CERO THERAPEUTICS HOLDINGS, INC.

Current report

CERo Therapeutics, Inc. (the “Predecessor”) was incorporated in Delaware on September 23, 2016, and is based in South San Francisco, California. Predecessor was focused on developing its therapeutic platform to genetically engineer human immune cells to fight cancer and did not begin clinical development or product commercialization. The Company’s efforts will focus on continued product development, including clinical development, to support regulatory approval to commercialize and subsequent product commercialization.

Current report

On June 4, 2023, Predecessor entered into a Business Combination Agreement (as amended by that certain Amendment No. 1 to the Business Combination Agreement, dated as of February 5, 2024 and Amendment No. 2 to the Business Combination Agreement, dated as of February 13, 2024, the “Business Combination Agreement”) by and among PBAX and PBCE Merger Sub, Inc., pursuant to which Merger Sub merged with and into Predecessor, with Predecessor surviving as a wholly-owned subsidiary of PBAX (the “Merger”). In connection with the consummation of the Business Combination on February 14, 2024, PBAX changed its corporate name to “CERo Therapeutics Holdings, Inc.”

Current report

Going concern

Current report

Reverse Stock Split

Current report

At 12:01 a.m. Eastern time on January 8, 2025, we effected the Reverse Stock Split pursuant to which each 100 shares of our Common Stock outstanding immediately prior thereto was converted into 1 share of our Common Stock outstanding immediately thereafter.

Current report

February 2025 Offering

Current report

On February 7, 2025, we closed our reasonable best efforts public offering, with participation from a member of our board of directors and a single institutional investor, for the purchase and sale of (i) 2,551,020 shares of Common Stock or common stock equivalents in lieu thereof; and (ii) February 2025 Common Warrants to purchase up to 2,551,020 shares of common stock, at a combined public offering price of $1.96 per share and warrant. In connection with the offering, on February 5, 2025, we entered into the SPA with the investors. Such transaction is referred to as the “February 2025 Offering.” The shares of Common Stock and the Warrants described above and the shares of Common Stock underlying the Warrants were offered pursuant to the Registration Statement on Form S-1 (File No. 333-284007), as amended, which was declared effective by the Securities and Exchange Commission on February 5, 2025. In connection with this offering, we received net proceeds of approximately $4.5 million.

Current report

Investigational New Drug Application Submission

Current report

On June 28, 2024, the Company submitted an Investigational New Drug Application (“IND”) for its product candidate, CER-1236, to FDA. On July 26, 2024, the Company was informed by the FDA that it has placed a clinical hold on the IND. The FDA indicated that the clinical hold has been placed as a result of insufficient data provided with regard to two issues within pharmacology and toxicology of CER-1236. The FDA indicated that, within 30 calendar days, it would provide a detailed official hold letter and requested that the Company hold its response until after receipt of such letter (the “Hold Letter”).

Current report

The Company received the Hold Letter on July 26, 2024 and submitted a complete response letter to the FDA on October 21, 2024 in which the Company requested a meeting to address the FDA’s questions.

Current report

On November 15, 2024, the Company received notice from the FDA that the IND for CER-1236 was cleared. The Company currently anticipates beginning clinical trials in the first half of 2025. We submitted a second IND application for the investigation of CER-T cell therapy in NSCLC and ovarian cancer, which was accepted by the FDA on March 27, 2025.

Current report

Nasdaq Notices of Non-compliance and Nasdaq Panel Decision

Current report

On July 19, 2024, the Company received a letter (the “Bid Price Requirement Letter”) from the staff at The Nasdaq Global Market notifying the Company that, for the 30 consecutive trading days prior to the date of the Bid Price Requirement Letter, the closing bid price for the Common Stock had not been in compliance with the Bid Price Requirement. On October 23, 2024, the trading price for CERo common stock closed under $0.10 and was the tenth consecutive trading day to do so. On October 24, 2024, the Company received a letter from the staff at The Nasdaq Global Market notifying the Company that, because its Common Stock had a closing bid price of $0.10 or less for ten consecutive trading days, it was no longer eligible to rely upon the 180-day cure period set forth in the Bid Price Requirement Letter.

Current report

On July 19, 2024, the Company also received the MVPHS Letter notifying the Company that, for the 30 consecutive trading days prior to the date of the MVPHS Letter, the Common Stock had not been in compliance with the MVPHS Requirement.

Current report

Such letters are in addition to the letter from The Nasdaq Global Market received by the Company on May 2, 2024 (the “MVLS Letter” and, together with the Bid Price Requirement Letter and the MVPHS Letter, the “Letters”) notifying the Company that, for the 30 consecutive trading days prior to the date of such MVLS Letter, the Common Stock had traded at a value below the minimum $50,000,000 “Market Value of Listed Securities” (“MVLS”) requirement set forth in Nasdaq Listing Rule 5450(b)(2)(A), which is required for continued listing of the Common Stock on The Nasdaq Global Market (the “MVLS Requirement”). On October 30, 2024, the Company received a letter from the staff at The Nasdaq Global Market notifying the Company that it had not regained compliance with the MVLS Requirement within the 180-day compliance period set forth in the MVLS Letter.

Current report

Each of the Bid Price Requirement and MVLS Requirement deficiencies results in the commencement of delisting proceedings. However, the Company attended a hearing before the Nasdaq Panel on December 17, 2024, at which the Company submitted a plan for regaining compliance. Notwithstanding that applicable Nasdaq rules provide a 180-day compliance period to regain compliance with the MVPHS Requirement, the plan submitted by the Company in connection with such hearing, as required by applicable Nasdaq requirements, demonstrated a pathway to compliance with all applicable deficiencies.

Current report

On January 17, 2025, the Nasdaq Panel granted the Company’s request for an extension of the deadline for regaining compliance with Nasdaq listing requirements to April 22, 2025, subject to Nasdaq Conditions. Pursuant to the Nasdaq Conditions, the Company shall demonstrate compliance with the Bid Price Requirement and apply to transfer its listing to the Nasdaq Capital Market on or prior to January 22, 2025. The Company is also required to satisfy the $2.5 million stockholders’ equity requirement of the Nasdaq Capital Market on or prior to April 22, 2025, submit certain plans to Nasdaq and make certain disclosures.

Current report

On February 12, 2025, we received a letter from Nasdaq confirming that we have regained compliance with the Bid Price Requirement and we have been moved to the Nasdaq Capital Market, as required by the Nasdaq Panel.

Current report

Regaining compliance with the Bid Price Requirement is one of the conditions set forth by the Nasdaq Panel in its previously disclosed decision granting our request for an extension to regain compliance with certain Nasdaq continued listing requirements until April 22, 2025. We continue to make progress towards satisfaction of the other conditions. Nevertheless, as of the date of this Annual Report, the trading price of our Common Stock is below the Bid Price Requirement and we have not satisfied the $2.5 million stockholder’s equity requirement. We cannot assure you that we will obtain compliance with these requirements in a timely manner, or at all.

Current report

Warrant Issuances

Current report

On December 23, 2024, the Company issued warrants to purchase an aggregate of 84,061 shares of Common Stock, with an exercise price of $5.61 per share, which was the closing price of the Common Stock on Nasdaq on December 20, 2024, to certain institutional investors as a condition to the exercise of Preferred Warrants held thereby. On January 6, 2025, the Company issued additional warrants to purchase an aggregate of 163,853 shares of Common Stock, with an exercise price of $5.82 per share, which was the closing price of the Common Stock on Nasdaq on January 3, 2025, to an institutional investor as a condition to the exercise of Preferred Warrants held thereby. Such number of shares gives effect to the Reverse Stock Split.

Current report

Revenue

Current report

Predecessor and the Company have not recognized any revenue from any sources, including from product sales, and the Company does not expect to generate any revenue from the sale of products in the foreseeable future. If the development efforts for the Company’s product candidates, each of which is a specific product and indication combination, are successful and result in regulatory approval, or if the Company executes license agreements with third parties, the Company may generate revenue from R&D services, from the achievement of development milestones or from milestones and royalties related to product sales. However, there can be no assurance as to when any revenues will be generated, if at all.

Current report

Operating Expenses

Current report

Research and Development Expenses

Current report

R&D expenses consist of discovery activities, manufacturing development and production, preclinical and clinical development, and regulatory filing for product candidates. R&D expenses are recognized as incurred and payments made prior to the receipt of goods or services to be used in R&D are capitalized until the goods or services are received. Costs incurred in obtaining technology licenses through asset acquisitions, if incurred, will be charged to R&D expense if the licensed technology has not reached technological feasibility and has no alternative future use. R&D expenses include or could include:

Current report

Product candidates in later stages of development generally have higher development costs than those in earlier stages of clinical development, primarily due to the increased size and duration of later-stage clinical trials. The Company plans to substantially increase its R&D expenses for the foreseeable future as it continues the development of its product candidates through clinical development. The Company cannot determine with certainty the timing of initiation, the duration or the costs of current or future preclinical studies and clinical trials required for regulatory approval due to the inherently unpredictable nature of preclinical and clinical development. Clinical and preclinical development timelines, the probability of success and development costs can differ materially from expectations. The Company anticipates that it will make determinations as to which product candidates to pursue and how much funding to direct to each product candidate on an ongoing basis in response to the results of ongoing and future preclinical studies and clinical trials, regulatory developments and ongoing assessments as to each product candidate’s commercial potential. The Company will need to, and plans to, raise substantial additional capital in the future. Future R&D expenses may vary significantly between periods and from current expectations based on factors such as:

Current report

General and Administrative Expenses

Current report

General and administrative expenses consist principally of salaries and related costs for personnel in executive and administrative functions, including stock-based compensation, travel expenses and recruiting expenses. Other general and administrative expenses include professional fees for legal, accounting and tax-related services, consulting fees, insurance costs, and investor relations fees.

Current report

The Company anticipates that its general and administrative expenses will increase in the future as the Company increases headcount and contracted services for operational support for expanded operations and infrastructure. The Company also anticipates that general and administrative expenses will increase as a result of expenses for accounting, audit, legal and consulting services, as well as costs associated with maintaining compliance with Nasdaq listing rules and SEC requirements, director and officer liability insurance, investor and public relations activities and other expenses associated with operating as a public company.

Current report

Other Income, Net

Current report

Other income, net consists predominantly of interest income from interest bearing bank accounts, interest expense on payables, gains recorded on settlements reached with vendors on payables, and the gain or loss on the revaluation of earnout and derivative liabilities, which represents the change in fair value of earnout liabilities or outstanding warrants between periods.

Current report

The Results of Operations for year ended December 31, 2024 arepro forma as the period presented in the following table and discussion includes the Predecessor for the period from January 1, 2024 through February 13, 2024 and the Company for the period from February 14, 2024 through December 31, 2024. This pro forma period from January 1, 2024 to December 31, 2024 does not include the Merger transactions that occurred on-the-line.

Current report

General and Administrative Expenses

Current report

General and administrative expenses were $9.1 million for the year ended December 31, 2024, compared to $2.4 million for the year ended December 31, 2023, reflecting an increase of $6.7 million. The increase in the year ended December 31, 2024, over the year ended December 31, 2023, was partially due to a $1.8 million expense consisting of the remaining underwriting fees from the PBAX initial public offering, which were earned on the consummation of the business combination. Additionally, the hiring of senior management in G&A resulted in an increase of $2.0 million, including recruiting fees. Legal fees increased $1.0 million and business consulting increased $0.8 million in the year ended December 31, 2024, versus the year ended December 31, 2023. Expenses related to services required for SEC compliance, such as printing and transfer agency fees, increased $0.5 million and public company insurance coverage increased insurance expenses $0.5 million in the year ended December 31, 2024, compared to the year ended December 31, 2023. Corporate communications and director fees each increased $0.2 million in the year ended December 31, 2024 compared to the year ended December 31, 2023. The additional expenses are all driven by the increased expenses of operational compliance as a public company.

Current report

Research and Development Expenses

Current report

Research and development expenses were $7.6 million for the year ended December 31, 2024, compared to $5.3 million for the year ended December 31, 2023, reflecting an increase of $1.8 million. The increase was related to increased R&D activity as the Company prepared and filed the IND for CER-1236, prepared for the clinical trial initiation, and conducted additional experiments in response to the FDA questions related to the IND. Clinical expenses increased $0.2 million, and scientific consulting expenses increased $1.2 million in the year ended December 31, 2024, due to activities related to the preparation of the IND and responses to questions from the FDA, and preparation for the anticipated clinical trial for CER-1236. Additional studies required to address FDA questions increased preclinical study costs by $0.3 million.

Current report

The Company anticipates that its R&D expenses will significantly increase in the future as the Company increases headcount, compensation expense, and contracted services for preclinical and clinical development of its product candidates, as well as for manufacturing of clinical product to be used in clinical development.

Current report

Other Income, Net

Current report

Other income was $7.9 million for the year ended December 31, 2024, compared to $0.4 million for the year ended December 31, 2023, reflecting an increase of $7.5 million. The increase in 2024 as compared to 2023 was primarily due to the $4.8 million positive change in value of the Company’s earnout liability and the $0.4 million gain recorded for the change in value of the Predecessor’s preferred stock warrant liability in the year ended December 31, 2024. Additionally, settlement of vendor liabilities in 2024 resulted in a $3.3 million increase in other income in 2024. This other income was offset by an increase in other expenses attributable to an increase in registration and other penalties of $0.6 million and a decrease in interest income of $0.1 million.

Previous report

We are a blank check company incorporated in Delaware on June 8, 2021. We were formed for the purpose of effecting a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or similar business combination with one or more target businesses, using cash from the proceeds of our IPO and the sale of the placement units that occurred simultaneously with the completion of our IPO, our capital stock, debt or a combination of cash, stock and debt.

Previous report

We incurred significant costs in the pursuit of a business combination. As described below, the Business Combination was consummated on February 14, 2024, after the date of the audited consolidated financial statements included in this Annual Report.

Previous report

On January 3, 2024, we held a special meeting of stockholders (the “Third Special Meeting”). At the Third Special Meeting, our stockholders approved a proposal to amend the Investment Management Trust Agreement (the “IMTA”), dated as of October 5, 2021, as amended by the Amendment No. 1 dated December 20, 2022 and Amendment No. 2 dated July 7, 2023, by and between us and Continental Stock Transfer and Trust Company (“Continental”), to extend the business combination period up to three times for one month each time from January 8, 2024 to February 8, 2024, March 8, 2024 or April 8, 2024 (the “Third IMTA Amendment”). On January 3, 2024, we entered into the Third IMTA Amendment with Continental. Our stockholders also approved an amendment (the “Third Charter Amendment”) to our amended and restated certificate of incorporation, as amended by the First Amendment dated December 20, 2022 and the Second Amendment dated July 7, 2023 (as amended by the Third Charter Amendment, the “PBAX Charter”) the to provide its board of directors the ability to extend the date by which we have to consummate a business combination up to three times for one month each time, for a maximum of three additional months. On January 3, 2024, we filed the Third Charter Amendment with the Secretary of State of the State of Delaware, which was subsequently corrected by a Certificate of Correction (the “Certificate of Correction”) dated January 4, 2024 to correct certain scrivener’s errors in the Third Charter Amendment.

Previous report

In connection with the approval of the Third Charter Amendment, holders of 11,625 shares of our Class A common stock, exercised redemption rights. As a result, following satisfaction of such redemptions, we had 6,234,582 shares of Class A common stock outstanding, of which (i) 753,332 were shares of Class A common stock issued to the public in our IPO, which shares of Class A common stock were entitled to receive a pro rata portion of the remaining funds in our trust account (the “Trust Account”) in connection with our initial business combination, a liquidation or certain other events, (ii) 4,596,250 were shares of Class A common stock issued upon the conversion of an equal number of shares of our Class B common stock, par value $0.0001 per share (“Class B common stock”), acquired by Phoenix Biotech Sponsor, LLC (“Sponsor”) prior to our IPO, which shares of Class A common stock did not have redemption rights, and (iii) 885,000 were shares of Class A common stock included in the private placement units acquired in the private placement by the Sponsor and other investors concurrent with our IPO, which shares of Class A common stock did not have redemption rights.

Previous report

On January 4, 2024, the Sponsor deposited $22,600 in the Trust Account in connection with the extension of the business combination deadline. On January 4, 2024, we made a series of payments of an aggregate of $128,133 to holders of redeemed Class A common stock (an aggregate of $11.02 per redeemed share).

Previous report

On February 5, 2024, the parties entered into Amendment No. 1 to the Business Combination Agreement to, among other things, (i) remove the minimum cash condition, (ii) modify the stock-price based milestones such that (a) the trading price condition for the First Level Earnout Target shall be reset from $12.50 to 125% of the Conversion Price of the Series A Preferred Stock (in each case, as defined below) upon the reset of such Conversion Price as described below and (b) the trading price condition for the Second Level Earnout Target shall be reset from $15.00 to 150% of the Conversion Price of the Series A Preferred Stock upon reset of such Conversion Price as described below, and (iii) increase the aggregate number of shares of Class A common stock issuable to the stockholders of CERo in connection with the Business Combination from 4,651,704 shares to 5,000,000 shares. Such number of shares is in addition to up to 1,200,000 shares issuable upon satisfaction of certain earn-out conditions and 382,651 shares issuable upon exercise of rollover options or warrants.

Previous report

On February 8, 2024, we held a special meeting of stockholders (the “Fourth Special Meeting”). At the Fourth Special Meeting, our stockholders adopted and approved: (i) the Business Combination Agreement, pursuant to which Merger Sub merged with and into CERo, with CERo surviving the merger as a wholly-owned subsidiary of PBAX and approved the Business Combination and the other transactions and ancillary documents contemplated by and required for the Business Combination; (ii) on a non-binding advisory basis, certain changes to the PBAX Charter, including the name change to CERo Therapeutics Holdings, Inc., share authorizations, and others; (iii) the issuance of Class A common stock to CERo stockholders pursuant to the Business Combination Agreement; (iv) the election of five directors; and (v) the 2024 Equity Incentive Plan and the 2024 Employee Stock Purchase Plan, contingent of the consummation of the Business Combination.

Previous report

In connection with the approval of the Business Combination, holders of 671,285 shares of Class A common stock, exercised redemption rights. As a result, following satisfaction of such redemptions, we had 5,563,297 shares of Class A common stock outstanding, of which (i) 82,047 were shares of Class A common stock issued to the public in our IPO, which shares of Class A common stock were entitled to receive a pro rata portion of the remaining funds in our Trust Account in connection with its initial business combination, a liquidation or certain other events, (ii) 4,596,250 were shares of Class A common stock issued upon the conversion of an equal number of shares of our Class B Shares acquired by Sponsor prior to our IPO, which shares of Class A common stock did not have redemption rights, and (iii) 885,000 were shares of Class A common stock included in the private placement units acquired in the private placement by the Sponsor and other investors concurrent with our IPO, which shares of Class A common stock did not have redemption rights. On February 14, 2024, we made a series of payments of an aggregate of $7,456,463.30 to holders of redeemed Class A common stock (an aggregate of $11.11 per redeemed share).

Previous report

On February 13, 2024, the parties entered into Amendment No. 2 to the Business Combination Agreement to create two additional pools of Earnout Shares of Class A common stock, one pool of which contained 875,000 shares, which were fully vested at closing of the Business Combination and which were issued as an offset to the agreement by Sponsor to forfeit an offsetting number of shares, and one pool of which will contain 1,000,000 shares, which will be fully vested upon the achievement of certain regulatory milestone-based earnout targets and make certain other technical changes to the timing and process for issuance of the 1,200,000 shares of Class A common stock subject to the other earn-out conditions set forth in the Business Combination Agreement.

Previous report

On February 14, 2024, the Business Combination between Legacy CERo and PBAX was consummated pursuant to the Business Combination Agreement.

Previous report

On February 14, 2024, we sold 10,080 shares of Series A Preferred Stock, 612,746 Common Warrants and 2,500 Preferred Warrants pursuant to the Amended and Restated Securities Purchase Agreement, dated February 14, 2024, by and among the Company, CERo and certain accredited investors (the “Initial Investors”) for aggregate cash proceeds of approximately $9.98 million. A portion of the issued Series A Preferred Stock were issued as condition for extinguishment of indebtedness.

Previous report

On February 14, 2024, we entered into a common stock purchase agreement (the “First ELOC”) with an investor which allows us to elect at our sole discretion to sell and issue, up to the lesser of $25 million or a limit determined by maximum ownership percentages. As consideration for executing this agreement, we refunded $1 million of the proceeds of the Series A financing to the investor and $150,000 to investor counsel.

Previous report

On February 23, 2024, we entered into a purchase agreement (the “Second ELOC”) with an investor which allows us to elect at our sole discretion to sell and issue, up to the lesser of $25 million or a limit determined by maximum ownership percentages following the termination of the First ELOC, including as a result of the sale of the maximum amount permitted under such First ELOC or the expiration of the First ELOC at the end of its three-year term. As consideration for executing this agreement, we will issue $500,000 of Common Stock with a per share price determined by the five-day volume weighted average daily common share price on the five days preceding the effectiveness of the registration statement that includes the shares pursuant to the purchase agreement.

Previous report

On April 1, 2024, we sold 626 shares of Series B Preferred Stock pursuant to the Securities Purchase Agreement, dated March 28, 2024, by and among us and certain accredited investors for aggregate cash proceeds of approximately $0.5 million.

Previous report

As of December 31, 2023, we had not commenced any operations. All activity through December 31, 2023 relates to our formation, the IPO, and since the IPO, the search for a prospective initial business combination. We will not generate any operating revenues until after the completion of a business combination, at the earliest. We generate non-operating income in the form of interest income from the proceeds derived from the IPO placed in the Trust Account.

Previous report

For the year ended December 31, 2023, we had a net loss of $2,536,233, which primarily consists of operating expenses of $2,892,935 and Delaware franchise taxes of $40,050, partially offset by the interest earned on marketable securities held in Trust Account of $491,571.

Previous report

For the year ended December 31, 2022, we had a net loss of $667,736, which primarily consists of operating expenses of $2,841,391 and Delaware franchise taxes of $64,050, partially offset by the interest earned on marketable securities held in Trust Account of $2,836,864.

Previous report

Liquidity and Going Concern

Previous report

On October 8, 2021, we consummated the IPO of 17,500,000 units (“Units”), at a price of $10.00 per Unit, which included the partial exercise by the underwriter of its over-allotment option in the amount of 2,000,000 Units, generating gross proceeds of $175,000,000. Simultaneously with the closing of the IPO, we consummated the sale of 885,000 units (the “Private Placement Units”) to the Sponsor, Cantor Fitzgerald & Co. (“Cantor”) and Cohen & Company Capital Markets, a division of J.V.B. Financial Group, LLC (“CCM”) at a price of $10.00 per Private Placement Unit, generating gross proceeds of $8,850,000.

Previous report

Following the IPO, the partial exercise of the over-allotment option and the sale of the Private Placement Units, a total of $178,500,000 was placed in the Trust Account ($10.20 per Unit). We incurred $12,729,318 in transaction costs, including $2,635,000 of underwriting fees, $9,150,000 of deferred underwriting fees and $944,318 of other offering costs.

Previous report

As of December 31, 2023, we had $96,873 in our operating bank accounts, $8,436,311 in money market funds held in Trust Account to be used for a business combination or to repurchase or redeem our Public Shares in connection therewith and a working capital deficit of $5,049,122.

Previous report

For the year ended December 31, 2023, there was $1,523,604 of cash used in operating activities.

Previous report

For the year ended December 31, 2022, there was $1,092,247 of cash used in operating activities.

Previous report

We used substantially all of the funds held in the Trust Account, including any amounts representing interest earned on the Trust Account (less taxes payable), to complete our Business Combination, including the payment of transaction costs.

Previous report

In order to finance transaction costs in connection with a business combination, our Sponsor or an affiliate of our Sponsor or certain of our officers and directors may, but are not obligated to, loan us funds as may be required. If we complete a business combination, we may repay such loaned amounts out of the proceeds of the Trust Account released to us. In the event that a business combination does not close, we may use a portion of the working capital held outside the Trust Account to repay such loaned amounts, but no proceeds from our Trust Account would be used for such repayment. Up to $1,500,000 of such loans may be converted into units of the post business combination entity, at a price of $10.00 per unit, at the option of the lender. The units would be identical to the Private Placement Units. On December 13, 2022, we entered into a promissory note with the Sponsor. In order to fund ongoing operations, the Sponsor will loan up to $1,500,000 to us. On December 8, 2023, the Promissory Note was amended to increase the aggregate amount from $1,500,000 to $1,600,00. As of December 31, 2023 and 2022, there was $1,555,000 and $650,000 of outstanding borrowings under the working capital loan arrangement, respectively. On February 14, 2024, the Sponsor surrendered the Promissory Note to us in payment of its subscription price for Series A Preferred Stock in the financing transaction described above.

Previous report

Contractual Obligations

Previous report

We do not have any long-term debt, capital lease obligations, operating lease obligations or long-term liabilities, other than an agreement to pay the Sponsor or an affiliate of the Sponsor a monthly fee of $20,000 for office space, administrative and shared personnel support services to us. We began incurring these fees on October 6, 2021 and incurred these fees monthly through December 31, 2022. The payment of these fees was suspended on December 31, 2022 and reinstated on March 31, 2023. As of December 31, 2023, there was a $75,000 outstanding balance owed to the Sponsor.

Previous report

We entered into an agreement, commencing on the date of our listing on Nasdaq, to pay the spouse of our Chief Executive Officer a monthly consulting fee of $15,000 for assisting us in identifying and evaluating potential acquisition targets. Payment of the consulting fees ended on December 31, 2022 as part of the First Charter Amendment approval.

Previous report

In addition, we have an agreement to pay the underwriter a deferred fee of $9,150,000. The deferred fee will become payable to the representative from the amounts held in the Trust Account solely in the event that we complete a business combination, subject to the terms of the underwriting agreement. Prior to Closing the Business Combination, we entered into a fee modification agreement with the underwriter, pursuant to which the underwriter received shares of Common Stock in lieu of certain cash payments.

Previous report

Critical Accounting Policies

Previous report

The preparation of financial statements and related disclosures in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements, and income and expenses during the periods reported. Actual results could materially differ from those estimates. We have identified the following critical accounting policies:

Previous report

Accounting for Warrants

Previous report

We account for Warrants as either equity-classified or liability-classified instruments based on an assessment of the instruments’ specific terms and applicable authoritative guidance in ASC 480 and ASC 815, Derivatives and Hedging (“ASC 815”). The assessment considers whether the instruments are free standing financial instruments pursuant to ASC 480, meet the definition of a liability pursuant to ASC 480, and whether the instruments meet all of the requirements for equity classification under ASC 815, including whether the instruments are indexed to our own Common Stock and whether the instrument holders could potentially require “net cash settlement” in a circumstance outside of our control, among other conditions for equity classification. This assessment, which requires the use of professional judgment, was conducted at the time of warrant issuance and as of each subsequent period end date while the instruments are outstanding. Management has concluded that the Private Warrants and Private Placement Warrants issued pursuant to the warrant agreement qualify for equity accounting treatment.

Previous report

Common Stock Subject to Possible Redemption

Previous report

We account for our Common Stock subject to possible redemption in accordance with the guidance in ASC Topic 480 “Distinguishing Liabilities from Equity.” Common stock subject to mandatory redemption is classified as a liability instrument and is measured at fair value. Conditionally redeemable common stock (including common stock that features redemption rights that are either within the control of the holder or subject to redemption upon the occurrence of uncertain events not solely within our control) is classified as temporary equity. At all other times, common stock is classified as stockholders’ equity. Our Common Stock features certain redemption rights that are considered to be outside of our control and subject to occurrence of uncertain future events. Accordingly, Common Stock subject to possible redemption is presented as temporary equity, outside of the stockholders’ deficit section of our balance sheets. We recognize changes in redemption value immediately as they occur and adjust the carrying value of redeemable common stock to equal the redemption value at the end of each reporting period. Increases or decreases in the carrying amount of redeemable common stock are affected by charges against additional paid in capital and accumulated deficit.

Previous report

Net Loss per Common Share

Previous report

Net loss per share is computed by dividing net loss by the weighted average number of shares of common stock outstanding during the period. At December 31, 2023, we did not have any dilutive securities and/or other contracts that could, potentially, be exercised or converted into shares of common stock and then share in our earnings. As a result, diluted net loss per share is the same as basic net loss per share for the period presented.

Previous report

In December 2023, the Financial Accounting Standard Board (“FASB”) FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures (“ASU 2023-09”), which requires disclosure of incremental income tax information within the rate reconciliation and expanded disclosures of income taxes paid, among other disclosure requirements. ASU 2023-09 is effective for fiscal years beginning after December 15, 2024. Early adoption is permitted. Management does not believe the adoption of ASU 2023-09 will have a material impact on its consolidated financial statements and disclosures.

Previous report

In June 2016, the FASB issued Accounting Standards Update (“ASU 2016-13”)Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments (“ASU 2016-13”). This update requires financial assets measured at amortized cost basis to be presented at the net amount expected to be collected. The measurement of expected credit losses is based on relevant information about past events, including historical experience, current conditions, and reasonable and supportable forecasts that affect the collectability of the reported amount. Since June 2016, the FASB issued clarifying updates to the new standard including changing the effective date for smaller reporting companies. The guidance is effective for fiscal years beginning after December 15, 2022, and interim periods within those fiscal years, with early adoption permitted. We adopted ASU 2016-13 on January 1, 2023. The adoption of ASU 2016-13 did not have an impact on our financial statements.

Previous report

Management does not believe that any other recently issued, but not yet effective, accounting standards if currently adopted would have a material effect on the accompanying financial statements.