Financial Performance - Revenues for the years ended December 31, 2022 and 2021 were $0, indicating no operating revenue generated until the completion of the Business Combination[196] - Total Operating Expenses for the year ended December 31, 2022 were $1,221,649, primarily driven by administrative and professional fees[196] - Total Other Income for the year ended December 31, 2022 was $5,110,357, mainly from fair value adjustments of warrant liabilities[196] - Net income for the year ended December 31, 2022, was $3,888,708, compared to $2,316,786 for the year ended December 31, 2021, indicating an increase of approximately 77.8%[231] - Total expenses increased from $1,016,819 in 2021 to $1,221,649 in 2022, reflecting a rise of about 20.1%[231] - The provision for income taxes was deemed to be de minimis for the year ending December 31, 2022[280] - The Company has not recognized any uncertain tax positions as of December 31, 2022[277] Assets and Liabilities - Total Assets as of December 31, 2022 amounted to $7,790,834, a significant decrease from $107,186,710 in 2021 due to trust redemptions[198][199] - Total Liabilities as of December 31, 2022 were $516,755, down from $8,898,244 in 2021, primarily due to fair value of warrant liability[198][199] - Total liabilities decreased from $8,898,244 in 2021 to $4,228,369 in 2022, a reduction of about 52.5%[228] - The accumulated deficit increased from $2,316,786 in 2021 to $6,205,494 in 2022, indicating a rise of approximately 168.5%[228] - Cash held in the trust account significantly decreased from $106,116,023 in 2021 to $7,613,762 in 2022, a drop of approximately 92.8%[226] Trust Account and Business Combination - The trust account balance as of December 31, 2022 was $7,613,761.76, following redemptions of $90,334,512.92 and $8,331,836.23 in 2022[202][203] - The company intends to use substantially all funds in the trust account to complete the Business Combination and for working capital for target businesses[204] - The Company will only proceed with a Business Combination if it has net tangible assets of at least $5,000,001 upon consummation[249] - Stockholders can redeem their Public Shares for a pro rata portion of the Trust Account, initially valued at $10.10 per share, plus any pro rata interest earned[252] - The Combination Period has been extended to March 21, 2023, allowing additional time to complete a Business Combination[255] - If a Business Combination is not completed by the end of the Combination Period, the Company will redeem 100% of the outstanding Public Shares[254] Shareholder and Stock Information - As of December 31, 2022, 742,308 shares of Class A common stock are subject to possible redemption, classified as temporary equity[273] - The Company is authorized to issue 100,000,000 shares of Class A common stock, with 2,975,000 shares of Class B common stock issued and outstanding as of December 31, 2022[289] - As of December 31, 2022, there were 742,308 shares of Class A common stock issued and outstanding, a decrease from 10,506,002 shares at December 31, 2021[288] Initial Public Offering - The initial public offering generated gross proceeds of $100,000,000 from the sale of 10,000,000 units at $10.00 per unit[240] - Transaction costs for the initial public offering amounted to $4,910,297, including $1,000,000 in underwriting fees[242] - The Company sold 10,000,000 Units at a purchase price of $10.00 per Unit during the Initial Public Offering, generating gross proceeds of $100 million[283] - The Sponsor purchased an aggregate of 3,800,000 Private Warrants at a price of $1.00 per warrant, totaling $3.8 million, with potential additional purchases if underwriters' over-allotment is exercised[284] Management and Operations - The company has no off-balance sheet arrangements as of December 31, 2022, and does not participate in transactions creating relationships with unconsolidated entities[209] - Management is evaluating the potential negative impact of the COVID-19 pandemic on the Company's financial position and operations[259] - The Company has advanced and repaid $760,000 in related party loans, with no outstanding balance as of December 31, 2022[296] Warrant and Share Valuation - The fair value of the Public Warrants decreased from $3,036,301 in 2021 to $110,182 in 2022, while the Private Warrants decreased from $2,262,941 to $101,432 in the same period[315][320] - The expected volatility of the warrants was 1.55% in 2022, significantly lower than 11.1% in 2021[311] - The Company uses the Black-Scholes option pricing model to value its warrants and options, with significant inputs including the risk-free rate of 4.27% in 2022[310][311] - The exercise price of the Public Warrants may be adjusted to 115% of the higher of the Market Value or Newly Issued Price if certain conditions are met[308] Agreements and Future Plans - The Company has a binding agreement to merge with Royalty Management Co, valuing it at an enterprise value of $111,000,000, pending regulatory approval[327] - An amended and restated articles of incorporation was filed on March 21, 2023, extending the trust term to September 22, 2023, allowing for a business combination[328] - The Company has granted a right of first refusal to the Representative for future public and private equity and debt offerings for a period of 24 months from the closing of a business combination[324]
Royalty Management (RMCO) - 2022 Q4 - Annual Report