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MWRX > SEC Filings for MWRX > Form 10-Q on 13-Aug-2013All Recent SEC Filings




Quarterly Report

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations.

Forward-Looking Statements

This Quarterly Report on Form 10-Q includes forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and
Section 21E of the Securities Exchange Act of 1934, as amended (the "Exchange Act"). We have based these forward-looking statements on our current expectations and projections about future events. These forward-looking statements are subject to known and unknown risks, uncertainties and assumptions about us that may cause our actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by such forward-looking statements. In some cases, you can identify forward-looking statements by terminology such as "may," "should," "could," "would," "expect," "plan," "anticipate," "believe," "estimate," "continue," or the negative of such terms or other similar expressions. Factors that might cause or contribute to such a discrepancy include, but are not limited to, those described in our other Securities and Exchange Commission ("SEC") filings. References to "we", "us", "our" or the "Company" are to MedWorth Acquisition Corp., except where the context requires otherwise. The following discussion should be read in conjunction with our condensed financial statements and related notes thereto included elsewhere in this report.


We are a blank check company in the development stage, formed on January 22, 2013 to acquire, through a merger, share exchange, asset acquisition, stock purchase, plan of arrangement, recapitalization, reorganization or other similar business combination, one or more businesses or entities. The Company expects to focus its search for a target business(es) for its initial Business Combination in the specialty pharmacy, infusion pharmacy, and/or drug distribution industries based in the United States, although the Company does not intend to limit its search to a particular geographic region and the Company may pursue opportunities in other business sectors or industries. We do not have any specific initial business transaction under consideration, but we are actively searching for a target business.

We presently have no revenue, have had losses since inception from incurring formation costs and have no other operations other than the active solicitation of a target business with which to complete a business combination. We have relied upon the sale of our securities and loans from our officers and directors to fund our operations.

On July 2, 2013, we consummated the Public Offering of 6,600,000 shares (the "Public Shares") of common stock, $.0001 par value per share ("Common Stock"). The Public Shares were sold at an offering price of $8.00 per share, generating gross proceeds of $52,800,000.

Simultaneously with the consummation of the Public Offering, we consummated the private placement to certain of its initial stockholders ("Private Placement") of 634,250 shares of Common Stock ("Sponsors' Shares") at a price of $8.00 per share, generating total gross proceeds of $5,074,000. The Sponsors' Shares are identical to the Public Shares. The purchasers have agreed not to transfer, assign or sell any of the Sponsors' Shares (except to certain permitted transferees) until 30 days after the completion of the Company's initial Business Combination.

In connection with the Public Offering, the Company granted the underwriters a 45-day option to purchase up to an additional 990,000 Public Shares to cover over-allotments. On July 3, 2013, the underwriters elected to exercise the over-allotment option in full.

On July 8, 2013, we completed the sale of an additional 990,000 shares of common stock (the "Additional Shares") pursuant to the July 3, 2013 exercise in full of the over-allotment option granted to EarlyBirdCapital, Inc. ("EBC"), the lead underwriter of our initial public offering ("IPO") of 6,600,000 shares of common stock, which closed on July 2, 2013. The Additional Shares were sold at the offering price of $8.00 per share, generating gross proceeds to us of $7,920,000, and proceeds net of the underwriters' discount of $7,642,800. Simultaneously with the closing of the sale of the Additional Shares, we raised, via private placement, an additional $633,600 through the sale of an additional 79,200 shares (at $8.00 per share) to Anthony Minnuto, our Chairman.

We deposited all of the net proceeds of these sales, or $8,276,400, into the trust account holding its IPO proceeds at UBS Financial Services, Inc. (the "Trust Account") maintained by Continental Stock Transfer & Trust Company acting as the trustee. The funds will not be released from the Trust Account except under certain limited circumstances as described in the final prospectus relating to the IPO. As of July 8, 2013, the Company holds a total of $63,452,400 in the Trust Account, or $8.36 per share.

Results of Operations

Our entire activity since inception up to the closing of our initial public offering on July 2, 2013 was in preparation for that event. Since the offering, our activity has been limited to the evaluation of business combination candidates, and we will not be generating any operating revenues until the closing and completion of our initial business combination. We expect to generate small amounts of non-operating income in the form of interest income on cash and cash equivalents. Interest income is not expected to be significant in view of current low interest rates on risk-free investments (treasury securities). We expect to incur increased expenses as a result of being a public company (for legal, financial reporting, accounting and auditing compliance), as well as for due diligence expenses. We expect our expenses to increase substantially after this period.

For the three months ended June 30, 2013 and for the period from January 22, 2013 (inception) through June 30, 2013, we had net losses of $5,488 and $8,488 respectively, which consist of formation and operating costs. We incurred offering costs of $432,607 with regard to the offering, which are classified as deferred offering costs on the balance sheet as of June 30, 2013.

Liquidity and Capital Resources

As of June 30, 2013, we have cash of $545. Subsequent to the initial public offering, as described above, the Company received and maintained in a trust approximately $63.4 million in cash. As of June 30, 2013, we owed to two officers of the Company an aggregate of $170,000 in notes payable. These amounts were fully repaid with the consummation of the initial public offering.

After the consummation of the initial public offering, we have approximately $345,000 not held in the trust account, plus the interest earned on the trust account balance (net of income, and other tax obligations) that may be released to us to fund our working capital requirements which we anticipate will be approximately $55,000, will be sufficient to allow us to operate for at least the next 18 months, assuming that a business combination is not consummated during that time. Over this time period, we will be using these funds for identifying and evaluating prospective acquisition candidates, performing business due diligence on prospective target businesses, traveling to and from the offices, plants or similar locations of prospective target businesses, reviewing corporate documents and material agreements of prospective target businesses, selecting the target business to acquire and structuring, negotiating and consummating the business combination. We anticipate that we will incur approximately:

$200,000 of expenses for the search for target businesses and for the legal, accounting and other third-party expenses attendant to the due diligence investigations, structuring and negotiating of our initial business combination;

$50,000 of reimbursement for out-of-pocket expenses incurred by our officers, directors and sponsors in connection with the due diligence and investigation of a target business;

$65,000 of expenses in legal and accounting fees relating to our SEC reporting obligations; and

$85,000 for general working capital that will be used for miscellaneous expenses, liquidation obligations and reserves, including director and officer liability insurance premiums.

If our estimates of the costs of undertaking in-depth due diligence and negotiating our initial business combination is less than the actual amount necessary to do so, or the amount of interest available to us from the trust account is less than we expect as a result of the current interest rate environment, we may have insufficient funds available to operate our business prior to our initial business combination. Moreover, we may need to obtain additional financing either to consummate our initial business combination or because we become obligated to redeem a significant number of our public shares upon consummation of our initial business combination, in which case we may issue additional securities or incur debt in connection with such business combination. Subject to compliance with applicable securities laws, we would only consummate such financing simultaneously with the consummation of our initial business combination. In the current economic environment, it has become especially difficult to obtain acquisition financing. Following our initial business combination, if cash on hand is insufficient, we may need to obtain additional financing in order to meet our obligations.

Off-Balance Sheet Arrangements

We did not have any off-balance sheet arrangements as of June 30, 2013.

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