Redwoods Acquisition (RWOD) - 2023 Q2 - Quarterly Report

Part I. Financial Information Financial Statements The company reported a net income of $967,065 for the six months ended June 30, 2023, driven by trust account interest, despite a significant asset decrease to $57.2 million and a going concern warning Condensed Consolidated Balance Sheets Total assets decreased to $57.2 million from $118.2 million as of June 30, 2023, primarily due to trust account withdrawals, while total liabilities and stockholders' deficit increased Condensed Consolidated Balance Sheet Highlights (Unaudited) | Balance Sheet Item | June 30, 2023 | December 31, 2022 | | :--- | :--- | :--- | | Cash | $123,722 | $340,962 | | Investments held in Trust Account | $56,950,088 | $117,806,478 | | Total Assets | $57,209,006 | $118,246,636 | | Total Current Liabilities | $1,351,686 | $506,241 | | Total Liabilities | $6,725,948 | $4,929,496 | | Common stock subject to possible redemption | $56,528,771 | $117,361,652 | | Total Stockholders' Deficit | ($6,045,713) | ($4,044,512) | Unaudited Condensed Consolidated Statements of Operations The company reported a net income of $967,065 for the six months ended June 30, 2023, a significant improvement from a net loss in the prior year, primarily due to increased interest income from its Trust Account Statement of Operations Summary (Unaudited) | Metric | Three Months Ended June 30, 2023 | Three Months Ended June 30, 2022 | Six Months Ended June 30, 2023 | Six Months Ended June 30, 2022 | | :--- | :--- | :--- | :--- | :--- | | Loss from operations | ($357,951) | ($232,740) | ($683,705) | ($237,750) | | Interest earned on investment held in Trust Account | $862,224 | $146,397 | $2,112,292 | $146,397 | | Net Income (Loss) | ($153,546) | ($208,826) | $967,065 | ($213,836) | Unaudited Condensed Consolidated Statements of Cash Flows Net cash used in operating activities was $886,472 for the six months ended June 30, 2023, while investing activities provided $63.0 million, primarily from trust account withdrawals for redemptions Cash Flow Summary for the Six Months Ended June 30 (Unaudited) | Cash Flow Activity | 2023 | 2022 | | :--- | :--- | :--- | | Net cash used in operating activities | ($886,472) | ($386,623) | | Net cash provided by (used in) investing activities | $62,968,683 | ($116,150,000) | | Net cash provided by (used in) financing activities | ($62,299,451) | $116,979,053 | | Net change in cash | ($217,240) | $442,430 | Notes to Unaudited Condensed Consolidated Financial Statements The notes detail the company's blank check status, the definitive business combination agreement with ANEW Medical, Inc., a going concern uncertainty, and the impact of a new excise tax on stock redemptions - The Company operates as a blank check company with no operations as of June 30, 2023[17][18] - A definitive business combination agreement was signed with ANEW Medical, Inc. on May 30, 2023, with an implied equity value of $60 million plus contingent consideration[34] - The business combination deadline was extended to October 4, 2023, with 6,103,350 shares redeemed for approximately $63.2 million in connection with this extension[24][30] - Management has identified substantial doubt about the Company's ability to continue as a going concern due to liquidity concerns and the impending liquidation date[42] - The Sponsor provided $870,000 in convertible promissory notes to fund operations and transaction costs as of June 30, 2023[89] - An excise tax liability of $631,696 was recorded due to stock redemptions in March 2023 under the Inflation Reduction Act of 2022[46] Management's Discussion and Analysis of Financial Condition and Results of Operations The company, a blank check entity, entered a definitive merger agreement with ANEW Medical, Inc., reported a net income of $967,065 for the first six months of 2023, but faces significant liquidity challenges and a going concern warning - The company operates as a blank check company with no operating revenues, focused solely on completing a business combination[115][125] - A definitive business combination agreement was executed with ANEW Medical, Inc. on May 30, 2023[119] Results of Operations Summary | Period | Net Income / (Loss) | Key Driver | | :--- | :--- | :--- | | Six Months Ended June 30, 2023 | $967,065 | $2,112,292 in interest income | | Six Months Ended June 30, 2022 | ($213,836) | $146,397 in interest income | - As of June 30, 2023, the company reported $123,722 in cash and a working capital deficit of $646,300, relying on Sponsor loans for transaction costs[135] - Management has concluded that the impending business combination deadline and liquidity issues create substantial doubt about the company's ability to continue as a going concern[137] Quantitative and Qualitative Disclosures About Market Risk The company, qualifying as a smaller reporting company, is exempt from providing disclosures regarding quantitative and qualitative market risk - The company is not required to provide disclosures under this item due to its status as a smaller reporting company[163] Controls and Procedures Management concluded that disclosure controls and procedures were effective as of June 30, 2023, with no material changes in internal control over financial reporting during the quarter - Disclosure controls and procedures were deemed effective as of June 30, 2023, following evaluation by principal officers[165] - No material changes in internal control over financial reporting occurred during the quarter ended June 30, 2023[166] Part II. Other Information Legal Proceedings The company has no legal proceedings to report for the period - There are no legal proceedings to report[168] Risk Factors As a smaller reporting company, Redwoods Acquisition Corp. is not required to provide disclosures for risk factors - The company is not required to provide disclosures under this item due to its status as a smaller reporting company[169] Unregistered Sales of Equity Securities and Use of Proceeds The company reported no unregistered sales of equity securities or use of proceeds for the period - There were no unregistered sales of equity securities to report for the period[170] Other Information The company has no other material information to report for the period - There is no other information to report[173]