Redwoods Acquisition Corp. (NASDAQ:RWOD), a special purpose acquisition company, disclosed today that ANEW MEDICAL, INC., with whom it has a pending business combination, has re-audited its financial statements for the year ended December 31, 2022. The re-audit was conducted by Yusufali & Associates, LLC, following the discovery that the company's previous auditor, B.F. Borgers, CPA PC, is no longer permitted to practice before the SEC.
The re-audit was initiated to ensure the accuracy and reliability of ANEW's financial reporting after the SEC barred B.F. Borgers from practicing. The re-audited financial statements, along with ANEW's audited financials for the year ended December 31, 2023, and unaudited financials for the quarter ended March 31, 2024, have been filed with the SEC and are now publicly available.
Redwoods Acquisition Corp. and ANEW MEDICAL initially entered into a business combination agreement on May 30, 2023. The transaction is aimed at bringing ANEW, a company specializing in biological products, under the Redwoods umbrella as a wholly-owned subsidiary. The business combination is subject to approval by Redwoods' shareholders and other customary closing conditions.
On February 14, 2024, the SEC declared effective the Registration Statement on Form S-4 filed in connection with the business combination, which included ANEW's audited financials for the year ended December 31, 2022. However, the need for re-auditing arose after the SEC's action against B.F. Borgers.
The announcement comes as Redwoods Acquisition Corp. continues to work towards completing the business combination with ANEW, which is anticipated to create a combined entity with enhanced growth prospects and operational synergies. Redwoods Acquisition Corp. is based in New York and is listed on The Nasdaq Stock Market LLC under the symbols RWODU for its units, RWOD for common stock, RWODW for warrants, and RWODR for rights.
This news is based on a press release statement and includes forward-looking statements subject to various risks and uncertainties. The completion of the proposed business combination is contingent upon several factors, including stockholder approval and the satisfaction of other closing conditions outlined in the definitive merger agreement.
In other recent news, Redwoods Acquisition Corp. has entered into a definitive agreement with Meteora Capital Partners and affiliates for a potential sale of equity securities. This transaction could result in Meteora Capital Partners and its affiliates acquiring up to 1,000,000 shares of Redwoods Acquisition Corp. The agreement, which is set to precede a planned merger with ANEW MEDICAL, INC., will adjust the number of shares purchased based on various market conditions and the seller's discretion.
The shares in question represent the common stock of Redwoods Acquisition Corp. prior to the merger and will convert to the common stock of the post-merger entity. Redwoods Acquisition Corp. has also committed to a subscription agreement with the same parties, pledging to issue and sell up to 1,000,000 shares before a valuation date set within 30 days following the transaction.
Moreover, Redwoods Acquisition Corp. has agreed to file a registration statement with the SEC for the resale of all shares held by the seller, including any additional shares purchased. This filing is expected within 30 days of the trade date. These are among the recent developments in the company's operations.
InvestingPro Insights
In light of Redwoods Acquisition Corp.'s (NASDAQ:RWOD) ongoing efforts to finalize the business combination with ANEW MEDICAL, INC., recent data from InvestingPro provides a snapshot of RWOD's current financial health and market performance.
With a market capitalization of approximately $30.89 million and a high earnings multiple reflected by a P/E ratio of 59.62 for the last twelve months as of Q1 2024, investors are looking at a company that trades with significant price volatility. Despite being profitable over the last twelve months, RWOD's short-term obligations currently exceed its liquid assets, which may raise concerns about the company's financial flexibility in the near term.
InvestingPro Tips indicate that RWOD's stock has experienced a notable decline over the past three months, with a 24.23% drop in price total return, and a 31.39% decrease over the last six months. Moreover, the stock does not pay a dividend, which could influence investor decisions, especially those seeking income-generating investments. It's worth noting that for investors looking to make an informed decision, there are additional InvestingPro Tips available for RWOD at https://www.investing.com/pro/RWOD.
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