PART
I
Introduction
OmniLit
Acquisition Corp. (“OLIT,” the “Company,” “we” or “us”) is a blank check
company incorporated on May 20, 2021 and formed as a Delaware corporation for the purpose of effecting a merger, capital stock exchange,
asset acquisition, stock purchase, reorganization or similar business combination with one or more businesses, which we refer to throughout
this Form 10-K as our initial business combination. We may pursue an initial business combination target in any industry or sector, but
we expect to focus on acquiring a business combination target within the advanced manufacturing industry, specifically the photonics
or optics sectors, and related sectors, with an enterprise value of approximately $350 million to $750 million. Management believes that
this relative size of target opportunities will enable us to pursue companies that are the most attractive from a return standpoint and
are less pursued by larger, more established sources of capital.
Leadership
Al
Kapoor has been our Chief Executive Officer and Chairman of our board of directors since our inception in May 2021. Al has engaged
in finding, acquiring, and growing optics and photonics companies since 1997 as a technology entrepreneur immediately after graduating
Harvard Business School. Shortly thereafter he found and acquired his first advanced manufacturing company in Rochester New York, renamed
it Syntec Optics, transformed it into a defense, medical and consumer optics and photonics leader, and accelerated growth with add-on
acquisitions. Mr. Kapoor has extensive experience identifying, evaluating, and executing acquisitions, and has led multiple operating
companies across the advanced manufacturing industry. Of note, Mr. Kapoor has built Syntec Optics, a full-service and integrated optics
and photonics solution provider over the last 20+ years through a combination of strategic acquisitions, operational improvements and
focused end market expansion and diversification. Syntec Optics is now a leading solution provider of high technology and strategically
sourced optics and photonics components to many Fortune 500 Companies in sensitive product areas such as Aerospace, Defense and Healthcare,
among others. Over the course of Mr. Kapoor’s career, he has developed a broad network of contacts and corporate relationships,
including deep networks in the optics and photonics industry that we believe will serve to identify and vet potential combination targets.
This deep technical and business experience has led to diverse relationships in the optics and photonics ecosystem – suppliers,
customers, end-users, venture capitalists, private equity managers, entrepreneurs, and executives. Al runs an app called PioneeringMinds
with a fortnightly newsletter on future industries with circulation of over 100,000 to executives around the country. He continues to
invest in optics and photonics, from driverless cars, robotics, virtual reality, sensors, to terabit internet. He is also on the advisory
council for MIT’s program to train and educate the workforce for new disruptions in the area of integrated photonics. Al has been
invited to the White House on several occasions to participate in innovation policy discussions. Al studied various disciplines of engineering
and business at 5 universities earning an MBA from Harvard University and MS from Iowa State University.
Robert
O. Nelson II, our Chief Financial Officer, has 20+ years of finance, tax, and technology experience. Robert has successfully supported
public & private corporations, including optics and photonics companies, in design and transformation of their general accounting,
financial close, consolidation, budgeting, and forecasting functions. He has worked in domestic and international areas, advising clients
in finance and tax technology optimization projects, tax accounting, tax compliance, and IP planning. Robert has built a proven management
track record of successful business transformation. Drawing upon steady leadership, determination, and strategic insight, Robert has
leveraged financial and operational best practices as well as sound judgment in guiding teams through the intricacies of aligning organizational
performance with corporate strategy. Most recently, as Vice President of Financial Systems at AMG (NASDAQ: AMG), he has worked with the
executive management team on enhancing financial operations, business systems, regulatory reporting and business process improvements.
Previously, Robert played a key role in SEC compliance for a spin-out of an optics and photonics division from a public company, which
now has an over $1B valuation. During his tenure as a consultant, he provided guidance and consultation to CFOs and finance departments
on internal control, regulatory reporting, taxation, financial due diligence and systems implementations. While at Deloitte, Robert instructed
at many of Deloitte’s national technical training sessions covering international and domestic tax concepts and enterprise performance
management solutions. Robert is a Certified Public Accountant and earned a Master of Science in Taxation from Bentley University’s
McCallum Graduate School of Business and a Master of Science in Information Systems from Boston University’s Graduate School of
Management.
Skylar
M. Jacobs, our Chief Operating Officer, compliments an experienced sponsor team with his eight years of execution experience working
with technology entrepreneurs and meeting their specific growth and capital needs. Most recently, as Vice President of Business Development
and Operations at PainQx, a medical device company developing proprietary AI algorithms to translate neural activity into actionable
health measures, Skylar developed a non-dilutive funding pipeline, but more importantly, developed and executed a fundraising strategy
across high-net-worth individuals, family offices, venture funds, and strategic partners for eventual M&A activities. Prior to PainQx,
Skylar started his career in investment consulting at Life Science Nation helping scientist entrepreneurs connect with investors and
develop their fundraising campaigns. Skylar spent several years developing strategies and partnering opportunities for healthcare companies
including Cascade Prodrug, Meenta, Andaman7, and SpringTide Partners, a Healthcare IT focused venture fund. Skylar also worked on business
strategies for CureMatch, an AI-driven oncology diagnostic company, and with one of the world’s first CRO marketplaces, Assay Depot,
rebranded as Scientist.com. Skylar received a B.S. in Molecular Biology with minors in Business and Literature from the University of
California, San Diego.
Kent
R. Weldon serves as an independent director. Kent has three decades of experience in finding, structuring, and acquiring companies.
He is an advisory partner to Thomas H. Lee Partners, previously serving as managing director, starting at the firm in 1991. Thomas H.
Lee Partners has raised over $25B in capital since 1974. Prior to joining Thomas H. Lee Partners, Mr. Weldon worked at Morgan Stanley
& Co. Incorporated in the Financial Institutions Group. Mr. Weldon also worked at Wellington Management Company, an institutional
money management firm. Mr. Weldon’s prior directorships include Acosta Sales and Marketing, Bargain Hunt, CTI Foods, Give and Go
Prepared Foods Corp., iHeartMedia, Inc., CMP Susquehanna Corp., FairPoint Communications, Inc. (NASDAQ: FRP), Fisher Scientific International
Inc. (NYSE: TMO), Michael Foods, Nortek, Inc. (NASDAQ: NTK), Phillips Pet Food & Supplies, and Progressive Moulded Products; Mr.
Weldon holds a B.A., summa cum laude, in Economics and Arts and Letters Program for Administrators from the University of Notre Dame
and an M.B.A. from Harvard Business School.
Mark
D. Norman serves as an independent director. Mark is a Managing Partner at FM Capital and serves on the boards of the following FM
Capital portfolio companies: AutoPay, Gatik, GuardKnox, Lunewave, Motorq, NextDroid and Optimus Ride. Mark has significant experience
leading both early stage and global businesses in the automotive manufacturing, service and mobility industries. He started washing cars
at the local Chrysler dealership in high school and ultimately was named CEO of Chrysler Canada (NYSE: STLA (merged with Stellantis)).
From there, he was recruited to become CEO of Flexcar, a nascent car-sharing company. He successfully negotiated the sale of Flexcar
to rival Zipcar (NASDAQ: ZIP), where as president, he led the company’s expansion into over 25 major cities and more than 300 college
campuses, creating the world’s largest carsharing network. Mark and the team managed the company’s IPO on the NASDAQ and
subsequent sale to Avis Budget Group (NASDAQ: CAR).
James
M. Jenkins serves as an independent director. He specializes in securities law matters for initial and secondary public offerings,
private placements, mergers and acquisitions, and securities law compliance for SPACs. James was the practice leader of HSE Law’s
Securities practice, and the Partner in Charge of HSE’s New York City office. Professional Affiliations: Member, New York State
Bar Association, General Counsel to Transcat (Nasdaq: TRNS), 2001 – Present, Board of Directors, Lakeland Industries, Inc. (Nasdaq:
LAKE), 2012-2015, 2016 – Present, Chair, Governance Committee, 2016 – Present; Member, 2012-2015, Member, Compensation Committee,
2012-2015, 2016 – Present, Member, Audit Committee, 2012-2015, 2016 – Present, General Counsel to Jerash Holdings, Inc.,
2016-2020, General Counsel to IEC Electronics, Inc. (NYSE/MKT: IEC), 2015-2020, General Counsel and Corporate Secretary to iVEDiX, Inc.,
2013-2020, General Counsel and Corporate Secretary to Finger Lakes Technologies Group, Inc., 2013-2020.
In
addition to our management and board of directors, we have an execution team with a combined experience of over 100 years. The team consists
of a finance manager working in conjunction with a controller, a compliance manager, and two industry researchers. The controller maintains
the financial statements and accounts, the finance manager oversees the audit conducted by our independent outside accountants, the compliance
manager maintains records on the trust account established in connection with our IPO, which we refer to as the trust account, and listings
of our securities, and two industry researchers track and analyze public and private company data including acquisition history. The
execution team has no fiduciary obligations to present business opportunities to us.
Business
and Investment Strategies
While
we may pursue an initial business combination target in any industry, our investment strategy will focus our efforts in the advanced
manufacturing industry, specifically the photonics and optics products, services, and end-markets, and related products, services, and
end-markets. Our initial business combination and value creation strategy will be to identify, acquire and, after our initial business
combination, implement an operating strategy with a view of creating value for our stockholders through operational improvements, capital
infusion, or future acquisitions. We intend to source initial business combination opportunities through our management team’s
broad network of investors in the advanced manufacturing industry, board members, company executives, lawyers, accountants, and brokers.
We
believe that technology and globalization are creating enormous opportunities for disruption and value creation in advanced manufacturing.
Many of these technologies can be transformative for varied markets but require the right expertise and global connections to capture
opportunities within public markets. Within the broader market space of advanced manufacturing, we intend to concentrate on sourcing
business combination opportunities that serve, or can be transformed to supply solutions to, the optics and photonics market.
Our
investment thesis is rooted in the following core beliefs that will influence the types of investment opportunities that we will target.
We
believe that businesses involved in the design, development, manufacturing, operation, and distribution of optics and photonics assets
will benefit from strong tailwinds in years to come and may represent attractive acquisition opportunities.
Optics
and Photonics Industry Report 2020 estimated that the manufacturing sector contributes 30% of global gross domestic product (“GDP”)
annually, or an estimated $26.3 trillion, and optics and photonics comprise a substantial amount of this market. The optics and photonics
market, the value of light-enabled products and services, is estimated to be between $7 trillion and $10 trillion annually, and represents
roughly 11% of the world’s economy. Within this end-market, it is estimated that global annual revenue for photonics-enabled products
and services had exceeded $2 trillion in 2019. Photonics touches most sectors of our economy including consumer electronics (barcode
scanners, DVD players, TV remote controls), telecommunications (fiber optics, lasers, switches), health (eye surgery, medical instruments,
and imaging), industrial (laser cutting and machining), Défense and Security (Infrared cameras, remote sensing, aiming) and entertainment
(holography, cinema projection). We believe accelerating optics and photonics innovation will continue to drive economic growth and increase
its share of the global GDP.
The
most recent review from the Optics & Photonics 2020 Industry Report valued the 2019 photonics-enabled products and services at $2.02
trillion – an increase of 34% over the seven-year period, and a compound annual growth (CAGR) rate of 4.2%, from 2012 to 2019,
shown below by end market.
The
potential use of photonics in varied industries is fueling growth of the optics and photonics market. We believe sectors including telecom,
transportation, healthcare, energy, aerospace, security, defense & space exploration, consumer, retail, electronics, food & agriculture,
artificial intelligence software, and robotics are in the early stages of a dramatic transformation of scope and scale due to the unprecedented
developments in advanced manufacturing of optics and photonics products, sub-systems, components, and materials. Continued mobility,
intelligence, automation, sensing, and safety needs will accelerate in years to come, which will create a large market opportunity for
such enabling businesses at the forefront of optics and photonics. The global optics and photonics sectors have experienced demand increasing
use of photonics in various applications.
The
Optics & Photonics 2020 Industry Report estimated revenue growth for top five areas based on CAGR from 2012 to 2019. These areas
are listed below, as examples of verticals that we intend to focus on:
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Sensing,
monitoring, and control (+10%), autonomous systems and the internet-of-things continued to create demand for a wide variety of photonic
sensors. Self-driving cars, drones, and other robotics systems utilize a wide range of photonic sensors and imaging systems, some
of which are increasingly benefiting from embedded artificial intelligence. Developments in the emerging field of quantum technology
should drive major advances in metrology, sensing, communications, and computing, creating what we believe will be a multitude of
new opportunities in photonics. |
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Advanced
manufacturing (+8%), gains in this segment were led by lasers for materials processing while robotics and vision technologies maintained
their momentum as did implementation of 3D printing/additive manufacturing. Photonics-based production tools including lasers, optical
metrology, and machine vision combined with adoption of rapid prototyping and Industry 4.0 are driving big manufacturing changes
in industries like aerospace and automobiles. |
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Semiconductor
processing (+8%), driven by demand for optical processing and metrology equipment. Opto-electronics and mobility, integrated photonics
circuits are beginning to address applications that were typically addressed by integrated electronic circuits. POC Biosensing, terabit
internet, lidar based radar, and telecom are areas that are being disrupted due to reduced cost, size, weight, and power consumption
while still improving performance and reliability. Design, develop, and manufacturing processes are similar to micro-electronics.
Integrated photonics is envisioned to play the role in industry 4.0 what electronic integrated circuits did in industry 3.0. |
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BioMedical
(+13%), growth in diagnostic imaging, digital pathology, in vitro diagnostics, and point-of-care diagnostics led broad- based gains
across this segment. Food safety testing also saw a significant uptick. Looking ahead, cost-effective photonics-based diagnostic
and therapeutic medical devices are achieving higher market penetration. |
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Defense,
safety, and security (+10%), driven by gains in more than 30 sub-segments combined with substantial upswings in video surveillance,
perimeter security and sensing, and investment in equipment for directed energy systems. Infrared systems, hyperspectral imaging,
and laser-based countermeasures are all deployed, while laser weapons are emerging as a real near-term possibility. We believe there
may be increased demand for aiming, scoping, and targeting using optics and photonics. |
Industry
4.0 is revolutionizing the advanced manufacturing sector
This
fourth industrial revolution (“Industry 4.0”), which encompasses the internet-of-things and smart manufacturing, marries
physical production and operations with digital technology, machine learning / artificial intelligence and big data to create a more
holistic and connected ecosystem for companies that focus on manufacturing and supply chain management. As industry 4.0 continues to
bring changes in manufacturing, technological advancements leading to innovative photonics-enabled products, and photonics are improving
manufacturing performance with photonics-enabled technology. We expect Industry 4.0 to transform production by driving faster, more flexible
and more efficient processes which will be monetized by companies through the production of higher-quality goods at reduced costs.
Beyond
the traditional industrial automation, new transforming products from unmanned aircrafts and driverless cars, smart robots in the operating
rooms and artificial intelligence of organ and tissue imaging, to augmented and virtual reality increasingly require optics and photonics
imagers, sensors, and detectors. We expect this trend to be especially pronounced in the United States, which has seen automation as
a way to be globally competitive in spite of rising wages.
Optics
and photonics are an integral aspect of the ongoing advancement of traditional manufacturing and industrial practices. Optics and photonics
can reduce cost, size, weight, and power consumption in all spheres of technology that is making us smarter. These includes our content,
its context, inter-connection for exchange, and various types of content - from imaging to detection and sensing. Mr. Kapoor has operated
extensively across this advancing ecosystem of customers, suppliers, and business operators, which is at the overlapping intersection
on contextual technology, content technology, connected technology, and imaging, detecting, and sensing technology. The advanced technologies,
which are beneficiaries and drivers of this ecosystem include artificial intelligence, quantum computing, internet-of-things, driverless
cars, robotics, 3D printing, and other new technologies.
Business
Combination Criteria
Our
business combination criteria will not be limited to a particular industry or geographic sector, but given the experience of our management
team, we expect to focus on acquiring a business combination target within the advanced manufacturing industry, with a focus on optics
and photonics, with an enterprise value of approximately $350 million to $750 million. Our management team will look to identify business
combination targets which are in need of strategic growth capital, will benefit from becoming a publicly listed company, may require
creative business approaches to unlock additional value, or may need to repurchase debt, target strategic acquisitions or require working
capital.
Consistent
with our business strategy, we have identified the following general criteria and guidelines that we believe are important in evaluating
prospective target businesses. We will use these criteria and guidelines in evaluating acquisition opportunities, but we may decide to
enter into our initial business combination with a target business that does not meet these criteria and guidelines.
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Services
& end markets. We intend to pursue targets within a space that has many varied offerings based on diversity of manufacturing
processes, wavelength of light used, materials, and whether the offering is a component, sub-system or OEM. |
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Diversity
of sectors. Our strategy is to acquire a participant with potential in the wide range of end-market. We intend to build sustainable
value with a company that provides us a platform of diverse sectors, R&D spend, vertical integration, and design-for-manufacturability.
We intend to focus on active or passive optics and photonics as entry point as the industry overall is quite fragmented. |
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Proprietary
pipeline and deal flow. We intend to find and acquire companies off the radar screen of other acquirers with deal flow from a
deep professional network & research of new sciences and technologies. Deals will be assessed for social disruption in their
sectors using proprietary models. |
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Geography.
We intend to initially focus on well-established optics and photonics capabilities in the United States markets. |
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Barriers
to entry and differentiation. We intend to focus on businesses that provide differentiated industrial solutions and ability to
pivot or extend to optics and photonics and that possess high barriers to entry and a certain degree of technological differentiation
and manufacturing complexity embedded in their platform; have defensible proprietary technology and intellectual property rights
that are significantly differentiated and superior to attract good talent. |
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Scalability
and growth. We intend to focus on businesses that are scaled or have ability to scale within their large addressable market with
R&D and capex; and are on a promising organic growth path, driven by a sustainable competitive advantage, with opportunities
for acceleration by add-on acquisitions. |
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Financial
and regulatory processes and controls. We intend to focus on businesses that have robust compliance, financial controls and reporting
processes in place and that we believe are ready for the regulatory requirements of a public entity, or have the potential to timely
implement appropriate public company reporting, compliance and financial controls under the guidance of our management team. |
These
criteria are not intended to be exhaustive. Any evaluation relating to the merits of a particular initial business combination may be
based, to the extent relevant, on these general guidelines as well as other considerations, factors and criteria that our management
team may deem relevant. In the event that we decide to enter into our initial business combination with a target business that does not
meet the above criteria and guidelines, we will disclose that the target business does not meet the above criteria in our stockholder
communications related to our initial business combination, which would be in the form of proxy solicitation materials or tender offer
documents that we would file with the U.S. Securities and Exchange Commission.
Competitive
Strengths
We
believe the sourcing, valuation, diligence, and execution capabilities of our management team will provide us with a significant pipeline
of opportunities from which to evaluate and select a business that will benefit from our expertise.
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Strong Management Team. We will leverage the
extensive experience of our management team, all of whom have been involved at various levels in acquisitions, financings, and advisory
transactions, totaling billions in transaction value, and have significant experience investing in a variety of economic cycles,
with a track record of identifying high-quality assets with opportunities for optimization. We believe our management team’s
ability to originate, effectively diligence, and creatively and thoughtfully structure transactions will generate attractive risk-adjusted
returns for investors. We believe we will benefit from our management team’s successful track record in technology and business
services industry, including experiences serving as corporate executives and board members for various companies, both public and
private. |
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Broad
Sourcing Channels and Leading Industry Relationships. We believe the capabilities and relationships associated with our management
team will provide us with a differentiated pipeline of attractive business combination opportunities that would be difficult for
other market participants to replicate. |
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Underwriting, Execution, and Structuring Capabilities.
Our management team will apply to our acquisition targets a rigorous analytical review and diligence process that its individual
members apply or have applied in their current or past professional experiences. The sensitivity of financial and operational drivers
to external factors is a key component of evaluating investment opportunities and pricing risk. We believe our investment discipline
will allow us to identify opportunities where our management team can create stockholder value, which may include operational or
capital structure improvements, as well as the introduction of new technologies and/or products to drive growth. |
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Public
Company Operating Expertise. As a result of serving as executive officers and directors of publicly traded companies, our management
team has substantial experience in navigating the challenges of operating as a public company. We anticipate that one or more members
of our management team or board, would remain on the board of the company post business combination. In addition, some of the potential
acquisition targets we consider may operate within a regulated industry. We believe that the expertise within our management team
around technology and business services industries will be advantageous when evaluating certain acquisition targets. |
Initial
Business Combination
Nasdaq
rules require that we must complete one or more business combinations having an aggregate fair market value of at least 80% of the value
of the assets held in the trust account (excluding the deferred underwriting commissions and taxes payable on the interest earned on
the trust account) at the time of our signing a definitive agreement in connection with our initial business combination. Our board of
directors will make the determination as to the fair market value of our initial business combination. If our board of directors is not
able to independently determine the fair market value of our initial business combination, we will obtain an opinion from an independent
investment banking firm that is a member of FINRA or an independent accounting firm with respect to the satisfaction of such criteria.
While we consider it unlikely that our board of directors will not be able to make an independent determination of the fair market value
of our initial business combination, it may be unable to do so if it is less familiar or experienced with the business of a particular
target or if there is a significant amount of uncertainty as to the value of a target’s assets or prospects. Additionally, pursuant
to Nasdaq rules, any initial business combination must be approved by a majority of our independent directors.
Our IPO prospectus and charter provided that we had
15 months from the date of our IPO (until February 12, 2023) to complete a merger, share exchange, asset acquisition, stock purchase,
recapitalization, reorganization or other similar business combination with one or more businesses or entities (a “Business Combination”).
Our charter and Trust Agreement provided that we had the right to extend the period of time to consummate a Business Combination up to
two times by an additional three months each time (for a total of up to 21 months to complete a Business Combination) by depositing into
the trust account maintained by Continental Stock Transfer & Trust Company, acting as trustee, an amount of $0.10 per unit sold to
the public in the IPO for each such three-month extension (resulting in a total deposit of $10.40 per unit sold to the public in the event
both extensions are elected) (each, an “Extension Election”), as described in more detail in our IPO prospectus.
In a Special Meeting of the Stockholders on December
21, 2022, an Extension Amendment Proposal and the Trust Amendment Proposal were approved, and as a result, we will not have to rely on
an Extension Election, but will instead have the right to extend the Combination Period for an additional nine (9) months or such earlier
date as determined by the Board, from February 12, 2023 to November 12, 2023. The purpose of the Extension is to provide the Company more
time to complete a Business Combination, which the Board believes is in the best interests of our stockholders. With the Extension Proposal
approved, neither the Sponsor nor the Company are required to deposit additional funds into the trust account in connection with the Extension.
In connection
with the Extension Proposal, stockholders who owned shares of our common stock issued in our IPO (we refer to such stockholders as “public
stockholders” and such shares as “public shares”) elected to redeem all or a portion of their public shares. Stockholders
who elected to redeem, the redemption for a per-share price, payable in cash, was equal to the aggregate amount then on deposit in the
Company’s trust account (the “Trust Account”), including interest (which interest was net of taxes payable), divided
by the number of then outstanding public shares. Therefore, as of December 21, 2022, there were 1,348,049 shares of Class A common
stock, par value $0.0001 per share, issued and outstanding.
We
anticipate structuring our initial business combination either: (i) in such a way so that the post-transaction company in which our public
stockholders own shares will own or acquire 100% of the equity interests or assets of the target business or businesses; or (ii) in such
a way so that the post-transaction company owns or acquires less than 100% of such interests or assets of the target business in order
to meet certain objectives of the target management team or stockholders, or for other reasons. However, we will only complete an initial
business combination if the post-transaction company owns or acquires 50% or more of the outstanding voting securities of the target
or otherwise acquires a controlling interest in the target sufficient for it not to be required to register as an investment company
under the Investment Company Act of 1940, as amended, or the “Investment Company Act.” Even if the post-transaction company
owns or acquires 50% or more of the voting securities of the target, our stockholders prior to the initial business combination may collectively
own a minority interest in the post-transaction company, depending on valuations ascribed to the target and us in the initial business
combination. For example, we could pursue a transaction in which we issue a substantial number of new shares in exchange for all of the
outstanding capital stock of a target. In this case, we would acquire a 100% controlling interest in the target. However, as a result
of the issuance of a substantial number of new shares, our stockholders immediately prior to our initial business combination could own
less than a majority of our outstanding shares subsequent to our initial business combination. If less than 100% of the equity interests
or assets of a target business or businesses are owned or acquired by the post-transaction company, the portion of such business or businesses
that is owned or acquired is what will be taken into account for purposes of Nasdaq’s 80% of net assets test. If the initial business
combination involves more than one target business, the 80% of net assets test will be based on the aggregate value of all of the transactions
and we will treat the target businesses together as the initial business combination for purposes of a tender offer or for seeking stockholder
approval, as applicable.
Our
Initial Business Combination Process
In
evaluating prospective business combinations, we expect to conduct a thorough due diligence review process that will encompass, among
other things, a review of historical and projected financial and operating data, meetings with management and their advisors (if applicable),
on-site inspection of facilities and assets, discussion with customers and suppliers, legal reviews and other reviews as we deem appropriate.
We
are not prohibited from pursuing an initial business combination with a company that is affiliated with our sponsor, officers or directors.
In the event we seek to complete our initial business combination with a company that is affiliated with our sponsor, officers or directors,
we, or a committee of independent directors, will obtain an opinion from an independent investment banking firm that is a member of FINRA
or an independent accounting firm that our initial business combination is fair to our company from a financial point of view.
Members
of our management team indirectly own shares of Class B common stock issued prior to our IPO, which we refer to as our founder shares,
and warrants issued in a private placement completed concurrently with our IPO, which we refer to as the private warrants, and, accordingly,
may have a conflict of interest in determining whether a particular target business is an appropriate business with which to effectuate
our initial business combination. Further, each of our officers and directors may have a conflict of interest with respect to evaluating
a particular business combination if the retention or resignation of any such officers and directors were to be included by a target
business as a condition to any agreement with respect to our initial business combination. However, subject to any pre-existing contractual
or fiduciary obligations, our sponsor and officers and directors will offer all suitable business combination opportunities within the
technology industry (and other related sectors) to us before any other person or company until we have entered into a definitive agreement
regarding our initial business combination or we have failed to complete our initial business combination within 15 months from the closing
of our IPO (or up to 21 months from the closing of our IPO, if we extend the period of time to consummate a business combination).
Members
of our management team are employed by or otherwise work with our sponsor or with other entities. Our sponsor and these other entities
and their respective affiliates are continuously made aware of potential business opportunities, one or more of which we may desire to
pursue for an initial business combination; we have not, however, selected any specific business combination target and we have not,
nor has anyone on our behalf, initiated any substantive discussions, directly or indirectly, with any business combination target.
Our
sponsor and each of our officers and directors presently has, and any of them and our sponsor in the future may have additional, fiduciary
or contractual obligations to other entities pursuant to which such officer or director is or will be required to present a business
combination opportunity. Accordingly, if any of our officers or directors becomes aware of a business combination opportunity which is
suitable for an entity to which he or she has then-current fiduciary or contractual obligations, he or she will honor his or her fiduciary
or contractual obligations to present such business combination opportunity to such other entity. We do not believe, however, that any
fiduciary duties or contractual obligations of our sponsor and our officers or directors will materially affect our ability to complete
our initial business combination. Our certificate of incorporation provides that we renounce our interest in any corporate opportunity
offered to any director or officer unless such opportunity is expressly offered to such person solely in his or her capacity as a director
or officer of our company and such opportunity is one we are legally and contractually permitted to undertake and would otherwise be
reasonable for us to pursue, and to the extent the director or officer is permitted to refer that opportunity to us without violating
another legal obligation.
Lack
of Business Diversification
For
an indefinite period of time after the completion of our initial business combination, the prospects for our success may depend entirely
on the future performance of a single business. Unlike other entities that have the resources to complete business combinations with
multiple entities in one or several industries, it is probable that we will not have the resources to diversify our operations and mitigate
the risks of being in a single line of business. By completing our initial business combination with only a single entity, our lack of
diversification may:
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subject
us to negative economic, competitive and regulatory developments, any or all of which may have a substantial adverse impact on the
particular industry in which we operate after our initial business combination; and |
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cause
us to depend on the marketing and sale of a single product or limited number of products or services. |
Limited
Ability to Evaluate a Target’s Management Team
Although
we will closely scrutinize the management of a prospective business when evaluating the desirability of effecting our initial business
combination with that business, our assessment of the business’s management may not prove to be correct. In addition, the future
management may not have the necessary skills, qualifications or abilities to manage a public company. Furthermore, the future role of
members of our founding team, if any, in the business cannot presently be stated with any certainty. The determination as to whether
any of the members of our founding team will remain with the combined company will be made at the time of our initial business combination.
While it is possible that one or more of our directors will remain associated in some capacity with us following our initial business
combination, it is unlikely that any of them will devote their full efforts to our affairs subsequent to our initial business combination.
Moreover, we cannot assure you that members of our founding team will have significant experience or knowledge relating to the operations
of the particular business.
We
cannot assure you that any of our key personnel will remain in senior management, director or advisory positions with the combined company.
The determination as to whether any of our key personnel will remain with the combined company will be made at the time of our initial
business combination.
Following
an initial business combination, we may seek to recruit additional managers to supplement the incumbent management of the business. We
cannot assure you that we will have the ability to recruit additional managers, or that additional managers will have the requisite skills,
knowledge or experience necessary to enhance the incumbent management.
Competition
In
identifying, evaluating and selecting a business for our initial business combination, we may encounter intense competition from other
entities having a business objective similar to ours, including other blank check companies, private equity groups and leveraged buyout
funds, public companies, and operating businesses seeking strategic acquisitions. Many of these entities are well established and have
extensive experience identifying and effecting business combinations directly or through affiliates.
Moreover,
many of these competitors possess greater financial, technical, human and other resources than us. Our ability to acquire a business
or businesses will be limited by our available financial resources. This inherent limitation gives others an advantage in pursuing the
acquisition of a business. These and other factors may place us at a competitive disadvantage in successfully negotiating an initial
business combination.
Corporate
Information
Our
executive offices are located at 1111 Lincoln Road, Suite 500, Miami Beach, FL 33139 and our telephone number is (786) 750-2820.
Employees
We
currently have three executive officers. These individuals are not obligated to devote any specific number of hours to our matters but
they intend to devote as much of their time as they deem necessary to our affairs until we have completed our initial business combination.
The amount of time they will devote in any time period will vary based on whether a partner business has been selected for our initial
business combination and the stage of the business combination process.
Reports
to Security Holders
We
have reporting obligations, including the requirement that we file annual, quarterly and current reports with the SEC. The SEC maintains
an internet site that contains reports, proxy and information statements, and other information regarding issuers that file electronically
with the SEC, located at http://sec.gov. In accordance with the requirements of the Exchange Act, our annual reports contain financial
statements audited and reported on by our independent registered public accountants.
We
are an “emerging growth company,” as defined in Section 2(a) of the Securities Act of 1933, as amended (the “Securities
Act”), as modified by the Jumpstart Our Business Startups Act of 2012, or the JOBS Act. As such, we are eligible to take advantage
of certain exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth
companies including, but not limited to, not being required to comply with the auditor attestation requirements of Section 404 of the
Sarbanes-Oxley Act of 2002, or the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in our periodic
reports and proxy statements, and exemptions from the requirements of holding a non-binding advisory vote on executive compensation and
stockholder approval of any golden parachute payments not previously approved. If some investors find our securities less attractive
as a result, there may be a less active trading market for our securities and the prices of our securities may be more volatile.
In
addition, Section 107 of the JOBS Act also provides that an emerging growth company can take advantage of the extended transition period
provided in Section 7(a)(2)(B) of the Securities Act for complying with new or revised accounting standards. In other words, an emerging
growth company can delay the adoption of certain accounting standards until those standards would otherwise apply to private companies.
We intend to take advantage of the benefits of this extended transition period.
We
will remain an emerging growth company until the earlier of: (1) the last day of the fiscal year: (a) following the fifth anniversary
of the completion of our IPO; (b) in which we have total annual gross revenue of at least $1.07 billion; or (c) in which we are deemed
to be a large accelerated filer, which means the market value of our Class A common stock that is held by non-affiliates exceeds $700
million as of the prior June 30; and (2) the date on which we have issued more than $1.0 billion in non-convertible debt securities during
the prior three-year period. References herein to emerging growth company will have the meaning associated with it in the JOBS Act.
Additionally,
we are a “smaller reporting company” as defined in Rule 10(f)(1) of Regulation S-K. Smaller reporting companies may take
advantage of certain reduced disclosure obligations, including, among other things, providing only two years of audited financial statements.
We will remain a smaller reporting company until the last day of the fiscal year in which: (1) the market value of our common stock held
by non-affiliates equals or exceeds $250 million as of the end of the prior June 30th; or (2) our annual revenues equaled or exceeded
$100 million during such completed fiscal year and the market value of our common stock held by non-affiliates equals or exceeds $700
million as of the prior June 30th.
Factors
that could cause our actual results to differ materially from those in this Annual Report are any of the risks described in our Prospectus
for our Initial Public Offering filed with the SEC on November 10, 2021. 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 Annual Report, there have been no material
changes to the risk factors disclosed in our Prospectus.
ITEM 1B. |
UNRESOLVED STAFF COMMENTS |
Not
applicable.
We
currently maintain our executive offices at 1111 Lincoln Road, Suite 500 Miami Beach, FL 33139. Our executive offices are provided to
us by our sponsor at no charge. We consider our current office space adequate for our current operations.
ITEM 3. |
LEGAL PROCEEDINGS |
We
may be subject to legal proceedings, investigations and claims incidental to the conduct of our business from time to time. We are not
currently a party to any material litigation or other legal proceedings brought against us. We are also not aware of any legal proceeding,
investigation or claim, or other legal exposure that has a more than remote possibility of having a material adverse effect on our business,
financial condition or results of operations.
ITEM 4. |
MINE SAFETY DISCLOSURES |
Not
Applicable.
PART
III
ITEM 10. |
DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE |
The
following table sets forth information about our directors and executive officers as of the date of this report.
Name |
|
Age |
|
Position |
Al Kapoor |
|
55 |
|
Chairman and Chief Executive Officer |
Robert O Nelson II |
|
51 |
|
Chief Financial Officer |
Skylar M Jacobs |
|
29 |
|
Chief Operating Officer |
Kent R Weldon |
|
55 |
|
Independent Director |
Mark D Norman |
|
55 |
|
Independent Director |
James M Jenkins |
|
58 |
|
Independent Director |
Below
is a summary of the business experience of each our executive officers and directors:
Al
Kapoor – Chairman & Chief Executive Officer: Al Kapoor has served as our Chairman & Chief Executive Officer since
our inception. Since 1999, Al has been Chairman of Syntec Optics and has engaged in finding, acquiring, and growing optics and photonics
companies since 1997 as a technology entrepreneur immediately after graduating Harvard Business School. Shortly thereafter he found and
acquired his first advanced manufacturing company in Rochester, New York, renamed it Syntec Optics, transformed it into a defense, medical
and consumer optics and photonics leader, and accelerated growth with add-on acquisitions. This deep technical and business experience
has led to diverse relationships in the optics and photonics ecosystem – suppliers, customers, end-users, venture capitalists,
private equity managers, entrepreneurs, and executives. Al runs an app called PioneeringMinds with a fortnightly newsletter on future
industries with circulation of over 100,000 to executives around the country. He continues to invest in optics and photonics, from driverless
cars, robotics, virtual reality, sensors, to terabit internet. He is also on the advisory council for MIT’s program to train and
educate the workforce for new disruptions in the area of Integrated Photonics. Al has been invited to the White House on several occasions
to participate in innovation policy discussions. Al studied various disciplines of engineering and business at 5 universities earning
an MBA from Harvard University and MS from Iowa State University.
Robert
O. Nelson II – Chief Financial Officer: Robert O. Nelson II has served as our Chief Financial Officer since September 2021.
Prior to this he served as Vice President of Financial Systems at AMG (NASDAQ: AMG from 2017 to 2021. Robert has 20+ years of finance,
tax, and technology experience. Robert has successfully supported public & private corporations, including optics and photonics companies,
in design and transformation of their general accounting, financial close, consolidation, budgeting, and forecasting functions. He has
worked in domestic and international areas, advising clients in finance and tax technology optimization projects, tax accounting, tax
compliance, and IP planning. Robert has built a proven management track record of successful business transformation. Drawing upon steady
leadership, determination, and strategic insight, Robert has leveraged financial and operational best practices as well as sound judgment
in guiding teams through the intricacies of aligning organizational performance with corporate strategy. Most recently, as Vice President
of Financial Systems at AMG (NASDAQ: AMG), he has worked with the executive management team on enhancing financial operations, business
systems, regulatory reporting and business process improvements. Previously, Robert played a key role in SEC compliance for a spin-out
of an optics and photonics division from a public company, which now has an over $1B valuation. During his tenure as a consultant, he
provided guidance and consultation to CFOs and finance departments on internal control, regulatory reporting, taxation, financial due
diligence and systems implementations. While at Deloitte, Robert instructed at many of Deloitte’s national technical training sessions
covering international and domestic tax concepts and enterprise performance management solutions. Robert is a Certified Public Accountant
and earned a Master of Science in Taxation from Bentley University’s McCallum Graduate School of Business and a Master of Science
in Information Systems from Boston University’s Graduate School of Management.
Skylar
M. Jacobs – Chief Operating Officer: Skylar M Jacobs has served as our Chief Operating Officer since August 2021 and compliments
an experienced sponsor team with his eight years of execution experience working with technology entrepreneurs and meeting their specific
growth and capital needs. From 2017 to present Skylar serves as Vice President of Business Development and Operations at PainQx, a medical
device company developing proprietary AI algorithms to translate neural activity into actionable health measures, Skylar developed a
non-dilutive funding pipeline, but more importantly, developed and executed a fundraising strategy across high-net-worth individuals,
family offices, venture funds, and strategic partners for eventual M&A activities. Prior to PainQx, Skylar started his career in
2017 in investment consulting at Life Science Nation helping scientist entrepreneurs connect with investors and develop their fundraising
campaigns. Skylar spent several years developing strategies and partnering opportunities for healthcare companies including Cascade Prodrug,
Meenta, Andaman7, and SpringTide Partners, a Healthcare IT focused venture fund. Skylar also worked on business strategies for CureMatch,
an AI-driven oncology diagnostic company, and with one of the world’s first CRO marketplaces, Assay Depot, rebranded as Scientist.com.
Skylar received a B.S. in Molecular Biology with minors in Business and Literature from the University of California, San Diego.
Kent
R. Weldon – Independent Director: Kent R Weldon has served as our independent director since our IPO in November 2021 and
has three decades of experience in finding, structuring, and acquiring companies. He is an advisory partner to Thomas H. Lee Partners,
previously serving as managing director, starting at the firm in 1991. Thomas H. Lee Partners has raised over $25B in capital since 1974.
Prior to joining Thomas H. Lee Partners, Mr. Weldon worked at Morgan Stanley & Co. Incorporated in the Financial Institutions Group.
Mr. Weldon also worked at Wellington Management Company, an institutional money management firm. Mr. Weldon’s prior directorships
include Acosta Sales and Marketing, Bargain Hunt, CTI Foods, Give and Go Prepared Foods Corp., iHeartMedia, Inc., CMP Susquehanna Corp.,
FairPoint Communications, Inc. (NASDAQ: FRP), Fisher Scientific International Inc. (NYSE: TMO), Michael Foods, Nortek, Inc. (NASDAQ:
NTK), Phillips Pet Food & Supplies, and Progressive Moulded Products; Mr. Weldon holds a B.A., summa cum laude, in Economics and
Arts and Letters Program for Administrators from the University of Notre Dame and an M.B.A. from Harvard Business School.
Mark
D. Norman – Independent Director: Mark D Norman has served as our independent director since our IPO in November 2021 and
is a Managing Partner at FM Capital, starting at the firm in 2015, and serves on the boards of the following FM Capital portfolio companies:
AutoPay, Gatik, GuardKnox, Lunewave, Motorq, NextDroid and Optimus Ride. Mark has significant experience leading both early stage and
global businesses in the automotive manufacturing, service and mobility industries. He started washing cars at the local Chrysler dealership
in high school and ultimately was named CEO of Chrysler Canada (NYSE: STLA (merged with Stellantis)). From there, he was recruited to
become CEO of Flexcar, a nascent car-sharing company. He successfully negotiated the sale of Flexcar to rival Zipcar (NASDAQ: ZIP), where
as president, he led the company’s expansion into over 25 major cities and more than 300 college campuses, creating the world’s
largest carsharing network. Mark and the team managed the company’s IPO on the NASDAQ and subsequent sale to Avis Budget Group
(NASDAQ: CAR).
James
M. Jenkins – Independent Director: James M. Jenkins has served as our independent director since our IPO in November 2021
and specializes in securities law matters for initial and secondary public offerings, private placements, mergers and acquisitions, and
securities law compliance for SPACs. Prior to becoming General Counsel and Vice President of Corporate Development at Transcat, Inc.
in September 2020, James was the practice group leader of Harter Secrest & Emery LLP’s Securities and Capital Markets practice,
and the Partner in Charge of HSE’s New York City office having joined the firm in 1989 and served as partner since 1997. Professional
Affiliations: Member, New York State Bar Association, General Counsel to Transcat (Nasdaq: TRNS), 2001 – Present, Board of Directors,
Lakeland Industries, Inc. (Nasdaq: LAKE), 2012-2015, 2016 – Present, Chair, Governance Committee, 2016 – Present; Member,
2012-2015, Member, Compensation Committee, 2012-2015, 2016 – Present, Member, Audit Committee, 2012-2015, 2016 – Present,
General Counsel to Jerash Holdings, Inc., 2016-2020, General Counsel to IEC Electronics, Inc. (NYSE/MKT: IEC), 2015-2020, General Counsel
and Corporate Secretary to iVEDiX, Inc., 2013-2020, General Counsel and Corporate Secretary to Finger Lakes Technologies Group, Inc.,
2013-2020.
In
addition to our management and board of directors, we have an execution team with a combined experience of over 100 years. The team consists
of a finance manager working in conjunction with a controller, a compliance manager, and two industry researchers. The controller maintains
the financial statements and accounts, the finance manager oversees the audit conducted by our independent outside accountants, the compliance
manager maintains records on the trust account established in connection with our IPO, which we refer to as the trust account, and listings
of our securities, and two industry researchers track and analyze public and private company data including acquisition history. The
execution team has no fiduciary obligations to present business opportunities to us.
We
believe our management team’s operating and transaction experience and relationships with companies will provide us with a substantial
number of potential business combination targets. Over the course of their careers, the members of our management team have developed
a broad network of contacts and corporate relationships. This network has grown through the activities of our management team sourcing,
acquiring and financing businesses, our management team’s relationships with sellers, financing sources and target management teams
and the experience of our management team in executing transactions under varying economic and financial market conditions.
Officer
and Director Qualifications
Our
officers and board of directors are composed of a diverse group of leaders with a wide array of professional roles. In these roles, they
have gained experience in core management skills, such as strategic and financial planning, financial reporting, compliance, risk management,
and leadership development. Many of our officers and directors also have experience serving on boards of directors and board committees
of other companies, and have an understanding of corporate governance practices and trends, which provides an understanding of different
business processes, challenges, and strategies. Further, our officers and directors also have other experience that makes them valuable,
managing and investing assets or facilitating the consummation of business combinations.
We,
along with our officers and directors, believe that the above-mentioned attributes, along with the leadership skills and other experiences
of our officers and board members described above, provide us with a diverse range of perspectives and judgment necessary to facilitate
our goals of consummating an acquisition transaction.
Number
and Terms of Office of Officers and Directors
We
have four directors. Our board of directors is divided into two classes with only one class of directors being elected in each year
and each class (except for those directors appointed prior to our first annual meeting of stockholders) serving a two-year term. In
accordance with Nasdaq corporate governance requirements, we are not required to hold an annual meeting until one year after our
first fiscal year end following our listing on Nasdaq. The term of office of the first class of directors, consisting of Kent R.
Weldon and James M. Jenkins will expire at our first annual meeting of stockholders. The term of office of the second class of
directors, consisting of Mark D. Norman and Al Kapoor, will expire at the second annual meeting of stockholders.
Our
officers are appointed by the board of directors and serve at the discretion of the board of directors, rather than for specific terms
of office. Our board of directors is authorized to appoint persons to the offices set forth in our bylaws as it deems appropriate. Our
bylaws provide that our officers may consist of a Chairman of the Board, Chief Executive Officer, Chief Operating Officer, President,
Vice Presidents, Secretary, Treasurer, Assistant Secretaries, and such other offices as may be determined by the board of directors.
Family
Relationships
There
are no family relationships among any of the Company’s directors and officers.
Board
Committees
The
Board has a standing audit and compensation committee. Both audit committee and compensation committee have a charter, each of which
was filed with the SEC as exhibits to the registration statement on form S-1 filed with the SEC in connection with our IPO (File No.
333-260090). You can review these documents by accessing our public filings at the SEC’s web site at www.sec.gov or at our website,
https://www.omnilitac.com/, under the “Investors” section.
Audit
Committee
We
have established an audit committee of the board of directors. Mark D. Norman, James M. Jenkins, and Kent R. Weldon serve as members
of our audit committee, and Mr. Norman chairs the audit committee. Under the Nasdaq listing standards and applicable SEC rules, we are
required to have at least three members of the audit committee, all of whom must be independent. Each of Mark D. Norman, Kent R. Weldon,
and James M. Jenkins meet the independent director standard under Nasdaq listing standards and under Rule 10-A-3(b)(1) of the Exchange
Act.
Each
member of the audit committee is financially literate and our board of directors has determined that Mr. Norman qualifies as an “audit
committee financial expert,” as defined in applicable SEC rules.
We
have adopted an audit committee charter, which details the principal functions of the audit committee, including:
|
● |
the appointment, compensation,
retention, replacement, and oversight of the work of the independent registered public accounting firm engaged by us; |
|
● |
pre-approving all audit
and permitted non-audit services to be provided by the independent registered public accounting firm engaged by us, and establishing
pre-approval policies and procedures; |
|
● |
setting clear hiring policies
for employees or former employees of the independent registered public accounting firm, including but not limited to, as required
by applicable laws and regulations; |
|
● |
setting clear policies
for audit partner rotation in compliance with applicable laws and regulations; |
|
● |
obtaining and reviewing
a report, at least annually, from the independent registered public accounting firm describing: (i) the independent registered public
accounting firm’s internal quality-control procedures; (ii) any material issues raised by the most recent internal quality-control
review, or peer review, of the audit firm, or by any inquiry or investigation by governmental or professional authorities within
the preceding five years respecting one or more independent audits carried out by the firm and any steps taken to deal with such
issues; and (iii) all relationships between the independent registered public accounting firm and us to assess the independent registered
public accounting firm’s independence; |
|
● |
reviewing and approving
any related party transaction required to be disclosed pursuant to Item 404 of Regulation S-K promulgated by the SEC prior to us
entering into such transaction; and |
|
● |
reviewing with management,
the independent registered public accounting firm, and our legal advisors, as appropriate, any legal, regulatory or compliance matters,
including any correspondence with regulators or government agencies and any employee complaints or published reports that raise material
issues regarding our financial statements or accounting policies and any significant changes in accounting standards or rules promulgated
by the Financial Accounting Standards Board, the SEC or other regulatory authorities. |
Compensation
Committee
We
have established a compensation committee of the board of directors. Kent R. Weldon and Mark D. Norman serve as members of our compensation
committee. Under the Nasdaq listing standards and applicable SEC rules, we are required to have at least two members of the compensation
committee, all of whom must be independent. Kent R. Weldon, and Mark D. Norman are independent, and Kent R. Weldon chairs the compensation
committee.
We
have adopted a compensation committee charter, which details the principal functions of the compensation committee, including:
|
● |
reviewing and approving
on an annual basis the corporate goals and objectives relevant to our Chief Executive Officer’s compensation, if any is paid
by us, evaluating our Chief Executive Officer’s performance in light of such goals and objectives and determining and approving
the remuneration (if any) of our Chief Executive Officer based on such evaluation; |
|
● |
reviewing and approving
on an annual basis the compensation, if any is paid by us, of all of our other officers; |
|
● |
reviewing on an annual
basis our executive compensation policies and plans; |
|
● |
implementing and administering
our incentive compensation equity-based remuneration plans; |
|
● |
assisting management in
complying with our proxy statement and annual report disclosure requirements; |
|
● |
approving all special perquisites,
special cash payments and other special compensation and benefit arrangements for our officers and employees; |
|
● |
if required, producing
a report on executive compensation to be included in our annual proxy statement; and |
|
● |
reviewing, evaluating,
and recommending changes, if appropriate, to the remuneration for directors. |
Notwithstanding
the foregoing, no compensation of any kind, including finders, consulting, or other similar fees, will be paid to any of our existing
stockholders, officers, directors, or any of their respective affiliates, prior to, or for any services they render in order to effectuate
the consummation of an initial business combination.
Accordingly,
it is likely that prior to the consummation of an initial business combination, the compensation committee will only be responsible for
the review and recommendation of any compensation arrangements to be entered into in connection with such initial business combination.
The
charter also provides that the compensation committee may, in its sole discretion, retain or obtain the advice of a compensation consultant,
legal counsel or other adviser and will be directly responsible for the appointment, compensation and oversight of the work of any such
adviser. However, before engaging or receiving advice from a compensation consultant, external legal counsel or any other adviser, the
compensation committee will consider the independence of each such adviser, including the factors required by Nasdaq and the SEC.
Director
Nominations
We
do not have a standing nominating committee though we intend to form a corporate governance and nominating committee as and when required
to do so by law or Nasdaq rules. In accordance with Rule 5605 of the Nasdaq rules, a majority of the independent directors may recommend
a director nominee for selection by the board of directors. The board of directors believes that the independent directors can satisfactorily
carry out the responsibility of properly selecting or approving director nominees without the formation of a standing nominating committee.
The directors who will participate in the consideration and recommendation of director nominees are James M. Jenkins, Mark D. Norman,
and Kent R. Weldon. In accordance with Rule 5605 of the Nasdaq rules, all such directors are independent. As there is no standing nominating
committee, we do not have a nominating committee charter in place.
The
board of directors will also consider director candidates recommended for nomination by our stockholders during such times as they are
seeking proposed nominees to stand for election at the next annual meeting of stockholders (or, if applicable, a special meeting of stockholders).
Our stockholders that wish to nominate a director for election to our board of directors should follow the procedures set forth in our
bylaws.
We
have not formally established any specific, minimum qualifications that must be met or skills that are necessary for directors to possess.
In general, in identifying and evaluating nominees for director, the board of directors considers educational background, diversity of
professional experience, knowledge of our business, integrity, professional reputation, independence, wisdom, and the ability to represent
the best interests of our stockholders.
Compensation
Committee Interlocks and Insider Participation
None
of our officers currently serves, or in the past year has served, as a member of the compensation committee of any entity that has one
or more officers serving on our board of directors.
Code
of Ethics
We
adopted a code of conduct and ethics applicable to our directors, officers and employees in accordance with applicable federal securities
laws which was filed with the SEC as an exhibit to the registration statement on form S-1 filed with the SEC in connection with our IPO
(File No. 333-260090). You can review the code by accessing our public filings at the SEC’s web site at www.sec.gov or at our website,
https://www.omnilitac.com/, under the “Investors” section. In addition, a copy of the Code of Ethics will be provided without
charge upon request from us. The code of ethics codifies the business and ethical principles that govern all aspects of our business.
We intend to disclose any amendments to or waivers of certain provisions of our Code of Ethics in a Current Report on Form 8-K.
Section
16(a) Beneficial Ownership Reporting Compliance
Section
16(a) of the Securities Exchange Act of 1934, as amended, or the Exchange Act, requires our executive officers, directors and persons
who beneficially own more than 10% of a registered class of our equity securities to file with the Securities and Exchange Commission
initial reports of ownership and reports of changes in ownership of our shares of common stock and other equity securities. These executive
officers, directors, and greater than 10% beneficial owners are required by SEC regulation to furnish us with copies of all Section 16(a)
forms filed by such reporting persons.
Based
solely on our review of such forms furnished to us and written representations from certain reporting persons, we believe that all filing
requirements applicable to our executive officers, directors and greater than 10% beneficial owners were filed in a timely manner.
ITEM 11. |
EXECUTIVE COMPENSATION |
Employment
Agreements
We
have not entered into any employment agreements with our executive officers and have not made any agreements to provide benefits upon
termination of employment.
Executive
Officers and Director Compensation
Each
of our directors and executive officers are members of our sponsor. None of our officers or directors has received any cash compensation
for services rendered to us. Our sponsor, officers, and directors, or any of their respective affiliates will be reimbursed for any out-of-pocket
expenses incurred in connection with activities on our behalf such as identifying potential target businesses and performing due diligence
on suitable business combinations. Our audit committee reviews on a quarterly basis all payments that were made to our sponsor, officers
or directors, or our or their affiliates. Any such payments prior to an initial business combination will be made using funds held outside
the trust account. Other than quarterly audit committee review of such payments, we do not expect to have any additional controls in
place governing our reimbursement payments to our directors and executive officers for their out-of-pocket expenses incurred in connection
with identifying and consummating an initial business combination.
After
the completion of our initial business combination, directors or members of our management team who remain with us may be paid consulting
or management fees from the combined company. All of these fees will be fully disclosed to stockholders, to the extent then known, in
the tender offer materials or proxy solicitation materials furnished to our stockholders in connection with a proposed initial business
combination. We have not established any limit on the amount of such fees that may be paid by the combined company to our directors or
members of management. It is unlikely the amount of such compensation will be known at the time of the proposed initial business combination,
because the directors of the post-combination business will be responsible for determining officer and director compensation. Any compensation
to be paid to our officers will be determined, or recommended to the board of directors for determination, either by a compensation committee
constituted solely by independent directors or by a majority of the independent directors on our board of directors.
We
do not intend to take any action to ensure that members of our management team maintain their positions with us after the consummation
of our initial business combination, although it is possible that some or all of our officers and directors may negotiate employment
or consulting arrangements to remain with us after our initial business combination. The existence or terms of any such employment or
consulting arrangements to retain their positions with us may influence our management’s motivation in identifying or selecting
a target business but we do not believe that the ability of our management to remain with us after the consummation of our initial business
combination will be a determining factor in our decision to proceed with any potential business combination. We are not party to any
agreements with our officers and directors that provide for benefits upon termination of employment.
ITEM 12. |
SECURITY OWNERSHIP OF
CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS |
The
following table sets forth as of January 30, 2023 the number of shares of common stock beneficially owned by (i) each person who is known
by us to be the beneficial owner of more than five percent of our issued and outstanding shares of common stock (ii) each of our officers
and directors; and (iii) all of our officers and directors as a group. As of January 30, 2023, we had 6,139,716 shares of common stock
issued and outstanding.
Unless
otherwise indicated, we believe that all persons named in the table have sole voting and investment power with respect to all shares
of common stock beneficially owned by them. The following table does not reflect record of beneficial ownership of any shares of common
stock issuable upon exercise of the public or private warrants, as these warrants are not exercisable within 60 days of January 30, 2023.
Name and Address of Beneficial Owner (1) | |
Number of Shares of Common Stock Beneficially Owned | | |
Percent of Class | |
OmniLit Sponsor LLC (our sponsor) (2)(3)(9) | |
| 4,791,667 | | |
| 25.00 | % |
Al Kapoor(2)(3) | |
| 4,791,667 | | |
| 25.00 | % |
Kent R. Weldon(4) | |
| - | | |
| - | |
Mark D. Norman(4) | |
| - | | |
| - | |
James M. Jenkins(4) | |
| - | | |
| - | |
Robert O. Nelson II(4) | |
| - | | |
| - | |
Skylar M. Jacobs(4) | |
| - | | |
| - | |
All officers and directors as a group (7 individuals) | |
| 4,791,667 | | |
| 25.00 | % |
Other 5% Holders | |
| | | |
| | |
Radcliffe Capital Management, L.P.(5) | |
| 115,000 | | |
| 8.53 | % |
Sea Otter Advisors, L.P.(6) | |
| 125,005 | | |
| 9.27 | % |
Owl Creek Asset Management, L.P.(7) | |
| 200,000 | | |
| 14.84 | % |
Polar Asset Management Partners Inc.(8) | |
| 230,000 | | |
| 17.06 | % |
(1) |
Unless
otherwise noted, the business address of the entities and individuals is c/o OmniLit Acquisition Corp., 1111 Lincoln Road, Suite
500 Miami Beach, FL 33139. |
|
|
(2) |
Interests
shown consist solely of founder shares, which are shares of Class B common stock. Such shares are convertible into shares of Class
A common stock on a one-for-one basis, subject to adjustment, as described in the section entitled “Description of Securities”
in our prospectus filed with the SEC pursuant to Rule 424(b)(4) (File No. 333-260090). |
|
|
(3) |
OmniLit
Sponsor LLC, our sponsor, is the record holder of the shares reported herein. Al Kapoor, our Chief Executive Officer and Chairman,
is the Chief Executive Officer of OmniLit Sponsor LLC. Accordingly, Al Kapoor has voting and investment discretion with respect to
the shares held by OmniLit Sponsor LLC, and as such, he may be deemed to have beneficial ownership of the Class B common stock held
directly by OmniLit Sponsor LLC. Al Kapoor disclaims any beneficial ownership of the reported shares other than to the extent of
any pecuniary interest he may have therein, directly or indirectly. |
|
|
(4) |
Does
not include any shares held by our sponsor, of which each of these individuals is a member. Each individual disclaims beneficial
ownership of such securities except to the extent of their ultimate pecuniary interest therein. |
|
|
(5) |
According
to a Schedule 13G filed on December 22, 2022 Radcliffe Capital Management, L.P. may be deemed to be the beneficial owner of the 115,000
shares of Class A Common Stock. |
|
|
(6) |
According
to a Schedule 13G filed on December 28, Sea Otter Advisors L.P. may be deemed to be the beneficial owner of, the 125,005 shares of
Class A Common Stock reported in such Schedule 13G. |
|
|
(7) |
According
to a Form 3 filed on December 27, Owl Creek Asset Management, L.P. may be deemed to be the beneficial owner of, the 200,000 shares
of Class A Common Stock reported in such Form 3. |
|
|
(8) |
According
to a Form 3 filed on December 30, Polar Asset Management Partners Inc. may be deemed to be the beneficial owner of, the 230,000 shares
of Class A Common Stock reported in such Form 3. |
|
|
(9) |
As per 8-K filed on December 15, 2022, nine investors signed non-redemption
agreements for 499,992 founder shares. |
Securities
Authorized for Issuance Under Equity Compensation Plans
None.
Changes
in Control
None.
ITEM 13. |
CERTAIN RELATIONSHIPS
AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE |
On
May 20, 2021, our sponsor purchased 4,312,500 founder shares. On September 27, 2021 our sponsor forfeited 718,750 shares for no consideration.
On November 1, 2021, we effected a 1 1/3-to-1 forward stock split on our founder shares and as a result our sponsor owns 4,791,667 shares
for an aggregate purchase price of $25,000, or approximately $0.005 per share. The number of founder shares issued was determined based
on the expectation that such founder shares would represent 25% of the outstanding shares upon completion of our IPO. The founder shares
(including the Class A common stock issuable upon exchange thereof) may not, subject to certain limited exceptions, be transferred, assigned
or sold by the holder until 30 days after the completion of our initial business combination.
On
November 12, 2021, simultaneously with the consummation of our IPO, we sold to our sponsor, Imperial Capital, LLC, and I-Bankers Securities
in a private placement an aggregate of 6,920,500 private warrants at a price of $1.00 per warrant, generating total proceeds of $6,920,500.
The private warrants are identical to the public warrants, except that they: (i) may not (including the Class A common stock issuable
upon exercise of these warrants), subject to certain limited exceptions, be transferred, assigned or sold by the holders until 30 days
after the completion of our initial business combination; and (ii) will be entitled to registration rights.
As
more fully discussed in our final prospectus filed with the SEC pursuant to Rule 424(b)(4) (File No. 333-260090), if any of our officers
or directors becomes aware of an initial business combination opportunity that falls within the line of business of any entity to which
he or she has then-current fiduciary or contractual obligations, he or she will honor his or her fiduciary or contractual obligations
to present such business combination opportunity to such other entity. Our officers and directors currently have certain relevant fiduciary
duties or contractual obligations that may take priority over their duties to us.
Each
of our directors and executive officers are members of our sponsor. None of our officers or directors has received any cash compensation
for services rendered to us. Our sponsor, officers, and directors, or any of their respective affiliates will be reimbursed for any out-of-pocket
expenses incurred in connection with activities on our behalf such as identifying potential target businesses and performing due diligence
on suitable business combinations. Our audit committee reviews on a quarterly basis all payments that were made to our sponsor, officers
or directors, or our or their affiliates. Any such payments prior to an initial business combination will be made using funds held outside
the trust account. Other than quarterly audit committee review of such payments, we do not expect to have any additional controls in
place governing our reimbursement payments to our directors and executive officers for their out-of-pocket expenses incurred in connection
with identifying and consummating an initial business combination.
Prior
to the closing of our IPO, our sponsor loaned us $300,000 to be used for a portion of the expenses of our IPO. This loan was non-interest
bearing, unsecured and was due at the earlier of December 31, 2021 or the closing of our IPO. The loan was repaid upon the closing of
our IPO out of the $340,000 of offering proceeds that had been allocated for the payment of offering expenses (other than underwriting
commissions). The value of our sponsor’s interest in this transaction corresponds to the principal amount outstanding under the
loan.
We
currently maintain our executive offices at 1111 Lincoln Road, Suite 500 Miami Beach, FL 33139. Our executive offices are provided to
us by our sponsor at no charge.
In
order to finance transaction costs in connection with a business combination, our sponsor or an affiliate of our sponsor, or certain
of the Company’s officers and directors may, but are not obligated to, loan the Company funds as may be required. Up to $1,500,000
of such working capital loans may be convertible into warrants equivalent to the private warrants at a price of $1.00 per warrant (which,
for example, would result in the holders being issued 1,500,000 warrants if $1,500,000 of notes were so converted), at the option of
the lender. Such warrants would be identical to the private warrants, including as to exercise price, exercisability and exercise period.
In the event that a business combination does not close, the Company may use a portion of proceeds held outside the Trust account to
repay the working capital loans but no proceeds held in the trust account would be used to repay the working capital loans. The terms
of such loans by our officers and directors, if any, have not been determined and no written agreements exist with respect to such loans.
We do not expect to seek loans from parties other than our sponsor or an affiliate of our sponsor as we do not believe third parties
will be willing to loan such funds and provide a waiver against any and all rights to seek access to funds in our trust account.
After
the completion of our initial business combination, directors or members of our management team who remain with us may be paid consulting
or management fees from the combined company. All of these fees will be fully disclosed to stockholders, to the extent then known, in
the tender offer materials or proxy solicitation materials furnished to our stockholders in connection with a proposed initial business
combination. We have not established any limit on the amount of such fees that may be paid by the combined company to our directors or
members of management. It is unlikely the amount of such compensation will be known at the time of the proposed initial business combination,
because the directors of the post-combination business will be responsible for determining officer and director compensation. Any compensation
to be paid to our officers will be determined, or recommended to the board of directors for determination, either by a compensation committee
constituted solely by independent directors or by a majority of the independent directors on our board of directors.
We
do not intend to take any action to ensure that members of our management team maintain their positions with us after the consummation
of our initial business combination, although it is possible that some or all of our officers and directors may negotiate employment
or consulting arrangements to remain with us after our initial business combination. The existence or terms of any such employment or
consulting arrangements to retain their positions with us may influence our management’s motivation in identifying or selecting
a target business but we do not believe that the ability of our management to remain with us after the consummation of our initial business
combination will be a determining factor in our decision to proceed with any potential business combination. We are not party to any
agreements with our officers and directors that provide for benefits upon termination of employment.
Registration
Rights
The
holders of founder shares and private warrants are entitled to registration rights pursuant to a registration rights agreement signed
on November 8, 2021. The Company will bear the expenses incurred in connection with the filing of any registration statements pursuant
to the registration rights agreement.
Related
Party Policy
We
had not yet adopted a formal policy for the review, approval or ratification of related party transactions at the time of prior to our
IPO. Accordingly, the transactions discussed above were not reviewed, approved or ratified in accordance with any such policy.
Since
our IPO we have adopted a code of ethics requiring us to avoid, wherever possible, all conflicts of interests, except under guidelines
or resolutions approved by our board of directors (or the appropriate committee of our board) or as disclosed in our public filings with
the SEC. Under our code of ethics, conflict of interest situations include any financial transaction, arrangement or relationship (including
any indebtedness or guarantee of indebtedness) involving the company.
In
addition, our audit committee, pursuant to a written charter, is responsible for reviewing and approving related party transactions to
the extent that we enter into such transactions. An affirmative vote of a majority of the members of the audit committee present at a
meeting at which a quorum is present is required in order to approve a related party transaction. A majority of the members of the entire
audit committee will constitute a quorum. Without a meeting, the unanimous written consent of all of the members of the audit committee
will be required to approve a related party transaction. We also require each of our directors and executive officers to complete a directors’
and officers’ questionnaire annually that elicits information about related party transactions.
These
procedures are intended to determine whether any such related party transaction impairs the independence of a director or presents a
conflict of interest on the part of a director, employee or officer.
To
further minimize conflicts of interest, we have agreed not to consummate an initial business combination with an entity that is affiliated
with any of our sponsor, officers or directors unless we, or a committee of independent directors, have obtained an opinion from an independent
investment banking firm which is a member of FINRA or an independent accounting firm that our initial business combination is fair to
our company from a financial point of view. Furthermore, no finder’s fees, reimbursements or cash payments will be paid by us to
our sponsor, officers or directors, or our or their affiliates, for services rendered to us prior to or in connection with the completion
of our initial business combination, other than the $300,000 repaid to our sponsor for the loan granted in connection with the offering
and the following payments, which may be made to our sponsor, officers or directors, or our or their affiliates, none of which will be
made from the proceeds of the offering held in the trust account prior to the completion of our initial business combination:
● |
Reimbursement
for any out-of-pocket expenses related to identifying, investigating and completing an initial business combination; and |
● |
Repayment
of loans which may be made by our sponsor or an affiliate of our sponsor or certain of our officers and directors to finance transaction
costs in connection with an intended initial business combination, the terms of which have not been determined nor have any written
agreements been executed with respect thereto. Up to $1,500,000 of such loans may be convertible into warrants, at a price of $1.00
per warrant at the option of the lender. |
Our
audit committee reviews on a quarterly basis all payments that were made to our sponsor, officers or directors, or our or their affiliates.
Director
Independence
Nasdaq
listing standards require that a majority of our board of directors be independent. An “independent director” is defined
generally as a person other than an officer or employee of the company or its subsidiaries or any other individual having a relationship
which in the opinion of the company’s board of directors, would interfere with the director’s exercise of independent judgment
in carrying out the responsibilities of a director. Our board of directors has determined that James M. Jenkins, Mark
D. Norman, and Kent R. Weldon are “independent directors” as defined in the Nasdaq listing standards and applicable SEC rules.
Our independent directors have regularly scheduled meetings at which only independent directors are present.
ITEM 14. |
PRINCIPAL ACCOUNTANT FEES AND SERVICES |
Public
Accounting Fees
The
firm of Marcum LLP, or Marcum, acts as our independent registered public accounting firm. The following is a summary of fees paid to
Marcum or services rendered.
Audit
Fees. For the year ended December 31, 2022, fees for our independent registered public accounting firm were approximately $111,240,
for the services Marcum performed in connection with our annual regulatory filings. For the period from May 20, 2021 (inception) through
December 31, 2021, fees for our independent registered public accounting firm were approximately $94,760, for the services Marcum performed
in connection with our IPO and the audit of our December 31, 2021 financial statements included in this Annual Report on Form 10-K.
Audit-Related
Fees. For the year ended December 31, 2022 and for the period from May 20, 2021 (inception through December 31, 2021, our independent
registered public accounting firm did not render assurance and related services related to the performance of the audit or review of
financial statements.
Tax
Fees. For the year ended December 31, 2022, fees for our independent registered public accounting firm were approximately $7,200
for services relating to tax compliance, tax advice and tax planning. For the period from May 20, 2021 (inception) through December 31,
2021, our independent registered public accounting firm did not render services to us for tax compliance, tax advice and tax planning.
All
Other Fees. For the year ended December 31, 2022, there were no fees billed for products and services provided by our independent
registered public accounting firm other than those set forth above. For the period from May 20, 2021 (inception) through December 31,
2021, there were no fees billed for products and services provided by our independent registered public accounting firm other than those
set forth above.
Pre-Approval
Policy
Our
audit committee was formed upon the consummation of our IPO. As a result, the audit committee did not pre-approve all of the foregoing
services, although any services rendered prior to the formation of our audit committee were approved by our board of directors. Since
the formation of our audit committee, and on a going-forward basis, the audit committee has and will pre-approve all auditing services
and permitted non-audit services to be performed for us by our auditors, including the fees and terms thereof (subject to the de minimis
exceptions for non-audit services described in the Exchange Act which are approved by the audit committee prior to the completion of
the audit).
NOTES
TO FINANCIAL STATEMENTS
Note
1 — Organization and Business Operations
OmniLit
Acquisition Corp. (the “Company”) was incorporated in Delaware 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 “Business Combination”).
The Company has not selected any specific business-combination target and it has not, nor has anyone on the Company’s behalf, initiated
any substantive discussions, directly or indirectly, with any business-combination target.
As
of December 31, 2022, the Company had not commenced any operations other than searching for a business combination after our Initial
Public Offering (as defined below). All activity for the period from May 20, 2021 (inception) through December 31, 2021 and for the year
ended December 31, 2022 relates to the Company’s formation, the Initial Public Offering and, subsequent to the Initial Public Offering,
identifying a target company for a Business Combination. The Company will not generate any operating revenues until after the completion
of its initial Business Combination, at the earliest. The Company will generate non-operating income in the form of interest income on
cash and cash equivalents from the proceeds derived from the Initial Public Offering. The Company has selected December 31 as its fiscal
year end.
The
registration statements for the Initial Public Offering were declared effective by the U.S. Securities and Exchange Commission (the
“SEC”) on November 8, 2021 (the “Effective Date”). On November 12, 2021, the Company completed its initial
public offering (the “Initial Public Offering” or “IPO”) of 14,375,000 units
(“Units”), including the issuance of 1,875,000 Units
as a result of the underwriters’ exercise in full of their over-allotment option at an offering price of $10.00 per
Unit, generating gross proceeds of $143,750,000 which
is discussed in Note 3. Simultaneously with the closing of the IPO, the Company consummated a private placement (the “Private
Placement”) of 6,201,750 warrants
to OmniLit Sponsor LLC, a Delaware limited liability company and the Company’s sponsor (the “Sponsor”), 575,000 warrants
to Imperial Capital, LLC, a Delaware limited liability company (“Imperial Capital”), and 143,750 warrants
to I-Bankers Securities, Inc., a Texas corporation (“I- Bankers”), (together, the “Private Placement
Warrants”), each at a price of $1.00 per
Private Placement Warrant, generating total proceeds of $6,920,500,
which is described in Note 4. Transaction costs amounted to $8,333,135,
consisting of $2,875,000 of
underwriting discount, $5,031,250 of
deferred underwriting discount, and $426,884 of
other offering costs. In addition, $1,579,046 of
cash was held outside of the Trust Account (as defined below) and was available for working capital purposes. The Company’s
Business Combination must be with one or more target businesses that together have a fair market value equal to at least 80%
of the balance in the Trust Account (as defined below) (net of taxes payable) at the time of the signing of an agreement to enter
into the Business Combination. However, the Company will only complete the Business Combination if the post-Business Combination
company owns or acquires 50% or more of the outstanding voting securities of the target or otherwise acquires a controlling interest
in the target sufficient for it not to be required to register as an investment company under the Investment Company Act of 1940, as
amended (the “Investment Company Act”). There is no assurance that the Company will be able to successfully effect the
Business Combination.
Upon
the closing of the Initial Public Offering, a total of $146,625,000 ($10.20 per Unit) of the net proceeds from the IPO and the Private
Placement was deposited in a trust account (“Trust Account”) and invested in U.S. government securities, within the meaning
set forth in Section 2(a)(16) of the Investment Company Act, with a maturity of 180 days or less or in any open-ended investment company
that holds itself out as a money market fund meeting the conditions of Rule 2a-7 of the Investment Company Act, as determined by the
Company. Except with respect to interest earned on the funds held in the Trust Account that may be released to the Company to pay its
franchise and income tax obligations (less up to $100,000 of interest to pay dissolution expenses), the proceeds from the IPO and the
sale of the Private Placement Warrants will not be released from the Trust Account until the earliest of: (a) the completion of the Business
Combination; (b) the redemption of any public shares properly submitted in connection with a stockholder vote to amend the Company’s
certificate of incorporation; and (c) the redemption of the Company’s public shares if the Company is unable to complete the Business
Combination within 15 months from the closing of the IPO (or up to 21 months from the closing of the IPO, if the Company extend the period
of time to consummate a business combination, as described in more detail in our final prospectus related to our IPO filed with the SEC
on November 10, 2021 (the “Prospectus”)), subject to applicable law. The proceeds deposited in the Trust Account could become
subject to the claims of the Company’s creditors, if any, which could have priority over the claims of the Company’s public
stockholders.
In
connection with the Special Meeting of the Stockholders held on December 21, 2022, the Company provided its public stockholders with
the opportunity to redeem all or a portion of their public shares. The stockholders were entitled to redeem their shares for a pro rata
portion of the amount then on deposit in the Trust Account (initially approximately $10.20
per share, plus any pro rata interest earned
on the funds held in the Trust Account and not previously released to the Company to pay its tax obligations). All of the public shares
contain a redemption feature which allows for the redemption of such public shares in connection with the Company’s liquidation,
if there is a shareholder vote or tender offer in connection with the initial Business Combination and in connection with certain amendments
to the Company’s amended and restated certificate of incorporation.
In this Special Meeting of the Stockholders held on
December 21, 2022, an Extension Amendment Proposal and the Trust Amendment Proposal were approved, and as a result, the Company has filed with the state of Delaware an amendment to the Amended and Restated
Certificate of Incorporation to provide the Company the right to extend the Combination Period for an additional nine (9) months
or such earlier date as determined by the Board, from February 12, 2023 to November 12, 2023. The purpose of the Extension was to provide
the Company more time to complete a Business Combination, which the Board believes is in the best interests of our stockholders. With
the Extension Proposal approved, neither the Sponsor nor the Company were required to deposit additional funds into the trust account in
connection with the Extension.
In connection
with the Extension Proposal, stockholders who owned shares of our common stock issued in our IPO (we refer to such stockholders as “public
stockholders” and such shares as “public shares”) elected to redeem all or a portion of their public shares. Stockholders
who elected to redeem, the redemption for a per-share price, payable in cash, was equal to the aggregate amount then on deposit in the
Company’s trust account (the “Trust Account”), including interest (which interest was net of taxes payable), divided
by the number of then outstanding public shares. In connection with the vote to approve the Extension Amendment and Trust Amendment Proposals,
the holders of 13,026,951
shares of Class A common stock properly exercised their right to redeem their shares
for cash at a redemption price of approximately $10.28
per share, for an aggregate redemption amount of approximately $133,917,056.
Therefore, as of December 21, 2022, there were 1,348,049
shares of Class A common stock, par value $0.0001
per share, issued and outstanding.
The underwriters were entitled to a deferred fee
of $0.35 per Unit, or $5,031,250 in the aggregate as noted in our prospectus, however, the underwriters have issued a letter on November
12, 2022 to the Company that it has reduced the deferred fee to $500,000 in the aggregate. The deferred fee will become payable to the
underwriters from the amounts held in the trust account solely in the event that we complete our initial business combination, subject
to the same terms of the underwriting agreement, which was attached as an exhibit to our registration statement on form S-1 filed with
the SEC in connection with our IPO (File No. 333-260090).
OMNILIT
ACQUISITION CORP
NOTES
TO FINANCIAL STATEMENTS
In
accordance with SEC and its guidance on redeemable equity instruments, which has been codified in Financial Accounting Standards Board
(“FASB”) Accounting Standards Codification (“ASC”) Topic 480-10-S99, redemption provisions not solely within
the control of a company require ordinary shares subject to redemption to be classified outside of permanent equity. Given that the public
shares will be issued with other freestanding instruments (i.e., public warrants), the initial carrying value of ordinary shares classified
as temporary equity will be the allocated proceeds determined in accordance with FASB ASC 470-20. The public shares are subject to FASB
ASC 480-10-S99. If it is probable that the equity instrument will become redeemable, the Company has the option to either (i) accrete
changes in the redemption value over the period from the date of issuance (or from the date that it becomes probable that the instrument
will become redeemable, if later) to the earliest redemption date of the instrument or (ii) recognize changes in the redemption value
immediately as they occur and adjust the carrying amount of the instrument to equal the redemption value at the end of each reporting
period. The Company has elected to recognize this change immediately.
Initial
Business Combination
The
Company had 15 months from the closing of the Initial Public Offering (or up to 21 months from the closing of the IPO, if the
Company extends the period of time to consummate a business combination, as described in more detail in the Prospectus) to
consummate the Business Combination (the “Combination Period”). Following the approval of the Extension Amendment
Proposal and Trust Amendment Proposal at the 2022 Special Meeting of Stockholders, the Company now has the right to extend the
Combination Period for an additional nine (9) months, or such earlier date as determined by the Board, from February 12, 2023 to
November 12, 2023 (“Extended Combination Period”. However, if the Company is unable to complete the Business Combination
within the Extended Combination Period, the Company will redeem 100% of the outstanding public shares for a pro rata portion of the
funds held in the Trust Account, equal to the aggregate amount then on deposit in the Trust Account including interest earned on the
funds held in the Trust Account and not previously released to the Company to pay its franchise and income taxes obligations and
less up to $100,000
of interest to pay dissolution expenses, divided by the number of then outstanding public shares, subject to applicable law and as
further described in this registration statement of which the Prospectus forms a part, and then seek to dissolve and
liquidate.
The
Sponsor, officers, and directors have agreed: (i) to waive their redemption rights with respect to their founder shares and public shares
in connection with the completion of the Business Combination; (ii) to waive their redemption rights with respect to their founder shares
and public shares in connection with a stockholder vote to approve an amendment to the Company’s certificate of incorporation;
and (iii) to waive their rights to liquidating distributions from the Trust Account with respect to their founder shares if the Company
fails to complete the Business Combination within the Extended Combination Period.
The
Sponsor has agreed that it will be liable to the Company if and to the extent any claims by a third party for services rendered or products
sold to the Company, or a prospective target business with which the Company has entered into a written letter of intent, confidentiality
or similar agreement, or business-combination agreement, reduce the amount of funds in the Trust Account to below the lesser of: (i)
$10.20 per public share; and (ii) the actual amount per public share held in the Trust Account as of the date of the liquidation of the
Trust Account, if less than $10.20 per share due to reductions in the value of the trust assets, less taxes payable, provided that such
liability will not apply to any claims by a third party or prospective target business who executed a waiver of any and all rights to
the monies held in the Trust Account (whether or not such waiver is enforceable) nor will it apply to any claims under the Company’s
indemnity of the underwriters of the IPO against certain liabilities, including liabilities under the Securities Act. However, the Company
has not asked its Sponsor to reserve for such indemnification obligations, nor has the Company independently verified whether its Sponsor
has sufficient funds to satisfy its indemnity obligations and believe that the Sponsor’s only assets are securities of the Company.
Therefore, the Company cannot assure that its Sponsor would be able to satisfy those obligations.
Liquidity
and Going Concern Consideration
As
of December 31, 2022, the Company had cash on hand of $117,506 held outside of the Trust Account and available for working capital purposes.
The Sponsor has provided a Commitment Letter to the Company to provide access to $100,000 of additional working capital, if needed, for
operations prior to a Business Combination.
The
Company does not believe we will need to raise additional funds in order to meet the expenditures required for operating our business.
However, if the estimate of the costs of identifying a target business, undertaking in-depth due diligence and negotiating a Business
Combination are less than the actual amount necessary to do so, the Company may have insufficient funds available to operate our business
prior to a Business Combination. Moreover, the Company may need to obtain additional financing either to complete a Business Combination
or because the Company becomes obligated to redeem a significant number of public shares upon consummation of a Business Combination,
in which case the Company may issue additional securities or incur debt in connection with such Business Combination. Subject to compliance
with applicable securities laws, the Company would only complete such financing simultaneously with the completion of a Business Combination.
If the Company is unable to complete a Business Combination because it does not have sufficient funds available, the Company will be
forced to cease operations and liquidate the Trust Account. In addition, following a Business Combination, if cash on hand is insufficient,
the Company may need to obtain additional financing in order to meet its obligations.
The
Company is a Special Purpose Acquisition Corporation with a scheduled liquidation date of November 12, 2023. The Company must implement
a resolution by the board as a condition of earlier liquidation date. The Company plans to complete the transaction before the scheduled
liquidation date. In connection with the Special Purpose Acquisition Corporation’s assessment of going concern considerations in
accordance with ASC Topic 205-40 Presentation of Financial Statements - Going Concern, although the Company intends to consummate a Business
Combination on or before November 12, 2023, management has determined that the mandatory liquidation deadline less than 12 months away,
should a Business Combination not occur, it raises doubt about the Company’s ability to continue as a going concern. No adjustments
have been made to the carrying amounts of assets or liabilities should the Company be required to liquidate after February 12, 2023.
Based on the foregoing, management believes that the Company will have insufficient
working capital to meet its needs through the earlier of the consummation of a Business Combination or one year from this filing. Over
this time period, the Company will be using these funds for paying existing accounts payable, identifying and evaluating prospective initial
Business Combination candidates, performing due diligence on prospective target businesses, paying for travel expenditures, selecting
the target business to merge with or acquire, and structuring, negotiating and consummating the Business
Combination.
Risks
and Uncertainties
Management
is currently evaluating the impact of the COVID-19 pandemic on the industry and has concluded that while it is reasonably possible that
the virus could have a negative effect on the Company’s financial position and/or search for a target company, the specific impact
is not readily determinable as of the date of the financial statement. The financial statement does not include any adjustments that
might result from the outcome of this uncertainty.
In Febraury 2022, The Russian Federation and Belarus commenced a military
action with the country of Ukraine. As a result of this action, various nations, including the United States, have instituted economic
sanctions against the Russian Federation and Belarus. Further, the impact of this action and related sanctions on the world economy are
not determinable as of the date of these condensed financial statements. The specific impact on the Company’s financial condition,
results of operations, and cash flows is also not determinable as of the date of these condensed financial statements.
OMNILIT
ACQUISITION CORP
NOTES
TO FINANCIAL STATEMENT
Note
2 — Significant Accounting Policies Basis of Presentation
Basis
of Presentation
The
accompanying financial statements of the Company is presented in U.S. dollars in conformity with accounting principles generally accepted
in the United States of America (“GAAP”) and pursuant to the rules and regulations of the SEC.
Emerging
Growth Company Status
The
Company is an “emerging growth company,” as defined in Section 2(a) of the Securities Act of 1933, as amended, (the “Securities
Act”), as modified by the Jumpstart our Business Startups Act of 2012, (the “JOBS Act”), and it may take advantage
of certain exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth
companies including, but not limited to, not being required to comply with the auditor attestation requirements of Section 404 of the
Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in its periodic reports and proxy statements, and
exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and stockholder approval of any golden
parachute payments not previously approved.
Further,
Section 102(b)(1) of the JOBS Act exempts emerging growth companies from being required to comply with new or revised financial accounting
standards until private companies (that is, those that have not had a Securities Act registration statement declared effective or do
not have a class of securities registered under the Exchange Act) are required to comply with the new or revised financial accounting
standards. The JOBS Act provides that a company can elect to opt out of the extended transition period and comply with the requirements
that apply to non-emerging growth companies but any such election to opt out is irrevocable. The Company has elected not to opt out of
such extended transition period which means that when a standard is issued or revised and it has different application dates for public
or private companies, the Company, as an emerging growth company, can adopt the new or revised standard at the time private companies
adopt the new or revised standard. This may make comparison of the Company’s financial statements with another public company which
is neither an emerging growth company nor an emerging growth company which has opted out of using the extended transition period difficult
or impossible because of the potential differences in accounting standards used.
Use
of Estimates
The
preparation of financial statements in conformity with GAAP requires 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 and the
reported amounts of expenses during the reporting period. Actual results could differ from those estimates.
Cash
and Cash Equivalents
The
Company considers all short-term investments with an original maturity of three months or less when purchased to be cash equivalents.
The Company did not have any cash equivalents as of December 31, 2022 and 2021.
Marketable
Securities Held in Trust Account
The
Company’s portfolio of investments is comprised of U.S. government securities, within the meaning set forth in Section 2(a)(16)
of the Investment Company Act, with a maturity of 185 days or less, or investments in money market funds that invest in U.S. government
securities and generally have a readily determinable fair value, or a combination thereof. When the Company’s investments held
in the Trust Account are comprised of U.S. government securities, the investments are classified as trading securities. When the Company’s
investments held in the Trust Account are comprised of money market funds, the investments are recognized at fair value. Trading securities
and investments in money market funds are presented on the balance sheets at fair value at the end of each reporting period. Gains and
losses resulting from the change in fair value of these securities is included in gain on investments held in the Trust Account in the
accompanying condensed statements of operations. The estimated fair values of investments held in the Trust Account are determined
using available market information.
Concentration
of credit risk
Financial
instruments that potentially subject the Company to concentration of credit risk consist of a cash account in a financial institution
which, at times may exceed the Federal depository insurance coverage of $250,000. At December 31, 2022 and December 31, 2021, the Company had not experienced
losses on this account.
Offering
Costs
The
Company complies with the requirements of Accounting Standards Codification (“ASC”) 340-10-S99-1 and SEC Staff Accounting
Bulletin (“SAB”) Topic 5A-” Expenses of Offering”. Offering costs consist of legal, accounting, underwriting
discount and other costs that are directly related to the IPO. Accordingly, on December 31, 2021, offering costs totaling $8,333,135,
consisting of $2,875,000 of underwriting discount, $5,031,250 of deferred underwriting discount, and $426,885 of other offering costs
were recorded as a charge in accumulated deficit. The underwriters have issued a letter to the Company on November 12, 2022 that it has reduced the deferred fee to
$500,000 in the aggregate.
OMNILIT
ACQUISITION CORP
NOTES
TO FINANCIAL STATEMENT
Class
A Ordinary Shares Subject to Possible Redemption
The
Company accounts for its shares of Class A common stock subject to possible redemption in accordance with the guidance in ASC Topic 480
“Distinguishing Liabilities from Equity.” Shares of Class A common stock subject to mandatory redemption (if any) is classified
as a liability instrument and is measured at fair value. Conditionally redeemable shares of Class A common stock (including shares that
feature 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) is classified as temporary equity. At all other times, shares of Class A common
stock are classified as stockholders’ equity. The Company’s shares of Class A common stock feature certain redemption rights
that are considered to be outside of the Company’s control and subject to the occurrence of uncertain future events. Accordingly,
shares of Class A common stock subject to possible redemption is presented at redemption value as temporary equity, outside of the stockholders’
equity section of the Company’s balance sheet.
All
of the 14,375,000 Class A ordinary shares sold as part of the Units in the IPO contain a redemption feature which allows for the redemption
of such public shares in connection with the Company’s liquidation, if there is a shareholder vote or tender offer in connection
with the Business Combination and in connection with certain amendments to the Company’s amended and restated memorandum and articles
of association. In accordance with the accounting treatment for redeemable equity instruments, which has been codified in ASC 480-10-S99,
redemption provisions not solely within the control of the Company require Class A ordinary shares subject to redemption to be classified
outside of permanent equity. Therefore, all Class A ordinary shares have been classified outside of permanent equity.
The
Company recognizes changes in redemption value immediately as they occur and adjusts the carrying value of redeemable ordinary shares
to equal the redemption value at the end of each reporting period. Increases or decreases in the carrying amount of redeemable ordinary
shares are affected by charges against additional paid in capital and accumulated deficit. At December 31, 2022, the Class A Ordinary
shares reflected in the balance sheet are reconciled in the following table:
Schedule of Reconciliation of Class A Ordinary
Shares
| |
| | |
|
|
|
|
| |
| 12/31/2022 | |
|
|
12/31/2021 |
|
| |
| | |
|
|
|
|
Gross proceeds | |
$ | 146,625,000 | |
|
$ |
143,750,000 |
|
| |
| | |
|
|
|
|
Less: | |
| | |
|
|
|
|
Proceeds allocated to Public Warrants at issuance | |
| - | |
|
|
(3,566,173 |
) |
Redeemable common stock issuance costs | |
| - | |
|
|
(8,106,798 |
) |
NRA issuance cost | |
| (1,011,984 | ) |
|
|
- |
|
Redemption | |
| (133,917,056 | ) |
|
|
- |
|
| |
| | |
|
|
|
|
Add | |
| | |
|
|
|
|
Accretion of Carrying value to redemption value | |
| 2,223,874 | |
|
|
14,547,971 |
|
Common stock subject to redemption | |
$ | 13,919,834 | |
|
$ |
146,625,000 |
|
Fair
Value of Financial Instruments
The
fair value of the Company’s assets and liabilities, which qualify as financial instruments under the FASB ASC 820, “Fair
Value Measurements and Disclosures,” approximates the carrying amounts represented in the financial statement, primarily due to
its short-term nature.
Fair
Value Measurements
Fair
value is defined as the price that would be received for sale of an asset or paid for transfer of a liability, in an orderly transaction
between market participants at the measurement date. 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.
In some circumstances, the inputs used to measure fair value might be categorized within different levels of the fair value hierarchy.
In those instances, the fair value measurement is categorized in its entirety in the fair value hierarchy based on the lowest level
input that is significant to the fair value measurement. |
Accounting
for Warrants
The
Company accounts 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 the Company’s own Common Stocks and whether the instrument holders could potentially require “net cash settlement”
in a circumstance outside of the Company’s 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 Public Warrants and Private Placement Warrants issued pursuant to the warrant agreement
qualify for equity accounting treatment.
Income
Taxes
The
Company accounts for income taxes under ASC 740 Income Taxes (“ASC 740”). ASC 740 requires the recognition of deferred tax
assets and liabilities for both the expected impact of differences between the financial statement and tax basis of assets and liabilities
and for the expected future tax benefit to be derived from tax loss and tax credit carry forwards. ASC 740 additionally requires a valuation
allowance to be established when it is more likely than not that all or a portion of deferred tax assets will not be realized.
ASC
740 also clarifies the accounting for uncertainty in income taxes recognized in an enterprise’s financial statements and prescribes
a recognition threshold and measurement process for financial statement recognition and measurement of a tax position taken or expected
to be taken in a tax return. For those benefits to be recognized, a tax position must be more- likely-than-not to be sustained upon examination
by taxing authorities. ASC 740 also provides guidance on derecognition, classification, interest and penalties, accounting in interim
period, disclosure and transition.
The
Company recognizes accrued interest and penalties related to unrecognized
tax benefits as income tax expense. There were no unrecognized tax benefits and no amounts accrued for interest and penalties as of December
31, 2022 and December 31, 2021. The Company is currently not aware of any issues under review that could result in significant payments,
accruals or material deviation from its
position.
The
Company has identified the United States and Florida as its only “major” tax jurisdictions.
OMNILIT
ACQUISITION CORP
NOTES
TO FINANCIAL STATEMENT
The Company is subject to potential income tax examinations by federal
and state taxing authorities. These potential examinations may include questioning the timing and amount of deductions, the nexus of income
among various tax jurisdictions and compliance with federal and state tax laws. The Company’s management does not expect that the
total amount of unrecognized tax benefits will materially change over the next twelve months.
New
Law and Changes
On
August 16, 2022, the Inflation Reduction (the IR) Act was signed into law, which, beginning in 2023, will impose a 1% excise tax
on public company stock buybacks. The company is assessing the potential impact of the Act.
The
IR Act imposes a 1% excise tax on the fair market value of stock repurchases made by covered corporations after December 31, 2022.
The total taxable value of shares repurchased is reduced by the fair market value of and newly issued shares during the taxable year. Redemption
rights are ubiquitous to nearly all SPACs. Shareholders have the ability to require the SPAC to repurchase their shares prior to the
merger in what is known as a redemption right, essentially getting their money back. There are two possible scenarios in which redemption
rights come into play. First, they can be exercised by the shareholders themselves because they are exiting the transaction, or second,
they can be triggered because the SPAC did not find a target with which to merge. The
Company will continue to access the potential impact of the IR Act. Based on our preliminary assessment, we do not expect a material
impact on our consolidated financial statements.
Net
Income (Loss) Per Common Stock
The
Company complies with accounting and disclosure requirements of FASB ASC Topic 260, “Earnings Per Share”. The Company has
two classes of shares, which are referred to as Class A common stock and Class B common stock. Earnings and losses are shared pro rata
between the two classes of stock. The warrants are exercisable to purchase 14,108,000 shares of Class A common stock in the aggregate
and were excluded from diluted earnings per share for the year ended December 31, 2022 because the warrants are contingently exercisable,
and the contingencies have not yet been met. As a result, diluted loss per share is the same as basic loss per share for the year ended
December 31, 2022 and the period from May 20, 2021 (Inception) through December 31, 2021. Remeasurement associated with the redeemable
shares of Class A common stock to redemption value is excluded from earnings per share as the redemption value approximates fair value.
For
the Year Ended December 31, 2022 and the period from May 20, 2021 (Inception) Through December 31, 2021, net income (loss) per common
share is as follows:
Schedule
of Net Income (loss) Per Common Share
| |
Class A | | |
Class B | | |
Class A | | |
Class B | |
| |
Year Ended December 31, 2022 | | |
May 20, 2021 (Inception) Through December 31, 2021 | |
| |
Class A | | |
Class B | | |
Class A | | |
Class B | |
Basic and diluted net income (loss) per share | |
| | | |
| | | |
| | | |
| | |
Numerator: | |
| | | |
| | | |
| | | |
| | |
Allocation of net income (loss) | |
$ | 631,285 | | |
$ | 216,337 | | |
$ | (127,116 | ) | |
$ | (42,372 | ) |
| |
| | | |
| | | |
| | | |
| | |
Denominator | |
| | | |
| | | |
| | | |
| | |
Weighted-average shares outstanding | |
| 13,982,407 | | |
| 4,791,667 | | |
| 14,375,000 | | |
| 4,330,522 | |
Basic and diluted net income (loss) per share | |
$ | 0.05 | | |
$ | 0.05 | | |
$ | (0.01 | ) | |
$ | (0.01 | ) |
Recent
Accounting Pronouncements
In
August 2020, the FASB issued Accounting Standards Update (“ASU”) No. 2020-06, Debt - Debt with Conversion and Other Options
(Subtopic 470-20) and Derivatives and Hedging —Contracts in Entity’ Own Equity (Subtopic 815-40): Accounting for Convertible
Instruments and Contracts in an Entity’ Own Equity (“ASU 2020-06”), which simplifies accounting for convertible instruments
by removing major separation models required under current GAAP. The ASU also removes certain settlement conditions that are required
for equity-linked contracts to qualify for the derivative scope exception, and it simplifies the diluted earnings per share calculation
in certain areas. The provisions of ASU 2020-06 are applicable for fiscal years beginning after December 15, 2023, with early adoption
permitted no earlier than fiscal years beginning after December 15, 2020. The Company is currently evaluating the impact of ASU 2020-
06 on its financial statements.
The
Company’s 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 balance sheet.
Note
3 — Initial Public Offering
On
November 12, 2021, the Company completed its IPO of 14,375,000 units, including the issuance of 1,875,000 Units as a result of the underwriters’
exercise in full of their over-allotment option at an offering price of $10.00 per Unit, generating gross proceeds of $143,750,000. Each
Unit consists of one Class A ordinary share and one-half of one redeemable warrant. Each whole public warrant entitles the holder to
purchase one Class A ordinary share at a price of $11.50 per share. Each public warrant will become exercisable on the later of 30 days
after the completion of the initial Business Combination or 12 months from the closing of the IPO and will expire five years after the
completion of the initial Business Combination, or earlier upon redemption or liquidation. In connection with the Extension
Proposal, stockholders who owned shares of our common stock issued in our IPO (we refer to such stockholders as “public stockholders”
and such shares as “public shares”) elected to redeem all or a portion of their public shares. Stockholders who elected to
redeem, the redemption for a per-share price, payable in cash, was equal to the aggregate amount then on deposit in the Company’s
trust account (the “Trust Account”), including interest (which interest was net of taxes payable), divided by the number of
then outstanding public shares. Therefore, as of December 21, 2022, there were 1,348,049 shares of Class A common stock, par value
$0.0001 per share, issued and outstanding.
The
underwriters were paid a cash underwriting discount of $2,875,000,
or $0.20 per
Unit, of the gross proceeds of the IPO. Additionally, the underwriters are entitled to a deferred underwriting discount of $500,000 of
the gross proceeds of the IPO held in the Trust Account upon the completion of the Company’s initial Business Combination
subject to the terms of the underwriter letter on November 12, 2022.
Note
4— Private Placement
Simultaneously
with the closing of the IPO, the Company completed a private placement of an aggregate of 6,920,500 Private Placement Warrants at a price
of $1.00 per Private Placement Warrant, generating total gross proceeds of $6,920,500. A portion of the proceeds from the sale of the
Private Placement Warrants were added to the net proceeds from the IPO held in the Trust Account.
The
Private Placement Warrants will be identical to the warrants sold in the Initial Public Offering, except that the Private Placement Warrants:
(i) may not (including the Class A common stock issuable upon exercise of these warrants), subject to certain limited exceptions, be
transferred, assigned, or sold by the holders until 30 days after the completion of the Business Combination; and (ii) will be entitled
to registration rights.
OMNILIT
ACQUISITION CORP
NOTES
TO FINANCIAL STATEMENT
The
Company’s Sponsor has agreed: (i) to waive its redemption rights with respect to its founder shares and public shares in connection
with the completion of the Business Combination; (ii) to waive its redemption rights with respect to its founder shares and public shares
in connection with a stockholder vote to approve an amendment to the Company’s certificate of incorporation: (A) to modify the
substance or timing of the Company’s obligation to redeem 100% of its public shares if the Company does not complete its Business
Combination within 15 months from the closing of the IPO (or up to 21 months from the closing of the IPO, if the Company extends the
period of time to consummate a business combination, as described in more detail in the Prospectus); or (B) with respect to any other
provision relating to stockholders’ rights or pre-initial business-combination activity; and (iii) to waive its rights to liquidating
distributions from the Trust Account with respect to its founder shares if the Company fails to complete its Business Combination within
15 months from the closing of the IPO (or up to 21 months from the closing of the IPO, if the Company extends the period of time to consummate
a business combination, as described in more detail in the Prospectus). In addition, the Company’s Sponsor has agreed to vote any
founder shares held by them and any public shares purchased during or after the IPO (including in open market and privately negotiated
transactions) in favor of the Business Combination.
Note
5 — Related Party Transactions
Related
Party Payables
Since
our inception our Sponsor has advanced an aggregate of $363,995 on our behalf to cover certain expenses (the “Advances”).
The Advances were repaid upon the consummation of the Initial Public Offering from funds not held in the trust account.
Promissory
Note — Related Party
On
June 10, 2021, the Company issued an unsecured promissory note to the Sponsor, pursuant to which the Company may borrow up to an aggregate
principal amount of $300,000 to be used for a portion of the expenses of the Initial Public Offering. In July, 2021, $ was advanced
to the Company in accordance with the terms of the agreement. This loan is non-interest bearing, unsecured and due at the earlier of
December 31, 2021, or the closing of the Initial Public Offering. The loan was repaid upon the closing of the Initial Public Offering
out of the offering proceeds that has been allocated for the payment of offering expenses (other than underwriting commissions).
Related
Party Loans
In connection with the Special Meeting of Stockholders held on December,
31 2022, the Extension Proposal was approved, neither the Sponsor nor the Company are required to deposit additional funds into the trust
account in connection with the Extension.
In
order to finance transaction costs in connection with a Business Combination, the Sponsor or an affiliate of the Sponsor, or certain
of the Company’s officers and directors may, but are not obligated to, loan the Company funds as may be required (“Working
Capital Loans”). Such Working Capital Loans would be convertible into private placement-equivalent warrants at a price of $1.00
per warrant (which, for example, would result in the holders being issued 1,500,000 warrants if $1,500,000 of notes were so converted),
at the option of the lender. Such warrants would be identical to the private placement warrants, including as to exercise price, exercisability
and exercise period. In the event that a Business Combination does not close, the Company may use a portion of proceeds held outside
the Trust account to repay the Working Capital Loans but no proceeds held in the Trust Account would be used to repay the Working Capital
Loans. As of December 31, 2021 and 2022, no Working Capital Loans have been made to the Company. The Sponsor has provided a Commitment Letter to the Company to provide access to $100,000 of additional working capital,
if needed, for operations prior to a Business Combination.
Founder
Shares
On
May 20, 2021, the Company issued an aggregate of 4,312,500 founder shares to our sponsor. On September 27, 2021, our sponsor forfeited
718,750 founder shares for no consideration. On November 1, 2021, the Company effected a 1 1/3 for 1 forward stock split on our founder
shares and as a result holds 4,791,667 founder shares for an aggregate purchase price of $25,000 in cash, or approximately $0.005 per
share, in connection with formation. The Sponsor has agreed not to transfer, assign or sell its founder shares until the earlier of:
(i) one year after the date of the consummation of the Business Combination; or (ii) the date on which the Company consummates a liquidation,
merger, stock exchange, or other similar transaction that results in all of its stockholders having the right to exchange their shares
of Class A common stock for cash, securities, or other property. Notwithstanding the foregoing, if the closing price of the Company’s
Class A common stock equals or exceeds $12.00 per share (as adjusted for stock splits, stock dividends, reorganizations, recapitalizations,
and the like) for any 20 trading days within any 30-trading day period commencing 60 days after the Business Combination, the founder
shares will no longer be subject to such transfer restrictions.
As per 8-K filed on December 15, 2022, nine investors signed non-redemption
agreements for 499,992 founder shares.
OMNILIT
ACQUISITION CORP
NOTES
TO FINANCIAL STATEMENT
Note
6 — Commitments
Registration
Rights
The
holders of the founder shares, Private Placement Warrants, shares of Class A common stock underlying the Private Placement Warrants,
and warrants (including underlying securities) that may be issued upon conversion of working capital loans will have registration rights
to require the Company to register a sale of any of its securities held by them pursuant to a registration rights agreement to be signed
prior to or on the effective date of the IPO. These holders will be entitled to make up to three demands, excluding short form registration
demands, that the Company registers such securities for sale under the Securities Act. In addition, these holders will have “piggy-back”
registration rights to include their securities in other registration statements filed by the Company.
Notwithstanding
the foregoing, the underwriters may not exercise their demand and “piggyback” registration rights after five and seven years,
respectively, after the effective date of the Initial Public Offering and may not exercise their demand rights on more than one occasion.
Underwriters
Agreement
On
November 12, 2021, the underwriters were paid a cash underwriting discount of $2,875,000, or $0.20 per Unit, of the gross proceeds of
the IPO. An additional fee of $0.35 per Unit, or $5,031,250 in the aggregate payable to the underwriters for deferred underwriting
commissions, however, the underwriters have issued a letter on November 12, 2022 to
the Company that it has reduced the deferred fee to $500,000 in the aggregate. The deferred fee will become payable to the underwriters from the amounts held in the Trust Account solely in the event
that the Company completes a Business Combination, subject to the terms of the underwriting agreement.
Right
of First Refusal
Subject
to certain conditions, the Company granted Imperial Capital, for a period beginning on the closing of the Initial Public Offering and
ending 12 months after the date of the consummation of the Business Combination, a right of first refusal to provide investment banking
and/or financial advisory services in connection with certain future transaction until the earlier of (x) the date of the consummation
of our initial business combination and (y) 18 months from the closing of the IPO. In accordance with FINRA Rule 5110(g)(6), such right
of first refusal shall not have a duration of more than three years from the effective date of the registration statement of which the
Prospectus forms a part.
Note
7 — Stockholder’s Deficit
Recapitalization
— On November 1, 2021, the Company effected a recapitalization whereby a 1 1/3 for 1 forward stock split of its Class B
common stock was completed so that the Sponsor owns an aggregate of founder shares.
Preferred
Stock — The Company is authorized to issue a total of 1,000,000 shares of preferred stock at par value of $0.0001 each.
At December 31, 2021 and 2022, there were no shares of preferred stock issued or outstanding.
Class
A Common Stock — The Company is authorized to issue a total of 100,000,000 shares of Class A common stock at par value
of $0.0001 each. At December 31,2021 there were 14,375,000 shares of Class A common stock issued and outstanding and subject
to possible redemption. At December 31,2022 there were 1,348,049 shares of Class A common stock issued and outstanding and subject to possible
redemption.
Class
B Common Stock — The Company is authorized to issue a total of 20,000,000 shares of Class B common stock at par value of
$0.0001 each. At December 31,2021 and 2022, there were 4,791,667 shares of Class B common stock issued and outstanding.
The
Company’s initial stockholder has agreed not to transfer, assign, or sell any of its founder shares until the earlier of: (i) one
year after the date of the consummation of the Business Combination; or (ii) the date on which the Company consummates a liquidation,
merger, stock exchange, or other similar transaction that results in all of its stockholders having the right to exchange their shares
of Class A common stock for cash, securities, or other property. Any permitted transferees will be subject to the same restrictions and
other agreements of the initial stockholder with respect to any founder shares. Notwithstanding the foregoing, if the closing price of
the Company’s Class A common stock equals or exceeds $12.00 per share (as adjusted for stock splits, stock dividends, reorganizations,
recapitalizations, and the like) for any 20 trading days within any 30-trading day period commencing 60 days after the Business Combination,
the founder shares will no longer be subject to such transfer restrictions. Any permitted transferees will be subject to the same restrictions
and other agreements of the Company’s initial stockholder with respect to any founder shares.
The
shares of Class B common stock will automatically convert into shares of the Company’s Class A common stock at the time of its
Business Combination on a one-for-one basis, subject to adjustment for stock splits, stock dividends, reorganizations, recapitalizations,
and the like, and subject to further adjustment as provided herein. In the case that additional shares of Class A common stock, or equity-linked
securities, are issued or deemed issued in excess of the amounts offered in the Company’s registration statement and related to
the closing of the Business Combination, the ratio at which shares of Class B common stock shall convert into shares of Class A common
stock will be adjusted (unless the holders of a majority of the outstanding shares of Class B common stock agree to waive such adjustment
with respect to any such issuance or deemed issuance) so that the number of shares of Class A common stock issuable upon conversion of
all shares of Class B common stock will equal, in the aggregate, on an as-converted basis, 25% of the sum of the total number of all
shares of common stock outstanding upon the completion of the IPO plus all shares of Class A common stock and equity-linked securities
issued or deemed issued in connection with the Business Combination (excluding any shares or equity-linked securities issued, or to be
issued, to any seller in the Business Combination or any private placement- equivalent units issued to the Sponsor, its affiliates, or
certain of officers and directors upon conversion of working capital loans made to the Company).
OMNILIT
ACQUISITION CORP
NOTES
TO FINANCIAL STATEMENT
Holders
of the Class A common stock and holders of the Class B common stock will vote together as a single class on all matters submitted to
a vote of the Company’s stockholders, with each share of common stock entitling the holder to one vote.
Warrants —
At December 31, 2022 and 2021, there were 7,187,500
Public Warrants and 6,920,500
Private Placement Warrants outstanding respectively.
Each
whole warrant entitles the holder thereof to purchase one share of the Company’s Class A common stock at a price of $11.50 per
share, subject to adjustment as discussed herein. In addition, if: (A) the Company issues additional shares of Class A common stock or
equity-linked securities for capital raising purposes in connection with the closing of its Business Combination at an issue price or
effective issue price of less than $9.20 per share of Class A common stock (with such issue price or effective issue price to be determined
in good faith by the Company’s board of directors and, in the case of any such issuance to the Company’s sponsor or its affiliates,
without taking into account any founder shares held by the Company’s sponsor or its affiliates, prior to such issuance) (the “Newly
Issued Price”); (B) the aggregate gross proceeds from such issuances represent more than 60% of the total equity proceeds, and
interest thereon, available for the funding of the Business Combination on the date of the consummation of the Business Combination (net
of redemptions); and (C) the volume weighted average trading price of the Company’s common stock during the 20 trading day period
starting on the trading day prior to the day on which the Company consummates the Business Combination (such price, the “Market
Value”) is below $9.20 per share, the exercise price of the warrants will be adjusted (to the nearest cent) to be equal to 115%
of the higher of the Market Value and the Newly Issued Price, and the $18.00 per share redemption trigger price described below under
“Redemption of warrants” will be adjusted (to the nearest cent) to be equal to 180% of the higher of the Market Value and
the Newly Issued Price.
The
warrants will become exercisable on the later of 12 months from the closing of the IPO, or 30 days after the completion of its Business
Combination and will expire five years after the completion of the Business Combination, at 5:00 p.m., New York City time, or earlier
upon redemption or liquidation.
The
Company will not be obligated to deliver any shares of Class A common stock pursuant to the exercise of a warrant and will have no obligation
to settle such warrant exercise unless a registration statement under the Securities Act with respect to the shares of Class A common
stock underlying the warrants is then effective and a prospectus is current. No warrant will be exercisable, and the Company will not
be obligated to issue shares of Class A common stock upon exercise of a warrant unless Class A common stock issuable upon such warrant
exercise has been registered, qualified, or deemed to be exempt under the securities laws of the state of residence of the registered
holder of the warrants. In no event will the Company be required to net cash settle any warrant. In the event that a registration statement
is not effective for the exercised warrants, the purchaser of a unit containing such warrant will have paid the full purchase price for
the unit solely for the share of Class A common stock underlying such unit.
Once
the warrants become exercisable, the Company may call the warrants for redemption (excluding the Private Placement Warrants):
|
● |
in
whole and not in part; |
|
● |
at
a price of $0.01 per warrant; |
|
● |
upon
not less than 30 days’ prior written notice of redemption to each warrant holder; and |
|
● |
if,
and only if, the reported last sale price of the Class A common stock equals or exceeds $18.00 per share (as adjusted for stock splits,
stock dividends, reorganizations, recapitalizations and the like) for any 20 trading days within a 30-trading day period ending three
business days before the Company send the notice of redemption to the warrant holders. |
|
● |
if,
and only if, there is a current registration statement in effect with respect to the shares of Class A common stock underlying such
warrants. |
If
the Company calls the warrants for redemption as described above, the management will have the option to require any holder that wishes
to exercise its warrant to do so on a “cashless basis.” If the management takes advantage of this option, all holders of
warrants would pay the exercise price by surrendering their warrants for that number of shares of Class A common stock equal to the quotient
obtained by dividing: (A) the product of the number of shares of Class A common stock underlying the warrants, multiplied by the difference
between the exercise price of the warrants and the “fair market value” (defined below); by (B) the fair market value. The
“fair market value” shall mean the average reported last sale price of the Class A common stock for the 10 trading days ending
on the third trading day prior to the date on which the notice of redemption is sent to the holders of warrants.
The
exercise price and number of shares of common stock issuable on exercise of the warrants may be adjusted in certain circumstances, including
in the event of a stock dividend, extraordinary dividend, or the Company’s recapitalization, reorganization, merger, or consolidation.
However, the warrants will not be adjusted for issuances of shares of common stock at a price below their respective exercise prices.
Note
8 — Fair Value
The
following table presents information about the Company’s assets that are measured at fair value on a recurring basis as of December
31, 2021 and 2022, and indicates the fair value hierarchy of the valuation techniques that the Company utilized to determine such fair
value.
Schedule of the Fair Value Valuation Techniques
Assets: | |
Level | |
|
December
31, 2022 |
|
|
December 31, 2021 | |
Marketable securities held in Trust Account | |
| 1 | |
|
$ |
14,011,070 |
|
|
$ | 146,626,679 | |
Transfers
to/from Levels 1, 2, and 3 are recognized at the beginning of the reporting period. There were no transfers between levels for the year
ended December 31, 2022 and the period from May 20, 2021 (inception) through December 31, 2021.
OMNILIT
ACQUISITION CORP
NOTES
TO FINANCIAL STATEMENT
Level
1 instruments include investments in mutual funds invested in government securities. The Company uses inputs such as actual trade data,
benchmark yields, quoted market prices from dealers or brokers, and other similar sources to determine the fair value of its investments.
Warrant
Fair Value Measurement
The
Company established the initial fair value for the warrants on November 9, 2021, the date of the Company’s Initial Public Offering,
using a modified Black-Scholes model for the Public Warrants and Private Placement Warrants and the transaction prices that serve as
a proxy for fair value that were observed on the Balance Sheet date. 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) and (ii) the sale of Private Placement
Warrants, first to the warrants based on their fair values as determined at initial measurement, with the remaining proceeds recorded
as a charge to accumulated deficit based on their relative fair values recorded at the initial measurement date. The warrants were classified
as Level 3 at the initial measurement date due to the use of unobservable inputs.
Schedule
of Fair Value Measurement of Unobservable Inputs
|
|
November 9, 2021 | |
|
|
Fair Value Measurement | |
Input |
|
Public Warrants | | |
Private Placement Warrants | |
Common stock price |
|
$ | 9.79 | | |
$ | 9.79 | |
Risk-free interest rate |
|
| 1.34 | % | |
| 1.34 | % |
Expected term in years |
|
| 5.87 years | | |
| 5.87 years | |
Expected volatility |
|
| 10.0 | % | |
| 10.0 | % |
Exercise price |
|
$ | 11.50 | | |
$ | 11.50 | |
Fair Value per warrant |
|
$ | 0.50 | | |
$ | 0.50 | |
Note
9-Income Taxes
As
of December 31, 2022 and December 31, 2021, the Company’s net deferred tax assets are as follows:
Schedule of Net Deferred Tax Assets
| |
| | | |
| | |
| |
12/31/2022 | | |
12/31/2021 | |
Deferred tax asset: | |
| | |
| |
Organizational costs/Startup expenses | |
$ | 162,512 | | |
$ | 11,964 | |
Net operating loss | |
| - | | |
| 29,971 | |
Total deferred tax asset | |
| 162,512 | | |
| 41,935 | |
Valuation allowance | |
| (162,512 | ) | |
| (41,935 | ) |
Deferred tax asset, net of allowance | |
$ | - | | |
$ | - | |
The
income tax benefit for the period from January 1, 2022 through December 31, 2022 and from May 20, 2021 (Inception) through December 31,
2021, consists of the following:
Schedule of Income Tax Benefit
| |
| | | |
| | |
| |
January 1, 2022 through December 31, 2022 | | |
May 20, 2021 (inception) through December 31, 2021 | |
Federal: | |
| | | |
| | |
Current | |
$ | 349,053 | | |
| - | |
Deferred | |
| (100,083 | ) | |
| (35,944 | ) |
| |
| | | |
| | |
State: | |
| | | |
| | |
Current | |
$ | 96,739 | | |
| - | |
Deferred | |
| (20,493 | ) | |
| (5,991 | ) |
Change in valuation allowance | |
| 120,577 | | |
| 41,935 | |
Income tax provision | |
$ | 445,793 | | |
| - | |
A
reconciliation of the federal income tax rate to the Company’s effective tax rate at December 31, 2022 and December 31, 2021, consists
of the following:
Schedule of Reconciliation of the Federal Income Tax Rate
| |
| | | |
| | |
| |
12/31/2022 | | |
12/31/2021 | |
Statutory federal income tax rate | |
| 21.0 | % | |
| 21.0 | % |
State taxes, net of federal tax benefit | |
| 4.3 | % | |
| 2.8 | % |
Change in State Tax Rate | |
| 2.0 | % | |
| 0.0 | % |
Net Operating Loss | |
| -2.3 | % | |
| 0.0 | % |
Change in valuation allowance | |
| 9.3 | % | |
| -23.8 | % |
Effective Tax Rate | |
| 34.4 | % | |
| 0.0 | % |
The Company will file taxes in the U.S. Federal
jurisdiction and Florida. In 2022, the Company paid $355,916
in U.S. Federal Tax and $98,641
in Florida State Tax based on estimates. The amount of $6,863
for Federal Tax and $1,902
for State Tax were recorded as Tax Receivables.
Note
10-Subsequent Events
The
Company evaluated subsequent events and transactions that occurred after the balance sheet date up to the date the financial statements
were available to be issued. The Company did not identify any subsequent events that would have required adjustment or disclosure in
the financial statements, except as described below.