10-Q: FutureTech II Acquisition Corp. Faces Delisting Amidst Proposed Merger with Longevity Biomedical

FutureTech II Acquisition Corp.'s Q1 2025 report reveals a net loss, ongoing efforts to complete a business combination with Longevity Biomedical, and challenges with Nasdaq listing compliance.

Summary

• FutureTech II Acquisition Corp. reported a net loss of $289,673 for the three months ended March 31, 2025, compared to a net income of $129,577 for the same period in 2024.
• The company's investment income decreased to $199,826 from $536,343 year-over-year, primarily due to a decrease in trust assets.
• Operating expenses increased to $453,835 from $310,934 year-over-year, driven by due diligence costs related to the proposed business combination with Longevity Biomedical, Inc.
• The company is pursuing a business combination with Longevity Biomedical, Inc., with an expected name change to Longevity Biomedical, Inc. and a new ticker symbol 'LBIO' on the NASDAQ Capital Market.
• FutureTech II's securities were suspended from trading on Nasdaq on February 26, 2025, due to non-compliance with Nasdaq IM-5101-2, and are now trading over the counter under the symbols FTII, FTIIU, and FTIIW.
• The company has until August 18, 2025, to complete a business combination, and its ability to continue as a going concern is dependent on securing additional capital and completing the merger.
• The company has entered into a Subscription Agreement with Yuantian Zhang for the purchase of 1,000,000 shares of Class A Common Stock at $5.00 per share, contingent upon the Longevity Business Combination.
• The company has also signed Zero Interest Convertible Notes with several investors, agreeing to loan the company $1,025,000 in aggregate, which can be converted into shares after the closing of the initial business combination.

Sentiment

Score: 4

Explanation: The sentiment is slightly negative due to the net loss, Nasdaq delisting, and going concern uncertainty, but there are positive aspects such as the ongoing merger efforts and secured funding.

Positives

• The company is actively pursuing a business combination with Longevity Biomedical, Inc., which could provide a path to future growth and value creation.
• The company has secured a Subscription Agreement and Zero Interest Convertible Notes to provide additional funding for the business combination.
• The company is taking steps to address the material weakness in its internal control over financial reporting.
• The company has received approximately $695,024 in aggregate in connection with the First and Second Extension Overpayments as of March 31, 2025.

Negatives

• The company reported a net loss of $289,673 for Q1 2025, a significant decrease from the net income of $129,577 in Q1 2024.
• The company's securities were suspended from trading on Nasdaq on February 26, 2025, and are now trading over the counter, which could reduce liquidity and investor interest.
• The company's ability to continue as a going concern is dependent on securing additional capital and completing the merger by August 18, 2025.
• The company has identified a material weakness in its internal control over financial reporting.
• The company has a working capital deficit of $5,290,544 as of March 31, 2025.

Risks

• The company's ability to complete the business combination with Longevity Biomedical, Inc. is subject to certain conditions and may not be successful.
• The company's securities are trading over the counter, which could reduce liquidity and investor interest.
• The company's ability to continue as a going concern is dependent on securing additional capital and completing the merger by August 18, 2025.
• The company has identified a material weakness in its internal control over financial reporting, which could affect its ability to accurately report its financial results.
• The company is subject to risks related to the COVID-19 pandemic, the military action in Ukraine, and the armed conflict in Israel, which could negatively affect its financial position and operations.
• The company is subject to a 1% excise tax on stock buybacks, which could reduce the cash available to complete a Business Combination.
• The company's ability to consummate a transaction may be dependent on the ability to raise equity or debt financing which may be impacted by these events, including as a result of increased market volatility, or decreased market liquidity in third-party financing being unavailable on terms acceptable to the Company or at all.

Future Outlook

The company's future outlook is heavily dependent on its ability to complete the proposed business combination with Longevity Biomedical, Inc. by August 18, 2025. The company's management believes that the company will not have sufficient working capital and borrowing capacity to meet its needs through the consummation of the Business Combination unless the Company can raise additional capital, including continuing funding from the Sponsor.

Industry Context

The report reflects the challenges faced by SPACs in the current market, including difficulties in completing business combinations and maintaining listing compliance. The company's efforts to secure additional funding and pursue a merger are indicative of the broader trend of SPACs seeking to navigate a challenging environment.

Comparison to Industry Standards

• Given the limited information, a direct comparison to industry standards is difficult.
• However, the challenges faced by FutureTech II in maintaining its Nasdaq listing and securing a business combination are common among SPACs.
• Many SPACs have struggled to find suitable targets and complete mergers within the allotted timeframe, leading to liquidations or extensions.
• The company's reliance on sponsor funding and convertible notes is also a common practice among SPACs seeking to bridge financing gaps.

Related Party Transactions

• The Sponsor has agreed to loan the Company funds as may be required up to $ 1,500,000 (the Sponsor Working Capital Loans).
• The company has paid a total of $ 1,145,065 in expenses that will be reimbursed by the Sponsor.
• The Company has agreed to pay the Sponsor a total of $ 10,000 per month for office space, utilities and secretarial and administrative support.

Stakeholder Impact

• Shareholders face uncertainty due to the Nasdaq delisting and the company's going concern status.
• Employees of FutureTech II face uncertainty regarding their future employment prospects.
• The success of the business combination with Longevity Biomedical, Inc. will have a significant impact on all stakeholders.

Next Steps

• Complete the business combination with Longevity Biomedical, Inc.
• Secure additional funding to support the business combination.
• Address the material weakness in internal control over financial reporting.
• Apply to list the securities of the post-business-combination Company on The Nasdaq Capital Market.

Key Dates

Keywords

business combination, Longevity Biomedical, SPAC, merger, acquisition, financial results, Nasdaq, delisting, redemption, PIPE, convertible notes, going concern, internal control, FTII