FutureTech II Acquisition Corp. SEC 10-K Report

FutureTech II Acquisition Corp., a blank check company focused on the disruptive technology sector in the U.S., has released its Form 10-K report for the fiscal year ended December 31, 2024. The report provides a comprehensive overview of the company's financial performance, business operations, strategic initiatives, and the challenges it faces as it pursues a business combination with Longevity Biomedical Inc.

Financial Highlights

Net Income: FutureTech reported a net income of $2.91 million for the year ended December 31, 2023, compared to a net loss of $0.75 million for the year ended December 31, 2024. This change reflects a decrease in investment income and an increase in expenses due to due diligence costs related to a potential business combination.

Net Income (Loss) Per Share of Redeemable Common Stock: The net income per share of redeemable common stock was $0.18 for the year ended December 31, 2024, compared to $0.21 for the year ended December 31, 2023.

Net Income (Loss) Per Share of Non-redeemable Common Stock: The net loss per share of non-redeemable common stock was $(0.35) for the year ended December 31, 2024, compared to $(0.16) for the year ended December 31, 2023.

Interest Earned on Interest Bearing Bank Demand Deposit Held in Trust Account: The company earned $1.34 million in interest for the year ended December 31, 2024, compared to $4.81 million for the year ended December 31, 2023, due to a decrease in trust assets.

Total Expenses: Total expenses increased to $1.81 million for the year ended December 31, 2024, from $1.06 million for the year ended December 31, 2023, primarily due to increased due diligence costs.

Business Highlights

Business Formation and Purpose: FutureTech II Acquisition Corp. is a blank check company incorporated in Delaware on August 19, 2021, with the purpose of effecting a merger, capital stock exchange, asset acquisition, stock purchase, reorganization, or similar business combination with one or more businesses, focusing on the disruptive technology sector in the U.S., excluding China, Hong Kong, and Macau.

Initial Public Offering: The company completed its Initial Public Offering on February 18, 2022, raising $115 million through the sale of 11,500,000 units at $10.00 per unit, with an additional $5.2 million raised through a private placement with its sponsor.

Trust Account and Investment Strategy: Proceeds from the IPO and private placement were placed in a trust account, initially invested in U.S. government securities or money market funds, and later held in an interest-bearing bank demand deposit account to avoid being classified as an investment company.

Merger Agreement with Longevity Biomedical Inc.: On September 16, 2024, FutureTech entered into a merger agreement with Longevity Biomedical Inc., a biopharmaceutical company focused on technologies addressing aging-related diseases. The merger will result in Longevity becoming a wholly-owned subsidiary, with the combined company expected to list on Nasdaq under the ticker symbol 'LBIO'.

Management Team: The management team is led by Ray Chen, who has extensive experience in financial and operational roles within acquisition companies and other industries, providing strategic leadership for FutureTech's business combination efforts.

Business Strategy and Acquisition Criteria: FutureTech targets private companies with positive cash flow or compelling technology in sectors like biomedical life science, AI, and robotics, focusing on operational improvements and competitive market advantages.

Extension of Combination Period: The company has extended its deadline to complete a business combination multiple times, with the current deadline set for August 18, 2025, following stockholder approvals and amendments to its charter.

Operational Challenges and Compliance: FutureTech faced challenges in maintaining Nasdaq listing standards, resulting in a transfer to the Nasdaq Capital Market and eventual delisting, with plans to trade over-the-counter and reapply for Nasdaq listing post-merger.

Future Outlook: The company is focused on completing the Longevity Business Combination and addressing operational and compliance challenges to enhance shareholder value and achieve its strategic objectives.

Strategic Initiatives

Business Combination with Longevity Biomedical Inc.: The company is focused on completing a business combination with Longevity Biomedical Inc., which involves merging Longevity with a wholly-owned subsidiary of the company. This strategic initiative aims to transform the company into Longevity Biomedical, Inc., with plans to list on the NASDAQ Capital Market under the ticker symbol 'LBIO'.

Capital Management: The company has been actively managing its capital through a series of extensions to the period allowed for completing its initial business combination, funded by deposits into a trust account. It has also been involved in redeeming shares of Class A common stock, which has impacted its cash flows. The company has received capital contributions from its sponsor and issued promissory notes to manage liquidity. Additionally, the company has been addressing overpayments related to share redemptions through a claw-back process.

Future Outlook: The company plans to continue its efforts to complete the business combination with Longevity Biomedical Inc. and aims to list the combined company's securities on NASDAQ. It is also focused on resolving compliance issues with NASDAQ listing standards and managing its liquidity to ensure the successful completion of the merger. The company anticipates further capital management activities, including potential equity issuances and debt management, to support its strategic objectives.

Challenges and Risks

Regulatory and Market Risks: The company faces significant regulatory risks related to U.S. foreign investment regulations, particularly the potential review by the Committee on Foreign Investment in the United States (CFIUS). This could limit the company's ability to complete a business combination with a U.S. target company, especially in regulated industries or those affecting national security. Additionally, the company may be deemed an investment company under the Investment Company Act, which would impose burdensome compliance requirements and could lead to liquidation if not addressed. The company has taken steps to mitigate this risk by changing the investment strategy of its trust account.

Tax and Compliance Risks: The company also faces risks related to the new 1% U.S. federal excise tax on stock repurchases, which could apply to SPAC redemptions and liquidations. Furthermore, the company has been delisted from Nasdaq due to non-compliance with listing rules, which may affect the liquidity and trading of its securities and its ability to complete a business combination.

Operational Challenges: The company has extended its combination period multiple times, incurring significant costs and facing potential liquidation if a business combination is not completed by August 18, 2025. The company has entered into a merger agreement with Longevity Biomedical Inc., but the consummation of this business combination is subject to various conditions and regulatory approvals. The company has also faced challenges in maintaining compliance with Nasdaq listing standards, resulting in its securities being quoted on the over-the-counter market.

Market Risks: The company faces market risks related to interest rate fluctuations affecting the interest income from its trust account investments.

SEC Filing: FutureTech II Acquisition Corp. [ FTII ] - 10-K - Apr. 09, 2025