IPO and Financial Proceeds - 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[24]. - 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[26]. - The Company also sold 520,075 private placement units for gross proceeds of $5,200,750 at the same time as the IPO[198]. - The Company incurred transaction costs of $5,688,352 related to the IPO, including $1,725,000 in cash underwriting fees[200]. - Management has broad discretion regarding the application of net proceeds from the IPO, primarily intended for a Business Combination[202]. Business Combination Plans - The company intends to focus on acquiring U.S. companies in the disruptive technology sector, particularly in AI and related innovations[21]. - The company has not yet selected a specific business combination target and has not initiated substantive discussions with any potential targets[36]. - The company anticipates structuring its initial business combination to acquire 100% of the equity interests or assets of the target business[43]. - Nasdaq rules require that the company complete initial business combinations with an aggregate fair market value of at least 80% of the assets held in the trust account[41]. - The company has until April 18, 2024, to complete a Business Combination, with substantial doubt raised about its ability to continue as a going concern if not completed by this date[91]. Financial Performance - For the year ended December 31, 2023, the company reported a net income of $2,911,502, which included investment income of $4,809,102 and a gain on extinguishment of notes payable of $144,443, offset by expenses of $1,062,699 and tax expense of $979,344[89]. - Net income for 2023 was $2,911,502, a significant increase of 315.5% compared to $700,015 in 2022[187]. - Interest earned on marketable securities held in the Trust Account rose to $4,809,102 in 2023, up from $1,676,585 in 2022, marking a growth of 187.5%[187]. - Total expenses increased to $1,062,699 in 2023, up from $666,311 in 2022, reflecting a rise of 59.5%[187]. - Cash at the end of the period decreased to $17,578 in 2023 from $262,756 in 2022, a decline of 93.3%[192]. Risks and Compliance - The company is prohibited from pursuing initial business combinations with entities whose principal operations are in China, including Hong Kong and Macau[22]. - The company is at risk of delisting from Nasdaq if it does not regain compliance with the minimum holder requirement of 400 total holders[62]. - If delisted, the company’s securities may only be quoted on an over-the-counter market, leading to potential adverse consequences[63]. - The company faces substantial doubt about its ability to continue as a going concern if it cannot complete a Business Combination by the deadline[209]. - The impact of external factors, such as the COVID-19 pandemic and geopolitical events, may adversely affect the Company's ability to consummate a Business Combination[210][211]. Management and Governance - Ray Chen has been appointed as the Chief Executive Officer and Chief Financial Officer since August 2023, bringing extensive experience from previous roles in other companies[120]. - The board of directors consists of five members, with terms expiring at different annual meetings, ensuring staggered elections[126]. - The audit committee consists of independent directors, including Neil Bush, Jonathan McKeage, and Jeffrey Moseley, ensuring compliance with Nasdaq listing standards[133]. - The compensation committee is responsible for reviewing and recommending compensation arrangements, although no compensation has been paid prior to the initial business combination[137]. - The company has adopted a Code of Ethics applicable to its directors, officers, and employees, which is available for review by the public[143]. Internal Controls and Financial Reporting - Management assessed the effectiveness of internal control over financial reporting and identified a material weakness as of December 31, 2023[109]. - The company concluded that its disclosure controls and procedures were not effective due to the identified material weakness in internal control over financial reporting[111]. - There were no changes in internal control over financial reporting during the most recent fiscal quarter that materially affected its effectiveness[114]. - The company is assessing resource needs and roles to address the identified material weakness in internal control over financial reporting[113]. Shareholder Information - The company’s sponsor owns approximately 39.7% of its outstanding shares, and there are potential foreign ownership restrictions that could limit business combination opportunities[53]. - FutureTech Partners II LLC holds 520,075 shares of Class A common stock (17.6%) and 2,825,000 shares of Class B common stock (98.3%), representing approximately 57.4% of outstanding common stock[152]. - Karpus Management, Inc. is a significant shareholder, owning 790,575 shares of Class A common stock (26.8%), which accounts for 13.6% of the total common stock[152]. - The founder shares held by initial stockholders represent 57.7% of the outstanding shares of common stock, allowing them to influence significant corporate transactions[154]. - The Company issued 2,875,000 shares of Class B common stock to the Sponsor for a total purchase price of $25,000, ensuring the Sponsor retains at least 20% ownership post-Offering[157].
FutureTech II Acquisition (FTII) - 2023 Q4 - Annual Report