Financial Performance - The net loss for the three months ended March 31, 2024, was $439,985, a significant decline from a net income of $2,350,377 for the same period in 2023[12]. - For the three months ended March 31, 2024, the company reported a net loss of $63,345, with a basic and diluted net loss per common stock of $(0.03)[73]. - As of March 31, 2024, the company reported a net loss of approximately $0.4 million, compared to a net income of approximately $2.4 million for the same period in 2023[157][158]. Assets and Liabilities - Total assets as of March 31, 2024, increased to $21,692,082 from $21,502,723 as of December 31, 2023, representing a growth of approximately 0.88%[10]. - Current liabilities rose to $4,562,893 as of March 31, 2024, compared to $4,181,229 as of December 31, 2023, indicating an increase of about 9.1%[10]. - The total stockholders' deficit as of March 31, 2024, was $(22,196,645), worsening from $(21,632,811) as of December 31, 2023[10]. - The company had a working capital deficit of approximately $4.2 million as of March 31, 2024, with $335,304 in its operating bank account[159]. - As of March 31, 2024, the Company had $335,304 in its operating bank account and a working capital deficit of approximately $4.2 million[44]. Cash and Trust Account - Cash held in the Trust Account increased to $21,356,778 as of March 31, 2024, compared to $21,099,267 as of December 31, 2023, marking an increase of about 1.22%[10]. - Cash at the end of the period decreased to $335,304 as of March 31, 2024, from $403,456 at the beginning of the period, a decline of approximately 17%[20]. - The company withdrew $2,636,344 from the Trust Account for tax liabilities, with $411,858 remaining excess funds[42]. - The company raised $306,000,000 from its IPO, with $1,656,890 held outside the Trust Account for working capital purposes[161]. Business Combination and Operations - The company has not engaged in any operations or generated revenues as of March 31, 2024, and all activities relate to its formation and IPO[22]. - The company has not selected any specific Business Combination target and has not engaged in substantive discussions regarding an initial Business Combination[22]. - The Company must complete one or more initial Business Combinations with an aggregate fair market value of at least 80% of the value of the assets held in the Trust Account[28]. - The Company entered into a Business Combination Agreement on March 18, 2024, with CID HoldCo, Inc. and SEE ID, Inc., which is expected to lead to a merger[106]. - Upon closing of the Business Combination, Holdings is expected to be listed on the Nasdaq Stock Market, subject to customary closing conditions[108]. Stockholder Actions and Amendments - On April 20, 2023, stockholders approved an extension for the business combination deadline from May 19, 2023, to November 19, 2023[36]. - On November 17, 2023, stockholders approved another extension of the business combination deadline to May 19, 2024[38]. - On December 28, 2023, stockholders approved an amendment allowing Class B common stock to convert to Class A common stock on a one-to-one basis[39]. - The Company held a special meeting on May 17, 2024, where stockholders approved an amendment extending the termination date for a business combination from May 19, 2024, to November 19, 2024, with 1,125,154 shares redeemed at approximately $10.78 per share, totaling $12,136,736[132]. Financial Instruments and Derivatives - The fair value of the company’s financial instruments approximates their carrying amounts due to their short-term nature[60]. - The company has a derivative liability amounting to $6,893,760 as of March 31, 2024, up from $6,646,080 as of December 31, 2023[151]. - The fair value of the Non-Redemption Agreements derivative liability increased to $6,893,760 from $6,646,080 at the end of 2023, reflecting a change of $247,680[129]. Tax Liabilities - The Company has accrued but unpaid income tax liability of $345,055 and unpaid Delaware franchise tax liability of $91,506 as of March 31, 2024[164]. - The Company's effective tax rate was (11.11)% for the three months ended March 31, 2024, compared to 22.43% for the same period in 2023, primarily due to a valuation allowance on deferred tax assets[76]. Internal Controls and Compliance - The company has identified material weaknesses in internal controls over financial reporting as of March 31, 2024[170]. - The company has not made adjustments to asset or liability carrying amounts in light of substantial doubt about its ability to continue as a going concern[47]. IPO and Financing - The Company sold 30,000,000 Units in its IPO at a purchase price of $10.00 per Unit, raising a total of $300,000,000, which was deposited into the Trust Account[82][83]. - The Sponsor purchased 1,350,000 Private Units at a price of $10.00 per Private Unit, totaling $13,500,000, with $600,000 not yet funded as of March 31, 2024[85]. - The underwriters received cash underwriting commissions of $5,300,000 and are entitled to a deferred underwriting commission of $11,200,000 upon completion of the initial Business Combination[96]. Risk Factors - The company’s cash balances regularly exceed the federally insured limit of $250,000, posing a concentration of credit risk[59]. - There are no defaults upon senior securities reported[179]. - There are no mine safety disclosures applicable to the company[180].
ShoulderUp Technology Acquisition (SUAC) - 2024 Q1 - Quarterly Report