DEFR14A: FutureTech II Acquisition Corp. Seeks Extension and Founder Share Amendment to Facilitate Business Combination

FutureTech II Acquisition Corp. is seeking stockholder approval to extend the deadline for completing a business combination and to amend the charter to allow for earlier conversion of founder shares to maintain Nasdaq compliance.

Summary

• FutureTech II Acquisition Corp. is seeking stockholder approval for two key proposals: a charter amendment to extend the deadline for completing a business combination by up to nine months, from November 18, 2024, to August 18, 2025, and an amendment to allow holders of Class B common stock (founder shares) to convert them into Class A common stock on a one-to-one basis at any time prior to a business combination.
• The extension requires the Sponsor to deposit into a trust account the lesser of $50,000 or $0.03 multiplied by the number of public shares not redeemed for each one-month extension.
• The founder share amendment aims to regain compliance with Nasdaq's minimum market value of listed securities (MVLS) requirement of $50 million.
• FutureTech entered into a merger agreement with Longevity Biomedical, Inc. on September 16, 2024, but believes it needs more time to complete the transaction.
• The company received a delisting notice from Nasdaq on October 23, 2024, and has requested a hearing with the Nasdaq Hearings Panel scheduled for December 17, 2024.
• As of October 11, 2024, the estimated redemption price is approximately $11.61 per share before deducting estimated taxes payable, and $11.01 per share after deducting estimated taxes payable.
• As of October 11, 2024, there was approximately $26.9 million in the Trust Account.
• The current yield on the funds held in the Trust Account as of October 1, 2024 is 3.72%.

Sentiment

Score: 5

Explanation: The document presents a mixed sentiment. While it highlights the company's efforts to complete a business combination and maintain Nasdaq compliance, it also acknowledges the risks and challenges involved, including potential liquidation and delisting. The need for an extension suggests some difficulties, but the company is taking proactive steps to address them.

Positives

• The proposed extension provides FutureTech with more time to complete its business combination with Longevity Biomedical, Inc.
• The founder share amendment could help FutureTech regain compliance with Nasdaq listing requirements.
• Stockholders retain the right to redeem their shares if they disapprove of the extension or any future business combination.
• The Sponsor is committed to depositing funds into the trust account for each extension month.

Negatives

• If the proposals are not approved, FutureTech will be forced to liquidate.
• Redemptions in connection with the extension could significantly reduce the amount of funds available in the trust account.
• Failure to regain Nasdaq compliance could lead to delisting and adverse consequences for the company's securities.
• The company faces immediate suspension and delisting of its securities once the 36-month window ends on February 14, 2025.

Risks

• There is no assurance that the extension will enable FutureTech to complete a business combination.
• Redemptions could leave FutureTech with insufficient cash to consummate the business combination.
• The company may not be able to regain compliance with Nasdaq listing requirements.
• Delisting from Nasdaq could lead to reduced liquidity, limited market quotations, and other adverse consequences.
• The proposed extension of the Combination Period beyond August 18, 2025, contravenes Nasdaq rules and, as a result, may lead Nasdaq to suspend trading in the Company's securities or lead the Company's securities to be delisted from Nasdaq.
• The Company may not be able to complete an initial business combination with a U.S. target company since such initial business combination may be subject to U.S. foreign investment regulations and review by a U.S. government entity such as the Committee on Foreign Investment in the United States (CFIUS), and ultimately prohibited.
• The Companys proposed extension of the Combination Period beyond August 18, 2025, contravenes Nasdaq rules and, as a result, may lead Nasdaq to suspend trading in the Companys securities or lead the Companys securities to be delisted from Nasdaq.
• If we are deemed to be an investment company for purposes of the Investment Company Act, we would be required to institute burdensome compliance requirements and our activities would be severely restricted.
• Since the Sponsor and our directors and officers will lose their entire investment in us if an initial business combination is not completed, they may have a conflict of interest in the approval of the proposals at the Special Meeting.

Future Outlook

FutureTech intends to complete a business combination by the Extended Date of August 18, 2025, if the extension is approved. The company is working towards completing the Business Combination before February 14, 2025.

Management Comments

• The Board believes that it is in the best interests of the stockholders to continue FutureTechs existence until the Extended Date in order to allow FutureTech more time to complete such business combination.
• The Companys management believes that it can close the Business Combination before February 14, 2025; however, out of an abundance of caution, the Company is seeking extension until August 18, 2025.

Industry Context

This announcement reflects the challenges faced by SPACs in completing business combinations within the initial timeframe, particularly given current market conditions and regulatory scrutiny. Many SPACs are seeking extensions to provide more time to find and close deals.

Comparison to Industry Standards

• The need for SPACs to seek extensions is a common trend in the current market, reflecting difficulties in finding suitable targets and completing deals within the initial timeframe.
• Comparable SPACs, such as Goldenstone Acquisition Ltd. and Wealthbridge Acquisition Limited, have also faced similar challenges and sought extensions or alternative strategies.
• The redemption rate and trust account balance are key metrics to watch, as they indicate investor sentiment and the company's ability to fund a business combination.

Related Party Transactions

• The Sponsor has committed to loan the Company an aggregate of up to $300,000 to cover expenses related to the Initial Public Offering pursuant to a promissory note.
• The Sponsor may provide us with a loan to the Company up to $1,500,000 as may be required (Working Capital Loans).
• The Company has caused to be deposited $50,000 into the Companys Trust Account for its public stockholders, representing $0.002 per public share, allowing the Company to extend the period of time it has to consummate its initial Business Combination by one month from September 18, 2024 to October 18, 2024.
• The Company has caused to be deposited $50,000 into the Companys Trust Account for its public stockholders, representing $0.002 per public share, allowing the Company to extend the period of time it has to consummate its initial Business Combination by one month from September 18, 2024 to November 18, 2024 (collectively, the Extension Loans).

Stakeholder Impact

• Stockholders have the opportunity to vote on the extension and founder share amendment proposals.
• Stockholders retain the right to redeem their shares if they disapprove of the extension or any future business combination.
• The outcome of the vote and the success of the business combination will impact the value of stockholders' investments.
• If the company liquidates, warrant holders will not receive any distribution from the Trust Account.

Next Steps

• Stockholder vote on the charter amendment and founder share amendment proposals on November 18, 2024.
• Filing of the charter amendment with the Secretary of State of Delaware, if approved.
• Continued efforts to complete the business combination with Longevity Biomedical, Inc.
• Preparation for the Nasdaq Hearings Panel hearing on December 17, 2024.
• Seek shareholder approval of the Business Combination following the SEC declaring a registration statement on Form S-4 effective.

Key Dates

Keywords

business combination, extension, redemption, Nasdaq, founder shares, FutureTech II Acquisition Corp., Longevity Biomedical, merger, proxy statement, trust account, delisting, MVLS Requirement