Here is the section that whoever cherry picked and highlighted from the filing, . Leaving out the full speculation part that was highlighted. Why do they need to increase promissory notes made days before deal was suppose to be completed.
Note 8 – Subsequent Events
The Company evaluated subsequent events and transactions that occurred after the balance sheet date up to the date that the financial statement was issued. Based upon this review, the Company did not identify any subsequent events that would have required adjustment or disclosure in the financial statement.
On September 12, 2023 the Company issued a promissory note with Sagaliam Sponsor LLC. Subsequent to the acquisition of the Sagaliam Sponsor LLC the Sponsor Promissory note has been increased to $3,500,000.
On September 15, 2023 the Company executed a binding business combination agreement for the purchase of Biogenysis, Inc. (“BGEN”) and Virogentics Inc. (“VIRO”), operating subsidiaries of Enzolytics Inc. (OTC PK: ENZC).
On April 14, 2023, the Company entered into a 12% Convertible Promissory Note agreement with Seacor Capital Inc. (“Seacor Note”) The Seacor Note accrues interest at a rate of 12% and is due on or before October 31, 2023. The Seacor Note may be converted at a price equal to a 50% discount to the weighted average share price.
On April 14, 2023, the Company entered into a 12% Convertible Promissory Note agreement with NYF Capital Inc. (“NYF Note”) The NYF Note accrues interest at a rate of 12% and is due on or before October 31, 2023. The NYF Note may be converted at a price equal to a 50% discount to the weighted average share price.
On October 3, 2023, the Company entered into a $100 thousand Convertible Note (“LMI Note”) to Legacy Metaverse Inc. (“LMI”), an entity controlled by Barry Kostiner, the CEO of the Company. The LMI Note accrues interest at a rate of 10% and is due on October 3, 2024. The LMI Note may be converted at a price equal to a 90% discount to the weighted average share price. Together with each LMI conversion share, a warrant will be issued with the strike price equal to the conversion price per share and an expiration date of 5 years after issuance. Additionally, LMI has the non-exclusive right to market the Company’s nutraceutical products for a 50% profit participation. LMI has the right to fund an additional $900,000.
It is expected that the Sponsor, Seacor, NYF and LMI debt obligations will be repaid and restructured upon completion of a PIPE transaction to be fund after approval of the BCA by shareholders.
On December 5, 2023, the Company received a letter from Nasdaq telling the Company it was going to be delisted and giving the Company an opportunity to appeal this determination. The Company put out an 8-K on December 11, 2023, pursuant to Nasdaq Guidelines, alerting the investing public of this notification. Nasdaq found the Business Combination Agreement with Virogentics and Biogenysis to be done incorrectly, the Company was not compliant with its regulatory filing requirements, and the Company did not apply to move down a level of Nasdaq when it went below $50,000,000. There is a hearing scheduled for March 7, 2024. The Company will issue an update within 4 days. The Company has hired Patrick Morris, Esq. with Morris Legal Corp to be its SEC Counsel and are actively working to hire a Nasdaq Compliance Specialist. The Company filed the paperwork and paid the appeal fee of $20,000 in a timely manner, and has also requested a stay of the delisting.
