QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED |
(State or other jurisdiction of incorporation or organization) |
(IRS Employer Identification No.) |
Title of each class |
Trading Symbol(s) |
Name of each exchange on which registered | ||
one-half of one redeemable warrant |
||||
| Large accelerated filer | ☐ | Accelerated filer | ☐ | |||
Non-accelerated filer |
☒ | Smaller reporting company | ||||
| Emerging growth company | ||||||
TABLE OF CONTENTS
| PART I. FINANCIAL INFORMATION | 1 | |||||
| Item 1. | 1 | |||||
| Condensed Balance Sheets as of September 30, 2024 (unaudited) and December 31, 2023 (audited) |
1 | |||||
| 2 | ||||||
| 3 | ||||||
| Condensed Statements of Cash Flows for the nine months ended September 30, 2024 and 2023 (unaudited) |
5 | |||||
| 6 | ||||||
| Item 2. | Management’s Discussion and Analysis of Financial Condition and Results of Operations |
35 | ||||
| Item 3. | 45 | |||||
| Item 4. | 46 | |||||
| PART II. OTHER INFORMATION | 48 | |||||
| Item 1. | 48 | |||||
| Item 2. | 48 | |||||
| Item 3. | 48 | |||||
| Item 4. | 49 | |||||
| Item 5. | 49 | |||||
| Item 6. | 49 | |||||
i
September 30, 2024 (unaudited) |
December 31, 2023 (audited) |
|||||||
ASSETS |
||||||||
Current Assets: |
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Cash |
$ | $ | ||||||
Prepaid expenses – Short-Term |
||||||||
Income tax receivable |
||||||||
Other investments held for trading (Restricted) |
||||||||
Total Current Assets |
||||||||
Investments held in the Trust Account |
||||||||
Total Assets |
$ |
$ |
||||||
LIABILITIES, COMMON STOCK SUBJECT TO POSSIBLE REDEMPTION AND STOCKHOLDERS’ DEFICIT |
||||||||
Current Liabilities: |
||||||||
Accounts payable and accrued expenses |
$ | $ | ||||||
Accrued Tax Payable - Excise Tax |
||||||||
Other accrued expenses - deferred |
||||||||
Due to related party |
||||||||
Loan payable- Sponsor |
||||||||
Total Current Liabilities |
||||||||
Derivative warrant liabilities |
||||||||
Deferred underwriting commission |
||||||||
Total liabilities |
||||||||
COMMITMENTS AND CONTINGENCIES (Note 6) |
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Class A common stock subject to possible redemption; |
||||||||
Stockholders’ deficit: |
||||||||
Preference shares, $ |
||||||||
Class A common stock, $ |
||||||||
Class B common stock, $ |
||||||||
Additional paid-in capital |
||||||||
Accumulated deficit |
( |
) | ( |
) | ||||
Total Stockholders’ Deficit |
( |
) | ( |
) | ||||
Total Liabilities, Common Stock Subject to Possible Redemption and Stockholders’ Deficit |
$ |
$ |
||||||
For the Three Months Ended September 30, |
For the Nine Months Ended September 30, |
|||||||||||||||
2024 |
2023 |
2024 |
2023 |
|||||||||||||
(as restated) |
(as restated) |
|||||||||||||||
EXPENSES |
||||||||||||||||
Administrative fee - related party |
$ | $ | $ | $ | ||||||||||||
Non-redemption agreement expense |
||||||||||||||||
Consulting fees – related party |
||||||||||||||||
Business combination expenses |
||||||||||||||||
General and administrative |
||||||||||||||||
TOTAL EXPENSES |
||||||||||||||||
OTHER INCOME (EXPENSE) |
||||||||||||||||
Income earned on investments held in Trust Account |
||||||||||||||||
Income earned on cash and investment accounts |
||||||||||||||||
Change in fair value of warrant liabilities |
( |
) | ||||||||||||||
Interest expense |
( |
) | ( |
) | ( |
) | ( |
) | ||||||||
TOTAL OTHER INCOME, NET |
( |
) | ||||||||||||||
Net income (loss) before income tax provision |
( |
) | ( |
) | ( |
) | ||||||||||
Income tax benefit (provision) |
( |
) | ( |
) | ( |
) | ||||||||||
Net income (loss) |
$ |
( |
) |
$ |
( |
) |
$ |
( |
) |
$ |
||||||
Weighted average number of shares of Class A common stock outstanding, basic and diluted |
||||||||||||||||
Basic and diluted net income (loss) per share of Class A common stock |
$ | ( |
) | $ | ( |
) | $ | ( |
) | $ | ||||||
Weighted average number of shares of Class B common stock outstanding, basic and diluted |
||||||||||||||||
Basic and diluted net income (loss) per share of Class B common stock |
$ | ( |
) | $ | ( |
) | $ | ( |
) | $ | ||||||
Class A Common Stock |
Class B Common Stock |
Additional Paid In Capital |
Accumulated Deficit |
Stockholders’ Deficit |
||||||||||||||||||||||||
Shares |
Amount |
Shares |
Amount |
|||||||||||||||||||||||||
Balance, January 1, 2024 |
$ |
$ |
$ |
$ |
( |
) |
$ |
( |
) | |||||||||||||||||||
Remeasurement of Class A common stock subject to possible redemption to redemption amount |
— | — | — | — | ( |
) | ( |
) | ||||||||||||||||||||
Net loss |
— | — | — | — | — | ( |
) | ( |
) | |||||||||||||||||||
Balance, March 31, 2024 |
$ |
$ |
$ |
$ |
( |
) |
$ |
( |
) | |||||||||||||||||||
Remeasurement of Class A common stock subject to possible redemption to redemption amount |
— | — | — | — | ( |
) | ( |
) | ||||||||||||||||||||
Excise tax imposed on common stock redemptions |
— | — | — | — | — | ( |
) | ( |
) | |||||||||||||||||||
Net loss |
— | — | — | — | — | ( |
) | ( |
) | |||||||||||||||||||
Balance, June 30, 2024 |
$ |
$ |
$ |
$ |
( |
) |
$ |
( |
) | |||||||||||||||||||
Remeasurement of Class A common stock subject to possible redemption to redemption amount |
— | — | — | — | ( |
) | ( |
) | ||||||||||||||||||||
Net loss |
— | — | — | — | — | ( |
) | ( |
) | |||||||||||||||||||
Balance, September 30, 2024 |
$ |
$ |
$ |
$ |
( |
) |
$ |
( |
) | |||||||||||||||||||
Class A Common Stock |
Class B Common Stock |
Additional Paid In Capital |
Accumulated Deficit |
Stockholders’ Deficit |
||||||||||||||||||||||||
Shares |
Amount |
Shares |
Amount |
|||||||||||||||||||||||||
Balance, January 1, 2023 |
$ | $ | $ | $ | ( |
) | $ | ( |
) | |||||||||||||||||||
Remeasurement of Class A common stock subject to possible redemption to redemption amount |
— | — | — | — | ( |
) | ( |
) | ||||||||||||||||||||
Net income |
— | — | — | — | — | |||||||||||||||||||||||
Balance, March 31, 2023 |
$ | $ | $ | $ | ( |
) | $ | ( |
) | |||||||||||||||||||
Remeasurement of Class A common stock subject to possible redemption to redemption amount |
— | — | — | — | ( |
) | ( |
) | ( |
) | ||||||||||||||||||
Excise tax imposed on common stock redemptions |
— | — | — | — | — | ( |
) | ( |
) | |||||||||||||||||||
Contribution – Non-redemption agreement |
— | — | — | — | — | |||||||||||||||||||||||
Class B common stock converted to Class A common stock |
( |
) | ( |
) | — | — | — | |||||||||||||||||||||
Net income |
— | — | — | — | — | |||||||||||||||||||||||
Balance, June 30, 2023 |
$ | $ | $ | $ | ( |
) | $ | ( |
) | |||||||||||||||||||
Remeasurement of Class A common stock subject to possible redemption to redemption amount |
— | — | — | — | ( |
) | ( |
) | ||||||||||||||||||||
N et loss |
— | — | — | — | — | ( |
) | ( |
) | |||||||||||||||||||
Balance, September 30, 2023 |
$ |
$ |
$ |
$ |
( |
) |
$ |
( |
) | |||||||||||||||||||
For the Nine Months Ended September 30, 2024 |
For the Nine Months Ended September 30, 2023 |
|||||||
(as restated) |
||||||||
Cash Flows From Operating Activities: |
||||||||
Net income (loss) |
( |
) | ||||||
Adjustments to reconcile net income (loss) to net cash used in operating activities: |
||||||||
Investment income earned on investments held in the Trust Account |
( |
) | ( |
) | ||||
Gain on change in fair value of derivative liabilities |
( |
) | ( |
) | ||||
Interest income earned on investment account |
( |
) | ( |
) | ||||
Non-redemption agreement expense |
||||||||
Changes in operating assets and liabilities: |
||||||||
Prepaid expenses |
||||||||
Income tax receivable |
||||||||
Other deferred expenses |
||||||||
Consulting fees payable – related party |
||||||||
Accrued income taxes payable |
( |
) | ||||||
Accounts payable and accrued expenses |
( |
) | ||||||
Net Cash Used In Operating Activities |
( |
) | ( |
) | ||||
Cash Flows From Investing Activities: |
||||||||
Taxes paid from trust |
||||||||
Cash withdrawn from Trust Account to redeeming stockholders |
||||||||
Cash withdrawn from Trust Account for taxes payable and dissolution |
||||||||
Funds deposited into held to maturity investment account |
( |
) | ( |
) | ||||
Funds withdrawn from held to maturity investment account |
||||||||
Net Cash Provided by Investing Activities |
||||||||
Cash Flows From Financing Activities: |
||||||||
Redemption of Class A common stock |
( |
) | ( |
) | ||||
Proceeds from loan payable - Sponsor |
||||||||
Proceeds from related party advances |
||||||||
Net Cash Used In Financing Activities |
( |
) | ( |
) | ||||
Net change in cash |
( |
) | ||||||
Cash at beginning of period |
||||||||
Cash at end of period |
$ |
$ |
||||||
Supplemental cash flow information: |
||||||||
| Cash paid for income taxes |
$ |
$ |
||||||
Supplemental Schedule of Non-cash Financing Activities: |
||||||||
Remeasurement of Class A common stock subject to possible redemption to redemption amount |
$ | $ | ||||||
Excise tax liability accrued for common stock redemptions |
$ | $ | ||||||
Class A common stock subject to possible redemption at December 31, 2021 |
$ | |||
Remeasurement adjustment of Class A common stock to redemption value |
||||
Class A common stock subject to possible redemption at December 31, 2022 |
$ | |||
Remeasurement adjustment of Class A common stock to redemption value |
||||
Class A common stock subject to possible redemption at March 31, 2023 |
||||
Remeasurement adjustment of Class A common stock to redemption value |
||||
Fair value of redeemed Class A common stock |
( |
) | ||
Class A common stock subject to possible redemption at June 30, 2023 |
||||
Remeasurement adjustment of Class A common stock to redemption value |
||||
Class A common stock subject to possible redemption at September 30, 2023 |
$ | |||
Remeasurement adjustment of Class A common stock to redemption value |
||||
Class A common stock subject to possible redemption at December 31, 2023 |
$ | |||
Remeasurement adjustment of Class A common stock to redemption value |
||||
Class A common stock subject to possible redemption at March 31, 2024 |
$ | |||
Remeasurement adjustment of Class A common stock to redemption value |
||||
Fair value of redeemed Class A common stock |
( |
) | ||
Class A common stock subject to possible redemption at June 30, 2024 |
$ | |||
Remeasurement adjustment of Class A common stock to redemption value |
||||
Class A common stock subject to possible redemption at September 30, 2024 |
$ | |||
For the Three Months Ended |
||||||||
September 30, 2024 |
||||||||
Class A |
Class B |
|||||||
Basic and diluted net loss per share of common stock |
||||||||
Numerator: |
||||||||
Allocation of net loss |
$ | ( |
) | $ | ( |
) | ||
Denominator: |
||||||||
Basic and diluted weighted average shares outstanding |
||||||||
Basic and diluted net loss per share of common stock |
$ | ( |
) | $ | ( |
) | ||
For the Three Months Ended |
||||||||
September 30, 2023 |
||||||||
Class A |
Class B |
|||||||
Basic and diluted net loss per share of common stock |
||||||||
Numerator: |
||||||||
Allocation of net loss |
$ | ( |
) | $ | ( |
) | ||
Denominator: |
||||||||
Basic and diluted weighted average shares outstanding |
||||||||
Basic and diluted net loss per share of common stock |
$ | ( |
) | $ | ( |
) | ||
For the Nine Months Ended |
||||||||
September 30, 2024 |
||||||||
Class A |
Class B |
|||||||
Basic and diluted net loss per share of common stock |
||||||||
Numerator: |
||||||||
Allocation of net loss |
$ | ( |
) | $ | ( |
) | ||
Denominator: |
||||||||
Basic and diluted weighted average shares outstanding |
||||||||
Basic and diluted net loss per share of common stock |
$ | ( |
) | $ | ( |
) | ||
For the Nine Months Ended |
||||||||
September 30, 2023 |
||||||||
Class A |
Class B |
|||||||
Basic and diluted net income per share of common stock |
||||||||
Numerator: |
||||||||
Allocation of net income |
$ | $ | ||||||
Denominator: |
||||||||
Basic and diluted weighted average shares outstanding |
||||||||
Basic and diluted net income per share of common stock |
$ | $ | ||||||
| • | Level 1, defined as observable inputs such as quoted prices (unadjusted) for identical instruments in active markets; |
| • | Level 2, defined as inputs other than quoted prices in active markets that are either directly or indirectly observable such as quoted prices for similar instruments in active markets or quoted prices for identical or similar instruments in markets that are not active; and |
| • | Level 3, defined as unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions, such as valuations derived from valuation techniques in which one or more significant inputs or significant value drivers are unobservable. |
| • | in whole and not in part; |
| • | at a price of $ |
| • | upon a minimum of 30-day redemption period to each warrant holder; and |
| • | if, and only if, the last reported sale price of the Class A common stock equals or exceeds $ |
| Level 1: | Quoted prices in active markets for identical assets or liabilities. An active market for an asset or liability is a market in which transactions for the asset or liability occur with sufficient frequency and volume to provide pricing information on an ongoing basis. |
| Level 2: | Observable inputs other than Level 1 inputs. Examples of Level 2 inputs include quoted prices in active markets for similar assets or liabilities and quoted prices for identical assets or liabilities in markets that are not active. | |
| Level 3: | Unobservable inputs based on our assessment of the assumptions that market participants would use in pricing the asset or liability. | |
Description: |
Level |
September 30, 2024 |
December 31, 2023 |
|||||||||
Assets: |
||||||||||||
Investments held to Maturity |
1 | $ | ||||||||||
Investments held in Trust Account |
1 | $ | $ | |||||||||
Liabilities: |
||||||||||||
Warrant liability - Private Placement Warrants ( |
3 | $ | $ | |||||||||
Warrant liability - Public Warrants ( |
1 | $ | $ | |||||||||
Fair Value Measurement Using Level 3 Inputs Total |
||||
Balance, fair value at June 30, 2024 |
$ | |||
in fair value of derivative warrant liabilities |
( |
) | ||
Balance, fair value at September 30, 2024 |
$ | |||
Fair Value Measurement Using Level 3 Inputs Total |
||||
Balance, fair value at December 31, 2023 |
$ | |||
in fair value of derivative warrant liabilities |
( |
) | ||
Balance, fair value at September 30, 2024 |
$ | |||
September 30, 2024 |
December 31, 2023 |
|||||||
Risk-free interest rate |
% | % | ||||||
Expected volatility of underlying shares |
% | % | ||||||
Dividend yield |
% | % | ||||||
Probability of business combination |
% | % | ||||||
Private Placement Warrants |
Public Warrants |
Total |
||||||||||
Fair value at December 31, 2023 |
$ | $ | $ | |||||||||
in fair value |
( |
) | ( |
) | ( |
) | ||||||
Fair value at September 30, 2024 |
$ | $ | $ | |||||||||
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.
The following discussion and analysis of the financial condition and results of operations of AltEnergy Acquisition Corp. (the “Company”) should be read in conjunction with the financial statements and the notes thereto contained elsewhere in this Quarterly Report on Form 10-Q (the “Quarterly Report”). Certain information contained in the discussion and analysis set forth below includes forward-looking statements that involve risks and uncertainties.
Cautionary Note Regarding Forward-Looking Statements
This Quarterly Report includes forward-looking statements. All statements, other than statements of historical fact included in this Quarterly Report including, without limitation, statements in this “Management’s Discussion and Analysis of Financial Condition and Results of Operations” regarding the Company’s financial position, business strategy and the plans and objectives of management for future operations, are forward-looking statements. In some cases, you can identify forward-looking statements by terminology such as “may,” “should,” “could,” “would,” “expect,” “plan,” “anticipate,” “believe,” “estimate,” “continue,” or the negative of such terms or other similar expressions. We have based these forward-looking statements on our current expectations and projections about future events. Forward-looking statements are subject to known and unknown risks, uncertainties and assumptions about us that may cause our actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by such forward-looking statements. Factors that might cause or contribute to such a discrepancy include, but are not limited to, those described in the Risk Factors section of our Annual Report on Form 10-K for the fiscal year ended December 31, 2023, filed with the Securities and Exchange Commission (“SEC”) on April 16, 2024, and in our other SEC filings. Except as expressly required by applicable securities law, we disclaim any intention or obligation to update or revise any forward-looking statements whether as a result of new information, future events or otherwise.
The following discussion and analysis of our financial condition and results of operations should be read in conjunction with the financial statements and the notes thereto contained elsewhere in this Report. Certain information contained in the discussion and analysis set forth below includes forward- looking statements that involve risks and uncertainties.
Overview
We are a blank check company incorporated as a Delaware corporation and formed for the purpose of effecting a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or similar business combination with one or more businesses (the “initial business combination”). We intend to effectuate an initial business combination using cash from the proceeds of our initial public offering (the “Public Offering”) that closed on November 2, 2021 (the “Closing Date”) and the private placement warrants sold in a private placement (the “Private Placement Warrants”) that closed simultaneously with the completion of the Public Offering, our capital stock, debt or a combination of cash, stock and debt.
The issuance of additional shares in connection with an initial business combination to the owners of the target or other investors:
| • | may significantly dilute the equity interest of investors in the initial public offering, which dilution would increase if the anti-dilution provisions in the Class B common stock resulted in the issuance of shares of Class A common stock on a greater than one-to-one basis upon conversion of the Class B common stock; |
| • | may subordinate the rights of holders of our common stock if preferred stock is issued with rights senior to those afforded our common stock; |
| • | could cause a change in control if a substantial number of shares of our common stock is issued, which may affect, among other things, our ability to use our net operating loss carry forwards, if any, and could result in the resignation or removal of our present officers and directors; |
| • | may have the effect of delaying or preventing a change of control of us by diluting the stock ownership or voting rights of a person seeking to obtain control of us; and |
| • | may adversely affect prevailing market prices for our Class A common stock and/or warrants. |
35
Similarly, if we issue debt securities or otherwise incur significant debt to bank or other lenders or the owners of a target, it could result in:
| • | default and foreclosure on our assets if our operating revenues after an initial business combination are insufficient to repay our debt obligations; |
| • | acceleration of our obligations to repay the indebtedness even if we make all principal and interest payments when due if we breach certain covenants that require the maintenance of certain financial ratios or reserves without a waiver or renegotiation of that covenant; |
| • | our immediate payment of all principal and accrued interest, if any, if the debt is payable on demand; |
| • | our inability to obtain necessary additional financing if the debt contains covenants restricting our ability to obtain such financing while the debt is outstanding; |
| • | our inability to pay dividends on our common stock; |
| • | using a substantial portion of our cash flow to pay principal and interest on our debt, which will reduce the funds available for dividends on our common stock if declared, our ability to pay expenses, make capital expenditures and acquisitions, and fund other general corporate purposes; |
| • | limitations on our flexibility in planning for and reacting to changes in our business and in the industry in which we erate; |
| • | increased vulnerability to adverse changes in general economic, industry and competitive conditions and adverse changes in government regulation; |
| • | limitations on our ability to borrow additional amounts for expenses, capital expenditures, acquisitions, debt service requirements, and execution of our strategy; and |
| • | other purposes and other disadvantages compared to our competitors who have less debt. |
In the short term, we expect to continue to incur significant costs in the pursuit of our initial business combination. There can be no assurance that our plans to raise capital or to complete our initial business combination will be successful.
Proposed Business Combination
On February 21, 2024, the Company entered into an Agreement and Plan of Merger (as it may be amended, supplemented or otherwise modified from time to time, the “Merger Agreement”), by and among the Company, Car Tech Merger Sub, LLC, a Delaware limited liability company and wholly-owned subsidiary of the Company (“Merger Sub”), and Car Tech, LLC, an Alabama limited liability company (“Car Tech”). The transactions set forth in the Merger Agreement, including the Merger (defined below), will constitute a “Business Combination” as contemplated by the Company’s Amended and Restated Certificate of Incorporation.
Upon the terms and subject to the conditions set forth in the Merger Agreement and in accordance with the Delaware Limited Liability Company Act (Car Tech having been converted to a Delaware limited liability company), Merger Sub will merge with and into Car Tech, with Car Tech surviving as a wholly-owned subsidiary of the Company (the “Merger”). Upon the consummation of the Merger, subject to approval by the Company’s stockholders and other customary closing conditions, the combined company will be renamed and is expected to list on The Nasdaq Capital Market.
Subject to the terms and conditions set forth in the Merger Agreement, in consideration of the Merger, membership interests in Car Tech (the “Car Tech Units”) will be converted into the right to receive a number of shares of the Company’s common stock (the “Parent Common Stock”) for each Car Tech Unit owned calculated by dividing (i) a fraction equal to (a) the quotient of (x) the Aggregate Merger Consideration divided by (y) ten dollars ($10.00), by (ii) the number of Car Tech Units that are issued and outstanding immediately prior to the effective time of the Merger. “Aggregate Merger Consideration” means (I) $80,000,000 plus the amount of any shortfall in the Company’s obligation to source at least $50,000,000 in proceeds from a private placement to be consummated immediately prior to the Merger, and an additional (II) $40,000,000 (the “Earn Out Consideration”).
36
Pursuant to Lock-up Agreements executed in connection with the Merger Agreement, all of the shares of Parent Common Stock to be issued to holders of Car Tech Units (other than 500,000 shares issued pursuant to clause (I) of the definition of Aggregate Merger Consideration) will be subject to time based restrictions on transfer, and the 4,000,000 shares of Parent Common Stock to be issued to holders of Car Tech Units based on the Earn Out Consideration will be subject to additional transfer restrictions, release and forfeiture. Other Agreements executed in connection with the Merger Agreement include a Contribution and Exchange Agreement executed by Car Tech’s principal equity holder and the Company, a Support Agreement executed by the Company and Car Tech and the Company’s Sponsor and certain members of Car Tech, and a Warrant Transfer and Option Agreement executed by the Company’s Sponsor and an affiliate of the underwriter in the Company’s Initial Public Offering and Car Tech’s principal equity holder. In connection with the proposed business combination, the Company intends to file with the SEC a registration statement on Form S-4, which will include a proxy statement to be sent to the Company’s stockholders and a prospectus for the registration of the Company’s Common Stock to be issued in connection with the Merger (as amended from time to time, the “Registration Statement”). A full description of the terms of the proposed business combination is expected to be provided in the Registration Statement.
Extension of Combination Period
April 2024 Special Meeting
On April 16, 2024, the Company held a special meeting of stockholders (the “April 2024 Special Meeting”). As of March 5, 2024, the record date of the April 2024 Special Meeting, there were 7,327,478 issued and outstanding shares of common stock of the Company, par value $0.0001 per share (the “Common Stock”) comprised of 7,077,478 shares of the Company’s Class A common stock, par value $0.0001 per share (“Class A Shares”), and 250,000 shares of the Company’s Class B common stock, par value $0.0001 per share. At the April 2024 Special Meeting, the Company’s stockholders approved the proposal to file an amendment to the Company’s Amended and Restated Certificate of Incorporation with the Secretary of State of Delaware (the “Amendment”) to extend the date from May 2, 2024 to November 2, 2024 (the “Extended Date”) and to allow the board of directors of the Company (the “Board”), without another stockholder vote, to elect to further extend the date to consummate an initial business combination after the
37
Extended Date up to six times, by an additional month each time, upon two days’ advance notice prior to the applicable deadline, up to May 2, 2025 (the “Additional Extension Date” and together with the Extended Date the “Extension” and such proposal, the “Extension Proposal”) by which the Company must (1) consummate a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or similar business combination with one or more businesses (an “initial business combination”) or (2) cease its operations except for the purpose of winding up if it fails to complete such initial business combination, and redeem all of the Class A Shares included as part of the units sold in the Company’s initial public offering that was consummated on November 2, 2021. On April 17, 2024, to effectuate the Extension, the Company filed the Amendment with the Secretary of State of the State of Delaware. On October 30, 2024, in accordance with the Amendment, the Board elected to further extend the date to consummate an initial business combination from November 2, 2024, to December 2, 2024 (the “First Optional Extension Date”), and on October 31, 2024, the Company filed a Current Report on Form 8-K with the Securities and Exchange Commission to effect the required two days’ notice.
At the April 2024 Special Meeting, the Company’s stockholders also approved a proposal to amend our amended and restated certificate of incorporation to eliminate the limitation that the Company shall not redeem Class A Common Stock included as part of the units sold in the IPO (including any shares issued in exchange thereof, the “public shares”) to the extent that such redemption would cause our net tangible assets to be less than $5,000,001 (the “Redemption Limitation”) to allow us to redeem public shares irrespective of whether such redemption would exceed the Redemption Limitation.
As a result of the April 2024 Special Meeting, stockholders holding 839,322 Class A Shares exercised their right to redeem such shares for a pro rata portion of the funds in the Company’s trust account (“Trust Account”) in connection with the Extension. As a result, $9,400,518 (approximately $11.20 per share) was removed from the Trust Account on or about April 23, 2024 to pay such holders. As of April 30, 2024 there was $8,344,699 (or approximately $11.30 per share of Class A common stock that is subject to redemption) held in the Trust Account.
First Monthly Extension of Combination Period
As contemplated in the amendment to the Company’s Amended and Restated Certificate of Incorporation that allows the Board, without a stockholder vote, to elect to further extend the date by which the Company must consummate its initial business combination as discussed above, on October 30, 2024, the Board approved an extension of the date by which the Company is required to complete an initial business combination from November 2, 2024 to December 2, 2024 (the “First Optional Extension”). The Company filed a Current Report on Form 8-K which constituted notice to stockholders of the Board’s approval of the First Optional Extension.
Nasdaq Delisting
On October 29, 2024, the Company, received a written notice from the Nasdaq Listing Qualifications Department of The Nasdaq Stock Market that the Company’s securities would be delisted from The Nasdaq Stock Market by reason of the failure of the Company to complete its initial business combination by October 28, 2024 (36 months from the effectiveness of the Company’s IPO registration statement) as required by IM-5101-2. Accordingly, trading in the Company’s Class A Common Stock, Units and Warrants was suspended at the opening of business on November 5, 2024 and Form 25-NSE was filed with the Securities and Exchange Commission, which removed the Company’s securities from listing and registration on The Nasdaq Stock Market.
The Company’s Class A Common Stock, Units and Warrants continue to be traded in the over-the-counter market. There is no guarantee, however, that a broker will continue to make a market in such securities or that trading thereof will continue on the over-the-counter market or otherwise.
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Notwithstanding the delisting of the Company’s securities from Nasdaq, it remains the intention of the Company to continue to pursue the previously announced initial business combination as well as the listing of its Common Stock and Warrants on The Nasdaq Stock Market in connection therewith. However, there can be no assurance that the initial business combination will ultimately be successful or the Company’s securities will ultimately be listed on Nasdaq.
Results of Operations
We have neither engaged in any operations nor generated any revenues to date. Our only activities since inception were organizational activities, those necessary to prepare for the initial public offering, and identifying a target company for a business combination. We do not expect to generate any operating revenues until after the completion of our initial business combination. We generate non-operating income in the form of interest income on marketable securities. We incur expenses as a result of being a public company (for legal, financial reporting, accounting and auditing compliance), as well as for due diligence expenses in connection with completing a business combination.
For the three months ended September 30, 2024 and 2023, we had a net loss of $691,836 and $749,750, respectively. Our net loss for the three months ended September 30, 2024 consisted of interest income earned on the funds held in Trust in the amount of $109,352, a gain of $235,000 on the change in fair value of the derivative warrant liabilities associated with the warrants issued as part of the Units sold in the Public Offering and the Private Placement Warrants, interest income earned on the operating account of $1,276 offset by operating expenses that total $999,367, interest expense of $20,879 and income tax expense of $17,218. Our net loss for the three months ended September 30, 2023 consisted of interest income earned on the funds held in Trust in the amount of $227,386, interest income earned on operating and investment accounts of $6,832 and income tax benefit of $86,851 offset by a loss of $705,000 on the change in fair value of the derivative warrant liabilities associated with the warrants issued as part of the Units sold in the Public Offering and the Private Placement Warrants, operating expenses that total $359,684 and interest expense of $6,135.
For the nine months ended September 30, 2024 and 2023, we had a net loss of $2,120,903 and net income of $2,027,782, respectively. Our net loss for the nine months ended September 30, 2024 consisted of interest income earned on the funds held in Trust in the amount of $478,018, a gain of $705,000 on the change in fair value of the derivative warrant liabilities associated with the warrants issued as part of the Units sold in the Public Offering and the Private Placement Warrants, interest income earned on the operating account of $3,135 offset by operating expenses that total $3,188,033, interest expense of $48,674 and income tax expense of $70,349. Our net income for the nine months ended September 30, 2023 consisted of interest income earned on the funds held in Trust in the amount of $3,984,184, interest income earned on operating and investment accounts of $7,895, a gain of $705,000 on the change in fair value of the derivative warrant liabilities associated with the warrants issued as part of the Units sold in the Public Offering and the Private Placement Warrants offset by operating expenses that total $1,712,882, interest expense of $11,138 and income tax expense of $945,277.
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Going Concern Considerations, Liquidity and Capital Resources
As of September 30, 2024 there was $8,493,268 (or approximately $11.51 per share) held in the Trust Account. Cash of $86,320 was held outside of the Trust Account on September 30, 2024 and was available for working capital purposes. As of September 30, 2024, there was $100,632 held in the restricted investment account which together with interest earned thereon and after payment of associated taxes and account fees up to $100,000 is reserved to pay dissolution costs and expenses in the event the Company fails to complete an initial business combination and is dissolved. To the extent such funds in the restricted investment account are insufficient (less than $100,000), additional funds will be dispersed from the Trust up to a combined total of $100,000. Any amount in the restricted investment account in excess of $100,000 will be for the benefit of the Trust. If an initial business combination is consummated all funds then held in the restricted investment account, including amounts previously reserved to pay dissolution costs and expenses in the event the Company fails to complete an initial business combination will be for the benefit of the Trust. As described in Note 6, the $8,050,000 deferred underwriting fees are contingent upon the consummation of the Business Combination.
In connection with the Company’s assessment of going concern considerations in accordance with Accounting Standards Update (“ASU”) 2014-15, “Disclosures of Uncertainties about an Entity’s Ability to Continue as a Going Concern,” management has determined that the Company may lack the financial resources it needs to sustain operations for a reasonable period of time, which is considered to be one year from the issuance date of the financial statements. Management has also determined that, in accordance with the Company’s amended and restated articles of incorporation, if the Company is unsuccessful in consummating an initial business combination by December 2, 2024 as extended by the first of up to six one-month extensions at the election of the Company’s Board of Directors from November 2, 2024, subject to up to five additional one-month extensions at the discretion of the Company’s Board of Directors, up to May 2, 2025,
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as discussed above, the Company will cease all operations, redeem the public shares and thereafter liquidate and dissolve. These conditions raise substantial doubt about the ability to continue as a going concern. The financial statements do not include any adjustments that might result from the outcome of this uncertainty. The accompanying financial statements have been prepared in conformity with GAAP, which contemplate continuation of the Company as a going concern.
The Company intends to use substantially all of the funds held in the Trust Account, including any amounts representing interest earned on the Trust Account, excluding the deferred underwriting commissions, and amounts paid to redeem public shares, to complete an initial business combination. To the extent that capital stock or debt is used, in whole or in part, as consideration to complete an initial business combination, the remaining proceeds held in the Trust Account will be used as working capital to finance the operations of the target business or businesses, make other acquisitions and pursue growth strategies. If an initial business combination agreement requires the Company to use a portion of the cash in the Trust Account to pay the purchase price or requires the Company to have a minimum amount of cash at closing (including any cash available from the Trust Account), the Company will need to arrange for third-party financing.
We may have insufficient funds available to operate our business prior to completing our initial business combination. Moreover, we may need to obtain additional financing either to complete our initial business combination or because we become obligated to redeem a significant number of the remaining public shares upon completion of our initial business combination, in which case we may issue additional securities or incur debt in connection with such initial business combination. Subject to compliance with applicable securities laws, we would only complete such financing simultaneously with the completion of our initial business combination. If we are unable to complete our initial business combination because we do not have sufficient funds available to us, we will be forced to cease operations and liquidate the Trust Account. In addition, following our initial business combination, if cash on hand is insufficient, we may need to obtain additional financing in order to meet our obligations.
As of September 30, 2024, we had cash of $186,952 held outside the Trust Account, of which $100,632 is held in a restricted account and reserved to pay taxes and dissolution costs and expenses in the event the Company fails to complete in initial business combination and is dissolved. We intend to use all of such funds held outside the Trust Account primarily to identify and evaluate target businesses, perform business due diligence on prospective target businesses, travel to and from the offices, plants or similar locations of prospective target businesses or their representatives or owners, review corporate documents and material agreements of prospective target businesses, and structure, negotiate and complete a business combination. The balance will be used to pay accrued taxes.
Convertible Working Capital Loan
In order to fund working capital deficiencies or finance transaction costs in connection with a business combination, the Sponsor or an affiliate of the 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 would repay such loaned amounts. 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 working capital loans may be convertible into private placement units at a price of $1.00 per warrant at the option of the lender.
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Loan Payable - Sponsor
Per a Commitment Letter, dated July 19, 2022, the Sponsor undertook upon the Company’s written request to make available an aggregate amount of up to $250,000 to provide the Company funds for working capital purposes to ensure that the Company would continue as a going concern for at least 12 months. A second Commitment Letter was dated May 4, 2023 for up to an additional $750,000. A third Commitment Letter was dated December 20, 2023 for up to an additional $800,000. A third Commitment Letter was dated December 20, 2023 for up to an additional $800,000. A fourth Commitment Letter was executed on July 8, 2024 for up to an additional $750,000. The Sponsor is charging interest at the mid-term applicable federal rate at the time of funding. During the three and nine months ended September 30, 2024, the Sponsor loaned an aggregate of $400,000 and $1,135,000 to the Company for working capital purposes, respectively. As of September 30, 2024 and December 31, 2023, $2,135,000 and $1,000,000 remained outstanding, respectively. As of September 30, 2024 and December 31, 2023, there was accrued interest of $68,053 and $19,404, respectively. On October 25, 2024, an additional request was made for funds in the amount of $200,000 of the remaining committed funds pursuant to the fourth Commitment Letter dated July 8, 2024.
Off-Balance Sheet Financing Arrangements
We have no obligations, assets or liabilities, which would be considered off-balance sheet arrangements as of September 30, 2024. We do not participate in transactions that create relationships with unconsolidated entities or financial partnerships, often referred to as variable interest entities, which would have been established for the purpose of facilitating off-balance sheet arrangements. We have not entered into any off-balance sheet financing arrangements, established any special purpose entities, guaranteed any debt or commitments of other entities, or purchased any non-financial assets.
Contractual Obligations
We do not have any long-term debt, capital lease obligations, operating lease obligations, purchase obligations or long-term liabilities, other than an agreement to pay an affiliate of the Sponsor a monthly fee of $15,000 for office space, utilities and administrative support to the Company. We began incurring these fees on October 28, 2021. On January 28, 2023 this agreement was amended to provide that, rather than be payable on a monthly basis, the payments due thereunder commencing with the monthly payment payable on or about February 28, 2023 shall accrue and be payable on the completion of a business combination or the Company’s liquidation.
Pursuant to the Underwriting Agreement with B. Riley securities, Inc., upon the consummation of our initial business combination, we will pay B. Riley Securities, Inc. a cash fee in an amount equal to 3.5% of the gross proceeds of the Public Offering (exclusive of any applicable finders’ fees which might become payable). No fee will be due if we do not complete an initial business combination.
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Critical Accounting Estimates
The preparation of the financial statements in conformity with US GAAP requires the Company’s management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements.
Making estimates requires management to exercise significant judgment. It is at least reasonably possible that the estimate of the effect of a condition, situation or set of circumstances that existed at the date of the balance sheet, which management considered in formulating its estimate, could change in the near term due to one or more future confirming events. One of the more significant accounting estimates included in these financial statements is the determination of the fair value of the warrant liabilities and the fair value of the non-redemption agreements. Accordingly, the actual results could differ significantly from those estimates.
Critical Accounting Policies
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:
Common stock subject to possible redemption
The Company accounts for its shares of Class A common stock subject to possible redemption in accordance with the guidance enumerated in ASC 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 the Company’s control) are classified as temporary equity. At all other times, common stock is classified as stockholders’ equity. The shares of the Company’s Class A common stock feature certain redemption rights that are considered by the Company to be outside of the Company’s control and subject to the occurrence of uncertain future events. Accordingly, at September 30, 2024 and December 31, 2023, the shares of Class A common stock subject to possible redemption in the amount of $8,593,900 and $17,700,146 are presented as temporary equity, outside of the stockholders’ deficit section of the Company’s balance sheets, respectively. The shares of Class A common stock that were issued upon conversion of shares of Class B common stock are not subject to redemption and accordingly are presented in the stockholders’ deficit section of the Company’s balance sheets.
Derivative Financial Instruments
The Company evaluates its financial instruments to determine if such instruments are derivatives or contain features that qualify as embedded derivatives in accordance with ASC Topic 815, “Derivatives and Hedging.” The Company’s derivative instruments are recorded at fair value as of the closing date of the Initial Public Offering (November 2, 2021) and re-valued at each reporting date, with changes in the fair value reported in the statements of operations. Derivative assets and liabilities are classified on the balance sheet as current or non-current based on whether or not net-cash settlement or conversion of the instrument could be required within 12 months of the balance sheet date. The Company has determined the Public Warrants and the Private Placement Warrants are derivative instruments. As the Public Warrants and the Private Placement Warrants meet the definition of a derivative, the Public Warrants and the Private Placement Warrants are measured at fair value at issuance and at each reporting date in accordance with ASC 820, Fair Value Measurement, with changes in fair value recognized in the statement of operations in the period of change.
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Warrants Instruments
We evaluated the Warrants in accordance with ASC 815-40, “Derivatives and Hedging-Contracts in Entity’s Own Equity”, and concluded that a provision in the Warrant Agreement related to certain tender or exchange offers as well as provisions that provided for potential changes to the settlement amounts dependent upon the characteristics of the holder of the warrant, precludes the Warrants from being accounted for as components of equity. As the Warrants meet the definition of a derivative as contemplated in ASC 815 and are not eligible for an exception from derivative accounting, the Warrants are recorded as derivative liabilities on the Balance Sheet. Upon consummation of the Initial Public Offering, the Company used a Monte Carlo simulation model to value the Public Warrants and a modified Black-Scholes model to value the Private Placement Warrants. The Company allocated the proceeds received from (i) the sale of Units (which is inclusive of one share of Class A common stock and one-half of one Public Warrant), (ii) the sale of Private Placement Warrants, and (iii) the issuance of shares of Class B common stock, first to the warrants based on their fair values as determined at initial measurement, with the remaining proceeds allocated to shares of Class A common stock subject to possible redemption (temporary equity) and Class B common stock (permanent equity) based on their relative fair values at the initial measurement date. The Public Warrants and the Private Placement Warrants were classified within Level 3 of the fair value hierarchy at the measurement dates due to the use of unobservable inputs.
As of September 30, 2024 and December 31, 2023, the Public Warrants were valued using the publicly available price for the Warrant and are classified as Level 1 on the Fair Value Hierarchy. As of September 30, 2024 and December 31, 2023, the Company used a modified Black-Scholes model to value the Private Placement Warrants. The Company relied upon the implied volatility of the Public Warrants and the implied volatilities of comparable companies and the closing price as of September 30, 2024 and December 31, 2023, per Public Warrant, respectively, to estimate the volatility for the Private Placement Warrants. As of September 30, 2024 and December 31, 2023, the Private Placement Warrants were classified within Level 3 of the Fair Value Hierarchy at the measurement dates due to the use of unobservable inputs.
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Fair Value Measurements
Fair value is defined as the price that would be received for sale of an asset or paid to transfer of a liability, in an orderly transaction between market participants at the measurement date. US GAAP establishes a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). These tiers include:
| • | Level 1, defined as observable inputs such as quoted prices (unadjusted) for identical instruments in active markets; |
| • | Level 2, defined as inputs other than quoted prices in active markets that are either directly or indirectly observable such as quoted prices for similar instruments in active markets or quoted prices for identical or similar instruments in markets that are not active; and |
| • | Level 3, defined as unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions, such as valuations derived from valuation techniques in which one or more significant inputs or significant value drivers are unobservable. |
Net income (loss) per share
Net income (loss) per share is computed by dividing net income (loss) by the weighted average number of shares of common stock outstanding during the period. The Company applies the two-class method in calculating earnings (losses) per share. Earnings and losses are shared pro rata between the two classes of shares. Net income (loss) per share of common stock is computed by dividing net income (loss) by the weighted-average number of shares of common stock outstanding during the period. The calculation of diluted income (loss) per share of common stock does not consider the effect of the warrants issued in connection with the (i) Initial Public Offering, and (ii) the private placement since the exercise of the warrants is contingent upon the occurrence of future events. As of September 30, 2024, the Company did not have any dilutive securities or other contracts that could, potentially, be exercised or converted into common stock and then share in the earnings of the Company. As a result, diluted net income per share of common stock is the same as basic net income per share of common stock for the periods presented. The warrants are exercisable to purchase 23,500,000 shares of Class A common stock in the aggregate.
Recent accounting pronouncements
In December 2023, the Financial Accounting Standards Board (“FASB”) issued ASU 2023-09, “Improvements to Income Tax Disclosures” (“ASU 2023-09”). The ASU is intended to enhance the transparency and decision usefulness of income tax disclosures. The amendments in the ASU address investor requests for enhanced income tax information primarily through changes to the rate reconciliation and income taxes paid information. ASU 2023-09 will be effective for the Company in the annual period beginning January 1, 2025, though early adoption is permitted. The Company is still evaluating the presentational effect that ASU 2023-09 will have on its financial statements.
Item 3. Quantitative and Qualitative Disclosures About Market Risk.
As of September 30, 2024, we were not subject to any market or interest rate risk.
We have not engaged in any hedging activities since our inception. We do not expect to engage in any hedging activities with respect to the market risk to which we are exposed.
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Item 4. Controls and Procedures.
Disclosure controls and procedures are controls and other procedures designed with the objective of ensuring that information required to be disclosed in our reports filed under the Securities Exchange Act of 1934 (the “Exchange Act”), such as this quarterly report, is recorded, processed, summarized, and reported within the time period specified in the SEC’s rules and forms. Disclosure controls and procedures are also designed with the objective of ensuring that such information is accumulated and communicated to our management, including the chief executive officer and chief financial officer, as appropriate to allow timely decisions regarding required disclosure. Our principal executive officer and principal financial and accounting officer (our “Certifying Officers”) evaluated the effectiveness of our disclosure controls and procedures as of September 30, 2024, pursuant to Rules 13a-15(e) and 15d-15(e) under the Exchange Act. Based on this evaluation, the Company’s principal executive officer and principal financial officer have concluded certain disclosure controls and procedures were not effective as of December 31, 2022 due to that material weaknesses that existed related our accounting for complex financial instruments and our accounting and reporting for the completeness and accuracy of warrant liabilities and the corresponding change in the fair value of the warrant liability, that led to the restatement of the Company’s Annual Report on Form 10-K for the year ended December 31, 2022. Management additionally identified, as it relates to the material weakness discussed above relating to the accounting for complex financial instruments, a failure to properly record the capital contributions and related costs associated with non-redemption agreements entered into with certain stockholders of the Company in connection with the special meeting of stockholders of the Company held on April 28, 2023 that led to the restatement of the Company’s Quarterly Report on Form 10-Q for the quarterly periods ended June 30, 2023 and September 30, 2023. In addition, management identified a material weakness in relation to the accounting of contractual liabilities which led to errors in our financial statements in the accounting of consulting fees pursuant to a consulting agreement with our chief financial officer that led to the restatement of the Company’s Quarterly Report on Form 10-Q for the quarterly periods ended March 31, 2023, June 30, 2023, and September 30, 2023. In addition to the remediation steps discussed below, the Company has added additional steps to its internal financial review process in order to provide reasonable assurance that a reoccurrence of a material misstatement of any item in our financial statements will not occur. As of September 30, 2024, the previously identified material weaknesses have not been remediated.
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A material weakness is a deficiency, or a combination of deficiencies, in disclosure controls and procedures or internal control over financial reporting such that there is a reasonable possibility that a material misstatement of our annual or interim financial statements will not be prevented or detected and corrected on a timely basis.
Effective disclosure controls and internal control are necessary for us to provide reliable financial reports and prevent fraud. We continue to evaluate steps to remediate the material weaknesses. These remediation measures may be time consuming and costly and there is no assurance that these initiatives will ultimately have the intended effects.
Management has implemented remediation steps to improve our disclosure controls and procedures and our internal control over financial reporting. Specifically, we expanded and improved our review process for complex securities and related accounting standards. We plan to further improve this process by enhancing access to accounting literature, identification of third-party professionals with whom to consult regarding complex accounting applications and consideration of additional staff with the requisite experience and training to supplement existing accounting professionals.
If we identify any new material weakness in the future, any such newly identified material weakness could limit our ability to prevent or detect a misstatement of our accounts or disclosures that could result in a material misstatement of our annual or interim financial statements. In such case, we may be unable to maintain compliance with securities law requirements regarding timely filing of periodic reports in addition to applicable stock exchange listing requirements, investors may lose confidence in our financial reporting and our stock price may decline as a result. We cannot assure you that the measures we have taken to date, or any measures we may take in the future, will be sufficient to avoid potential future material weaknesses.
We do not expect that our disclosure controls and procedures will prevent all errors and all instances of fraud. Disclosure controls and procedures, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the disclosure controls and procedures are met. Further, the design of disclosure controls and procedures must reflect the fact that there are resource constraints, and the benefits must be considered relative to their costs. Because of the inherent limitations in all disclosure controls and procedures, no evaluation of disclosure controls and procedures can provide absolute assurance that we have detected all our control deficiencies and instances of fraud, if any. The design of disclosure controls and procedures also is based partly on certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions.
Changes in Internal Control over Financial Reporting
There were no changes in our internal control over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) of the Exchange Act) during the most recent fiscal quarter that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
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PART II. OTHER INFORMATION
Item 1. Legal Proceedings
None.
Item 1A. Risk Factors
Factors that could cause our actual results to differ materially from those in this Quarterly Report are any of the risks described in the Risk Factors section of our Annual Report on Form 10-K for the year ended December 31, 2023, filed with the Securities and Exchange Commission (“SEC”) on April 16, 2024 (“10-K”). Any of these factors could result in a significant or material adverse effect on our results of operations or financial condition. Additional risk factors not presently known to us or that we currently deem immaterial may also impair our business or results of operations. As of the date of this Quarterly Report, there have been no material changes to the risk factors disclosed in our 10-K.
Because our common stock, units and warrants are quoted on the OTC Pink Open Market, instead of a national securities exchange, our stockholders and warrant holders may experience significant volatility in the market price of our stock, units or warrants and have difficulty selling their such securities.
Our common stock, units and warrants are currently quoted on the OTC Pink Open Mark (the “OTC Pink”), under the ticker symbol “AEAE”, “AEAEU” and “AEAEW.” The OTC Pink is a regulated quotation service that displays real-time quotes and last sale prices in over-the-counter securities. Trading in securities quoted on the OTC Pink is often thin and characterized by volatility. This volatility may be caused by a variety of factors, including the lack of readily available price quotations, the absence of consistent administrative supervision of bid and ask quotations, lower trading volume and market conditions. As a result, there may be wide fluctuations in the market price of our securities for reasons unrelated to operating performance, and this volatility, when it occurs, may have a negative effect on the market price for our securities. Moreover, the OTC Pink is not a stock exchange, and trading of securities on this platform is more sporadic than the trading of securities listed on a national quotation system or stock exchange. Accordingly, our stockholders and warrant holders may not be able to realize a fair price of their shares or warrants when they determine to sell them or may have to hold them for a substantial period of time until the market for such securities improves.
An active trading market for our common stock may not continue to develop or be sustained.
Although our securities are listed on the OTC Pink Open Market, we cannot assure you that an active, liquid trading market for our shares, units or warrants will continue to develop or be sustained. If an active market for any of our securities does not continue to develop or is not sustained, it may be difficult for you to sell shares, units or warrants quickly or without depressing the market price for such securities or to sell your such securities at all.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
None
Item 3. Defaults Upon Senior Securities
None.
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Exhibit No. |
Description | |
| 3.1 | Second Amendment to the Amended and Restated Certificate of Incorporation of AltEnergy Acquisition Corp. (incorporated by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K (File No. 001-40984), filed with the Securities and Exchange Commission on April 22, 2024) | |
| 31.1* | Certification of the Chief Executive Officer required by Rule 13a-14(a) or Rule 15d-14(a). | |
| 31.2* | Certification of the Chief Financial Officer required by Rule 13a-14(a) or Rule 15d-14(a). | |
| 32.1* | Certification of the Chief Executive Officer required by Rule 13a-14(b) or Rule 15d-14(b) and 18 U.S.C. 1350. | |
| 32.2* | Certification of the Chief Financial Officer required by Rule 13a-14(b) or Rule 15d-14(b) and 18 U.S.C. 1350. | |
| 101.INS* | Inline XBRL Instance Document-the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document. | |
| 101.CAL* | Inline XBRL Taxonomy Extension Schema Document | |
| 101.SCH* | Inline XBRL Taxonomy Extension Calculation Linkbase Document | |
| 101.DEF* | Inline XBRL Taxonomy Extension Definition Linkbase Document | |
| 101.LAB* | Inline XBRL Taxonomy Extension Label Linkbase Document | |
| 101.PRE* | Inline XBRL Taxonomy Extension Presentation Linkbase Document | |
| 104* | The cover page for the Company’s Quarterly Report on Form 10-Q has been formatted in Inline XBRL and contained in Exhibit 101 | |
| * | Furnished. |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
November 13, 2024
| ALTENERGY ACQUISITION CORP. | ||
| By: | /s/ Russell Stidolph | |
| Name: | Russell Stidolph | |
| Title: | Chief Executive Officer (principal executive officer) | |
| By: | /s/ Jonathan Darnell | |
| Name: | Jonathan Darnell | |
| Title: | Chief Financial Officer (principal financial officer) | |
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