DEF 14A: FutureTech II Acquisition Corp. Seeks Extension and Founder Share Amendment to Facilitate Longevity Biomedical Merger, Avert Nasdaq Delisting

FutureTech II Acquisition Corp. is seeking stockholder approval to extend its business combination deadline and amend founder share conversion terms to maintain its Nasdaq listing and proceed with its merger with Longevity Biomedical, Inc.

Summary

• FutureTech II Acquisition Corp. is holding a special meeting on November 18, 2024, to vote on proposals to extend the deadline for completing a business combination and amend the terms of founder share conversion.
• The company seeks to extend the business combination deadline by up to nine months, from November 18, 2024, to August 18, 2025.
• The Sponsor will deposit into a trust account the lesser of $50,000 and $0.03 multiplied by the number of public shares not redeemed for each one-month extension.
• FutureTech also proposes 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 the completion of a business combination.
• This amendment aims to help FutureTech regain compliance with Nasdaq's minimum market value requirement of $50 million.
• FutureTech received a letter from Nasdaq on October 23, 2024, stating it was not in compliance with the MVLS Requirement.
• The company has requested a hearing with Nasdaq's Hearings Panel, scheduled for December 17, 2024.
• The company entered into a merger agreement with Longevity Biomedical, Inc. on September 16, 2024, but believes it needs more time to complete the transaction.
• If the charter amendment is not approved, FutureTech will liquidate and distribute the funds in the trust account to public stockholders.
• As of October 11, 2024, the estimated redemption price is approximately $11.01 per share, and the trust account held approximately $26.9 million.
• The closing price of FutureTech's common stock on October 11, 2024, was $11.21.
• The company confirms that amounts placed in the Trust Account in connection with the company's initial public offering and any Extension Payments, as well as any interest earned thereon, will not be used to pay for the Excise Tax.

Sentiment

Score: 4

Explanation: The document presents a mixed sentiment. While the company is actively pursuing a merger, it faces challenges with Nasdaq compliance and requires an extension, creating uncertainty.

Positives

• The proposed extension allows FutureTech 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 the eventual business combination.
• The company has a merger agreement in place with Longevity Biomedical, Inc.
• The company confirms that amounts placed in the Trust Account in connection with the company's initial public offering and any Extension Payments, as well as any interest earned thereon, will not be used to pay for the Excise Tax.

Negatives

• Failure to approve the extension will result in the liquidation of FutureTech.
• Redemptions in connection with the extension vote could significantly reduce the amount of funds available in the trust account.
• If Nasdaq delists the company's securities, it could face significant material adverse consequences.
• The company is seeking an extension beyond the 36-month period typically allowed by Nasdaq, which could lead to delisting.

Risks

• There is no guarantee 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 complete an initial business combination with a U.S. target company due to foreign investment regulations.
• 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.
• 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.

Future Outlook

FutureTech intends to complete a business combination by the Extended Date of August 18, 2025, if the extension is approved. If the Founder Share Amendment Proposal is approved, FutureTech will attempt to regain compliance with Nasdaq and avoid the Hearing in front of the Panel.

Management Comments

• Management believes that the Company does not have sufficient time to complete the Business Combination before November 18, 2024.
• 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 Board believes that in order to be able to consummate the Business Combination, the Sponsor will need to convert such FutureTech Class B Common Stock to FutureTech Class A Common Stock for FutureTech to regain compliance with Nasdaq under the MVLS Requirement.

Industry Context

The document reflects the challenges faced by SPACs in the current market, including the pressure to complete mergers within a specific timeframe and maintain listing compliance. Many SPACs are seeking extensions to complete deals, and some are facing potential liquidation if they cannot find suitable targets or meet listing requirements.

Comparison to Industry Standards

• The document highlights the challenges faced by SPACs in meeting Nasdaq's listing requirements, particularly the minimum market value of listed securities (MVLS) requirement.
• Many SPACs are seeking extensions to complete deals, and some are facing potential liquidation if they cannot find suitable targets or meet listing requirements.
• The document mentions Nasdaq IM-5101-2, which requires SPACs to complete a business combination within 36 months of the effectiveness of their IPO registration statement.
• The document mentions Nasdaq Rule 5815, which was amended to provide for the immediate suspension and delisting upon issuance of a delisting determination letter to an issuer for failure to meet the requirements of Nasdaq IM5101-02.

Related Party Transactions

• The Sponsor has agreed to be liable to ensure that the proceeds in the Trust Account are not reduced by the claims of target businesses or claims of vendors or other entities that are owed money by us for services rendered or contracted for or products sold to us.
• 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 Company's 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.

Stakeholder Impact

• Stockholders will have the opportunity to vote on the extension and the founder share amendment.
• Public stockholders may elect to redeem their shares for a pro rata portion of the funds available in the Trust Account.
• The outcome of the vote will impact the future of FutureTech and its ability to complete a business combination.
• Warrant holders will see their warrants expire worthless if the business combination is not completed.

Next Steps

• Stockholders will vote on the Charter Amendment Proposal, the Founder Share Amendment Proposal, and the Adjournment Proposal at the special meeting on November 18, 2024.
• If the Charter Amendment Proposal is approved, FutureTech will file an amendment to the charter with the Secretary of State of the State of Delaware.
• FutureTech will continue to work to complete a business combination by the Extended Date.
• If the Founder Share Amendment Proposal is approved, FutureTech will amend the Charter to allow the holders of Class B Common Stock convert such shares into Class A Common Stock on a one-for-one basis, allow FutureTech to regain compliance with Nasdaq and to comply with the MVLS Requirement, and upon such compliance, potentially avoid the Hearing in front of the Panel.

Key Dates

Keywords

business combination, FutureTech II Acquisition Corp., Longevity Biomedical, Nasdaq, extension, redemption, founder shares, delisting, merger, SPAC