SBC Medical Group Holdings Incorporated(SBC) - 2024 Q1 - Quarterly Report

Financial Performance - The company reported a net loss of $292,546 for the three months ended March 31, 2024, due to operating and formation costs of$462,639, franchise tax expense of $42,027, and income tax expense of$45,215, partially offset by interest and dividend income of $257,335 [142]. - For the three months ended March 31, 2023, the company had a net income of$613,333, resulting from interest and dividend income of $1,264,475, offset by operating and formation costs of$374,488, franchise tax expense of $13,959, and income tax expense of$262,695 [143]. - The company has incurred net cash used in operating activities of $487,452 for the three months ended March 31, 2024, primarily due to interest and dividend income and net loss [144]. - For the three months ended March 31, 2024, the company incurred a loss from operations of$504,666, compared to a loss of $388,447 for the same period in 2023 [151]. Business Combination and Operations - The company has not engaged in any operations or generated revenues to date, with activities focused on organizational tasks and identifying a target company for a business combination [141]. - The company entered into a merger agreement with SBC Medical Group Holdings Incorporated, with a total consideration of$1,200,000,000, which was later amended to $1,000,000,000 [132]. - The company extended the date to consummate a business combination from February 9, 2024, to November 9, 2024, with stockholders redeeming an aggregate of 273,334 shares of Class A common stock, leaving approximately$17.9 million in the trust account [136]. - The company held a special meeting where stockholders approved an extension of the business combination deadline and redeemed 9,577,250 shares of Class A common stock, resulting in approximately $20.0 million remaining in the trust account [129]. - The company has until November 9, 2024, to consummate a business combination, or it will face mandatory liquidation [151]. Capital and Funding - As of March 31, 2024, the outstanding balance under the Convertible Promissory Note amounted to$2,700,000, an increase from $1,000,000 as of December 31, 2023 [140]. - The Initial Public Offering generated gross proceeds of$115,000,000 from the sale of 11,500,000 units [147]. - The company placed $117,875,000 in a trust account from the net proceeds of the Initial Public Offering and the sale of Placement Units [149]. - The company intends to use funds in the trust account to complete its initial business combination and for working capital needs [150]. - The company expects to need additional capital to satisfy liquidity needs beyond the net proceeds from the Initial Public Offering [151]. Shareholder Agreements and Stock - The company entered into a non-redemption agreement with an investor to acquire 1,500,000 to 1,700,000 shares of Class A common stock, with the incentive shares contingent on the investor holding the shares until the closing of the business combination [135]. - The company approved an amendment to its certificate of incorporation to allow Class B common stockholders to convert their shares into Class A common stock on a one-for-one basis prior to the closing of a business combination [129]. - The underwriters received a cash underwriting discount of$1,955,000 upon the closing of the Initial Public Offering [157]. - As of March 31, 2024, the company had $1,659,751 in cash held outside of the Trust Account and a working capital deficit of$1,500,980 [151]. Investing Activities - For the three months ended March 31, 2024, net cash provided by investing activities was $3,127,476, primarily due to payments to redeeming stockholders of$2,964,667 [146]. - The company incurred $30,000 for administrative support services from the Sponsor for the three months ended March 31, 2024 [155].