Bannix Acquisition (US:BNIX)2024-11-14 21:30Part I – FINANCIAL INFORMATION Financial Statements The company's financial statements show reduced assets from redemptions, a net loss, and liquidity concerns as a non-operating SPAC Condensed Consolidated Balance Sheets Balance Sheet Highlights (Unaudited) | Metric | September 30, 2024 | December 31, 2023 | | :--- | :--- | :--- | | Assets | | | | Cash | $271,833 | $232,278 | | Cash held in Trust Account | $3,663,652 | $32,116,099 | | Total Assets | $3,939,592 | $32,353,628 | | Liabilities & Equity | | | | Total Current Liabilities | $5,070,687 | $3,938,606 | | Total Liabilities | $5,303,807 | $4,167,666 | | Common stock subject to possible redemption | $4,017,469 | $31,839,150 | | Total Stockholders' Deficit | ($5,381,684) | ($3,653,188) | Unaudited Condensed Consolidated Statements of Operations Statement of Operations Summary (Unaudited) | Metric | Three Months Ended Sep 30, 2024 | Three Months Ended Sep 30, 2023 | Nine Months Ended Sep 30, 2024 | Nine Months Ended Sep 30, 2023 | | :--- | :--- | :--- | :--- | :--- | | Loss from operations | ($248,848) | ($394,213) | ($1,017,302) | ($1,197,866) | | Interest income on trust account | $178,084 | $370,848 | $744,351 | $1,394,123 | | Net Loss | ($154,697) | ($101,152) | ($336,020) | ($151,848) | | Basic and diluted net loss per share | ($0.04) | ($0.02) | ($0.08) | ($0.02) | Unaudited Condensed Consolidated Statements of Changes in Stockholders' Deficit - The total stockholders' deficit increased from ($3,653,188) on January 1, 2024, to ($5,381,684) on September 30, 202411 - Key drivers for the increased deficit during the nine months ended September 30, 2024, include the net loss of $336,020, excise tax on stock redemptions of $289,249, and accretion of common stock subject to redemption valued at $1,103,2271116 Unaudited Condensed Consolidated Statements of Cash Flows Cash Flow Summary for the Nine Months Ended September 30 (Unaudited) | Cash Flow Activity | 2024 | 2023 | | :--- | :--- | :--- | | Net cash used in operating activities | ($585,625) | ($687,693) | | Net cash provided by investing activities | $29,196,798 | $40,909,209 | | Net cash used in financing activities | ($28,571,618) | ($40,201,184) | | Net change in cash | $39,555 | $20,332 | - Investing activities primarily consisted of redemptions from the Trust Account ($28.9M), while financing activities were dominated by the corresponding redemption of Class A common stock ($28.9M)16 Notes to Unaudited Condensed Consolidated Financial Statements - The company is a blank check company (SPAC) that has not commenced operations and is seeking a business combination. The deadline has been extended to March 14, 2025, through monthly extensions181942 - A Business Combination Agreement with Evie Group was terminated on March 11, 2024. Subsequently, on September 6, 2024, the company entered into a new Merger Agreement with VisionWave Technologies5963 - The company has determined there is substantial doubt about its ability to continue as a going concern due to insufficient funds and the approaching mandatory liquidation date. The proposed merger with VisionWave is presented as a potential cure9091 - As of September 30, 2024, the company owed $1,729,840 to related parties for loans, accrued compensation, and administrative fees150 - The company has received a delisting notice from Nasdaq for failing to complete a business combination within 36 months. The company has appealed this determination, with a hearing scheduled for November 7, 20247982 Management's Discussion and Analysis of Financial Condition and Results of Operations Management discusses the company's SPAC status, redemptions, new merger, net losses, and substantial doubt about its ability to continue as a going concern Proposed Business Combination - The Business Combination Agreement with Evie Group was terminated on March 11, 2024, because Evie Group failed to provide a required loan to Bannix204 - On September 6, 2024, Bannix entered into a new Merger Agreement with VisionWave Technologies. The transaction involves a complex merger structure that will result in Bannix and VisionWave becoming subsidiaries of a new public holding company207209 - The VisionWave business combination is expected to close in the first quarter of 2025, subject to stockholder approvals and other customary closing conditions209 Results of Operations - The company has not generated any operating revenue since inception. Its activity has been focused on its IPO and the search for a business combination226 Net Loss Summary | Period | Net Loss | | :--- | :--- | | Three months ended Sep 30, 2024 | ($154,697) | | Nine months ended Sep 30, 2024 | ($336,020) | | Three months ended Sep 30, 2023 | ($101,152) | | Nine months ended Sep 30, 2023 | ($151,848) | Liquidity, Capital Resources, and Going Concern Liquidity Position as of September 30, 2024 | Metric | Amount | | :--- | :--- | | Cash | $271,833 | | Working Capital Deficit | ($4,794,747) | - Management has concluded that there is substantial doubt about the company's ability to continue as a going concern due to insufficient funds and the approaching mandatory liquidation date235 - The proposed business combination with VisionWave Technologies is presented as a cure for the going concern issue236 Quantitative and Qualitative Disclosures About Market Risk As a smaller reporting company, Bannix Acquisition Corp. is not required to provide market risk disclosures - The company is not required to make disclosures under this item as it qualifies as a smaller reporting company244 Controls and Procedures Management concluded disclosure controls were ineffective due to a material weakness in internal control over financial reporting, with remediation underway - Management evaluated disclosure controls and procedures and concluded they were not effective as of September 30, 2024245 - A material weakness was identified in internal control over financial reporting related to accounting for complex financial instruments, fair value measurements, and misstatements in prepaid expense, taxes, and legal fees245251252 - The company is in the process of implementing changes to remediate the identified material weakness252 Part II. Other Information Legal Proceedings The company reports no current legal proceedings - None253 Risk Factors Key risks include a material weakness in internal controls, changing regulations, and a new excise tax on stock redemptions - A material weakness in internal control over financial reporting has been identified, which may adversely affect investor confidence and the company's ability to report financial results accurately and timely253254 - Changes in laws or regulations, such as the SEC's proposed rules for SPACs, could increase the costs and time required to complete an initial business combination259261 - The company may be subject to a 1% excise tax on stock redemptions under the Inflation Reduction Act of 2022, which could reduce the cash available to complete a business combination262264 Unregistered Sales of Equity Securities and Use of Proceeds The company reports no unregistered sales of equity securities or use of proceeds from registered securities - None265 Defaults Upon Senior Securities The company reports no defaults upon senior securities - None265 Mine Safety Disclosures The company reports no mine safety disclosures - None265 Other Information No director or officer adopted or terminated a Rule 10b5-1 or non-Rule 10b5-1 trading arrangement during the quarter - No director or officer of the Company adopted or terminated a "Rule 10b5-1 trading arrangement" or "non-Rule 10b5-1 trading arrangement" during the quarter ended September 30, 2024265 Exhibits This section lists exhibits filed with the Form 10-Q, primarily certifications by officers and XBRL data files - The report includes certifications from the Principal Executive Officer and Principal Financial Officer pursuant to Sections 302 and 906 of the Sarbanes-Oxley Act of 2002268 - Interactive Data Files (XBRL documents) are included as exhibits267 Part III. Signatures Signatures The report is signed by Douglas Davis, Co-Chairman and CEO, and Erik Klinger, CFO, on November 14, 2024 - The report was signed on November 14, 2024, by Douglas Davis (Co-Chairman and Chief Executive Officer) and Erik Klinger (Chief Financial Officer)273