Financial Performance - The Company reported a net loss of $703,701 for the three months ended June 30, 2024, compared to a net loss of $332,537 for the same period in 2023, reflecting an increase in expenses related to professional fees and administrative costs [123][124]. - For the six months ended June 30, 2024, the net cash used in operating activities was $420,868, primarily due to a net loss of $295,321 and changes in operating assets and liabilities [126]. - The Company incurred a net loss of $295,321 for the six months ended June 30, 2024, which included $833,213 in professional fees and administrative expenses [124]. Liquidity and Capital Structure - As of June 30, 2024, the Company had a working capital deficit of $3,289,361, indicating potential liquidity challenges [125]. - The Company has incurred significant costs in pursuit of acquisition plans and may need additional financing to complete the Business Combination [128]. - As of June 30, 2024, the Company has borrowed $554,269 and accrued approximately $14,900 in interest, while as of December 31, 2023, it had borrowed $200,000 with approximately $4,222 in interest accrued [135]. Business Combination and Acquisitions - The Company has identified an acquisition target and executed a merger agreement with Cycurion, with plans to close the Business Combination by December 31, 2024 [117][118]. - The Merger Agreement may be terminated if the merger is not consummated by October 11, 2024, raising concerns about the completion of the Business Combination [122]. - The Company entered into a promissory note with Cycurion for $200,000, with an interest rate of 5% per annum, payable upon the consummation of the Business Combination or by January 11, 2024 [135]. - The Promissory Note was amended to increase its amount to $300,000 and extend the maturity date to April 11, 2024, and further extended to July 11, 2024, and then to October 11, 2024 [135]. - The Forward Purchase Agreement (FPA) allows Alpha to sell up to 300,000 shares to the Company at the Redemption Price after the Business Combination, with specific conditions for acceleration [136]. - The FPA is classified as a liability at fair value and is subject to re-measurement at each reporting period until exercised [139]. Advisory and Employment Agreements - The Company has engaged A.G.P. as an advisor for the Business Combination, with a fee arrangement that includes the distribution of 250,000 shares of common stock instead of a cash fee [134]. - The Company entered into an employment agreement with James P. McCormick, agreeing to pay a total of $125,000 annually, including $40,000 in cash and $85,000 in stock payment [138]. Accounting and Regulatory Matters - The Company is classified as an "emerging growth company" under the JOBS Act, allowing it to delay the adoption of new accounting standards [130]. - The Company adopted ASU 2016-13 on January 1, 2023, which did not have a material impact on its financial statements [140]. - ASU No. 2023-09 will require additional disclosures in income tax rate reconciliation, effective for annual periods beginning after December 15, 2024 [141]. - There have been no material changes to the quantitative and qualitative disclosures about market risk since the 2023 Annual Report [142]. Non-Operating Income - The Company generated non-operating income in the form of interest income from the IPO proceeds placed in the Trust Account, but has not generated any operating revenues to date [123].
Western Acquisition Ventures(WAVS) - 2024 Q2 - Quarterly Report