Business Combination - The company entered into a business combination agreement with ANEW Medical, Inc., valuing ANEW at an implied equity value of $60 million[149]. - Upon closing of the merger, the company will issue 2 million contingent consideration shares if the stock price reaches $12.50 for 10 trading days within 3 years[151]. - The company extended the termination date of the business combination agreement to March 4, 2024, and subsequently to June 4, 2024[156][158]. - The company plans to close the business combination transaction as soon as possible, subject to closing conditions[157]. - Stockholders approved the business combination proposal at a special meeting, with 4,189,027 shares represented, and 1,739,776 shares were elected for redemption[177]. - The company has extended the deadline to consummate a business combination to December 4, 2024, allowing for up to twelve monthly extensions at a cost of $35,000 each[176]. Financial Performance - As of March 31, 2024, the company reported a net loss of $123,223, primarily due to general and administrative expenses of $324,777 and income tax expense of $49,069, offset by interest income of $251,663 from the Trust Account[168]. - The company has a working capital deficit of $2,575,228 as of March 31, 2024, with cash on hand of only $8,051[179]. - The company incurred significant professional costs to remain publicly traded and expects to continue incurring transaction costs related to the business combination[180]. IPO and Trust Account - The company completed its IPO on April 4, 2022, raising gross proceeds of $100 million from the sale of 10,000,000 Public Units at $10.00 each[169]. - A total of $116,150,000 was placed in a Trust Account for the benefit of public stockholders, with transaction costs amounting to $8,365,339[172]. - As of March 31, 2024, the company held marketable securities in the Trust Account valued at $19,578,086, which are invested in U.S. government securities[178]. - An aggregate of 6,103,350 shares with a redemption value of $63,169,451 were tendered for redemption during the extension meeting[162]. Sponsor and Promissory Notes - The sponsor deposited $360,000 into the trust account to extend the business combination deadline from April 4, 2023, to July 4, 2023[163]. - The company issued multiple unsecured, non-interest bearing promissory notes to the Sponsor, totaling up to $1,230,000, which are payable upon the closing of the business combination[182][183][185][186]. - On September 25, 2023, the Company issued an unsecured, non-interest bearing promissory note of $120,000 to the Sponsor, convertible into shares at $10.00 per share upon the Business Combination[187]. - On November 27, 2023, the Company issued another unsecured, non-interest bearing promissory note of $400,000 to the Sponsor, also convertible at $10.00 per share upon the Business Combination[188]. Underwriting and Advisory Fees - The underwriters received a cash underwriting discount of $0.25 per unit, totaling $2,875,000, upon the IPO closing, with an additional deferred commission of $4,312,500 payable upon the completion of the initial business combination[191]. - Del Mar Global Advisors Limited will receive 240,000 shares valued at $2,400,000 as compensation for financial advisory services upon the closing of the business combination[194]. - As of March 31, 2024, the Company had deferred legal fees of approximately $1.5 million related to legal advisory services, contingent upon the completion of a Business Combination[195]. Financial Instruments and Equity - The fair value of the Company's financial instruments approximates the carrying amounts in the balance sheet, with cash and cash equivalents estimated to approximate carrying values due to short maturities[199]. - The Company accounts for its convertible promissory notes as debt at cash proceeds on the balance sheet, following amendments to the conversion feature[203]. - Common stock subject to possible redemption is classified as temporary equity and presented at redemption value, with changes recognized immediately[208]. - The Company complies with FASB ASC 260 for net income (loss) per share calculations, allocating undistributed income (loss) between redeemable and non-redeemable shares[209]. - Offering costs primarily included underwriting, legal, accounting, and other expenses related to the IPO, charged to stockholders' equity upon completion[210]. - The company allocates offering costs between public shares and public rights based on their relative fair values[210]. - As a smaller reporting company, the company is not required to make disclosures regarding market risk[211].
Redwoods Acquisition (RWOD) - 2024 Q1 - Quarterly Report