Phoenix Biotech Acquisition (PBAX) - 2023 Q2 - Quarterly Report

Financial Performance - As of June 30, 2023, the Company reported a net loss of $1,437,733 for the three months ended, primarily due to general and administrative expenses of $1,543,578 and unrealized losses on marketable securities [139]. - The Company incurred $12,729,318 in transaction costs related to the IPO, including $2,635,000 in underwriting fees [144]. - The Company anticipates it may not have sufficient funds to cover expenses over the next year, raising substantial doubt about its ability to continue as a going concern [151]. - As of June 30, 2023, the company reported no dilutive securities, resulting in diluted net loss per share being the same as basic net loss per share [160]. Working Capital and Financial Position - The Company had a working capital deficit of $4,068,379 as of June 30, 2023, with $105,234 in operating bank accounts and $13,897,050 in money market funds held in the Trust Account [145]. - The Company has a promissory note arrangement with the Sponsor for up to $1,500,000 to fund ongoing operations, with $1,175,000 outstanding as of June 30, 2023 [149]. - The Company has no off-balance sheet arrangements or long-term liabilities other than a monthly fee of $20,000 owed to the Sponsor for administrative services [152][153]. IPO and Trust Account - The Company generated gross proceeds of $175,000,000 from its initial public offering (IPO) and an additional $8,850,000 from the sale of Placement Units, totaling $178,500,000 placed in the Trust Account [143][144]. - On July 18, 2023, the Company made payments of $5,638,879.48 to holders of redeemed Class A Shares, resulting in a Trust Account balance of approximately $8.3 million as of July 31, 2023 [137]. Business Combination and Future Plans - The Company entered into a business combination agreement with CERo Therapeutics, Inc., which includes the issuance of approximately 5.0 million shares of Class A common stock as consideration [131][132]. - The Company expects to continue incurring significant costs in pursuit of its acquisition plans, with no assurance of successful completion of a Business Combination [130]. - The company has a deferred fee agreement of $9,150,000 payable to the underwriter, contingent upon the completion of a Business Combination [156]. Accounting Policies - The company accounts for warrants as either equity or liability-classified instruments based on specific terms and guidance, concluding that Public and Private Placement Warrants qualify for equity accounting treatment [158]. - Common stock subject to possible redemption is classified as temporary equity due to certain redemption rights considered outside of the company's control [159]. - The company adopted ASU 2016-13 on January 1, 2023, which did not impact its financial statements [161].