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ROSECLIFF ACQU(RCLF) - 2023 Q2 - Quarterly Report
RCLFROSECLIFF ACQU(RCLF)2023-08-14 20:34

Nasdaq Compliance - The Company received a notice from Nasdaq on January 22, 2023, indicating non-compliance with Listing Rule 5550(a)(4) due to failing to meet the minimum requirement of 500,000 publicly held shares[130] - On March 9, 2023, the Company submitted a compliance plan to Nasdaq, which was accepted on May 8, 2023[130] - The Company received another notice on April 3, 2023, for failing to meet the minimum 35millionMarketValueofListedSecurities(MVLS)requirement[131]−TheCompanyhasuntilOctober2,2023,toregaincompliancewiththeNasdaqMVLSrequirement[131]BusinessCombination−TheBusinessCombinationAgreementwithSpectralMDwasenteredintoonApril11,2023,involvingamergerwhereSpectralMDwillbecomeawhollyownedsubsidiaryoftheCompany[133]−TheBusinessCombinationissubjecttocustomaryclosingconditions,includingstockholderapprovalsandregulatoryclearances[135]−TheCompanywillberenamedtoNewSpectralMDfollowingthecompletionofthemergers[137]−TheBusinessCombinationAgreementincludescovenantsrequiringbothpartiestoconducttheirbusinessesintheordinarycourseuntilclosing[138]−TheSponsoragreedtovoteinfavoroftheBusinessCombinationandnottoredeemanyofitsequitysecurities[144]−TheCompanyisexpectedtoincursignificantcostsinpursuingitsacquisitionplans,withnoassuranceofsuccessfulcompletionoftheBusinessCombination[129]FinancialPerformance−ForthethreemonthsendedJune30,2023,thecompanyreportedanetlossof35 million Market Value of Listed Securities (MVLS) requirement[131] - The Company has until October 2, 2023, to regain compliance with the Nasdaq MVLS requirement[131] Business Combination - The Business Combination Agreement with Spectral MD was entered into on April 11, 2023, involving a merger where Spectral MD will become a wholly owned subsidiary of the Company[133] - The Business Combination is subject to customary closing conditions, including stockholder approvals and regulatory clearances[135] - The Company will be renamed to New Spectral MD following the completion of the mergers[137] - The Business Combination Agreement includes covenants requiring both parties to conduct their businesses in the ordinary course until closing[138] - The Sponsor agreed to vote in favor of the Business Combination and not to redeem any of its equity securities[144] - The Company is expected to incur significant costs in pursuing its acquisition plans, with no assurance of successful completion of the Business Combination[129] Financial Performance - For the three months ended June 30, 2023, the company reported a net loss of 1,033,276, consisting of formation and operating costs of 1,475,615andprovisionforincometaxesof1,475,615 and provision for income taxes of 10,458, offset by a change in fair value of warrant liabilities of 394,200andinterestearnedoninvestmentsheldintheTrustAccountof394,200 and interest earned on investments held in the Trust Account of 58,597[148] - For the six months ended June 30, 2023, the company had a net loss of 2,315,374,whichincludedformationandoperatingcostsof2,315,374, which included formation and operating costs of 2,002,997 and provision for income taxes of 17,551,offsetbyinterestearnedoninvestmentsheldintheTrustAccountof17,551, offset by interest earned on investments held in the Trust Account of 99,374[149] - As of June 30, 2023, the company had a working capital deficit of 4,577,162,indicatingliquiditychallenges[156]−ThecompanyhasnotgeneratedanyoperatingrevenuestodateanddoesnotexpecttodosountilafterthecompletionofitsBusinessCombination[147]−Thecompanyhasincurredmonthlyfeesof4,577,162, indicating liquidity challenges[156] - The company has not generated any operating revenues to date and does not expect to do so until after the completion of its Business Combination[147] - The company has incurred monthly fees of 10,000 for office space and administrative services since February 11, 2021, which will continue until the completion of the Business Combination or liquidation[162] Trust Account and Use of Funds - As of June 30, 2023, the company had U.S. Treasury Funds held in the Trust Account amounting to 4,725,481,consistingoffixedincomesecurities[155]−ThecompanyintendstousesubstantiallyallfundsheldintheTrustAccounttocompleteitsBusinessCombination,withanyremainingproceedstobeusedforworkingcapitalandgrowthstrategies[155]−Thecompanygeneratedgrossproceedsof4,725,481, consisting of fixed income securities[155] - The company intends to use substantially all funds held in the Trust Account to complete its Business Combination, with any remaining proceeds to be used for working capital and growth strategies[155] - The company generated gross proceeds of 253,000,000 from its Initial Public Offering of 25,300,000 Units at 10.00perUnit[152]−Theunderwritersareentitledtoadeferredfeeof10.00 per Unit[152] - The underwriters are entitled to a deferred fee of 0.35 per Unit, totaling $8,855,000, which will only be payable if the company completes a Business Combination[163] Going Concern - The company has until the Expiration Date to consummate a Business Combination, with substantial doubt raised about its ability to continue as a going concern if it fails to do so[158] Accounting Standards - The Company is currently assessing the impact of ASU 2020-06 on its financial position, results of operations, or cash flows, with the standard effective for fiscal years beginning after December 15, 2023[170] - ASU 2022-03 clarifies that contractual sales restrictions are not considered in measuring equity securities at fair value, effective for fiscal years beginning after December 15, 2024[171] - The Company is evaluating the impact of ASU 2022-03 on its condensed consolidated financial statements[171] - Management does not believe that any other recently issued accounting standards would have a material effect on the unaudited condensed consolidated financial statements[172]