading to an amended return [195]. - Portions of the funds from the Trust Account were inadvertently used for general operating expenses without appropriate review and approval [196]. - In 2023, the Company withdrew $898,940 of interest and dividend income from its Trust Account, which was restricted for tax liabilities [196]. - During the period ended March 31, 2024, the Company withdrew an additional $40,050 from the Trust Account and received a tax refund of $104,305 [196]. - The company is evaluating the impact of new accounting standards, including ASU 2022-03 and ASU 2023-09, but does not expect early adoption [175][176]. Tax and Financial Implications - The company may be subject to a 1% excise tax on stock repurchases under the Inflation Reduction Act, which could affect the value of securities and available cash for redemptions [185][187]. - Deferred underwriting discounts and commissions of $4,025,000, representing 3.5% of the gross proceeds from the Initial Public Offering, will be payable upon the Initial Business Combination [172]. Liquidation and Trust Account - As of September 30, 2024, the company has approximately $290,800 available under the October 2023 Promissory Note and up to $100,000 of interest income from the Trust Account for liquidation costs [168].
WinVest Acquisition (WINV) - 2024 Q3 - Quarterly Report