Financial Performance - The company had a net loss of $405,712 for the three months ended March 31, 2025, primarily due to operating and formation costs of $411,373, VAT and surcharges of $5,269, and Chinese income tax of $67,477, partially offset by interest earned on investments of $78,407[198]. - For the three months ended March 31, 2024, the company reported a net income of $32,539, consisting of interest earned on investments of $541,076, offset by operating and formation costs of $461,331, VAT and surcharges of $36,360, and Chinese income tax of $10,846[199]. - As of March 31, 2025, the company reported a net loss of $405,712, with net cash used in operating activities amounting to $123,717[203]. Business Combination Plans - The company has not engaged in any operations or generated revenues to date, with activities focused on organizational tasks and identifying a target company for a business combination[197]. - The company expects to incur significant costs in pursuing acquisition plans and cannot assure the success of completing a business combination[175]. - The company entered into a Business Combination Agreement with Youlife on May 17, 2024, involving a merger that will result in Youlife becoming a wholly-owned subsidiary of Pubco[185]. - The company has entered into Shareholder Support Agreements with shareholders holding approximately 69.1% of Youlife's outstanding shares to support the Business Combination[194]. - The company has agreed not to withdraw funds from the trust account to pay for any Chinese income tax prior to the closing of an initial business combination[181]. Shareholder Actions and Extensions - As of November 10, 2023, shareholders approved an extension allowing the company to consummate a business combination until November 18, 2024, with 3,018,308 ordinary shares redeemed for a total of $31.9 million[178]. - On November 14, 2024, shareholders approved a second extension, allowing the company to consummate a business combination until November 18, 2025, with 3,229,522 ordinary shares redeemed for a total of $36.3 million[180]. - The company extended the deadline for completing a business combination to November 18, 2025, with shareholders redeeming 3,229,522 ordinary shares for a total of $36.3 million[208]. Financial Position and Trust Account - Following the IPO and the sale of private units, a total of $70.38 million was placed in the trust account, with transaction costs amounting to $4.37 million[202]. - As of March 31, 2025, the trust account held investments valued at $7.60 million, including $762,428 of interest income[211]. - The company has no long-term debt or off-balance sheet arrangements as of March 31, 2025[218]. Capital Raising and Financial Assistance - The company issued a First Extension Note for up to $360,000 to the sponsor, with monthly installments of $30,000 until November 18, 2024, for public shares not redeemed[179]. - The company issued the Second Extension Note for up to $360,000 to the sponsor, with $120,000 outstanding as of March 31, 2025[210]. - The company may need to raise additional capital to complete a business combination, with potential loans convertible into units at $10.00 per unit[213]. - The company has engaged I-Bankers to assist with potential business combinations, agreeing to pay a cash fee of 4.0% of the gross proceeds of the IPO, totaling $2.76 million[220]. Accounting Standards and Concerns - The company has determined that there is substantial doubt about its ability to continue as a going concern for at least one year from the issuance of the financial statements[217]. - The fair value of public rights at issuance amounted to $3,305,100[227]. - The fair value of public warrants at issuance was $1,104,000, while representative warrants had a fair value of $12,075[229]. - The FASB issued ASU Topic 2023-09, effective for fiscal years beginning after December 15, 2024, which requires expanded disclosures of income taxes paid[230]. - ASU 2023-07, effective December 31, 2024, mandates annual and interim disclosures of significant segment expenses and other segment items[231]. - Management does not anticipate that the adoption of ASU 2023-09 will materially impact financial statements and disclosures[230]. - Management believes that no other recently issued accounting standards will have a material effect on financial statements if adopted[232].
Distoken Acquisition (DIST) - 2025 Q1 - Quarterly Report